PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs.
SHOEMART, INCORPORATED, and NORTH dated February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without
EDSA MARKETING, INCORPORATED,respondents.
[G.R. No. 148222. August 15, 2003]
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl &
Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision[1] of the Court of Appeals reversing the
October 31, 1996 decision[2] of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-
516 which declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI)
liable for infringement of trademark and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals[3] contained a summary of this dispute:
Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of
advertising display units simply referred to as light boxes. These units utilize specially printed posters
sandwiched between plastic sheets and illuminated with back lights. Pearl and Dean was able to
secure a Certificate of Copyright Registration dated January 20, 1981 over these illuminated display
units. The advertising light boxes were marketed under the trademark Poster Ads. The application
for registration of the trademark was filed with the Bureau of Patents, Trademarks and Technology
Transfer on June 20, 1983, but was approved only on September 12, 1988, per Registration No.
41165. From 1981 to about 1988, Pearl and Dean employed the services of Metro Industrial Services
to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the
lease and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under
construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl
and Dean agreed. On September 11, 1985, Pearl and Deans General Manager, Rodolfo Vergara,
submitted for signature the contracts covering SM Cubao and SM Makati to SMIs Advertising
Promotions and Publicity Division Manager, Ramonlito Abano. Only the contract for SM Makati,
however, was returned signed. On October 4, 1985, Vergara wrote Abano inquiring about the other
contract and reminding him that their agreement for installation of light boxes was not only for its
SM Makati branch, but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
basis. In the same letter, he pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to
fabricate its display units, offered to construct light boxes for Shoemarts chain of stores. SMI
approved the proposal and ten (10) light boxes were subsequently fabricated by Metro Industrial for
SMI. After its contract with Metro Industrial was terminated, SMI engaged the services of EYD
Rainbow Advertising Corporation to make the light boxes. Some 300 units were fabricated in
1991. These were delivered on a staggered basis and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed
at SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out
that aside from the two (2) reported SM branches, light boxes similar to those it manufactures were
also installed in two (2) other SM stores. It further discovered that defendant-appellant North Edsa
Marketing Inc. (NEMI), through its marketing arm, Prime Spots Marketing Services, was set up
primarily to sell advertising space in lighted display units located in SMIs different branches. Pearl
and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and
NEMI enjoining them to cease using the subject light boxes and to remove the same from SMIs
establishments. It also demanded the discontinued use of the trademark Poster Ads, and the
payment to Pearl and Dean of compensatory damages in the amount of Twenty Million Pesos
(P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224)
light boxes and NEMI took down its advertisements for Poster Ads from the lighted display units in
SMIs stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed
this instant case for infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its poster
panels using commonly known techniques and available technology, without notice of or reference
to Pearl and Deans copyright. SMI noted that the registration of the mark Poster Ads was only for
stationeries such as letterheads, envelopes, and the like. Besides, according to SMI, the word Poster
Ads is a generic term which cannot be appropriated as a trademark, and, as such, registration of such
mark is invalid. It also stressed that Pearl and Dean is not entitled to the reliefs prayed for in its
complaint since its advertising display units contained no copyright notice, in violation of Section 27
of P.D. 49. SMI alleged that Pearl and Dean had no cause of action against it and that the suit was
Page 1
purely intended to malign SMIs good name. On this basis, SMI, aside from praying for the dismissal
of the case, also counterclaimed for moral, actual and exemplary damages and for the cancellation of
Pearl and Deans Certification of Copyright Registration No. PD-R-2558 dated January 20, 1981 and
Certificate of Trademark Registration No. 4165 dated September 12, 1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor
having engaged in the business of advertising. It repleaded SMIs averments, admissions and denials
and prayed for similar reliefs and counterclaims as SMI.
(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were
fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark Poster Ads,
for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its trademark
Poster Ads.

The RTC of Makati City decided in favor of P & D: Defendants counterclaims are hereby ordered dismissed for lack of merit.

Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of
copyright under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of
RA No. 166, as amended, and are hereby penalized under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - P16,600,000.00,
SO ORDERED.[4]
On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints,
pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a
copyrightable class O work, we have to agree with SMI when it posited that what was copyrighted
were the technical drawings only, and not the light boxes themselves, thus:

representing profits 42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like
plaintiff-appellants will not extend to the actual object. It has so been held under jurisprudence, of
derived by defendants which the leading case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a
copyright protection for a book entitled Seldens Condensed Ledger or Bookkeeping Simplified which
as a result of infringe- purported to explain a new system of bookkeeping. Included as part of the book were blank forms
and illustrations consisting of ruled lines and headings, specially designed for use in connection with
ment of plaintiffs copyright
the system explained in the work. These forms showed the entire operation of a day or a week or a
from 1991 to 1992 month on a single page, or on two pages following each other. The defendant Baker then produced
forms which were similar to the forms illustrated in Seldens copyrighted books. The Court held that
(b) moral damages - P1,000.000.00 exclusivity to the actual forms is not extended by a copyright. The reason was that to grant a
monopoly in the underlying art when no examination of its novelty has ever been made would be a
(c) exemplary damages - P1,000,000.00
surprise and a fraud upon the public; that is the province of letters patent, not of copyright. And that
(d) attorneys fees - P1,000,000.00 is precisely the point. No doubt aware that its alleged original design would never pass the rigorous
examination of a patent application, plaintiff-appellant fought to foist a fraudulent monopoly on the
plus public by conveniently resorting to a copyright registration which merely employs a recordal system
without the benefit of an in-depth examination of novelty.
(e) costs of suit;

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 2

LAW ON INTELLECTUAL PROPERTY SET CASES
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F.
Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished
drawing entitled Bridge Approach the drawing showed a novel bridge approach to unsnarl traffic
congestion. The defendant constructed a bridge approach which was alleged to be an infringement
of the new design illustrated in plaintiffs drawings. In this case it was held that protection of the
drawing does not extend to the unauthorized duplication of the object drawn because copyright
extends only to the description or expression of the object and not to the object itself. It does not
prevent one from using the drawings to construct the object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v.
Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one who, without
being authorized, uses a copyrighted architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the technical drawings
of the latters advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that
the protective mantle of the Trademark Law extends only to the goods used by the first user as
specified in the certificate of registration, following the clear mandate conveyed by Section 20 of
Republic Act 166, as amended, otherwise known as the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a
mark or trade-name shall be prima facie evidence of the validity of the registration, the registrants
ownership of the mark or trade-name, and of the registrants exclusive right to use the same in
connection with the goods, business or services specified in the certificate, subject to any conditions
and limitations stated therein. (underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the
trademark Poster Ads with the Bureau of Patents, Trademarks, and Technology Transfer. Said
trademark was recorded in the Principal Register on September 12, 1988 under Registration No.
41165 covering the following products: stationeries such as letterheads, envelopes and calling cards
and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the
defendants-appellants for their use of the words Poster Ads, in the advertising display units in suit.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Jurisprudence has interpreted Section 20 of the Trademark Law as an implicit permission to a
manufacturer to venture into the production of goods and allow that producer to appropriate the
brand name of the senior registrant on goods other than those stated in the certificate of
registration. The Supreme Court further emphasized the restrictive meaning of Section 20 when it
stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified therein,
then a situation may arise whereby an applicant may be tempted to register a trademark on any and
all goods which his mind may conceive even if he had never intended to use the trademark for the
said goods. We believe that such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans registered trademark and
defendants-appellants Poster Ads design, as well as the parallel use by which said words were used
in the parties respective advertising copies, we cannot find defendants-appellants liable for
infringement of trademark. Poster Ads was registered by Pearl and Dean for specific use in its
stationeries, in contrast to defendants-appellants who used the same words in their advertising
display units. Why Pearl and Dean limited the use of its trademark to stationeries is simply beyond
us. But, having already done so, it must stand by the consequence of the registration which it had
caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words Poster Ads are a
simple contraction of the generic term poster advertising. In the absence of any convincing proof
that Poster Ads has acquired a secondary meaning in this jurisdiction, we find that Pearl and Deans
exclusive right to the use of Poster Ads is limited to what is written in its certificate of registration,
namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark Poster Ads.
There being no finding of either copyright or trademark infringement on the part of SMI and NEMI,
the monetary award granted by the lower court to Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is
rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of
merit.[5]
Page 3
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following
errors for the Courts consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT INFRINGEMENT
WAS COMMITTED BY RESPONDENTS SM AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF PEARL &
DEANS TRADEMARK POSTER ADS WAS COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL COURT,
DESPITE THE LATTERS FINDING, NOT DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM
WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND NEMI
LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND
COSTS OF SUIT.[6]
ISSUES
In resolving this very interesting case, we are challenged once again to put into proper perspective
four main concerns of intellectual property law patents, copyrights, trademarks and unfair
competition arising from infringement of any of the first three. We shall focus then on the following
issues:
(1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light box
depicted in such engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent issued by the Bureau
of Patents Trademarks and Technology Transfer (now Intellectual Property Office) in addition to the
copyright of the engineering drawings?
(3) can the owner of a registered trademark legally prevent others from using such trademark if it is
a mere abbreviation of a term descriptive of his goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes when SMI
had the units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously,
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
petitioners position was premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said drawings. In ruling that there
was no copyright infringement, the Court of Appeals held that the copyright was limited to the
drawings alone and not to the light box itself. We agree with the appellate court.
First, petitioners application for a copyright certificate as well as Copyright Certificate No. PD-R2588
issued by the National Library on January 20, 1981 clearly stated that it was for a class O work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to
any of the following works:
xxxxxxxxx
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
xxxxxxxxx
Although petitioners copyright certificate was entitled Advertising Display Units (which depicted the
box-type electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the
rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to
the subjects and by the persons, and on terms and conditions specified in the statute.[7] Accordingly,
it can cover only the works falling within the statutory enumeration or description.[8]
P & D secured its copyright under the classification class O work. This being so, petitioners copyright
protection extended only to the technical drawings and not to the light box itself because the latter
was not at all in the category of prints, pictorial illustrations, advertising copies, labels, tags and box
wraps. Stated otherwise, even as we find that P & D indeed owned a valid copyright, the same could
have referred only to the technical drawings within the category of pictorial illustrations. It could not
have possibly stretched out to include the underlying light box. The strict application[9] of the laws
enumeration in Section 2 prevents us from giving petitioner even a little leeway, that is, even if its
copyright certificate was entitled Advertising Display Units. What the law does not include, it
excludes, and for the good reason: the light box was not a literary or artistic piece which could be
copyrighted under the copyright law. And no less clearly, neither could the lack of statutory authority
Page 4
to make the light box copyrightable be remedied by the simplistic act of entitling the copyright
certificate issued by the National Library as Advertising Display Units.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license
from P & D, then no doubt they would have been guilty of copyright infringement. But this was not
the case. SMIs and NEMIs acts complained of by P & D were to have units similar or identical to the
light box illustrated in the technical drawings manufactured by Metro and EYD Rainbow Advertising,
for leasing out to different advertisers. Was this an infringement of petitioners copyright over the
technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a literary not
an artistic work but an engineering or marketing invention.[10] Obviously, there appeared to be
some confusion regarding what ought or ought not to be the proper subjects of copyrights, patents
and trademarks. In the leading case of Kho vs. Court of Appeals,[11] we ruled that these three legal
rights are completely distinct and separate from one another, and the protection afforded by one
cannot be used interchangeably to cover items or works that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an inventive step and is industrially
applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for
infringement of P & Ds copyright over its technical drawings of the said light boxes, should they be
liable instead for infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore
acquired no patent rights which could have protected its invention, if in fact it really was.And
because it had no patent, petitioner could not legally prevent anyone from manufacturing or
commercially using the contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,[12] we
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
held that there can be no infringement of a patent until a patent has been issued, since whatever
right one has to the invention covered by the patent arises alone from the grant of patent. x x x (A)n
inventor has no common law right to a monopoly of his invention. He has the right to make use of
and vend his invention, but if he voluntarily discloses it, such as by offering it for sale, the world is
free to copy and use it with impunity. A patent, however, gives the inventor the right to exclude all
others. As a patentee, he has the exclusive right of making, selling or using the invention.[13] On the
assumption that petitioners advertising units were patentable inventions, petitioner revealed them
fully to the public by submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention, a
patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is
to bring new designs and technologies into the public domain through disclosure.[14] Ideas, once
disclosed to the public without the protection of a valid patent, are subject to appropriation without
significant restraint.[15]
On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. ODonnel,[16] The act secured to the
inventor the exclusive right to make use, and vend the thing patented, and consequently to prevent
others from exercising like privileges without the consent of the patentee. It was passed for the
purpose of encouraging useful invention and promoting new and useful inventions by the protection
and stimulation given to inventive genius, and was intended to secure to the public, after the lapse
of the exclusive privileges granted the benefit of such inventions and improvements.
The law attempts to strike an ideal balance between the two interests:
(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and
disclosure of new useful and non-obvious advances in technology and design, in return for the
exclusive right to practice the invention for a number of years. The inventor may keep his invention
secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to
the community, the patent is granted. An exclusive enjoyment is guaranteed him for 17 years, but
upon the expiration of that period, the knowledge of the invention inures to the people, who are
thus enabled to practice it and profit by its use.[17]
The patent law has a three-fold purpose: first, patent law seeks to foster and reward invention;
second, it promotes disclosures of inventions to stimulate further innovation and to permit the
public to practice the invention once the patent expires; third, the stringent requirements for patent
Page 5
protection seek to ensure that ideas in the public domain remain there for the free use of the
public.[18]
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-
depth investigation is required because in rewarding a useful invention, the rights and welfare of the
community must be fairly dealt with and effectively guarded. To that end, the prerequisites to
obtaining a patent are strictly observed and when a patent is issued, the limitations on its exercise
are equally strictly enforced. To begin with, a genuine invention or discovery must be demonstrated
lest in the constant demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art.[19]
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the
effect that a person is claiming the creation of a work. The law confers the copyright from the
moment of creation[20] and the copyright certificate is issued upon registration with the National
Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot
exclude others from the manufacture, sale or commercial use of the light boxes on the sole basis of
its copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office
(IPO) to scrutinize the light boxs eligibility as a patentable invention. The irony here is that, had
petitioner secured a patent instead, its exclusivity would have been for 17 years only. But through
the simplified procedure of copyright-registration with the National Library without undergoing the
rigor of defending the patentability of its invention before the IPO and the public the petitioner
would be protected for 50 years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden[21], the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
copyright of a book which expounded on a new accounting system he had developed. The
publication illustrated blank forms of ledgers utilized in such a system. The defendant reproduced
forms similar to those illustrated in the plaintiffs copyrighted book. The US Supreme Court ruled
that:
There is no doubt that a work on the subject of book-keeping, though only explanatory of well
known systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But
there is a clear distinction between the books, as such, and the art, which it is, intended to
illustrate. The mere statement of the proposition is so evident that it requires hardly any argument
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
to support it. The same distinction may be predicated of every other art as well as that of
bookkeeping. A treatise on the composition and use of medicines, be they old or new; on the
construction and use of ploughs or watches or churns; or on the mixture and application of colors for
painting or dyeing; or on the mode of drawing lines to produce the effect of perspective, would be
the subject of copyright; but no one would contend that the copyright of the treatise would give the
exclusive right to the art or manufacture described therein. The copyright of the book, if not pirated
from other works, would be valid without regard to the novelty or want of novelty of its subject
matter. The novelty of the art or thing described or explained has nothing to do with the validity of
the copyright. To give to the author of the book an exclusive property in the art described therein,
when no examination of its novelty has ever been officially made, would be a surprise and a fraud
upon the public. That is the province of letters patent, not of copyright. The claim to an invention of
discovery of an art or manufacture must be subjected to the examination of the Patent Office before
an exclusive right therein can be obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by reference
to the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of
great value in the healing art. If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine; he
gives that to the public. If he desires to acquire such exclusive right, he must obtain a patent for the
mixture as a new art, manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all
other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may
contain, gives no exclusive right to the modes of drawing described, though they may never have
been known or used before. By publishing the book without getting a patent for the art, the latter is
given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book
intended to convey instruction in the art, any person may practice and use the art itself which he has
described and illustrated therein. The use of the art is a totally different thing from a publication of
the book explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to
make, sell and use account books prepared upon the plan set forth in such book. Whether the art
might or might not have been patented, is a question, which is not before us. It was not patented,
Page 6
and is open and free to the use of the public. And, of course, in using the art, the ruled lines and
headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of
ideas produced by the peculiar nature of the art described in the books, which have been made the
subject of copyright. In describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the operator who uses the
art. x x x The description of the art in a book, though entitled to the benefit of copyright, lays no
foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be secured, if it can be
secured at all, by letters patent. (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark Poster Ads which petitioners president said
was a contraction of poster advertising. P & D was able to secure a trademark certificate for it, but
one where the goods specified were stationeries such as letterheads, envelopes, calling cards and
newsletters.[22] Petitioner admitted it did not commercially engage in or market these goods. On
the contrary, it dealt in electrically operated backlit advertising units and the sale of advertising
spaces thereon, which, however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate
Appellate Court,[23] where we, invoking Section 20 of the old Trademark Law, ruled that the
certificate of registration issued by the Director of Patents can confer (upon petitioner) the exclusive
right to use its own symbol only to those goods specified in the certificate, subject to any conditions
and limitations specified in the certificate x x x. One who has adopted and used a trademark on his
goods does not prevent the adoption and use of the same trademark by others for products which
are of a different description.[24] Faberge, Inc. was correct and was in fact recently reiterated
in Canon Kabushiki Kaisha vs. Court of Appeals.[25]
Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of P & D to
secure a trademark registration for specific use on the light boxes meant that there could not have
been any trademark infringement since registration was an essential element thereof.
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was possible
even if P & D had no registration.[26] However, while the petitioners complaint in the RTC also cited
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
unfair competition, the trial court did not find private respondents liable therefor. Petitioner
did not appeal this particular point; hence, it cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
competition.
By the nature of things, there can be no unfair competition under the law on copyrights although it is
applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation
as a trademark or tradename may, by long and exclusive use by a business (such that the name or
phrase becomes associated with the business or product in the mind of the purchasing public), be
entitled to protection against unfair competition.[27] In this case, there was no evidence that P & Ds
use of Poster Ads was distinctive or well-known. As noted by the Court of Appeals, petitioners expert
witnesses himself had testified that Poster Ads was too generic a name. So it was difficult to identify
it with any company, honestly speaking.[28] This crucial admission by its own expert witness that
Poster Ads could not be associated with P & D showed that, in the mind of the public, the goods and
services carrying the trademark Poster Ads could not be distinguished from the goods and services of
other entities.
This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was
generic and incapable of being used as a trademark because it was used in the field of poster
advertising, the very business engaged in by petitioner. Secondary meaning means that a word or
phrase originally incapable of exclusive appropriation with reference to an article in the market
(because it is geographically or otherwise descriptive) might nevertheless have been used for so long
and so exclusively by one producer with reference to his article that, in the trade and to that branch
of the purchasing public, the word or phrase has come to mean that the article was his
property.[29] The admission by petitioners own expert witness that he himself could not associate
Poster Ads with petitioner P & D because it was too generic definitely precluded the application of
this exception.
Having discussed the most important and critical issues, we see no need to belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the
Regional Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22,
2001 is AFFIRMED in toto.
SO ORDERED.
Page 7
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.
SECOND DIVISION
[G.R. No. 161295. June 29, 2005]
JESSIE G. CHING, petitioner, vs. WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L.
SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL M. YABUT
(Board of Directors and Officers of WILAWARE PRODUCT CORPORATION),respondents.
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of polyvinyl
chloride plastic;
c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl chloride plastic;
d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the manufacture/fabrication
of items a to d;
e.) Evidences of sale which include delivery receipts, invoices and official receipts.[6]

DECISION The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for the
seizure of the aforecited articles.[7] In the inventory submitted by the NBI agent, it appears that the
CALLEJO, SR., J.: following articles/items were seized based on the search warrants:
This petition for review on certiorari assails the Decision[1] and Resolution[2] of the Court of Appeals Leaf Spring eye bushing
(CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and February 14, 2002 Orders[3] of the
Regional Trial Court (RTC) of Manila, Branch 1, which quashed and set aside Search Warrant Nos. 01- a) Plastic Polypropylene
2401 and 01-2402 granted in favor of petitioner Jessie G. Ching.
- C190 27 }
Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker and
manufacturer of a Utility Model, described as Leaf Spring Eye Bushing for Automobile made up of - C240 rear 40 }
plastic.
- C240 front 41 } BAG 1
On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates of
b) Polyvinyl Chloride Plastic
Copyright Registration and Deposit of the said work described therein as Leaf Spring Eye Bushing for
Automobile.[4] - C190 13 }

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for c) Vehicle bearing cushion
police/investigative assistance for the apprehension and prosecution of illegal manufacturers,
producers and/or distributors of the works.[5] - center bearing cushion 11 }

After due investigation, the NBI filed applications for search warrants in the RTC of Manila against Budder for C190 mold 8 }
William Salinas, Sr. and the officers and members of the Board of Directors of Wilaware Product
Diesel Mold
Corporation. It was alleged that the respondents therein reproduced and distributed the said models
penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293. The applications sought a) Mold for spring eye bushing rear 1 set
the seizure of the following:
b) Mold for spring eye bushing front 1 set
a.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of plastic
polypropylene; c) Mold for spring eye bushing for C190 1 set

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 8

LAW ON INTELLECTUAL PROPERTY SET CASES
d) Mold for C240 rear 1 piece of the
set
e) Mold for spring eye bushing for L300 2 sets
f) Mold for leaf spring eye bushing C190
with metal 1 set
g) Mold for vehicle bearing cushion 1 set[8]
The respondents filed a motion to quash the search warrants on the following grounds:
2. The copyright registrations were issued in violation of the Intellectual Property Code on the
ground that:
a) the subject matter of the registrations are not artistic or literary;
b) the subject matter of the registrations are spare parts of automobiles meaning there (sic) are
original parts that they are designed to replace. Hence, they are not original.[9]
The respondents averred that the works covered by the certificates issued by the National Library
are not artistic in nature; they are considered automotive spare parts and pertain to technology.
They aver that the models are not original, and as such are the proper subject of a patent, not
copyright.[10]
In opposing the motion, the petitioner averred that the court which issued the search warrants was
not the proper forum in which to articulate the issue of the validity of the copyrights issued to him.
Citing the ruling of the Court in Malaloan v. Court of Appeals,[11] the petitioner stated that a search
warrant is merely a judicial process designed by the Rules of Court in anticipation of a criminal case.
Until his copyright was nullified in a proper proceeding, he enjoys rights of a registered owner/holder
thereof.
On January 3, 2002, the trial court issued an Order[12] granting the motion, and quashed the search
warrant on its finding that there was no probable cause for its issuance. The court ruled that the
work covered by the certificates issued to the petitioner pertained to solutions to technical
problems, not literary and artistic as provided in Article 172 of the Intellectual Property Code.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
His motion for reconsideration of the order having been denied by the trial courts Order of February
14, 2002, the petitioner filed a petition for certiorari in the CA, contending that the RTC had no
jurisdiction to delve into and resolve the validity of the copyright certificates issued to him by the
National Library. He insisted that his works are covered by Sections 172.1 and 172.2 of the
Intellectual Property Code. The petitioner averred that the copyright certificates are prima
facie evidence of its validity, citing the ruling of the United States Court of Appeals inWildlife Express
Corporation v. Carol Wright Sales, Inc.[13] The petitioner asserted that the respondents failed to
adduce evidence to support their motion to quash the search warrants. The petitioner noted that
respondent William Salinas, Jr. was not being honest, as he was able to secure a similar copyright
registration of a similar product from the National Library on January 14, 2002.
On September 26, 2003, the CA rendered judgment dismissing the petition on its finding that the RTC
did not commit any grave abuse of its discretion in issuing the assailed order, to wit:
It is settled that preliminarily, there must be a finding that a specific offense must have been
committed to justify the issuance of a search warrant. In a number of cases decided by the Supreme
Court, the same is explicitly provided, thus:
The probable cause must be in connection with one specific offense, and the judge must, before
issuing the warrant, personally examine in the form of searching questions and answers, in writing
and under oath, the complainant and any witness he may produce, on facts personally known to
them and attach to the record their sworn statements together with any affidavit submitted.
In the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance or quashal of the search warrant.
In the instant case, the petitioner is praying for the reinstatement of the search warrants issued, but
subsequently quashed, for the offense of Violation of Class Designation of Copyrightable Works
under Section 177.1 in relation to Section 177.3 of Republic Act 8293, when the objects subject of
the same, are patently not copyrightable.
It is worthy to state that the works protected under the Law on Copyright are: literary or artistic
works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing
Cushion fall on neither classification. Accordingly, if, in the first place, the item subject of the petition
is not entitled to be protected by the law on copyright, how can there be any violation?[14]
The petitioners motion for reconsideration of the said decision suffered the same fate. The
petitioner forthwith filed the present petition for review on certiorari, contending that the
Page 9
revocation of his copyright certificates should be raised in a direct action and not in a search warrant
proceeding.
The petitioner posits that even assuming ex argumenti that the trial court may resolve the validity of
his copyright in a proceeding to quash a search warrant for allegedly infringing items, the RTC
committed a grave abuse of its discretion when it declared that his works are not copyrightable in
the first place. He claims that R.A. No. 8293, otherwise known as the Intellectual Property Code of
the Philippines, which took effect on January 1, 1998, provides in no uncertain terms that copyright
protection automatically attaches to a work by the sole fact of its creation, irrespective of its mode
or form of expression, as well as of its content, quality or purpose.[15] The law gives a non-inclusive
definition of work as referring to original intellectual creations in the literary and artistic domain
protected from the moment of their creation; and includes original ornamental designs or models for
articles of manufacture, whether or not registrable as an industrial design and other works of applied
art under Section 172.1(h) of R.A. No. 8293.
As such, the petitioner insists, notwithstanding the classification of the works as either literary
and/or artistic, the said law, likewise, encompasses works which may have a bearing on the utility
aspect to which the petitioners utility designs were classified. Moreover, according to the petitioner,
what the Copyright Law protects is the authors intellectual creation, regardless of whether it is one
with utilitarian functions or incorporated in a useful article produced on an industrial scale.
The petitioner also maintains that the law does not provide that the intended use or use in industry
of an article eligible for patent bars or invalidates its registration under the Law on Copyright. The
test of protection for the aesthetic is not beauty and utility, but art for the copyright and invention of
original and ornamental design for design patents.[16] In like manner, the fact that his utility designs
or models for articles of manufacture have been expressed in the field of automotive parts, or based
on something already in the public domain does not automatically remove them from the protection
of the Law on Copyright.[17]
The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the same
presumption to an affidavit executed by an author who claims copyright ownership of his work.
The petitioner adds that a finding of probable cause to justify the issuance of a search warrant
means merely a reasonable suspicion of the commission of the offense. It is not equivalent to
absolute certainty or a finding of actual and positive cause.[18] He assists that the determination of
probable cause does not concern the issue of whether or not the alleged work is copyrightable. He
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
maintains that to justify a finding of probable cause in the issuance of a search warrant, it is enough
that there exists a reasonable suspicion of the commission of the offense.
The petitioner contends that he has in his favor the benefit of the presumption that his copyright is
valid; hence, the burden of overturning this presumption is on the alleged infringers, the
respondents herein. But this burden cannot be carried in a hearing on a proceeding to quash the
search warrants, as the issue therein is whether there was probable cause for the issuance of the
search warrant. The petitioner concludes that the issue of probable cause should be resolved
without invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the petitioner is essentially
a technical solution to the problem of wear and tear in automobiles, the substitution of
materials, i.e., from rubber to plastic matter of polyvinyl chloride, an oil resistant soft texture plastic
material strong enough to endure pressure brought about by the vibration of the counter bearing
and thus brings bushings. Such work, the respondents assert, is the subject of copyright under
Section 172.1 of R.A. No. 8293. The respondents posit that a technical solution in any field of human
activity which is novel may be the subject of a patent, and not of a copyright. They insist that the
certificates issued by the National Library are only certifications that, at a point in time, a certain
work was deposited in the said office. Furthermore, the registration of copyrights does not provide
for automatic protection. Citing Section 218.2(b) of R.A. No. 8293, the respondents aver that no
copyright is said to exist if a party categorically questions its existence and legality. Moreover, under
Section 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the registration and deposit of work is
not conclusive as to copyright outlay or the time of copyright or the right of the copyright owner. The
respondents maintain that a copyright exists only when the work is covered by the protection of R.A.
No. 8293.
The petition has no merit.
The RTC had jurisdiction to delve into and resolve the issue whether the petitioners utility models
are copyrightable and, if so, whether he is the owner of a copyright over the said models. It bears
stressing that upon the filing of the application for search warrant, the RTC was duty-bound to
determine whether probable cause existed, in accordance with Section 4, Rule 126 of the Rules of
Criminal Procedure:
SEC. 4. Requisite for issuing search warrant. A search warrant shall not issue but upon probable
cause in connection with one specific offense to be determined personally by the judge after
Page 10
examination under oath or affirmation of the complainant and the witnesses he may produce, and,
particularly, describing the place to be searched and the things to be seized.
In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,[19] the Court held that in the
determination of probable cause, the court must necessarily resolve whether or not an offense exists
to justify the issuance of a search warrant or the quashal of one already issued by the court. Indeed,
probable cause is deemed to exist only where facts and circumstances exist which could lead a
reasonably cautious and prudent man to believe that an offense has been committed or is being
committed. Besides, in Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrant may
be issued for the search and seizure of personal property (a) subject of the offense; (b) stolen or
embezzled and other proceeds or fruits of the offense; or (c) used or intended to be used as the
means of committing an offense.
The RTC is mandated under the Constitution and Rules of Criminal Procedure to determine probable
cause. The court cannot abdicate its constitutional obligation by refusing to determine whether an
offense has been committed.[20] The absence of probable cause will cause the outright nullification
of the search warrant.[21]
For the RTC to determine whether the crime for infringement under R.A. No. 8293 as alleged in an
application is committed, the petitioner-applicant was burdened to prove that (a) respondents Jessie
Ching and Joseph Yu were the owners of copyrighted material; and (b) the copyrighted material was
being copied and distributed by the respondents. Thus, the ownership of a valid copyright is
essential.[22]
Ownership of copyrighted material is shown by proof of originality and copyrightability. By originality
is meant that the material was not copied, and evidences at least minimal creativity; that it was
independently created by the author and that it possesses at least same minimal degree of
creativity.[23] Copying is shown by proof of access to copyrighted material and substantial similarity
between the two works.[24] The applicant must thus demonstrate the existence and the validity of
his copyright because in the absence of copyright protection, even original creation may be freely
copied.[25]
By requesting the NBI to investigate and, if feasible, file an application for a search warrant for
infringement under R.A. No. 8293 against the respondents, the petitioner thereby authorized the
RTC (in resolving the application), to delve into and determine the validity of the copyright which he
claimed he had over the utility models. The petitioner cannot seek relief from the RTC based on his
claim that he was the copyright owner over the utility models and, at the same time, repudiate the
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
courts jurisdiction to ascertain the validity of his claim without running afoul to the doctrine of
estoppel.
To discharge his burden, the applicant may present the certificate of registration covering the work
or, in its absence, other evidence.[26] A copyright certificate provides prima facieevidence of
originality which is one element of copyright validity. It constitutes prima facie evidence of both
validity and ownership[27] and the validity of the facts stated in the certificate.[28]The presumption
of validity to a certificate of copyright registration merely orders the burden of proof. The applicant
should not ordinarily be forced, in the first instance, to prove all the multiple facts that underline the
validity of the copyright unless the respondent, effectively challenging them, shifts the burden of
doing so to the applicant.[29] Indeed, Section 218.2 of R.A. No. 8293 provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action
relates if the defendant does not put in issue the question whether copyright subsists in the work or
other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the
owner of the copyright if he claims to be the owner of the copyright and the defendant does not put
in issue the question of his ownership.
A certificate of registration creates no rebuttable presumption of copyright validity where other
evidence in the record casts doubt on the question. In such a case, validity will not be presumed.[30]
To discharge his burden of probable cause for the issuance of a search warrant for violation of R.A.
No. 8293, the petitioner-applicant submitted to the RTC Certificate of Copyright Registration Nos.
2001-197 and 2001-204 dated September 3, 2001 and September 4, 2001, respectively, issued by the
National Library covering work identified as Leaf Spring Eye Bushing for Automobile and Vehicle
Bearing Cushion both classified under Section 172.1(h) of R.A. No. 8293, to wit:
SEC. 172. Literary and Artistic Works. 172.1. Literary and artistic works, hereinafter referred to as
works, are original intellectual creations in the literary and artistic domain protected from the
moment of their creation and shall include in particular:
...
Page 11
(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as
an industrial design, and other works of applied art.
Related to the provision is Section 171.10, which provides that a work of applied art is an artistic
creation with utilitarian functions or incorporated in a useful article, whether made by hand or
produced on an industrial scale.
But, as gleaned from the specifications appended to the application for a copyright certificate filed
by the petitioner, the said Leaf Spring Eye Bushing for Automobile is merely a utility model described
as comprising a generally cylindrical body having a co-axial bore that is centrally located and
provided with a perpendicular flange on one of its ends and a cylindrical metal jacket surrounding
the peripheral walls of said body, with the bushing made of plastic that is either polyvinyl chloride or
polypropylene.[31] Likewise, the Vehicle Bearing Cushion is illustrated as a bearing cushion
comprising a generally semi-circular body having a central hole to secure a conventional bearing and
a plurality of ridges provided therefore, with said cushion bearing being made of the same plastic
materials.[32] Plainly, these are not literary or artistic works. They are not intellectual creations in
the literary and artistic domain, or works of applied art. They are certainly not ornamental designs or
one having decorative quality or value.
It bears stressing that the focus of copyright is the usefulness of the artistic design, and not its
marketability. The central inquiry is whether the article is a work of art.[33] Works for applied art
include all original pictorials, graphics, and sculptural works that are intended to be or have been
embodied in useful article regardless of factors such as mass production, commercial exploitation,
and the potential availability of design patent protection.[34]
As gleaned from the description of the models and their objectives, these articles are useful articles
which are defined as one having an intrinsic utilitarian function that is not merely to portray the
appearance of the article or to convey information. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and works of industrial
design are not.[35] A useful article may be copyrightable only if and only to the extent that such
design incorporates pictorial, graphic, or sculptural features that can be identified separately from,
and are capable of existing independently of the utilitarian aspects of the article.
We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293), that the
authors intellectual creation, regardless of whether it is a creation with utilitarian functions or
incorporated in a useful article produced on an industrial scale, is protected by copyright law.
However, the law refers to a work of applied art which is an artistic creation. It bears stressing that
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
there is no copyright protection for works of applied art or industrial design which have aesthetic or
artistic features that cannot be identified separately from the utilitarian aspects of the
article.[36] Functional components of useful articles, no matter how artistically designed, have
generally been denied copyright protection unless they are separable from the useful article.[37]
In this case, the petitioners models are not works of applied art, nor artistic works. They are utility
models, useful articles, albeit with no artistic design or value. Thus, the petitioner described the
utility model as follows:
LEAF SPRING EYE BUSHING FOR AUTOMOBILE
Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are made of hard
rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent
pressure would eventually wore (sic) out that would cause the wobbling of the leaf spring.
The primary object of this utility model, therefore, is to provide a leaf-spring eye bushing for
automobile that is made up of plastic.
Another object of this utility model is to provide a leaf-spring eye bushing for automobiles made of
polyvinyl chloride, an oil resistant soft texture plastic or polypropylene, a hard plastic, yet both
causes cushion to the leaf spring, yet strong enough to endure pressure brought about by the up and
down movement of said leaf spring.
Yet, an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has a
much longer life span than the rubber bushings.
Still an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has a
very simple construction and can be made using simple and ordinary molding equipment.
A further object of this utility model is to provide a leaf-spring eye bushing for automobile that is
supplied with a metal jacket to reinforce the plastic eye bushing when in engaged with the steel
material of the leaf spring.
These and other objects and advantages will come to view and be understood upon a reading of the
detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present utility
model;
Page 12
Figure 2 is a sectional view taken along line 2-2 of Fig. 1;
Figure 3 is a longitudinal sectional view of another embodiment of this utility model;
Figure 4 is a perspective view of a third embodiment; and
Figure 5 is a sectional view thereof.
Referring now to the several views of the drawings wherein like reference numerals designated same
parts throughout, there is shown a utility model for a leaf-spring eye bushing for automobile
generally designated as reference numeral 10.
Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a co-axial bore 12
centrally provided thereof.
As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a perpendicular flange 13
on one of its ends and a cylindrical metal jacket 14 surrounding the peripheral walls 15 of said body
11. When said leaf-spring bushing 10 is installed, the metal jacket 14 acts with the leaf-spring eye
(not shown), which is also made of steel or cast steel. In effect, the bushing 10 will not be directly in
contact with steel, but rather the metal jacket, making the life of the bushing 10 longer than those
without the metal jacket.
In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride, an oil resistant
soft texture plastic or a hard polypropylene plastic, both are capable to endure the pressure applied
thereto, and, in effect, would lengthen the life and replacement therefor.
Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing 10 is
insertably provided with a steel tube 17 to reinforce the inner portion thereof. This steel tube 17
accommodates or engages with the leaf-spring bolt (not shown) connecting the leaf spring and the
automobiles chassis.
Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is elongated and
cylindrical as to its construction. Said another embodiment is also made of polypropylene or
polyvinyl chloride plastic material. The steel tube 17 and metal jacket 14 may also be applied to this
embodiment as an option thereof.[38]
VEHICLE BEARING CUSHION
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Known bearing cushions inserted to bearing housings for vehicle propeller shafts are made of hard
rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent
pressure would eventually be worn out that would cause the wobbling of the center bearing.
The primary object of this utility model therefore is to provide a vehicle-bearing cushion that is made
up of plastic.
Another object of this utility model is to provide a vehicle bearing cushion made of polyvinyl
chloride, an oil resistant soft texture plastic material which causes cushion to the propellers center
bearing, yet strong enough to endure pressure brought about by the vibration of the center bearing.
Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a much longer life
span than rubber bushings.
Still an object of this utility model is to provide a vehicle bearing cushion that has a very simple
construction and can be made using simple and ordinary molding equipment.
These and other objects and advantages will come to view and be understood upon a reading of the
detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is a perspective view of the present utility model for a vehicle-bearing cushion; and
Figure 2 is a sectional view thereof.
Referring now to the several views of the drawing, wherein like reference numeral designate same
parts throughout, there is shown a utility model for a vehicle-bearing cushion generally designated
as reference numeral 10.
Said bearing cushion 10 comprises of a generally semi-circular body 11, having central hole 12 to
house a conventional bearing (not shown). As shown in Figure 1, said body 11 is provided with a
plurality of ridges 13 which serves reinforcing means thereof.
The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and chemical resistant
plastic material which is strong, durable and capable of enduring severe pressure from the center
bearing brought about by the rotating movement of the propeller shaft of the vehicle.[39]
A utility model is a technical solution to a problem in any field of human activity which is new and
industrially applicable. It may be, or may relate to, a product, or process, or an improvement of any
of the aforesaid.[40] Essentially, a utility model refers to an invention in the mechanical field. This is
Page 13
the reason why its object is sometimes described as a device or useful object.[41] A utility model
varies from an invention, for which a patent for invention is, likewise, available, on at least three
aspects: first, the requisite of inventive step[42] in a patent for invention is not required; second, the
maximum term of protection is only seven years[43] compared to a patent which is twenty
years,[44] both reckoned from the date of the application; and third, the provisions on utility model
dispense with its substantive examination[45] and prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original structural design of the
components they seek to replace, the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are not
ornamental. They lack the decorative quality or value that must characterize authentic works of
applied art. They are not even artistic creations with incidental utilitarian functions or works
incorporated in a useful article. In actuality, the personal properties described in the search warrants
are mechanical works, the principal function of which is utility sansany aesthetic embellishment.
Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as included in the
catch-all phrase other literary, scholarly, scientific and artistic works in Section 172.1(a) of R.A. No.
8293. Applying the principle of ejusdem generis which states that where a statute describes things of
a particular class or kind accompanied by words of a generic character, the generic word will usually
be limited to things of a similar nature with those particularly enumerated, unless there be
something in the context of the state which would repel such inference,[46] the Leaf Spring Eye
Bushing and Vehicle Bearing Cushion are not copyrightable, being not of the same kind and nature as
the works enumerated in Section 172 of R.A. No. 8293.
No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of the
certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle
Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon[47] and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated,[48] the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant,
the rights are only such as the statute confers, and may be obtained and enjoyed only with respect
to the subjects and by the persons, and on terms and conditions specified in the statute. Accordingly,
it can cover only the works falling within the statutory enumeration or description.
That the works of the petitioner may be the proper subject of a patent does not entitle him to the
issuance of a search warrant for violation of copyright laws. In Kho v. Court of Appeals[49] and Pearl
& Dean (Phil.), Incorporated v. Shoemart, Incorporated,[50] the Court ruled that these copyright and
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
patent rights are completely distinct and separate from one another, and the protection afforded by
one cannot be used interchangeably to cover items or works that exclusively pertain to the others.
The Court expounded further, thus:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an inventive step and is industrially
applicable.
The petitioner cannot find solace in the ruling of the United States Supreme Court in Mazer v.
Stein[51] to buttress his petition. In that case, the artifacts involved in that case were statuettes of
dancing male and female figures made of semi-vitreous china. The controversy therein centered on
the fact that although copyrighted as works of art, the statuettes were intended for use and used as
bases for table lamps, with electric wiring, sockets and lampshades attached. The issue raised was
whether the statuettes were copyright protected in the United States, considering that the copyright
applicant intended primarily to use them as lamp bases to be made and sold in quantity, and carried
such intentions into effect. At that time, the Copyright Office interpreted the 1909 Copyright Act to
cover works of artistic craftsmanship insofar as their form, but not the utilitarian aspects, were
concerned. After reviewing the history and intent of the US Congress on its copyright legislation and
the interpretation of the copyright office, the US Supreme Court declared that the statuettes were
held copyrightable works of art or models or designs for works of art. The High Court ruled that:
Works of art (Class G) (a) In General. This class includes works of artistic craftsmanship, in so far as
their form but not their mechanical or utilitarian aspects are concerned, such as artistic jewelry,
enamels, glassware, and tapestries, as well as all works belonging to the fine arts, such as paintings,
drawings and sculpture.
So we have a contemporaneous and long-continued construction of the statutes by the agency
charged to administer them that would allow the registration of such a statuette as is in question
here.[52]
Page 14
The High Court went on to state that [t]he dichotomy of protection for the aesthetic is not beauty
and utility but art for the copyright and the invention of original and ornamental design for design
patents. Significantly, the copyright office promulgated a rule to implement Mazer to wit:
[I]f the sole intrinsic function of an article is its utility, the fact that the work is unique and
attractively shaped will not qualify it as a work of art.
ROMERO, J.:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming the
decision of the trial court, petitioner Pascual Godines seeks to reverse the adverse decision of the
Court a quo that he was liable for infringement of patent and unfair competition. The dispositive
portion of the assailed decision is hereby quoted to wit:

In this case, the bushing and cushion are not works of art. They are, as the petitioner himself WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from is
admitted, utility models which may be the subject of a patent. hereby AFFIRMED, with costs against appellant. 1

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit. The The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 70411 are AFFIRMED. to one Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power
Search Warrant Nos. 01-2401 and 01-2402 issued on October 15, 2001 are ANNULLED AND SET tiller, the main components of which are the following: "(1) a vacuumatic house float; (2) a harrow
ASIDE. Costs against the petitioner. with adjustable operating handle; (3) a pair of paddy wheels; (4) a protective water covering for the
engine main drive; (5) a transmission case; (6) an operating handle; (7) an engine foundation on the
SO ORDERED. top midportion of the vacuumatic housing float to which the main engine drive is detachedly
installed; (8) a frontal frame extension above the quarter circularly shaped water covering hold
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
(sic) in place the transmission case; (9) a V-belt connection to the engine main drive with
transmission gear through the pulley, and (10) an idler pulley installed on the engine
foundation." 2 The patented hand tractor works in the following manner: "the engine drives the
transmission gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the
Republic of the Philippines transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The V-belt drives
SUPREME COURT the pulley attached to the transmission gear which in turn drives the shaft where the paddy wheels
Manila are attached. The operator handles the hand tractor through a handle which is inclined upwardly and
supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped
THIRD DIVISION
end." 3

The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private
G.R. No. 97343 September 13, 1993 respondent, from Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment
executed by the latter in its favor. On October 31, 1979, SV-Agro Industries caused the publication of
PASCUAL GODINES, petitioner, the patent in Bulletin Today, a newspaper of general circulation.
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-AGRO ENTERPRISES, In accordance with the patent, private respondent manufactured and sold the patented power tillers
INC.,respondents. with the patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50%
in sales in its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers
Jesus S. Anonat for petitioner. similar to those patented by private respondent were being manufactured and sold by petitioner
herein. Consequently, private respondent notified Pascual Godines about the existing patent and
Arturo M. Alinio for private respondent.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 15
LAW ON INTELLECTUAL PROPERTY SET CASES
demanded that the latter stop selling and manufacturing similar power tillers. Upon petitioner's
failure to comply with the demand, SV-Agro Industries filed before the Regional Trial Court a
complaint for infringement of patent and unfair competition.
After trial, the court held Pascual Godines liable for infringement of patent and unfair competition.
The dispositive portion of the decision reads as follows:
WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the plaintiff SV-Agro
Industries Enterprises, Inc., and against defendant Pascual Godines:
1. Declaring the writ of preliminary injunction issued by this Court against defendant as permanent;
2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty Thousand Pesos (P50,000.00)
as damages to its business reputation and goodwill, plus the further sum of Eighty Thousand Pesos
(P80,000.00) for unrealized profits during the period defendant was manufacturing and selling
copied or imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos (P8,000.00)
as reimbursement of attorney's fees and other expenses of litigation; and to pay the costs of the suit.
SO ORDERED. 4
The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial
and appellate courts, to wit: that he was not engaged in the manufacture and sale of the power
tillers as he made them only upon the special order of his customers who gave their own
specifications; hence, he could not be liable for infringement of patent and unfair competition; and
that those made by him were different from those being manufactured and sold by private
respondent.
We find no merit in his arguments. The question of whether petitioner was manufacturing and
selling power tillers is a question of fact better addressed to the lower courts. In dismissing the first
argument of petitioner herein, the Court of Appeals quoted the findings of the court, to wit:
It is the contention of defendant that he did not manufacture or make imitations or copies of
plaintiff's turtle power tiller as what he merely did was to fabricate his floating power tiller upon
specifications and designs of those who ordered them. However, this contention appears untenable
in the light of the following circumstances: 1) he admits in his Answer that he has been
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
manufacturing power tillers or hand tractors, selling and distributing them long before plaintiff
started selling its turtle power tiller in Zamboanga del Sur and Misamis Occidental, meaning that
defendant is principally a manufacturer of power tillers, not upon specification and design of buyers,
but upon his own specification and design; 2) it would be unbelievable that defendant would
fabricate power tillers similar to the turtle power tillers of plaintiff upon specifications of buyers
without requiring a job order where the specification and designs of those ordered are specified. No
document was (sic) ever been presented showing such job orders, and it is rather unusual for
defendant to manufacture something without the specification and designs, considering that he is an
engineer by profession and proprietor of the Ozamis Engineering shop. On the other hand, it is also
highly unusual for buyers to order the fabrication of a power tiller or hand tractor and allow
defendant to manufacture them merely based on their verbal instructions. This is contrary to the
usual business and manufacturing practice. This is not only time consuming, but costly because it
involves a trial and error method, repeat jobs and material wastage. Defendant judicially admitted
two (2) units of the turtle power tiller sold by him to Policarpio Berondo. 5
Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the
Supreme Court in cases brought to it from the Court of Appeals in a petition for certiorari under Rule
45 of the Rules of Court is limited to the review of errors of law, and that said appellate court's
findings of fact are conclusive upon this Court." 6
The fact that petitioner herein manufactured and sold power tillers without patentee's authority has
been established by the courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon the patent of private respondent?
Tests have been established to determine infringement. These are (a) literal infringement; and (b)
the doctrine of equivalents. 7 In using literal infringement as a test, ". . . resort must be had, in the
first instance, to the words of the claim. If accused matter clearly falls within the claim, infringement
is made out and that is the end of it." 8 To determine whether the particular item falls within the
literal meaning of the patent claims, the court must juxtapose the claims of the patent and the
accused product within the overall context of the claims and specifications, to determine whether
there is exact identity of all material elements. 9
The trial court made the following observation:
Samples of the defendant's floating power tiller have been produced and inspected by the court and
compared with that of the turtle power tiller of the plaintiff (see Exhibits H to H-28). In appearance
and form, both the floating power tillers of the defendant and the turtle power tiller of the plaintiff
Page 16
are virtually the same. Defendant admitted to the Court that two (2) of the power inspected on
March 12, 1984, were manufactured and sold by him (see TSN, March 12, 1984, p. 7). The three
power tillers were placed alongside with each other. At the center was the turtle power tiller of
plaintiff, and on both sides thereof were the floating power tillers of defendant (Exhibits H to H-2).
Witness Rodrigo took photographs of the same power tillers (front, side, top and back views for
purposes of comparison (see Exhibits H-4 to H-28). Viewed from any perspective or angle, the power
tiller of the defendant is identical and similar to that of the turtle power tiller of plaintiff in form,
configuration, design and appearance. The parts or components thereof are virtually the same. Both
have the circularly-shaped vacuumatic housing float, a paddy in front, a protective water covering, a
transmission box housing the transmission gears, a handle which is V-shaped and inclined upwardly,
attached to the side of the vacuumatic housing float and supported by the upstanding G.I. pipes and
an engine base at the top midportion of the vacuumatic housing float to which the engine drive may
be attached. In operation, the floating power tiller of the defendant operates also in similar manner
as the turtle power tiller of plaintiff. This was admitted by the defendant himself in court that they
are operating on the same principles. (TSN, August 19, 1987, p. 13) 10
Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The
patent issued by the Patent Office referred to a "farm implement but more particularly to a turtle
hand tractor having a vacuumatic housing float on which the engine drive is held in place, the
operating handle, the harrow housing with its operating handle and the paddy wheel protective
covering." 11 It appears from the foregoing observation of the trial court that these claims of the
patent and the features of the patented utility model were copied by petitioner. We are compelled
to arrive at no other conclusion but that there was infringement.
Petitioner's argument that his power tillers were different from private respondent's is that of a
drowning man clutching at straws.
Recognizing that the logical fallback position of one in the place of defendant is to aver that his
product is different from the patented one, courts have adopted the doctrine of equivalents which
recognizes that minor modifications in a patented invention are sufficient to put the item beyond the
scope of literal infringement. 12 Thus, according to this doctrine, "(a)n infringement also occurs
when a device appropriates a prior invention by incorporating its innovative concept and, albeit with
some modification and change, performs substantially the same function in substantially the same
way to achieve substantially the same result." 13 The reason for the doctrine of equivalents is that to
permit the imitation of a patented invention which does not copy any literal detail would be to
convert the protection of the patent grant into a hollow and useless thing. Such imitation would
leave room for indeed encourage the unscrupulous copyist to make unimportant and
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
insubstantial changes and substitutions in the patent which, though adding nothing, would be
enough to take the copied matter outside the claim, and hence outside the reach of the law. 14
In this case, the trial court observed:
Defendant's witness Eduardo Caete, employed for 11 years as welder of the Ozamis Engineering,
and therefore actually involved in the making of the floating power tillers of defendant tried to
explain the difference between the floating power tillers made by the defendant. But a careful
examination between the two power tillers will show that they will operate on the same
fundamental principles. And, according to establish jurisprudence, in infringement of patent,
similarities or differences are to be determined, not by the names of things, but in the light of what
elements do, and substantial, rather than technical, identity in the test. More specifically, it is
necessary and sufficient to constitute equivalency that the same function can be performed in
substantially the same way or manner, or by the same or substantially the same, principle or mode
of operation; but where these tests are satisfied, mere differences of form or name are immaterial. .
. . 15
It also stated:
To establish an infringement, it is not essential to show that the defendant adopted the device or
process in every particular; Proof of an adoption of the substance of the thing will be sufficient. "In
one sense," said Justice Brown, "it may be said that no device can be adjudged an infringement that
does not substantially correspond with the patent. But another construction, which would limit
these words to exact mechanism described in the patent, would be so obviously unjust that no court
could be expected to adopt it. . . .
The law will protect a patentee against imitation of his patent by other forms and proportions. If two
devices do the same work in substantially the same way, and accomplish substantially the same
result, they are the same, even though they differ in name, form, or shape. 16
We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No.
165, as amended, providing, inter alia:
Sec. 37. Right of Patentees. A patentee shall have the exclusive right to make, use and sell the
patented machine, article or product, and to use the patented process for the purpose of industry or
commerce, throughout the territory of the Philippines for the terms of the patent; and such making,
using, or selling by any person without the authorization of the Patentee constitutes infringement of
the patent. (Emphasis ours)
Page 17
As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. Hermenegildo V. Lopez for petitioner.
166, as amended, provides, inter alia: Isaac S. Puno, Jr. for respondent Felipe Tarroza.
Office of the Solicitor General for respondent Director of Patents.
Sec. 29. Unfair competition, rights and remedies. . . .
FERNANDO, J.:
xxx xxx xxx
With the statutory recognition of patentability based on the "practical utility" concept 1 thus
In particular, and without in any way limiting the scope of unfair competition, the following shall be rendering clear that a patent is not solely to be earned under the "flash of genius" theory, 2 this
deemed guilty of unfair competition: petition for the cancellation of a utility model patent for a Side Tilting-Dumping Wheelbarrow
granted to respondent Felipe A. Tarroza was correctly denied by respondent Director of Patents.
(a) Any person, who in selling his goods shall give them the general appearance of goods of another
Petitioner Gerardo Samson, Jr., himself the grantee of a utility model patent for a Dumping and
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
Detachable Wheelbarrow, lacked any legal justification for such a plea. So respondent Director ruled.
which they are contained, or the devices or words thereon, or in any other feature of their
Not satisfied, petitioner elevated the matter to us for review. There is no reason why a different
appearance, which would be likely to influence purchasers that the goods offered are those of a
outcome is to be expected. His appeal must fail.
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. . Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above type of
.. wheelbarrow which, as noted in the decision, "consists of a wheeled carriage base and an upper
pivoted and detachable carrying tray. The carriage base is comprised of a wheel and two equal
xxx xxx xxx
lengths of continuous pipes bent to provide wheel forks at the front and at the rear to support the
Considering the foregoing, we find no reversible error in the decision of the Court of Appeals back portion of the tray, with the ends of the pipes being adopted as the carrying handles for the
affirming with modification the decision of the trial court. wheelbarrow. The two pipes thus bent are joined together by cross braces in the front and at the
rear. The tray is removably pivoted at its front end through hook catches at its bottom corners, to
WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this the forward cross brace, and its rear end rests solidly over the rear portion of the legs. To dump the
petition DENIED for lack of merit. load the user pulls a dumping handle at the back end to cause the tray to pivot upwardly about the
front brace to a position of about 45 degrees with the horizontal and with its front end panel being
Republic of the Philippines
supported by the wheel." 3
SUPREME COURT
Manila Respondent's Side Tilting-Dumping Wheelbarrow, on the other hand, consists "of a wheeled carriage
made of tubular frames essentially as in petitioner's. Welded transversely to the parallel frames are
EN BANC
two brackets provided with holes designed to complement similar holes on brackets provided on the
G.R. No. L-20354 July 28, 1969 tray. The brackets on the tray are so placed that with the provision of a bolt through the openings
the tray may be tilted approximately 170 degrees to the left or to the right of the wheelbarrow with
GERARDO SAMSON, JR., petitioner, its axis running longitudinally through the center of the bottom face of the tray." 4
vs.
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents. There is an express recognition under the Patent Law, as already noted, that any new model of
implements or tools or of any industrial product even if not possessed of the quality of invention but
which is of "practical utility" is entitled to a "patent for a utility model." From the above description

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 18

LAW ON INTELLECTUAL PROPERTY SET CASES
of the side tilting-dumping wheelbarrow, the product of respondent's ingenuity and industry, it is
quite apparent that it has a place in the market and possesses what the statute refers to as "practical
utility." The requirement explicitly set forth in the statute has thus been met. Respondent Tarroza is
entitled to its benefits. The grant to him of a patent for a utility model is in accordance with law.
There was no reason, therefore, for its cancellation. So it was held by the Director of Patents. That
decision as already noted should stand.
Moreover, in appeals from a decision of the Director of Patents, only questions of law may be
reviewed, findings of facts being conclusive unless unsupported by substantial evidence. So it was
decided in Che v. Philippines Patent Office. 5 As was emphasized in Bagano v. Director of Patents: "It
is almost trite to state here that in cases of the nature as the one at bar, only questions of law are to
be raised in order that this Court could exercise its appellate jurisdiction and review the
decision." 6 The above well-settled doctrines suffice to demonstrate that this petition for review, as
noted at the outset, is without merit. It was not error then, to reiterate, for the respondent Director
of Patents to deny the cancellation of the utility patent granted respondent Tarroza. To borrow from
the language of the Che opinion: "Even on the sole issue alone, the petition for review must fail."
Another alleged error was imputed to respondent Director of Patents. It would find fault with his
failing to hold that respondent Tarroza "was not the true and actual" author of the mechanical
contrivance for which he was granted a utility model patent. This is what the appealed decision has
to say on this point: "Petitioner's theory with respect to the second ground for cancellation, to wit:
that respondent is not the true and actual inventor or designer of the utility model is premised on
the fact that because of the proximity of the two, the petitioner and the respondent being brothers-
in-law, and living in adjoining residential lots, the latter has had ample time and opportunity to
observe and copy the former's wheelbarrow. But the testimonial evidence thus presented is not
clear, satisfactory, and free from doubt, in the face of allegations to the contrary by the
respondent." 7 The futility of such an assignment of error is thus apparent. Again, it is factual in
character. It is not for us, as noted above, to review or revise the same, there being no showing of a
lack of substantial evidence in support thereof.
WHEREFORE, the decision of April 13, 1962 of respondent Director of Patents denying the petition
for the cancellation of Utility Model Letters Patent No. 62 in favor of respondent Tarroza is hereby
affirmed. With costs against petitioner.
FIRST DIVISION
[G.R. Nos. 160054-55. July 21, 2004]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
MANOLO P. SAMSON, petitioner, vs. HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge,
Regional Trial Court of Quezon City, Branch 90, PEOPLE OF THE PHILIPPINES and CATERPILLAR,
INC., respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for certiorari is the March 26, 2003 Order[1] of the Regional Trial Court of
Quezon City, Branch 90, which denied petitioners (1) motion to quash the information; and (2)
motion for reconsideration of the August 9, 2002 Order denying his motion to suspend the
arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44. Petitioner also
questioned its August 5, 2003 Order[2] which denied his motion for reconsideration.
The undisputed facts show that on March 7, 2002, two informations for unfair competition under
Section 168.3 (a), in relation to Section 170, of the Intellectual Property Code (Republic Act No.
8293), similarly worded save for the dates and places of commission, were filed against petitioner
Manolo P. Samson, the registered owner of ITTI Shoes. The accusatory portion of said informations
read:
That on or about the first week of November 1999 and sometime prior or subsequent thereto, in
Quezon City, Philippines, and within the jurisdiction of this Honorable Court, above-named accused,
owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation located at Robinsons
Galleria, EDSA corner Ortigas Avenue, Quezon City, did then and there willfully, unlawfully and
feloniously distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments,
clothing, bags, accessories and paraphernalia which are closely identical to and/or colorable
imitations of the authentic Caterpillar products and likewise using trademarks, symbols and/or
designs as would cause confusion, mistake or deception on the part of the buying public to the
damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following
internationally: CATERPILLAR, CAT, CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES
and TRACK-TYPE TRACTOR & DESIGN.
CONTRARY TO LAW.[3]
On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings in view of
the existence of an alleged prejudicial question involved in Civil Case No. Q-00-41446 for unfair
competition pending with the same branch; and also in view of the pendency of a petition for review
filed with the Secretary of Justice assailing the Chief State Prosecutors resolution finding probable
Page 19
cause to charge petitioner with unfair competition. In an Order dated August 9, 2002, the trial court
denied the motion to suspend arraignment and other proceedings.
On August 20, 2002, petitioner filed a twin motion to quash the informations and motion for
reconsideration of the order denying motion to suspend, this time challenging the jurisdiction of the
trial court over the offense charged. He contended that since under Section 170 of R.A. No. 8293, the
penalty5 of imprisonment for unfair competition does not exceed six years, the offense is cognizable
by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691.
In its assailed March 26, 2003 Order, the trial court denied petitioners twin motions.6 A motion for
reconsideration thereof was likewise denied on August 5, 2003.
Hence, the instant petition alleging that respondent Judge gravely abused its discretion in issuing the
assailed orders.
The issues posed for resolution are (1) Which court has jurisdiction over criminal and civil cases for
violation of intellectual property rights? (2) Did the respondent Judge gravely abuse his discretion in
refusing to suspend the arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44
on the ground of (a) the existence of a prejudicial question; and (b) the pendency of a petition for
review with the Secretary of Justice on the finding of probable cause for unfair competition?
Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for
infringement of registered marks, unfair competition, false designation of origin and false description
or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to
Two Hundred Thousand Pesos, to wit:
SEC. 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand
pesos (P50,000.00) to Two hundred thousand pesos (P200,000.00), shall be imposed on any person
who is found guilty of committing any of the acts mentioned in Section 155 [Infringement], Section
168 [Unfair Competition] and Section 169.1 [False Designation of Origin and False Description or
Representation].
Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under
Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with
appropriate jurisdiction under existing laws, thus
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
SEC. 163. Jurisdiction of Court. All actions under Sections 150, 155, 164 and 166 to 169 shall be
brought before the proper courts with appropriate jurisdiction under existing laws. (Emphasis
supplied)
The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The Trademark
Law) which provides that jurisdiction over cases for infringement of registered marks, unfair
competition, false designation of origin and false description or representation, is lodged with the
Court of First Instance (now Regional Trial Court)
SEC. 27. Jurisdiction of Court of First Instance. All actions under this Chapter [V Infringement] and
Chapters VI [Unfair Competition] and VII [False Designation of Origin and False Description or
Representation], hereof shall be brought before the Court of First Instance.
We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No.
8293. The repealing clause of R.A. No. 8293, reads
SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic
Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised
Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are
hereby repealed. (Emphasis added)
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it
would not have used the phrases parts of Acts and inconsistent herewith; and it would have simply
stated Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and
189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as
amended are hereby repealed. It would have removed all doubts that said specific laws had been
rendered without force and effect. The use of the phrases parts of Acts and inconsistent herewith
only means that the repeal pertains only to provisions which are repugnant or not susceptible of
harmonization with R.A. No. 8293.7 Section 27 of R.A. No. 166, however, is consistent and in
harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over
violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly
stated so under Section 163 thereof.
Moreover, the settled rule in statutory construction is that in case of conflict between a general law
and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial
Courts must prevail over that granted by a general law to Municipal Trial Courts.8
Page 20
In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws9 conferring jurisdiction over
violations of intellectual property rights to the Regional Trial Court. They should therefore prevail
over R.A. No. 7691, which is a general law.10 Hence, jurisdiction over the instant criminal case for
unfair competition is properly lodged with the Regional Trial Court even if the penalty therefor is
imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to
P200,000.00.
In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual
property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002
designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court
further issued a Resolution consolidating jurisdiction to hear and decide Intellectual Property Code
and Securities and Exchange Commission cases in specific Regional Trial Courts designated as Special
Commercial Courts.
The case of Mirpuri v. Court of Appeals,11 invoked by petitioner finds no application in the present
case. Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was repealed by R.A. No. 8293.
Neither did we make a categorical ruling therein that jurisdiction over cases for violation of
intellectual property rights is lodged with the Municipal Trial Courts. The passing remark
in Mirpuri on the repeal of R.A. No. 166 by R.A. No. 8293 was merely a backgrounder to the
enactment of the present Intellectual Property Code and cannot thus be construed as a jurisdictional
pronouncement in cases for violation of intellectual property rights.
Anent the second issue, petitioner failed to substantiate his claim that there was a prejudicial
question. In his petition, he prayed for the reversal of the March 26, 2003 order which sustained the
denial of his motion to suspend arraignment and other proceedings in Criminal Case Nos. Q-02-
108043-44. For unknown reasons, however, he made no discussion in support of said prayer in his
petition and reply to comment. Neither did he attach a copy of the complaint in Civil Case No. Q-00-
41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the criminal action can, according to law,
proceed independently of each other.12 Under Rule 111, Section 3 of the Revised Rules on Criminal
Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall proceed independently of the criminal
action and shall require only a preponderance of evidence.
In the case at bar, the common element in the acts constituting unfair competition under Section
168 of R.A. No. 8293 is fraud.13 Pursuant to Article 33 of the Civil Code, in cases of
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct
from the criminal action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446,
which as admitted14 by private respondent also relate to unfair competition, is an independent civil
action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will
justify the suspension of the criminal cases at bar.
Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides
SEC. 11. Suspension of arraignment. Upon motion by the proper party, the arraignment shall be
suspended in the following cases
xxxxxxxxx
(c) A petition for review of the resolution of the prosecutor is pending at either the Department of
Justice, or the Office of the President; Provided, that the period of suspension shall not exceed sixty
(60) days counted from the filing of the petition with the reviewing office.
While the pendency of a petition for review is a ground for suspension of the arraignment, the
aforecited provision limits the deferment of the arraignment to a period of 60 days reckoned from
the filing of the petition with the reviewing office. It follows, therefore, that after the expiration of
said period, the trial court is bound to arraign the accused or to deny the motion to defer
arraignment.
In the instant case, petitioner failed to establish that respondent Judge abused his discretion in
denying his motion to suspend. His pleadings and annexes submitted before the Court do not show
the date of filing of the petition for review with the Secretary of Justice.15 Moreover, the Order
dated August 9, 2002 denying his motion to suspend was not appended to the petition. He thus
failed to discharge the burden of proving that he was entitled to a suspension of his arraignment and
that the questioned orders are contrary to Section 11 (c), Rule 116 of the Revised Rules on Criminal
Procedure. Indeed, the age-old but familiar rule is that he who alleges must prove his allegations.
In sum, the dismissal of the petition is proper considering that petitioner has not established that the
trial court committed grave abuse of discretion. So also, his failure to attach documents relevant to
his allegations warrants the dismissal of the petition, pursuant to Section 3, Rule 46 of the Rules of
Civil Procedure, which states:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. The petition shall
contain the full names and actual addresses of all the petitioners and respondents, a concise
Page 21
statement of the matters involved, the factual background of the case, and the grounds relied upon
for the relief prayed for.
It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the
respondent with the original copy intended for the court indicated as such by the petitioner, and
shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment,
order, resolution, or ruling subject thereof, such material portions of the record as are referred to
therein, and other documents relevant or pertinent thereto.
xxxxxxxxx
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient
ground for the dismissal of the petition. (Emphasis added)
WHEREFORE, in view of all the foregoing, the petition is DISMISSED.
SO ORDERED.
THIRD DIVISION
[G.R. No. 120900. July 20, 2000]
CANON KABUSHIKI KAISHA, petitioner, vs. COURT OF APPEALS and NSR RUBBER
CORPORATION, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a petition for review that seeks to set aside the Decision[1] dated February 21, 1995 of
the Court of Appeals in CA-GR SP No. 30203, entitled "Canon Kabushiki Kaisha vs. NSR Rubber
Corporation" and its Resolution dated June 27, 1995 denying the motion for reconsideration of
herein petitioner Canon Kabushiki Kaisha (petitioner).
On January 15, 1985, private respondent NSR Rubber Corporation (private respondent) filed an
application for registration of the mark CANON for sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). A Verified Notice of Opposition was filed by petitioner, a foreign
corporation duly organized and existing under the laws of Japan, alleging that it will be damaged by
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
the registration of the trademark CANON in the name of private respondent. The case was docketed
as Inter Partes Case No. 3043.
Petitioner moved to declare private respondent in default for its failure to file its answer within the
prescribed period. The BPTTT then declared private respondent in default and allowed petitioner to
present its evidence ex-parte.
Based on the records, the evidence presented by petitioner consisted of its certificates of
registration for the mark CANON in various countries covering goods belonging to class 2 (paints,
chemical products, toner, and dye stuff). Petitioner also submitted in evidence its Philippine
Trademark Registration No. 39398, showing its ownership over the trademark CANON also under
class 2.
On November 10, 1992, the BPTTT issued its decision dismissing the opposition of petitioner and
giving due course to private respondents application for the registration of the trademark CANON.
On February 16, 1993, petitioner appealed the decision of the BPTTT with public respondent Court of
Appeals that eventually affirmed the decision of BPTTT. Hence, this petition for review.
Petitioner anchors this instant petition on these grounds:
A) PETITIONER IS ENTITLED TO EXCLUSIVE USE OF THE MARK CANON BECAUSE IT IS ITS TRADEMARK
AND IS USED ALSO FOR FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT TO REGISTER CANON FOR FOOTWEAR IS TO PREVENT
PETITIONER FROM USING CANON FOR VARIOUS KINDS OF FOOTWEAR, WHEN IN FACT, PETITIONER
HAS EARLIER USED SAID MARK FOR SAID GOODS.
C) PETITIONER IS ALSO ENTITLED TO THE RIGHT TO EXCLUSIVELY USE CANON TO PREVENT
CONFUSION OF BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO THE EXCLUSIVE USE OF CANON BECAUSE IT FORMS PART OF ITS
CORPORATE NAME, PROTECTED BY THE PARIS CONVENTION.[2]
The BPTTT and the Court of Appeals share the opinion that the trademark "CANON" as used by
petitioner for its paints, chemical products, toner, and dyestuff, can be used by private respondent
for its sandals because the products of these two parties are dissimilar. Petitioner protests the
appropriation of the mark CANON by private respondent on the ground that petitioner has used and
continues to use the trademark CANON on its wide range of goods worldwide. Allegedly, the
Page 22
corporate name or tradename of petitioner is also used as its trademark on diverse goods including
footwear and other related products like shoe polisher and polishing agents. To lend credence to its
claim, petitioner points out that it has branched out in its business based on the various goods
carrying its trademark CANON[3], including footwear which petitioner contends covers sandals, the
goods for which private respondent sought to register the mark CANON. For petitioner, the fact
alone that its trademark CANON is carried by its other products like footwear, shoe polisher and
polishing agents should have precluded the BPTTT from giving due course to the application of
private respondent.
We find the arguments of petitioner to be unmeritorious. Ordinarily, the ownership of a trademark
or tradename is a property right that the owner is entitled to protect[4] as mandated by the
Trademark Law.[5] However, 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.[6]
A review of the records shows that with the order of the BPTTT declaring private respondent in
default for failure to file its answer, petitioner had every opportunity to present ex-parte all of its
evidence to prove that its certificates of registration for the trademark CANON cover footwear. The
certificates of registration for the trademark CANON in other countries and in the Philippines as
presented by petitioner, clearly showed that said certificates of registration cover goods belonging to
class 2 (paints, chemical products, toner, dyestuff). On this basis, the BPTTT correctly ruled that since
the certificate of registration of petitioner for the trademark CANON covers class 2 (paints, chemical
products, toner, dyestuff), private respondent can use the trademark CANON for its goods classified
as class 25 (sandals). Clearly, there is a world of difference between the paints, chemical products,
toner, and dyestuff of petitioner and the sandals of private respondent.
Petitioner counters that notwithstanding the dissimilarity of the products of the parties, the
trademark owner is entitled to protection when the use of by the junior user "forestalls the normal
expansion of his business".[7] Petitioners opposition to the registration of its trademark CANON by
private respondent rests upon petitioners insistence that it would be precluded from using the mark
CANON for various kinds of footwear, when in fact it has earlier used said mark for said goods.
Stretching this argument, petitioner claims that it is possible that the public could presume that
petitioner would also produce a wide variety of footwear considering the diversity of its products
marketed worldwide.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
We do not agree. Even in this instant petition, except for its bare assertions, petitioner failed to
attach evidence that would convince this Court that petitioner has also embarked in the production
of footwear products. We quote with approval the observation of the Court of Appeals that:
"The herein petitioner has not made known that it intends to venture into the business of producing
sandals. This is clearly shown in its Trademark Principal Register (Exhibit "U") where the products of
the said petitioner had been clearly and specifically described as "Chemical products, dyestuffs,
pigments, toner developing preparation, shoe polisher, polishing agent". It would be taxing ones
credibility to aver at this point that the production of sandals could be considered as a possible
"natural or normal expansion" of its business operation".[8]
In Faberge, Incorporated vs. Intermediate Appellate Court,[9] the Director of patents allowed the
junior user to use the trademark of the senior user on the ground that the briefs manufactured by
the junior user, the product for which the trademark BRUTE was sought to be registered, was
unrelated and non-competing with the products of the senior user consisting of after shave lotion,
shaving cream, deodorant, talcum powder, and toilet soap. The senior user vehemently objected and
claimed that it was expanding its trademark to briefs and argued that permitting the junior user to
register the same trademark would allow the latter to invade the senior users exclusive domain. In
sustaining the Director of Patents, this Court said that since "(the senior user) has not ventured in
the production of briefs, an item which is not listed in its certificate of registration, (the senior user),
cannot and should not be allowed to feign that (the junior user) had invaded (the senior users)
exclusive domain."[10] We reiterated the principle that the certificate of registration confers upon
the trademark owner the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to the conditions and limitations stated therein.[11] Thus, the exclusive right of
petitioner in this case to use the trademark CANON is limited to the products covered by its
certificate of registration.
Petitioner further argues that the alleged diversity of its products all over the world makes it
plausible that the public might be misled into thinking that there is some supposed connection
between private respondents goods and petitioner. Petitioner is apprehensive that there could be
confusion as to the origin of the goods, as well as confusion of business, if private respondent is
allowed to register the mark CANON. In such a case, petitioner would allegedly be immensely
prejudiced if private respondent would be permitted to take "a free ride on, and reap the advantages
of, the goodwill and reputation of petitioner Canon".[12] In support of the foregoing arguments,
petitioner invokes the rulings in Sta. Ana vs. Maliwat[13], Ang vs. Teodoro[14] and Converse Rubber
Corporation vs. Universal Rubber Products, Inc.[15].
Page 23
The likelihood of confusion of goods or business is a relative concept, to be determined only
according to the particular, and sometimes peculiar, circumstances of each case.[16] Indeed, in
trademark law cases, even more than in other litigation, precedent must be studied in the light of
the facts of the particular case.[17] Contrary to petitioners supposition, the facts of this case will
show that the cases of Sta. Ana vs. Maliwat,, Ang vs. Teodoro and Converse Rubber Corporation vs.
Universal Rubber Products, Inc. are hardly in point. The just cited cases involved goods that were
confusingly similar, if not identical, as in the case of Converse Rubber Corporation vs. Universal
Rubber Products, Inc. Here, the products involved are so unrelated that the public will not be misled
that there is the slightest nexus between petitioner and the goods of private respondent.
In cases of confusion of business or origin, the question that usually arises is whether the respective
goods or services of the senior user and the junior user are so related as to likely cause confusion of
business or origin, and thereby render the trademark or tradenames confusingly similar.[18] 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.[19] They may also be related because they serve the same purpose
or are sold in grocery stores.[20]
Thus, in Esso Standard Eastern, Inc. vs. Court of Appeals, this Court ruled that the petroleum
products on which the petitioner therein used the trademark ESSO, and the product of respondent,
cigarettes are "so foreign to each other as to make it unlikely that purchasers would think that
petitioner is the manufacturer of respondents goods"[21]. Moreover, the fact that the goods
involved therein flow through different channels of trade highlighted their dissimilarity, a factor
explained in this wise:
"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 store, 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."[22]
Undoubtedly, the paints, chemical products, toner and dyestuff of petitioner that carry the
trademark CANON are unrelated to sandals, the product of private respondent. We agree with the
BPTTT, following the Esso doctrine, when it noted that the two classes of products in this case flow
through different trade channels. The products of petitioner are sold through special chemical stores
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
or distributors while the products of private respondent are sold in grocery stores, sari-sari stores
and department stores.[23] Thus, the evident disparity of the products of the parties in the case at
bar renders unfounded the apprehension of petitioner that confusion of business or origin might
occur if private respondent is allowed to use the mark CANON.
In its bid to bar the registration of private respondent of the mark CANON, petitioner invokes the
protective mantle of the Paris Convention. Petitioner asserts that it has the exclusive right to the
mark CANON because it forms part of its corporate name or tradename, protected by Article 8 of the
Paris Convention, to wit:
"A tradename 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."
Public respondents BPTTT and the Court of Appeals allegedly committed an oversight when they
required petitioner to prove that its mark is a well-known mark at the time the application of private
respondent was filed. Petitioner questions the applicability of the guidelines embodied in the
Memorandum of then Minister of Trade and Industry Roberto Ongpin (Ongpin) dated October 25,
1983 which according to petitioner implements Article 6bis of the Paris Convention, the provision
referring to the protection of trademarks. The memorandum reads:
"a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or anything else;
c) the mark must be for use in the same or similar class of goods;
d) the person claiming must be the owner of the mark."
According to petitioner, it should not be required to prove that its trademark is well-known and that
the products are not similar as required by the quoted memorandum. Petitioner emphasizes that the
guidelines in the memorandum of Ongpin implement Article 6bis of the Paris Convention, the
provision for the protection of trademarks, not tradenames. Article 6bis of the Paris Convention
states:
(1)....The countries of the Union undertake, either administratively if their legislation so permits, or
at the request of an interested party, to refuse or to cancel the registration and to prohibit the use of
a trademark which constitutes a reproduction, imitation or translation, liable to create confusion, of
a mark considered by the competent authority of the country of registration or use to be well-known
Page 24
in that 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.
(2)....A period of at least five years from the date of registration shall be allowed for seeking the
cancellation of such a mark. The countries of the Union may provide for a period within which the
prohibition of use must be sought.
(3)....No time limit shall be fixed for seeking the cancellation or the prohibition of the use of marks or
used in bad faith."
Petitioner insists that what it seeks is the protection of Article 8 of the Paris Convention, the
provision that pertains to the protection of tradenames. Petitioner believes that the appropriate
memorandum to consider is that issued by the then Minister of Trade and Industry, Luis Villafuerte,
directing the Director of patents to:
"reject all pending applications for Philippine registration of signature and other world famous
trademarks by applicants other than the original owners or users."
As far as petitioner is concerned, the fact that its tradename is at risk would call for the protection
granted by Article 8 of the Paris Convention. Petitioner calls attention to the fact that Article 8, even
as embodied in par. 6, sec. 37 of RA 166, mentions no requirement of similarity of goods. Petitioner
claims that the reason there is no mention of such a requirement, is "because there is a difference
between the referent of the name and that of the mark"[24] and that "since Art. 8 protects the
tradename in the countries of the Union, such as Japan and the Philippines, Petitioners tradename
should be protected here."[25]
We cannot uphold petitioners position.
The term "trademark" is defined by RA 166, the Trademark Law, as including "any word, name,
symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or
merchant to identify his goods and distinguish them for those manufactured, sold or dealt in by
others."[26] Tradename is defined by the same law as including "individual names and surnames,
firm names, tradenames, devices or words used by manufacturers, industrialists, merchants,
agriculturists, and others to identify their business, vocations, or occupations; the names or titles
lawfully adopted and used by natural or juridical persons, unions, and any manufacturing, industrial,
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
commercial, agricultural or other organizations engaged in trade or commerce."[27] Simply put, a
trade name refers to the business and its goodwill; a trademark refers to the goods.[28]
The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and Japan, the country of petitioner, are signatories[29], is
a multilateral treaty that seeks to protect industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and indications of source or appellations
of origin, and at the same time aims to repress unfair competition.[30] We agree with public
respondents that the controlling doctrine with respect to the applicability of Article 8 of the Paris
Convention is that established in Kabushi Kaisha Isetan vs. Intermediate Appellate Court.[31] As
pointed out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris Convention, this Office believes that there is no
automatic protection afforded an entity whose tradename is alleged to have been infringed through
the use of that name as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No. 75420, 15 November
1991, the Honorable Supreme Court held that:
The Paris Convention for the Protection of Industrial Property does not automatically exclude all
countries of the world which have signed it from using a tradename which happens to be used in one
country. To illustrate if a taxicab or bus company in a town in the United Kingdom or India happens
to use the tradename "Rapid Transportation", it does not necessarily follow that "Rapid" can no
longer be registered in Uganda, Fiji, or the Philippines.
This office is not unmindful that in the Treaty of Paris for the Protection of Intellectual Property
regarding well-known marks and possible application thereof in this case. Petitioner, as this office
sees it, is trying to seek refuge under its protective mantle, claiming that the subject mark is well
known in this country at the time the then application of NSR Rubber was filed.
However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin, issued a
memorandum dated 25 October 1983 to the Director of Patents, a set of guidelines in the
implementation of Article 6bis (sic) of the Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or anything else;
Page 25
c ) the mark must be for use in the same or similar kinds of goods; and
d) the person claiming must be the owner of the mark (The Parties Convention Commentary on the
Paris Convention. Article by Dr. Bogsch, Director General of the World Intellectual Property
Organization, Geneva, Switzerland, 1985)
From the set of facts found in the records, it is ruled that the Petitioner failed to comply with the
third requirement of the said memorandum that is the mark must be for use in the same or similar
kinds of goods. The Petitioner is using the mark "CANON" for products belonging to class 2 (paints,
chemical products) while the Respondent is using the same mark for sandals (class 25). Hence,
Petitioners contention that its mark is well-known at the time the Respondent filed its application for
the same mark should fail. "[32]
Petitioner assails the application of the case of Kabushi Kaisha Isetan vs. Intermediate Appellate
Court to this case. Petitioner points out that in the case of Kabushi Kaisha Isetan vs. Intermediate
Appellate Court, petitioner therein was found to have never at all conducted its business in the
Philippines unlike herein petitioner who has extensively conducted its business here and also had its
trademark registered in this country. Hence, petitioner submits that this factual difference renders
inapplicable our ruling in the case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court that
Article 8 of the Paris Convention does not automatically extend protection to a tradename that is in
danger of being infringed in a country that is also a signatory to said treaty. This contention deserves
scant consideration. Suffice it to say that the just quoted pronouncement in the case of Kabushi
Kaisha Isetan vs. Intermediate Appellate Court, was made independent of the factual finding that
petitioner in said case had not conducted its business in this country.
WHEREFORE, in view of the foregoing, the instant petition for review on certiorari is DENIED for lack
of merit.
SO ORDERED.
THIRD DIVISION
[G.R. No. 139300. March 14, 2001]
AMIGO MANUFACTURING, Inc., petitioner, vs. CLUETT PEABODY CO., INC., respondent.
DECISION
PANGANIBAN, J.:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The findings of the Bureau of Patents that two trademarks are confusingly and deceptively similar to
each other are binding upon the courts, absent any sufficient evidence to the contrary. In the
present case, the Bureau considered the totality of the similarities between the two sets of marks
and found that they were of such degree, number and quality as to give the overall impression that
the two products are confusingly if not deceptively the same.
Statement of the Case
Petitioner Amigo Manufacturing Inc. challenges, under Rule 45 of the Rules of Court, the January 14,
1999 Resolution[1] of the Court of Appeals (CA) in CA-GR SP No. 22792, which reversed, on
reconsideration, its own September 29, 1998 Decision.[2] The dispositive portion of the assailed
Resolution reads as follows:
WHEREFORE, the Motion for Reconsideration is GRANTED, and the Decision dated September 29,
1998 REVERSED. Consequently, the decision rendered by the Director of Patents dated September 3,
1990 is hereby AFFIRMED.
The Decision of the Director of Patents, referred to by the CA, disposed as follows:
WHEREFORE, the Petition is GRANTED. Consequently, Certificate of Registration No. SR-2206 issued
to Respondent-Registrant [herein petitioner] is hereby cancelled.
Let the records of this case be remanded to the Patent/Trademark Registry and EDP Division for
appropriate action in accordance with this Decision.
Petitioner also seeks the reversal of the June 30, 1999 CA Resolution[3] denying its own Motion for
Reconsideration.
The Facts
The facts, which are undisputed, are summarized by the Court of Appeals in its original Decision, as
follows:
The source of the controversy that precipitated the filing by [herein Respondent] Cluett Peabody Co.,
Inc. (a New York corporation) of the present case against [herein Petitioner] Amigo Manufacturing
Inc. (a Philippine corporation) for cancellation of trademark is [respondents] claim of exclusive
ownership (as successor in interest of Great American Knitting Mills, Inc.) of the following trademark
and devices, as used on mens socks:
Page 26
a) GOLD TOE, under Certificate of Registration No. 6797 dated September 22, 1958;
b) DEVICE, representation of a sock and magnifying glass on the toe of a sock, under Certificate of
Registration No. 13465 dated January 25, 1968;
c) DEVICE, consisting of a plurality of gold colored lines arranged in parallel relation within a
triangular area of toe of the stocking and spread from each other by lines of contrasting color of the
major part of the stocking under Certificate of Registration No. 13887 dated May 9, 1968; and
d) LINENIZED, under Certificate of Registration No. 15440 dated April 13, 1970.
On the other hand, [petitioners] trademark and device GOLD TOP, Linenized for Extra Wear has the
dominant color white at the center and a blackish brown background with a magnified design of the
socks garter, and is labeled Amigo Manufacturing Inc., Mandaluyong, Metro Manila, Made in the
Philippines.
In the Patent Office, this case was heard by no less than six Hearing Officers: Attys. Rodolfo Gilbang,
Rustico Casia, M. Yadao, Fabian Rufina, Neptali Bulilan and Pausi Sapak. The last named officer
drafted the decision under appeal which was in due court signed and issued by the Director of
Patents (who never presided over any hearing) adversely against the respondent Amigo
Manufacturing, Inc. as heretofore mentioned (supra, p.1).
The decision pivots on two point: the application of the rule of idem sonans and the existence of a
confusing similarity in appearance between two trademarks (Rollo, p. 33).[4]
Ruling of the Court of Appeals
In its assailed Resolution, the CA held as follows:
After a careful consideration of [respondents] arguments and a re-appreciation of the records of this
case. [w]e find [respondents] motion for reconsideration meritorious. As shown by the records, and
as correctly held by the Director of Patents, there is hardly any variance in the appearance of the
marks GOLD TOP and GOLD TOE since both show a representation of a mans foot wearing a sock,
and the marks are printed in identical lettering. Section 4(d) of R.A. No. 166 declares to be
unregistrable, a mark which consists o[r] comprises a mark or trademark which so resembles a mark
or tradename registered in the Philippines of tradename 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 the purchasers.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
[Petitioner]s mark is a combination of the different registered marks owned by [respondent]. As held
in Del Monte Corporation v. Court of Appeals, 181 SCRA 410 (1990), the question is not whether the
two articles are distinguishable by their label when set aside 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 confounding it with the original. As held by the Court in the same
decision[,] 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. Furthermore, [petitioner]s mark is
only registered with the Supplemental Registry which gives no right of exclusivity to the owner and
cannot overturn the presumption of validity and exclusiv[ity] given to a registered mark.
Finally, the Philippines and the United States are parties to the Union Convention for the Protection
of Industrial Property adopted in Paris on March 20, 1883, otherwise known as the Paris
Convention.(Puma Sportschuhfabriken Rudolf Dassler K.G. v. Intermediate Appellate Court, 158 SCRA
233). [Respondent] is domiciled in the United States of America and is the lawful owner of several
trademark registrations in the United States for the mark GOLD TOE.
xxxxxxxxx
By virtue of the Philippines membership to the Paris Union, trademark rights in favor of the
[respondent] were created. The object of the Convention is to accord a national of a member nation
extensive protection against infringement and other types of unfair competition. (Puma
Sportschuhfabriken Rudolf Dassler K.G. v. Intermediate Appellate Court, 158 SCRA 233; La Chemise
Lacoste, S.A. v. Fernandez, 129 SCRA 373)[5]
Hence, this Petition.[6]
Issues
In its Memorandum,[7] petitioner raises the following issues for the consideration of this Court:
I
Whether or not the Court of Appeals overlooked that petitioners trademark was used in commerce
in the Philippines earlier than respondents actual use of its trademarks, hence the Court of Appeals
erred in affirming the Decision of the Director of Patents dated September 3, 1990.
II
Page 27
Since the petitioners actual use of its trademark was ahead of the respondent, whether or not the
Court of Appeals erred in canceling the registration of petitioners trademark instead of canceling the
trademark of the respondent.
III
Whether or not the Court of Appeals erred in affirming the findings of the Director of Patents that
petitioners trademark [was] confusingly similar to respondents trademarks.
IV
Whether or not the Court of Appeals erred in applying the Paris Convention in holding that
respondent ha[d] an exclusive right to the trademark gold toe without taking into consideration the
absence of actual use in the Philippines.[8]
In the main, the Court will resolve three issues: (1) the date of actual use of the two trademarks; (2)
their confusing similarities, and (3) the applicability of the Paris Convention.
The Courts Ruling
The Petition has no merit.
First Issue:
Dates of First Use of Trademark and Devices
Petitioner claims that it started the actual use of the trademark Gold Top and Device in September
1956, while respondent began using the trademark Gold Toe only on May 15, 1962. It contends that
the claim of respondent that it had been using the Gold Toe trademark at an earlier date was not
substantiated. The latters witnesses supposedly contradicted themselves as to the date of first actual
use of their trademark, coming up with different dates such as 1952, 1947 and 1938.
We do not agree. Based on the evidence presented, this Court concurs in the findings of the Bureau
of Patents that respondent had actually used the trademark and the devices in question prior to
petitioners use of its own. During the hearing at the Bureau of Patents, respondent presented
Bureau registrations indicating the dates of first use in the Philippines of the trademark and the
devices as follows:a) March 16, 1954, Gold Toe; b) February 1, 1952, the Representation of a Sock
and a Magnifying Glass; c) January 30, 1932, the Gold Toe Representation; and d) February 28, 1952,
Linenized.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The registration of the above marks in favor of respondent constitutes prima facie evidence, which
petitioner failed to overturn satisfactorily, of respondents ownership of those marks, the dates of
appropriation and the validity of other pertinent facts stated therein. Indeed, Section 20 of Republic
Act 166 provides as follows:
Sec. 20. Certificate of registration prima facie evidence of validity. - A certificate of registration of a
mark or trade-name shall be prima facie evidence of the validity of the registration, the registrant's
ownership of the mark or trade-name, and of the registrant's exclusive right to use the same in
connection with the goods, business or services specified in the certificate, subject to any conditions
and limitations stated therein.[9]
Moreover, the validity of the Certificates of Registration was not questioned. Neither did petitioner
present any evidence to indicate that they were fraudulently issued. Consequently, the claimed
dates of respondents first use of the marks are presumed valid. Clearly, they were ahead of
petitioners claimed date of first use of Gold Top and Device in 1958.
Section 5-A of Republic Act No. 166[10] states that an applicant for a trademark or trade name shall,
among others, state the date of first use. The fact that the marks were indeed registered by
respondent shows that it did use them on the date indicated in the Certificate of Registration.
On the other hand, petitioner failed to present proof of the date of alleged first use of the trademark
Gold Top and Device. Thus, even assuming that respondent started using it only on May 15, 1962, we
can make no finding that petitioner had started using it ahead of respondent.
Furthermore, petitioner registered its trademark only with the supplemental register. In La Chemise
Lacoste v. Fernandez,[11] the Court held that registration with the supplemental register gives no
presumption of ownership of the trademark. Said the Court:
The registration of a mark upon the supplemental register is not, as in the case of the principal
register, prima facie evidence of (1) the validity of registration; (2) registrants ownership of the mark;
and (3) registrants exclusive right to use the mark. It is not subject to opposition, although it may be
cancelled after its issuance. Neither may it be the subject of interference proceedings. Registration
[i]n the supplemental register is not constructive notice of registrants claim of ownership. A
supplemental register is provided for the registration because of some defects (conversely, defects
which make a mark unregistrable on the principal register, yet do not bar them from the
supplemental register.) (Agbayani, II Commercial Laws of the Philippines, 1978, p. 514, citing Uy
Hong Mo v. Titay & Co., et al., Dec. No. 254 of Director of Patents, Apr. 30, 1968.
Page 28
As to the actual date of first use by respondent of the four marks it registered, the seeming
confusion may have stemmed from the fact that the marks have different dates of first use. Clearly,
however, these dates are indicated in the Certificates of Registration.
In any case, absent any clear showing to the contrary, this Court accepts the finding of the Bureau of
Patents that it was respondent which had prior use of its trademark, as shown in the various
Certificates of Registration issued in its favor. Verily, administrative agencies findings of fact in
matters falling under their jurisdiction are generally accorded great respect, if not finality. Thus, the
Court has held:
x x x. By reason of the special knowledge and expertise of said administrative agencies over matters
falling under their jurisdiction, they are in a better position to pass judgment thereon; thus, their
findings of fact in that regard are generally accorded great respect, if not finality, by the courts. The
findings of fact of an administrative agency must be respected as long as they are supported by
substantial evidence, even if such evidence might not be overwhelming or even preponderant. It is
not the task of an appellate court to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the administrative agency in
respect of sufficiency of evidence.[12]
Second Issue:
Similarity of Trademarks
Citing various differences between the two sets of marks, petitioner assails the finding of the
director of patents that its trademark is confusingly similar to that of respondent. Petitioner points
out that the director of patents erred in its application of the idem sonans rule, claiming that the two
trademarks Gold Toe and Gold Top do not sound alike and are pronounced differently. It avers that
since the words goldand toe are generic, respondent has no right to their exclusive use.
The arguments of petitioner are incorrect. True, it would not be guilty of infringement on the basis
alone of the similarity in the sound of petitioners Gold Top with that of respondents Gold Toe.
Admittedly, the pronunciations of the two do not, by themselves, create confusion.
The Bureau of Patents, however, did not rely on the idem sonans test alone in arriving at its
conclusion. This fact is shown in the following portion of its Decision:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
As shown by the drawings and labels on file, the mark registered by Respondent-Registrant under
Registration No. SR-2206 is a combination of the abovementioned trademarks registered separately
by the petitioner in the Philippines and the United States.
With respect to the issue of confusing similarity between the marks of the petitioner and that of the
respondent-registrant applying the tests of idem sonans, the mark GOLD TOP & DEVICE is confusingly
similar with the mark GOLD TOE. The difference in sound occurs only in the final letter at the end of
the marks. For the same reason, hardly is there any variance in their appearance. GOLD TOE and
GOLD TOP are printed in identical lettering. Both show [a] representation of a mans foot wearing a
sock. GOLD TOP blatantly incorporates petitioners LINENIZED which by itself is a registered mark.[13]
The Bureau considered the drawings and the labels, the appearance of the labels, the lettering, and
the representation of a mans foot wearing a sock. Obviously, its conclusion is based on the totality of
the similarities between the parties trademarks and not on their sounds alone.
In Emerald Garment Manufacturing Corporation v. Court of Appeals,[14] this Court stated that in
determining whether trademarks are confusingly similar, jurisprudence has developed two kinds of
tests, the Dominancy Test[15] and the Holistic Test.[16] In its words:
In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests
the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals and other cases and the Holistic
Test developed in Del Monte Corporation v. Court of Appeals and its proponent cases.
As its title implies, the test of dominancy focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or deception and thus constitutes infringement.
xxxxxxxxx
. . . . 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. v. 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. Hanover Rubber Co., 107 F. 2d 588; x x x.)
xxxxxxxxx
Page 29
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 present case, a resort to either the Dominancy Test or the Holistic Test shows that colorable
imitation exists between respondents Gold Toe and petitioners Gold Top. A glance at petitioners
mark shows that it definitely has a lot of similarities and in fact looks like a combination of the
trademark and devices that respondent has already registered; namely, Gold Toe, the representation
of a sock with a magnifying glass, the Gold Toe representation and linenized.
Admittedly, there are some minor differences between the two sets of marks. The similarities,
however, are of such degree, number and quality that the overall impression given is that the two
brands of socks are deceptively the same, or at least very similar to each another. An examination of
the products in question shows that their dominant features are gold checkered lines against a
predominantly black background and a representation of a sock with a magnifying glass. In addition,
both products use the same type of lettering. Both also include a representation of a mans foot
wearing a sock and the word linenized with arrows printed on the label. Lastly, the names of the
brands are similar -- Gold Top and Gold Toe. Moreover, it must also be considered that petitioner
and respondent are engaged in the same line of business.
Petitioner cannot therefore ignore the fact that, when compared, most of the features of its
trademark are strikingly similar to those of respondent. In addition, these representations are at the
same location, either in the sock itself or on the label. Petitioner presents no explanation why it
chose those representations, considering that these were the exact symbols used in respondents
marks. Thus, the overall impression created is that the two products are deceptively and confusingly
similar to each other. Clearly, petitioner violated the applicable trademark provisions during that
time.
Let it be remembered that duly registered trademarks are protected by law as intellectual properties
and cannot be appropriated by others without violating the due process clause. An infringement of
intellectual rights is no less vicious and condemnable as theft of material property, whether personal
or real.
Third Issue:
The Paris Convention
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Petitioner claims that the Court of Appeals erred in applying the Paris Convention. Although
respondent registered its trademark ahead, petitioner argues that the actual use of the said mark is
necessary in order to be entitled to the protection of the rights acquired through registration.
As already discussed, respondent registered its trademarks under the principal register, which means
that the requirement of prior use had already been fulfilled. To emphasize, Section 5-A of Republic
Act 166 requires the date of first use to be specified in the application for registration. Since the
trademark was successfully registered, there exists a prima facie presumption of the correctness of
the contents thereof, including the date of first use. Petitioner has failed to rebut this presumption.
Thus, applicable is the Union Convention for the Protection of Industrial Property adopted in Paris on
March 20, 1883, otherwise known as the Paris Convention, of which the Philippines and the United
States are members. Respondent is domiciled in the United States and is the registered owner of the
Gold Toe trademark. Hence, it is entitled to the protection of the Convention. A foreign-based
trademark owner, whose country of domicile is a party to an international convention relating to
protection of trademarks,[17] is accorded protection against infringement or any unfair competition
as provided in Section 37 of Republic Act 166, the Trademark Law which was the law in force at the
time this case was instituted.
In sum, petitioner has failed to show any reversible error on the part of the Court of Appeals. Hence,
its Petition must fail.
WHEREFORE, the Petition is hereby DENIED and the assailed Resolution AFFIRMED. Costs against
petitioner.
SO ORDERED.
Melo (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez JJ., concur.
********************************
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 112012 April 4, 2001
Page 30
SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE PHILIPPINES, INC., petitioners,
vs.
COURT OF APPEALS and CFC CORPORATION., respondents.
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R. SP No.
24101,1 reversing and setting aside the decision of the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT),2 which denied private respondents application for registration of the
trade-mark, 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 Nestle, S.A., a Swiss company registered under Swiss laws and
domiciled in Switzerland, filed an unverified Notice of Opposition,3 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 Nestle Philippines, Inc., a Philippine corporation
and a licensee of Societe Des Produits Nestle S.A., against CFCs application for registration of the
trademark FLAVOR MASTER.4 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 Nestle, 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 other in meaning, spelling, pronunciation, and sound". CFC further
argued that its trademark, FLAVOR MASTER, "is clearly very different from any of Nestles alleged
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."
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFCs application for
registration.5 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
Page 31
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.6
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."7
A manufacturers trademark is entitled to protection. As Mr. Justice Frankfurter observed in the case
ofMishawaka Mfg. Co. v. Kresge Co.:8
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 same --- to convey through the mark, in the minds of potential
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 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:
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 xxx
(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.9 In determining if colorable imitation exists, jurisprudence has developed two kinds of
tests - the Dominancy Test and the Holistic Test.10 The test of dominancy focuses on the similarity of
the prevalent features of the competing trademarks which might cause confusion or deception and
Page 32
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.11
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).12
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.13 In Esso Standard, Inc. v.
Court of Appeals,14 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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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.15
The Court of Appeals application of the case of Del Monte Corporation v. Court of Appeals16 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;17 Mead Johnson & Co. v. NVJ Van Dorf Ltd.;18 and American
Cyanamid Co. v. Director of Patents.19 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."20
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.
Page 33
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.
Nestle points out that the dominancy test should have been applied to determine whether there is a
confusing similarity between CFCs FLAVOR MASTER and Nestles 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."21
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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.22
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.
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.23 The totality or holistic test
Page 34
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.24
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 terms25 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 descriptive26 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.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Rather, the term "MASTER" is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms27 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 Nestle in promoting its coffee products. In
this case, Nestle 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, Nestle 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 beans - Arabica 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.28
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 beans - Arabica 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.29
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.,30 to wit:
Page 35
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.
SECOND DIVISION
[G.R. No. 115758. March 19, 2002]
ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS
LABORATORY, petitioner, vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL MERCHANDISING
and COMPANY, and ANG TIAM CHAY, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision[1] dated May 24, 1993 of the Court of
Appeals setting aside and declaring as null and void the Orders[2] dated February 10, 1992 and
March 19, 1992 of the Regional Trial Court, Branch 90, of Quezon City granting the issuance of a writ
of preliminary injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and damages with a
prayer for the issuance of a writ of preliminary injunction, docketed as Civil Case No. Q-91-10926,
against the respondents Summerville General Merchandising and Company (Summerville, for
brevity) and Ang Tiam Chay.
The petitioners complaint alleges that petitioner, doing business under the name and style of KEC
Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su and Oval Facial Cream
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Container/Case, as shown by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that
she also has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated cream after
purchasing the same from Quintin Cheng, the registered owner thereof in the Supplemental Register
of the Philippine Patent Office on February 7, 1980 under Registration Certificate No. 4529; that
respondent Summerville advertised and sold petitioners cream products under the brand name Chin
Chun Su, in similar containers that petitioner uses, thereby misleading the public, and resulting in the
decline in the petitioners business sales and income; and, that the respondents should be enjoined
from allegedly infringing on the copyrights and patents of the petitioner.
The respondents, on the other hand, alleged as their defense that Summerville is the exclusive and
authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi
Factory of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to
register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other
appropriate governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained the
copyrights through misrepresentation and falsification; and, that the authority of Quintin Cheng,
assignee of the patent registration certificate, to distribute and market Chin Chun Su products in the
Philippines had already been terminated by the said Taiwanese Manufacturing Company.
After due hearing on the application for preliminary injunction, the trial court granted the same in an
Order dated February 10, 1992, the dispositive portion of which reads:
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under the style of KEC
Cosmetic Laboratory, for preliminary injunction, is hereby granted. Consequentially, plaintiff is
required to file with the Court a bond executed to defendants in the amount of five hundred
thousand pesos (P500,000.00) to the effect that plaintiff will pay to defendants all damages which
defendants may sustain by reason of the injunction if the Court should finally decide that plaintiff is
not entitled thereto.
SO ORDERED.[3]
The respondents moved for reconsideration but their motion for reconsideration was denied by the
trial court in an Order dated March 19, 1992.[4]
On April 24, 1992, the respondents filed a petition for certiorari with the Court of Appeals, docketed
as CA-G.R. SP No. 27803, praying for the nullification of the said writ of preliminary injunction issued
by the trial court. After the respondents filed their reply and almost a month after petitioner
submitted her comment, or on August 14 1992, the latter moved to dismiss the petition for violation
of Supreme Court Circular No. 28-91, a circular prohibiting forum shopping. According to the
Page 36
petitioner, the respondents did not state the docket number of the civil case in the caption of their
petition and, more significantly, they did not include therein a certificate of non-forum shopping. The
respondents opposed the petition and submitted to the appellate court a certificate of non-forum
shopping for their petition.
On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No. 27803 ruling in favor of
the respondents, the dispositive portion of which reads:
WHEREFORE, the petition is hereby given due course and the orders of respondent court dated
February 10, 1992 and March 19, 1992 granting the writ of preliminary injunction and denying
petitioners motion for reconsideration are hereby set aside and declared null and void. Respondent
court is directed to forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the
issue raised by the parties on the merits.
SO ORDERED.[5]
In granting the petition, the appellate court ruled that:
The registration of the trademark or brandname Chin Chun Su by KEC with the supplemental register
of the Bureau of Patents, Trademarks and Technology Transfer cannot be equated with registration
in the principal register, which is duly protected by the Trademark Law.
xxx xxx xxx
As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:
Registration in the Supplemental Register, therefore, serves as notice that the registrant is using or
has appropriated the trademark. By the very fact that the trademark cannot as yet be on guard and
there are certain defects, some obstacles which the use must still overcome before he can claim
legal ownership of the mark or ask the courts to vindicate his claims of an exclusive right to the use
of the same. It would be deceptive for a party with nothing more than a registration in the
Supplemental Register to posture before courts of justice as if the registration is in the Principal
Register.
The reliance of the private respondent on the last sentence of the Patent office action on application
Serial No. 30954 that registrants is presumed to be the owner of the mark until after the registration
is declared cancelled is, therefore, misplaced and grounded on shaky foundation. The supposed
presumption not only runs counter to the precept embodied in Rule 124 of the Revised Rules of
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Practice before the Philippine Patent Office in Trademark Cases but considering all the facts
ventilated before us in the four interrelated petitions involving the petitioner and the respondent, it
is devoid of factual basis. As even in cases where presumption and precept may factually be
reconciled, we have held that the presumption is rebuttable, not conclusive, (People v. Lim Hoa, G.R.
No. L-10612, May 30, 1958, Unreported). One may be declared an unfair competitor even if his
competing trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil 928; La Yebana
Co. v. chua Seco & Co., 14 Phil 534).[6]
The petitioner filed a motion for reconsideration. This she followed with several motions to declare
respondents in contempt of court for publishing advertisements notifying the public of the
promulgation of the assailed decision of the appellate court and stating that genuine Chin Chun
Su products could be obtained only from Summerville General Merchandising and Co.
In the meantime, the trial court went on to hear petitioners complaint for final injunction and
damages. On October 22, 1993, the trial court rendered a Decision[7] barring the petitioner from
using the trademark Chin Chun Su and upholding the right of the respondents to use the same, but
recognizing the copyright of the petitioner over the oval shaped container of her beauty cream. The
trial court did not award damages and costs to any of the parties but to their respective counsels
were awarded Seventy-Five Thousand Pesos (P75,000.00) each as attorneys fees. The petitioner duly
appealed the said decision to the Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution[8] denying the petitioners motions
for reconsideration and for contempt of court in CA-G.R. SP No. 27803.
Hence, this petition anchored on the following assignment of errors:
I
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON PETITIONERS MOTION TO DISMISS.
II
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN REFUSING TO PROMPTLY RESOLVE PETITIONERS MOTION
FOR RECONSIDERATION.
III
Page 37
IN DELAYING THE RESOLUTION OF PETITIONERS MOTION FOR RECONSIDERATION, THE HONORABLE
COURT OF APPEALS DENIED PETITIONERS RIGHT TO SEEK TIMELY APPELLATE RELIEF AND VIOLATED
PETITIONERS RIGHT TO DUE PROCESS.
IV
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS IN
CONTEMPT.[9]
The petitioner faults the appellate court for not dismissing the petition on the ground of violation of
Supreme Court Circular No. 28-91. Also, the petitioner contends that the appellate court violated
Section 6, Rule 9 of the Revised Internal Rules of the Court of Appeals when it failed to rule on her
motion for reconsideration within ninety (90) days from the time it is submitted for resolution. The
appellate court ruled only after the lapse of three hundred fifty-four (354) days, or on June 3, 1994.
In delaying the resolution thereof, the appellate court denied the petitioners right to seek the timely
appellate relief. Finally, petitioner describes as arbitrary the denial of her motions for contempt of
court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the grounds for the
issuance of a writ of preliminary injunction is a proof that the applicant is entitled to the relief
demanded, and the whole or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, either for a limited period or perpetually. Thus, a
preliminary injunction order may be granted only when the application for the issuance of the same
shows facts entitling the applicant to the relief demanded.[10] This is the reason why we have ruled
that it must be shown that the invasion of the right sought to be protected is material and
substantial, that the right of complainant is clear and unmistakable, and, that there is an urgent and
paramount necessity for the writ to prevent serious damage.[11]
In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order on the
ground that she is entitled to the use of the trademark on Chin Chun Su and its container based on
her copyright and patent over the same. We first find it appropriate to rule on whether the copyright
and patent over the name and container of a beauty cream product would entitle the registrant to
the use and ownership over the same to the exclusion of others.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked
container of goods.[12] In relation thereto, a trade name means the name or designation identifying
or distinguishing an enterprise.[13] Meanwhile, the scope of a copyright is confined to literary and
artistic works which are original intellectual creations in the literary and artistic domain protected
from the moment of their creation.[14] Patentable inventions, on the other hand, refer to any
technical solution of a problem in any field of human activity which is new, involves an inventive step
and is industrially applicable.[15]
Petitioner has no right to support her claim for the exclusive use of the subject trade name and its
container. The name and container of a beauty cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its definition. In order to be entitled to exclusively use the
same in the sale of the beauty cream product, the user must sufficiently prove that she registered or
used it before anybody else did. The petitioners copyright and patent registration of the name and
container would not guarantee her the right to the exclusive use of the same for the reason that they
are not appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction
order cannot be issued for the reason that the petitioner has not proven that she has a clear right
over the said name and container to the exclusion of others, not having proven that she has
registered a trademark thereto or used the same before anyone did.
We cannot likewise overlook the decision of the trial court in the case for final injunction and
damages. The dispositive portion of said decision held that the petitioner does not have trademark
rights on the name and container of the beauty cream product. The said decision on the merits of
the trial court rendered the issuance of the writ of a preliminary injunction moot and academic
notwithstanding the fact that the same has been appealed in the Court of Appeals. This is supported
by our ruling in La Vista Association, Inc. v. Court of Appeals[16], to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at any time
after the commencement of the action and before judgment when it is established that the plaintiff
is entitled to the relief demanded and only when his complaint shows facts entitling such reliefs xxx
and it appearing that the trial court had already granted the issuance of a final injunction in favor of
petitioner in its decision rendered after trial on the merits xxx the Court resolved to Dismiss the
instant petition having been rendered moot and academic. An injunction issued by the trial court
after it has already made a clear pronouncement as to the plaintiffs right thereto, that is, after the
same issue has been decided on the merits, the trial court having appreciated the evidence
presented, is proper, notwithstanding the fact that the decision rendered is not yet final xxx. Being
Page 38
an ancillary remedy, the proceedings for preliminary injunction cannot stand separately or proceed
independently of the decision rendered on the merit of the main case for injunction. The merit of the
main case having been already determined in favor of the applicant, the preliminary determination
of its non-existence ceases to have any force and effect. (italics supplied)
La Vista categorically pronounced that the issuance of a final injunction renders any question on the
preliminary injunctive order moot and academic despite the fact that the decision granting a final
injunction is pending appeal. Conversely, a decision denying the applicant-plaintiffs right to a final
injunction, although appealed, renders moot and academic any objection to the prior dissolution of a
writ of preliminary injunction.
The petitioner argues that the appellate court erred in not dismissing the petition for certiorari for
non-compliance with the rule on forum shopping. We disagree. First, the petitioner improperly
raised the technical objection of non-compliance with Supreme Court Circular No. 28-91 by filing a
motion to dismiss the petition for certiorari filed in the appellate court. This is prohibited by Section
6, Rule 66 of the Revised Rules of Civil Procedure which provides that (I)n petitions
for certiorari before the Supreme Court and the Court of Appeals, the provisions of Section 2, Rule
56, shall be observed. Before giving due course thereto, the court may require the respondents to
file their comment to, and not a motion to dismiss, the petition xxx (italics supplied). Secondly, the
issue was raised one month after petitioner had filed her answer/comment and after private
respondent had replied thereto. Under Section 1, Rule 16 of the Revised Rules of Civil Procedure, a
motion to dismiss shall be filed within the time for but before filing the answer to the complaint or
pleading asserting a claim. She therefore could no longer submit a motion to dismiss nor raise
defenses and objections not included in the answer/comment she had earlier tendered. Thirdly,
substantial justice and equity require this Court not to revive a dissolved writ of injunction in favor of
a party without any legal right thereto merely on a technical infirmity. The granting of an injunctive
writ based on a technical ground rather than compliance with the requisites for the issuance of the
same is contrary to the primary objective of legal procedure which is to serve as a means to dispense
justice to the deserving party.
The petitioner likewise contends that the appellate court unduly delayed the resolution of her
motion for reconsideration. But we find that petitioner contributed to this delay when she filed
successive contentious motions in the same proceeding, the last of which was on October 27, 1993,
necessitating counter-manifestations from private respondents with the last one being filed on
November 9, 1993. Nonetheless, it is well-settled that non-observance of the period for deciding
cases or their incidents does not render such judgments ineffective or void.[17] With respect to the
purported damages she suffered due to the alleged delay in resolving her motion for
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
reconsideration, we find that the said issue has likewise been rendered moot and academic by our
ruling that she has no right over the trademark and, consequently, to the issuance of a writ of
preliminary injunction.
Finally, we rule that the Court of Appeals correctly denied the petitioners several motions for
contempt of court. There is nothing contemptuous about the advertisements complained of which,
as regards the proceedings in CA-G.R. SP No. 27803 merely announced in plain and straightforward
language the promulgation of the assailed Decision of the appellate court. Moreover, pursuant to
Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the said decision nullifying the injunctive
writ was immediately executory.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated May
24, 1993 and June 3, 1994, respectively, are hereby AFFIRMED. With costs against the petitioner.
SO ORDERED.
THIRD DIVISION
[G.R. No. 154342. July 14, 2004]
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. petitioners, vs. E. & J. GALLO
WINERY and THE ANDRESONS GROUP, INC.respondents.
DECISION
CORONA, J.:
In this petition for review on certiorari under Rule 45, petitioners Mighty Corporation and La
Campana Fabrica de Tabaco, Inc. (La Campana) seek to annul, reverse and set aside: (a) the
November 15, 2001 decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 65175 affirming the
November 26, 1998 decision,[2] as modified by the June 24, 1999 order,[3] of the Regional Trial
Court of Makati City, Branch 57 (Makati RTC) in Civil Case No. 93-850, which held petitioners liable
for, and permanently enjoined them from, committing trademark infringement and unfair
competition, and which ordered them to pay damages to respondents E. & J. Gallo Winery (Gallo
Winery) and The Andresons Group, Inc. (Andresons); (b) the July 11, 2002 CA resolution denying
their motion for reconsideration[4] and (c) the aforesaid Makati RTC decision itself.
I.
Page 39
The Factual Background
Respondent Gallo Winery is a foreign corporation not doing business in the Philippines but organized
and existing under the laws of the State of California, United States of America (U.S.), where all its
wineries are located. Gallo Winery produces different kinds of wines and brandy products and sells
them in many countries under different registered trademarks, including the GALLO and ERNEST &
JULIO GALLO wine trademarks.
Respondent domestic corporation, Andresons, has been Gallo Winerys exclusive wine importer and
distributor in the Philippines since 1991, selling these products in its own name and for its own
account.[5]
Gallo Winerys GALLO wine trademark was registered in the principal register of the Philippine Patent
Office (now Intellectual Property Office) on November 16, 1971 under Certificate of Registration No.
17021 which was renewed on November 16, 1991 for another 20 years.[6] Gallo Winery also applied
for registration of its ERNEST & JULIO GALLO wine trademark on October 11, 1990 under Application
Serial No. 901011-00073599-PN but the records do not disclose if it was ever approved by the
Director of Patents.[7]
On the other hand, petitioners Mighty Corporation and La Campana and their sister company,
Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco products for which they have been using the GALLO
cigarette trademark since 1973. [8]
The Bureau of Internal Revenue (BIR) approved Tobacco Industries use of GALLO 100s cigarette mark
on September 14, 1973 and GALLO filter cigarette mark on March 26, 1976, both for the
manufacture and sale of its cigarette products. In 1976, Tobacco Industries filed its manufacturers
sworn statement as basis for BIRs collection of specific tax on GALLO cigarettes.[9]
On February 5, 1974, Tobacco Industries applied for, but eventually did not pursue, the registration
of the GALLO cigarette trademark in the principal register of the then Philippine Patent Office.[10]
In May 1984, Tobacco Industries assigned the GALLO cigarette trademark to La Campana which, on
July 16, 1985, applied for trademark registration in the Philippine Patent Office.[11]On July 17, 1985,
the National Library issued Certificate of Copyright Registration No. 5834 for La Campanas lifetime
copyright claim over GALLO cigarette labels.[12]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Subsequently, La Campana authorized Mighty Corporation to manufacture and sell cigarettes
bearing the GALLO trademark.[13] BIR approved Mighty Corporations use of GALLO 100s cigarette
brand, under licensing agreement with Tobacco Industries, on May 18, 1988, and GALLO SPECIAL
MENTHOL 100s cigarette brand on April 3, 1989.[14]
Petitioners claim that GALLO cigarettes have been sold in the Philippines since 1973, initially by
Tobacco Industries, then by La Campana and finally by Mighty Corporation.[15]
On the other hand, although the GALLO wine trademark was registered in the Philippines in 1971,
respondents claim that they first introduced and sold the GALLO and ERNEST & JULIO GALLO wines in
the Philippines circa 1974 within the then U.S. military facilities only. By 1979, they had expanded
their Philippine market through authorized distributors and independent outlets.[16]
Respondents claim that they first learned about the existence of GALLO cigarettes in the latter part
of 1992 when an Andresons employee saw such cigarettes on display with GALLO wines in a Davao
supermarket wine cellar section.[17] Forthwith, respondents sent a demand letter to petitioners
asking them to stop using the GALLO trademark, to no avail.
II.
The Legal Dispute
On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark and tradename
infringement and unfair competition, with a prayer for damages and preliminary injunction.
Respondents charged petitioners with violating Article 6bis of the Paris Convention for the
Protection of Industrial Property (Paris Convention)[18] and RA 166 (Trademark Law),[19]specifically,
Sections 22 and 23 (for trademark infringement),[20] 29 and 30[21] (for unfair competition and false
designation of origin) and 37 (for tradename infringement).[22] They claimed that petitioners
adopted the GALLO trademark to ride on Gallo Winerys GALLO and ERNEST & JULIO GALLO
trademarks established reputation and popularity, thus causing confusion, deception and mistake on
the part of the purchasing public who had always associated GALLO and ERNEST & JULIO GALLO
trademarks with Gallo Winerys wines. Respondents prayed for the issuance of a writ of preliminary
injunction and ex parte restraining order, plus P2 million as actual and compensatory damages, at
least P500,000 as exemplary and moral damages, and at least P500,000 as attorneys fees and
litigation expenses.[23]
Page 40
In their answer, petitioners alleged, among other affirmative defenses, that: petitioners GALLO
cigarettes and Gallo Winerys wines were totally unrelated products; Gallo Winerys GALLO trademark
registration certificate covered wines only, not cigarettes; GALLO cigarettes and GALLO wines were
sold through different channels of trade; GALLO cigarettes, sold atP4.60 for GALLO filters and P3 for
GALLO menthols, were low-cost items compared to Gallo Winerys high-priced luxury wines which
cost between P98 to P242.50; the target market of Gallo Winerys wines was the middle or high-
income bracket with at least P10,000 monthly income while GALLO cigarette buyers were farmers,
fishermen, laborers and other low-income workers; the dominant feature of the GALLO cigarette
mark was the rooster device with the manufacturers name clearly indicated as MIGHTY
CORPORATION while, in the case of Gallo Winerys wines, it was the full names of the founders-
owners ERNEST & JULIO GALLO or just their surname GALLO; by their inaction and conduct,
respondents were guilty of laches and estoppel; and petitioners acted with honesty, justice and good
faith in the exercise of their right to manufacture and sell GALLO cigarettes.
In an order dated April 21, 1993,[24] the Makati RTC denied, for lack of merit, respondents prayer for
the issuance of a writ of preliminary injunction,[25] holding that respondents GALLO trademark
registration certificate covered wines only, that respondents wines and petitioners cigarettes were
not related goods and respondents failed to prove material damage or great irreparable injury as
required by Section 5, Rule 58 of the Rules of Court.[26]
On August 19, 1993, the Makati RTC denied, for lack of merit, respondents motion for
reconsideration. The court reiterated that respondents wines and petitioners cigarettes were not
related goods since the likelihood of deception and confusion on the part of the consuming public
was very remote. The trial court emphasized that it could not rely on foreign rulings cited by
respondents because the[se] cases were decided by foreign courts on the basis of unknown facts
peculiar to each case or upon factual surroundings which may exist only within their
jurisdiction. Moreover, there [was] no showing that [these cases had] been tested or found
applicable in our jurisdiction.[27]
On February 20, 1995, the CA likewise dismissed respondents petition for review on certiorari,
docketed as CA-G.R. No. 32626, thereby affirming the Makati RTCs denial of the application for
issuance of a writ of preliminary injunction against petitioners.[28]
After trial on the merits, however, the Makati RTC, on November 26, 1998, held petitioners liable for,
and permanently enjoined them from, committing trademark infringement and unfair competition
with respect to the GALLO trademark:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
WHEREFORE, judgment is rendered in favor of the plaintiff (sic) and against the defendant (sic), to
wit:
a. permanently restraining and enjoining defendants, their distributors, trade outlets, and all persons
acting for them or under their instructions, from (i) using E & Js registered trademark GALLO or any
other reproduction, counterfeit, copy or colorable imitation of said trademark, either singly or in
conjunction with other words, designs or emblems and other acts of similar nature, and (ii)
committing other acts of unfair competition against plaintiffs by manufacturing and selling their
cigarettes in the domestic or export markets under the GALLO trademark.
b. ordering defendants to pay plaintiffs
(i) actual and compensatory damages for the injury and prejudice and impairment of plaintiffs
business and goodwill as a result of the acts and conduct pleaded as basis for this suit, in an amount
equal to 10% of FOURTEEN MILLION TWO HUNDRED THIRTY FIVE THOUSAND PESOS
(PHP14,235,000.00) from the filing of the complaint until fully paid;
(ii) exemplary damages in the amount of PHP100,000.00;
(iii) attorneys fees and expenses of litigation in the amount of PHP1,130,068.91;
(iv) the cost of suit.
SO ORDERED.[29]
On June 24, 1999, the Makati RTC granted respondents motion for partial reconsideration and
increased the award of actual and compensatory damages to 10% of P199,290,000
orP19,929,000.[30]
On appeal, the CA affirmed the Makati RTC decision and subsequently denied petitioners motion for
reconsideration.
III.
The Issues
Petitioners now seek relief from this Court contending that the CA did not follow prevailing laws and
jurisprudence when it held that: [a] RA 8293 (Intellectual Property Code of the Philippines [IP
Code]) was applicable in this case; [b] GALLO cigarettes and GALLO wines were identical, similar or
Page 41
related goods for the reason alone that they were purportedly forms of vice; [c] both goods passed
through the same channels of trade and [d] petitioners were liable for trademark infringement,
unfair competition and damages.[31]
Respondents, on the other hand, assert that this petition which invokes Rule 45 does not involve
pure questions of law, and hence, must be dismissed outright.
IV.
Discussion
THE EXCEPTIONAL CIRCUMSTANCES
IN THIS CASE OBLIGE THE COURT TO REVIEW
THE CAS FACTUAL FINDINGS
As a general rule, a petition for review on certiorari under Rule 45 must raise only questions of
law[32] (that is, the doubt pertains to the application and interpretation of law to a certain set of
facts) and not questions of fact (where the doubt concerns the truth or falsehood of alleged
facts),[33] otherwise, the petition will be denied. We are not a trier of facts and the Court of Appeals
factual findings are generally conclusive upon us.[34]
This case involves questions of fact which are directly related and intertwined with questions of
law. The resolution of the factual issues concerning the goods similarity, identity, relation, channels
of trade, and acts of trademark infringement and unfair competition is greatly dependent on the
interpretation of applicable laws. The controversy here is not simply the identity or similarity of both
parties trademarks but whether or not infringement or unfair competition was committed, a
conclusion based on statutory interpretation. Furthermore, one or more of the following exceptional
circumstances oblige us to review the evidence on record:[35]
(1) the conclusion is grounded entirely on speculation, surmises, and conjectures;
(2) the inference of the Court of Appeals from its findings of fact is manifestly mistaken, absurd and
impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
(5) the appellate court, in making its findings, went beyond the issues of the case, and the same are
contrary to the admissions of both the appellant and the appellee;
(6) the findings are without citation of specific evidence on which they are based;
(7) the facts set forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondents; and
(8) the findings of fact of the Court of Appeals are premised on the absence of evidence and are
contradicted [by the evidence] on record.[36]
In this light, after thoroughly examining the evidence on record, weighing, analyzing and balancing all
factors to determine whether trademark infringement and/or unfair competition has been
committed, we conclude that both the Court of Appeals and the trial court veered away from the law
and well-settled jurisprudence.
Thus, we give due course to the petition.
THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE
We note that respondents sued petitioners on March 12, 1993 for trademark infringement and
unfair competition committed during the effectivity of the Paris Convention and the Trademark Law.
Yet, in the Makati RTC decision of November 26, 1998, petitioners were held liable not only under
the aforesaid governing laws but also under the IP Code which took effect only on January 1,
1998,[37] or about five years after the filing of the complaint:
Defendants unauthorized use of the GALLO trademark constitutes trademark infringement pursuant
to Section 22 of Republic Act No. 166, Section 155 of the IP Code, Article 6bis of the Paris
Convention, and Article 16 (1) of the TRIPS Agreement as it causes confusion, deception and mistake
on the part of the purchasing public.[38] (Emphasis and underscoring supplied)
The CA apparently did not notice the error and affirmed the Makati RTC decision:
In the light of its finding that appellants use of the GALLO trademark on its cigarettes is likely to
create confusion with the GALLO trademark on wines previously registered and used in the
Page 42
Philippines by appellee E & J Gallo Winery, the trial court thus did not err in holding that appellants
acts not only violated the provisions of the our trademark laws (R.A. No. 166 and R.A.
Nos. (sic) 8293) but also Article 6bis of the Paris Convention.[39] (Emphasis and underscoring
supplied)
We therefore hold that the courts a quo erred in retroactively applying the IP Code in this case.
It is a fundamental principle that the validity and obligatory force of a law proceed from the fact that
it has first been promulgated. A law that is not yet effective cannot be considered as conclusively
known by the populace. To make a law binding even before it takes effect may lead to the arbitrary
exercise of the legislative power.[40] Nova constitutio futuris formam imponere debet non
praeteritis. A new state of the law ought to affect the future, not the past. Any doubt must generally
be resolved against the retroactive operation of laws, whether these are original enactments,
amendments or repeals.[41] There are only a few instances when laws may be given retroactive
effect,[42] none of which is present in this case.
The IP Code, repealing the Trademark Law,[43] was approved on June 6, 1997. Section 241 thereof
expressly decreed that it was to take effect only on January 1, 1998, without any provision for
retroactive application. Thus, the Makati RTC and the CA should have limited the consideration of
the present case within the parameters of the Trademark Law and the Paris Convention, the laws in
force at the time of the filing of the complaint.
DISTINCTIONS BETWEEN
TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION
Although the laws on trademark infringement and unfair competition have a common conception at
their root, that is, a person shall not be permitted to misrepresent his goods or his business as the
goods or business of another, the law on unfair competition is broader and more inclusive than the
law on trademark infringement. The latter is more limited but it recognizes a more exclusive right
derived from the trademark adoption and registration by the person whose goods or business is first
associated with it. The law on trademarks is thus a specialized subject distinct from the law on unfair
competition, although the two subjects are entwined with each other and are dealt with together in
the Trademark Law (now, both are covered by the IP Code). Hence, even if one fails to establish his
exclusive property right to a trademark, he may still obtain relief on the ground of his competitors
unfairness or fraud.Conduct constitutes unfair competition if the effect is to pass off on the public
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
the goods of one man as the goods of another. It is not necessary that any particular means should
be used to this end.[44]
In Del Monte Corporation vs. Court of Appeals,[45] we distinguished trademark infringement from
unfair competition:
(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is
the passing off of one's goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary, whereas in unfair competition
fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the
action, whereas in unfair competition registration is not necessary.
Pertinent Provisions on Trademark
Infringement under the Paris
Convention and the Trademark Law
Article 6bis of the Paris Convention,[46] an international agreement binding on the Philippines and
the United States (Gallo Winerys country of domicile and origin) prohibits the [registration] or use of
a trademark which constitutes a reproduction, imitation or translation, liable to create confusion, of
a mark considered by the competent authority of the country of registration or use to be well-
known in that country as being already the mark of a person entitled to the benefits of the [Paris]
Convention and used for identical or similar goods. [This rule also applies] when the essential part of
the mark constitutes a reproduction of any such well-known mark or an imitation liable to
create confusion therewith. There is no time limit for seeking the prohibition of the use of marks
used in bad faith.[47]
Thus, under Article 6bis of the Paris Convention, the following are the elements of trademark
infringement:
(a) registration or use by another person of a trademark which is a reproduction, imitation or
translation liable to create confusion,
Page 43
(b) of a mark considered by the competent authority of the country of registration or use[48] to
be well-known in that country and is already the mark of a person entitled to the benefits of the
Paris Convention, and
(c) such trademark is used for identical or similar goods.
On the other hand, Section 22 of the Trademark Law holds a person liable for infringement when,
among others, he uses without the consent of the registrant, any reproduction, counterfeit, copy or
colorable imitation of any registered mark or tradename in connection with the sale, offering for
sale, or advertising of any goods, business or services or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or others as to the source or origin of such
goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably imitate
any such mark or tradename and apply such reproduction, counterfeit, copy or colorable imitation to
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or
in connection with such goods, business or services.[49] Trademark registration and actual use are
material to the complaining partys cause of action.
Corollary to this, Section 20 of the Trademark Law[50] considers the trademark registration
certificate as prima facie evidence of the validity of the registration, the registrants ownership and
exclusive right to use the trademark in connection with the goods, business or services as classified
by the Director of Patents[51] and as specified in the certificate, subject to the conditions and
limitations stated therein. Sections 2 and 2-A[52] of the Trademark Law emphasize the importance of
the trademarks actual use in commerce in the Philippines prior to its registration. In the adjudication
of trademark rights between contending parties, equitable principles of laches, estoppel, and
acquiescence may be considered and applied.[53]
Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law therefore, the following constitute the
elements of trademark infringement:
(a) a trademark actually used in commerce in the Philippines and registered in the principal register
of the Philippine Patent Office
(b) is used by another person in connection with the sale, offering for sale, or advertising of any
goods, business or services or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin of such goods or services, or
identity of such business; or such trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
or in connection with such goods, business or services as to likely cause confusion or mistake or to
deceive purchasers,
(c) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark registrant or assignee.
In summary, the Paris Convention protects well-known trademarks only (to be determined by
domestic authorities), while the Trademark Law protects all trademarks, whether well-known or not,
provided that they have been registered and are in actual commercial use in the
Philippines. Following universal acquiescence and comity, in case of domestic legal disputes on any
conflicting provisions between the Paris Convention (which is an international agreement) and the
Trademark law (which is a municipal law) the latter will prevail.[54]
Under both the Paris Convention and the Trademark Law, the protection of a registered trademark is
limited only to goods identical or similar to those in respect of which such trademark is registered
and only when there is likelihood of confusion. Under both laws, the time element in commencing
infringement cases is material in ascertaining the registrants express or implied consent to anothers
use of its trademark or a colorable imitation thereof. This is why acquiescence, estoppel or laches
may defeat the registrants otherwise valid cause of action.
Hence, proof of all the elements of trademark infringement is a condition precedent to any finding of
liability.
THE ACTUAL COMMERCIAL USE IN THE
PHILIPPINES OF GALLO CIGARETTE
TRADEMARK PRECEDED THAT OF
GALLO WINE TRADEMARK.
By respondents own judicial admission, the GALLO wine trademark was registered in the Philippines
in November 1971 but the wine itself was first marketed and sold in the country only in 1974 and
only within the former U.S. military facilities, and outside thereof, only in 1979. To prove commercial
use of the GALLO wine trademark in the Philippines, respondents presented sales invoice no. 29991
dated July 9, 1981 addressed to Conrad Company Inc., Makati, Philippines and sales invoice no.
85926 dated March 22, 1996 addressed to Andresons Global, Inc., Quezon City, Philippines. Both
invoices were for the sale and shipment of GALLO wines to the Philippines during that
Page 44
period.[55] Nothing at all, however, was presented to evidence the alleged sales of GALLO wines in
the Philippines in 1974 or, for that matter, prior to July 9, 1981.
On the other hand, by testimonial evidence supported by the BIR authorization letters, forms and
manufacturers sworn statement, it appears that petitioners and its predecessor-in-interest, Tobacco
Industries, have indeed been using and selling GALLO cigarettes in the Philippines since 1973 or
before July 9, 1981.[56]
In Emerald Garment Manufacturing Corporation vs. Court of Appeals,[57] we reiterated our rulings
in Pagasa Industrial Corporation vs. Court of Appeals,[58] Converse Rubber Corporation vs. Universal
Rubber Products, Inc.,[59] Sterling Products International, Inc. vs. Farbenfabriken Bayer
Aktiengesellschaft,[60] Kabushi Kaisha Isetan vs. Intermediate Appellate Court,[61] and Philip Morris
vs. Court of Appeals,[62] giving utmost importance to the actual commercial use of a trademark in
the Philippines prior to its registration, notwithstanding the provisions of the Paris Convention:
xxx xxx xxx
In addition to the foregoing, we are constrained to agree with petitioner's contention that private
respondent failed to prove prior actual commercial use of its LEE trademark in the Philippines before
filing its application for registration with the BPTTT and hence, has not acquired ownership over said
mark.
Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No.
166) x x x
xxx xxx xxx
The provisions of the 1965 Paris Convention for the Protection of Industrial Property relied upon by
private respondent and Sec. 21-A of the Trademark Law (R.A. No. 166) were sufficiently expounded
upon and qualified in the recent case of Philip Morris, Inc. v. Court of Appeals (224 SCRA 576 [1993]):
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on trademarks regarding the
requirement of actual use in the Philippines must subordinate an international agreement inasmuch
as the apparent clash is being decided by a municipal tribunal (Mortisen vs. Peters, Great Britain,
High Court of Judiciary of Scotland, 1906, 8 Sessions, 93; Paras, International Law and World
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Organization, 1971 Ed., p. 20). Withal, the fact that international law has been made part of the law
of the land does not by any means imply the primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of
international law are given a standing equal, not superior, to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have the capacity to sue for infringement irrespective of
lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the
question of whether they have an exclusive right over their symbol as to justify issuance of the
controversial writ will depend on actual use of their trademarks in the Philippines in line with
Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign
corporation not licensed to do business in the Philippines files a complaint for infringement, the
entity need not be actually using the trademark in commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit for infringement but it may not necessarily be
entitled to protection due to absence of actual use of the emblem in the local market.
xxx xxx xxx
Undisputably, private respondent is the senior registrant, having obtained several registration
certificates for its various trademarks LEE, LEE RIDERS, and LEESURES in both the supplemental and
principal registers, as early as 1969 to 1973. However, registration alone will not suffice. In Sterling
Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft (27 SCRA 1214 [1969];
Reiterated in Kabushi Isetan vs. Intermediate Appellate Court (203 SCRA 583 [1991]) we declared:
xxx xxx xxx
A rule widely accepted and firmly entrenched because it has come down through the years is
that actual use in commerce or business is a prerequisite in the acquisition of the right of ownership
over a trademark.
xxx xxx xxx
The credibility placed on a certificate of registration of one's trademark, or its weight as evidence of
validity, ownership and exclusive use, is qualified. A registration certificate serves merely as prima
facieevidence. It is not conclusive but can and may be rebutted by controverting evidence.
xxx xxx xxx
Page 45
In the case at bench, however, we reverse the findings of the Director of Patents and the Court of
Appeals. After a meticulous study of the records, we observe that the Director of Patents and the
Court of Appeals relied mainly on the registration certificates as proof of use by private respondent
of the trademark LEE which, as we have previously discussed are not sufficient. We cannot give
credence to private respondent's claim that its LEE mark first reached the Philippines in the 1960's
through local sales by the Post Exchanges of the U.S. Military Bases in the Philippines (Rollo, p. 177)
based as it was solely on the self-serving statements of Mr. Edward Poste, General Manager of Lee
(Phils.), Inc., a wholly owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private respondent.
(Original Records, p. 52) Similarly, we give little weight to the numerous vouchers representing
various advertising expenses in the Philippines for LEE products. It is well to note that these expenses
were incurred only in 1981 and 1982 by LEE (Phils.), Inc. after it entered into a licensing agreement
with private respondent on 11 May 1981. (Exhibit E)
On the other hand, petitioner has sufficiently shown that it has been in the business of selling jeans
and other garments adopting its STYLISTIC MR. LEE trademark since 1975 as evidenced by
appropriate sales invoices to various stores and retailers. (Exhibit 1-e to 1-o)
Our rulings in Pagasa Industrial Corp. v. Court of Appeals (118 SCRA 526 [1982]) and Converse
Rubber Corp. v. Universal Rubber Products, Inc., (147 SCRA 154 [1987]), respectively, are instructive:
The Trademark Law is very clear. It requires actual commercial use of the mark prior to its
registration. There is no dispute that respondent corporation was the first registrant, yet it failed to
fully substantiate its claim that it used in trade or business in the Philippines the subject mark; it did
not present proof to invest it with exclusive, continuous adoption of the trademark which should
consist among others, of considerable sales since its first use. The invoices submitted by respondent
which were dated way back in 1957 show that the zippers sent to the Philippines were to be used as
samples and of no commercial value. The evidence for respondent must be clear, definite and free
from inconsistencies. Samples are not for sale and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to the use contemplated by law. Respondent did
not expect income from such samples. There were no receipts to establish sale, and no proof were
presented to show that they were subsequently sold in the Philippines.
xxx xxx xxx
For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioner's use of
its own mark and for failure to establish confusing similarity between said trademarks, private
respondent's action for infringement must necessarily fail. (Emphasis supplied.)
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
In view of the foregoing jurisprudence and respondents judicial admission that the actual
commercial use of the GALLO wine trademark was subsequent to its registration in 1971 and to
Tobacco Industries commercial use of the GALLO cigarette trademark in 1973, we rule that, on this
account, respondents never enjoyed the exclusive right to use the GALLO wine trademark to the
prejudice of Tobacco Industries and its successors-in-interest, herein petitioners, either under the
Trademark Law or the Paris Convention.
Respondents GALLO trademark
registration is limited to
wines only
We also note that the GALLO trademark registration certificates in the Philippines and in other
countries expressly state that they cover wines only, without any evidence or indication that
registrant Gallo Winery expanded or intended to expand its business to cigarettes.[63]
Thus, by strict application of Section 20 of the Trademark Law, Gallo Winerys exclusive right to use
the GALLO trademark should be limited to wines, the only product indicated in its registration
certificates. This strict statutory limitation on the exclusive right to use trademarks was amply
clarified in our ruling in Faberge, Inc. vs. Intermediate Appellate Court:[64]
Having thus reviewed the laws applicable to the case before Us, it is not difficult to discern from the
foregoing statutory enactments that private respondent may be permitted to register the trademark
BRUTE for briefs produced by it notwithstanding petitioner's vehement protestations of unfair
dealings in marketing its own set of items which are limited to: after-shave lotion, shaving cream,
deodorant, talcum powder and toilet soap. Inasmuch as petitioner has not ventured in the
production of briefs, an item which is not listed in its certificate of registration, petitioner cannot and
should not be allowed to feign that private respondent had invaded petitioner's exclusive domain. To
be sure, it is significant that petitioner failed to annex in its Brief the so-called eloquent proof that
petitioner indeed intended to expand its mark BRUT to other goods (Page 27, Brief for the Petitioner;
page 202, Rollo). Even then, a mere application by petitioner in this aspect does not suffice and may
not vest an exclusive right in its favor that can ordinarily be protected by the Trademark Law. In
short, paraphrasing Section 20 of the Trademark Law as applied to the documentary evidence
adduced by petitioner, the certificate of registration issued by the Director of Patents can confer
upon petitioner the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations stated therein. This basic point is perhaps the
unwritten rationale of Justice Escolin in Philippine Refining Co., Inc. vs. Ng Sam (115 SCRA 472
Page 46
[1982]), when he stressed the principle enunciated by the United States Supreme Court in American
Foundries vs. Robertson (269 U.S. 372, 381, 70 L ed 317, 46 Sct. 160) that one who has adopted and
used a trademark on his goods does not prevent the adoption and use of the same trademark by
others for products which are of a different description. Verily, this Court had the occasion to
observe in the 1966 case of George W. Luft Co., Inc. vs. Ngo Guan (18 SCRA 944 [1966]) that no
serious objection was posed by the petitioner therein since the applicant utilized the emblem Tango
for no other product than hair pomade in which petitioner does not deal.
This brings Us back to the incidental issue raised by petitioner which private respondent sought to
belie as regards petitioner's alleged expansion of its business. It may be recalled that petitioner
claimed that it has a pending application for registration of the emblem BRUT 33 for briefs (page 25,
Brief for the Petitioner; page 202, Rollo) to impress upon Us the Solomonic wisdom imparted by
Justice JBL Reyes inSta. Ana vs. Maliwat (24 SCRA 1018 [1968]), to the effect that dissimilarity of
goods will not preclude relief if the junior user's goods are not remote from any other product which
the first user would be likely to make or sell (vide, at page 1025). Commenting on the former
provision of the Trademark Law now embodied substantially under Section 4(d) of Republic Act No.
166, as amended, the erudite jurist opined that the law in point does not require that the articles of
manufacture of the previous user and late user of the mark should possess the same descriptive
properties or should fall into the same categories as to bar the latter from registering his mark in the
principal register. (supra at page 1026).
Yet, it is equally true that as aforesaid, the protective mantle of the Trademark Law extends only to
the goods used by the first user as specified in the certificate of registration following the clear
message conveyed by Section 20.
How do We now reconcile the apparent conflict between Section 4(d) which was relied upon by
Justice JBL Reyes in the Sta. Ana case and Section 20? It would seem that Section 4(d) does not
require that the goods manufactured by the second user be related to the goods produced by the
senior user while Section 20 limits the exclusive right of the senior user only to those goods specified
in the certificate of registration. But the rule has been laid down that the clause which comes later
shall be given paramount significance over an anterior proviso upon the presumption that it
expresses the latest and dominant purpose. (Graham Paper Co. vs. National Newspapers Asso. (Mo.
App.) 193 S.W. 1003; Barnett vs. Merchant's L. Ins. Co., 87 Okl. 42; State ex nel Atty. Gen. vs. Toledo,
26N.E., p. 1061; cited by Martin, Statutory Construction Sixth ed., 1980 Reprinted, p. 144). It
ineluctably follows that Section 20 is controlling and, therefore, private respondent can appropriate
its symbol for the briefs it manufactures because as aptly remarked by Justice Sanchez in Sterling
Products International Inc. vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]):
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Really, if the certificate of registration were to be deemed as including goods not specified therein,
then a situation may arise whereby an applicant may be tempted to register a trademark on any and
all goods which his mind may conceive even if he had never intended to use the trademark for the
said goods. We believe that such omnibus registration is not contemplated by our Trademark Law.
(1226).
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS AND RESPONDENTS
GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as
to the identity, source or origin of the goods or identity of the business as a consequence of using a
certain mark. Likelihood of confusion is admittedly a relative term, to be determined rigidly
according to the particular (and sometimes peculiar) circumstances of each case. Thus, in trademark
cases, more than in other kinds of litigation, precedents must be studied in the light of each
particular case. [65]
There are two types of confusion in trademark infringement. The first is confusion of goods when an
otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing
another, in which case defendants goods are then bought as the plaintiffs and its poor quality
reflects badly on the plaintiffs reputation. The other is confusion of businesswherein the goods of
the parties are different but the defendants product can reasonably (though mistakenly) be assumed
to originate from the plaintiff, thus deceiving the public into believing that there is some connection
between the plaintiff and defendant which, in fact, does not exist.[66]
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between
the trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely
effect on the purchaser and [d] the registrants express or implied consent and other fair and
equitable considerations.
Petitioners and respondents both use GALLO in the labels of their respective cigarette and wine
products. But, as held in the following cases, the use of an identical mark does not, by itself, lead to a
legal conclusion that there is trademark infringement:
Page 47
(a) in Acoje Mining Co., Inc. vs. Director of Patent,[67] we ordered the approval of Acoje Minings
application for registration of the trademark LOTUS for its soy sauce even though Philippine Refining
Company had prior registration and use of such identical mark for its edible oil which, like soy sauce,
also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents,[68] we upheld the Patent
Directors registration of the same trademark CAMIA for Ng Sams ham under Class 47, despite
Philippine Refining Companys prior trademark registration and actual use of such mark on its lard,
butter, cooking oil (all of which belonged to Class 47), abrasive detergents, polishing materials and
soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun Liong,[69] we dismissed
Hickoks petition to cancel private respondents HICKOK trademark registration for its Marikina shoes
as against petitioners earlier registration of the same trademark for handkerchiefs, briefs, belts and
wallets;
(d) in Shell Company of the Philippines vs. Court of Appeals,[70] in a minute resolution, we dismissed
the petition for review for lack of merit and affirmed the Patent Offices registration of the trademark
SHELL used in the cigarettes manufactured by respondent Fortune Tobacco Corporation,
notwithstanding Shell Companys opposition as the prior registrant of the same trademark for its
gasoline and other petroleum products;
(e) in Esso Standard Eastern, Inc. vs. Court of Appeals,[71] we dismissed ESSOs complaint for
trademark infringement against United Cigarette Corporation and allowed the latter to use the
trademark ESSO for its cigarettes, the same trademark used by ESSO for its petroleum products, and
(f) in Canon Kabushiki Kaisha vs. Court of Appeals and NSR Rubber Corporation,[72] we affirmed the
rulings of the Patent Office and the CA that NSR Rubber Corporation could use the trademark
CANON for its sandals (Class 25) despite Canon Kabushiki Kaishas prior registration and use of the
same trademark for its paints, chemical products, toner and dyestuff (Class 2).
Whether a trademark causes confusion and is likely to deceive the public hinges on colorable
imitation[73] which has been defined as such similarity in form, content, words, sound, meaning,
special arrangement or general appearance of the trademark or tradename in their overall
presentation or in their essential and substantive and distinctive parts as would likely mislead or
confuse persons in the ordinary course of purchasing the genuine article.[74]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Jurisprudence has developed two tests in determining similarity and likelihood of confusion in
trademark resemblance:[75]
(a) the Dominancy Test applied in Asia Brewery, Inc. vs. Court of Appeals[76] and other
cases,[77] and
(b) the Holistic or Totality Test used in Del Monte Corporation vs. Court of Appeals[78] and its
preceding cases.[79]
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
which might cause confusion or deception, and thus infringement. If the competing trademark
contains the main, essential or dominant features of another, and confusion or 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. The question is whether the use of the marks
involved is likely to cause confusion or mistake in the mind of the public or deceive purchasers.[80]
On the other hand, the Holistic Test requires that the entirety of the marks in question be considered
in resolving confusing similarity. Comparison of words is not the only determining factor. The
trademarks in their entirety as they appear in their respective labels or hang tags must also be
considered in relation to the 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 in both
labels in order that he may draw his conclusion whether one is confusingly similar to the other.[81]
In comparing the resemblance or colorable imitation of marks, various factors have been considered,
such as the dominant color, style, size, form, meaning of letters, words, designs and emblems used,
the likelihood of deception of the mark or name's tendency to confuse[82] and the commercial
impression likely to be conveyed by the trademarks if used in conjunction with the respective goods
of the parties.[83]
Applying the Dominancy and Holistic Tests, we find that the dominant feature of the GALLO cigarette
trademark is the device of a large rooster facing left, outlined in black against a gold background. The
roosters color is either green or red green for GALLO menthols and red for GALLO filters. Directly
below the large rooster device is the word GALLO. The rooster device is given prominence in the
GALLO cigarette packs in terms of size and location on the labels.[84]
The GALLO mark appears to be a fanciful and arbitrary mark for the cigarettes as it has no relation at
all to the product but was chosen merely as a trademark due to the fondness for fighting cocks of the
son of petitioners president. Furthermore, petitioners adopted GALLO, the Spanish word for rooster,
Page 48
as a cigarette trademark to appeal to one of their target markets,
the sabungeros (cockfight aficionados).[85]
Also, as admitted by respondents themselves,[86] on the side of the GALLO cigarette packs are the
words MADE BY MIGHTY CORPORATION, thus clearly informing the public as to the identity of the
manufacturer of the cigarettes.
On the other hand, GALLO Winerys wine and brandy labels are diverse. In many of them, the labels
are embellished with sketches of buildings and trees, vineyards or a bunch of grapes while in a few,
one or two small roosters facing right or facing each other (atop the EJG crest, surrounded by leaves
or ribbons), with additional designs in green, red and yellow colors, appear as minor features
thereof.[87] Directly below or above these sketches is the entire printed name of the founder-
owners, ERNEST & JULIO GALLO or just their surname GALLO,[88] which appears in different fonts,
sizes, styles and labels, unlike petitioners uniform casque-font bold-lettered GALLO mark.
Moreover, on the labels of Gallo Winerys wines are printed the words VINTED AND BOTTLED BY
ERNEST & JULIO GALLO, MODESTO, CALIFORNIA.[89]
The many different features like color schemes, art works and other markings of both products
drown out the similarity between them the use of the word GALLO a family surname for the Gallo
Winerys wines and a Spanish word for rooster for petitioners cigarettes.
WINES AND CIGARETTES ARE NOT
IDENTICAL, SIMILAR, COMPETING OR
RELATED GOODS
Confusion of goods is evident where the litigants are actually in competition; but confusion of
business may arise between non-competing interests as well.[90]
Thus, apart from the strict application of Section 20 of the Trademark Law and Article 6bis of the
Paris Convention which proscribe trademark infringement not only of goods specified in the
certificate of registration but also of identical or similar goods, we have also uniformly recognized
and applied the modern concept of related goods.[91] Simply stated, when goods are so related that
the public may be, or is actually, deceived and misled that they come from the same maker or
manufacturer, trademark infringement occurs.[92]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Non-competing goods may be those which, though they are not in actual competition, are so related
to each other that it can reasonably be assumed that they originate from one manufacturer, in which
case, confusion of business can arise out of the use of similar marks.[93] They may also be those
which, being entirely unrelated, cannot be assumed to have a common source; hence, there is no
confusion of business, even though similar marks are used.[94] Thus, there is no trademark
infringement if the public does not expect the plaintiff to make or sell the same class of goods as
those made or sold by the defendant.[95]
In resolving whether goods are related,[96] several factors come into play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or
container [97]
(d) the nature and cost of the articles[98]
(e) the descriptive properties, physical attributes or essential characteristics with reference to their
form, composition, texture or quality
(f) the purpose of the goods[99]
(g) whether the article is bought for immediate consumption,[100] that is, day-to-day household
items[101]
(h) the fields of manufacture[102]
(i) the conditions under which the article is usually purchased[103] and
(j) the channels of trade through which the goods flow,[104] how they are distributed, marketed,
displayed and sold.[105]
The wisdom of this approach is its recognition that each trademark infringement case presents its
own unique set of facts. No single factor is preeminent, nor can the presence or absence of one
determine, without analysis of the others, the outcome of an infringement suit. Rather, the court is
required to sift the evidence relevant to each of the criteria. This requires that the entire panoply of
elements constituting the relevant factual landscape be comprehensively examined.[106] It is a
Page 49
weighing and balancing process. With reference to this ultimate question, and from a balancing of
the determinations reached on all of the factors, a conclusion is reached whether the parties have a
right to the relief sought.[107]
A very important circumstance though is whether there exists a likelihood that an appreciable
number of ordinarily prudent purchasers will be misled, or simply confused, as to the source of the
goods in question.[108] The purchaser is not the completely unwary consumer but is the ordinarily
intelligent buyer considering the type of product involved.[109] He is accustomed to buy, and
therefore to some extent familiar with, the goods in question. The test of fraudulent simulation is to
be found in the likelihood of the deception of some persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which that design has been
associated. The test is not found in the deception, or the possibility of deception, of the person who
knows nothing about the design which has been counterfeited, and who must be indifferent
between that and the other. The simulation, in order to be objectionable, must be such as appears
likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the
article that he seeks to purchase.[110]
Hence, in the adjudication of trademark infringement, we give due regard to the goods usual
purchasers character, attitude, habits, age, training and education. [111]
Applying these legal precepts to the present case, petitioners use of the GALLO cigarette trademark
is not likely to cause confusion or mistake, or to deceive the ordinarily intelligent buyer of either
wines or cigarettes or both as to the identity of the goods, their source and origin, or identity of the
business of petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing products. Neither do they belong to
the same class of goods. Respondents GALLO wines belong to Class 33 under Rule 84[a] Chapter III,
Part II of the Rules of Practice in Trademark Cases while petitioners GALLO cigarettes fall under Class
34.
We are mindful that product classification alone cannot serve as the decisive factor in the resolution
of whether or not wines and cigarettes are related goods. Emphasis should be on the similarity of the
products involved and not on the arbitrary classification or general description of their properties or
characteristics. But the mere fact that one person has adopted and used a particular trademark for
his goods does not prevent the adoption and use of the same trademark by others on articles of a
different description. [112]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Both the Makati RTC and the CA held that wines and cigarettes are related products because: (1)
they are related forms of vice, harmful when taken in excess, and used for pleasure and relaxation
and (2) they are grouped or classified in the same section of supermarkets and groceries.
We find these premises patently insufficient and too arbitrary to support the legal conclusion that
wines and cigarettes are related products within the contemplation of the Trademark Law and the
Paris Convention.
First, anything - not only wines and cigarettes can be used for pleasure and relaxation and can be
harmful when taken in excess. Indeed, it would be a grave abuse of discretion to treat wines and
cigarettes as similar or related products likely to cause confusion just because they are pleasure-
giving, relaxing or potentially harmful. Such reasoning makes no sense.
Second, it is common knowledge that supermarkets sell an infinite variety of wholly unrelated
products and the goods here involved, wines and cigarettes, have nothing whatsoever in common
with respect to their essential characteristics, quality, quantity, size, including the nature of their
packages, wrappers or containers.[113]
Accordingly, the U.S. patent office and courts have consistently held that the mere fact that goods
are sold in one store under the same roof does not automatically mean that buyers are likely to be
confused as to the goods respective sources, connections or sponsorships. The fact that different
products are available in the same store is an insufficient standard, in and of itself, to warrant a
finding of likelihood of confusion.[114]
In this regard, we adopted the Director of Patents finding in Philippine Refining Co., Inc. vs. Ng Sam
and the Director of Patents:[115]
In his decision, the Director of Patents enumerated the factors that set respondents products apart
from the goods of petitioner. He opined and we quote:
I have taken into account such factors as probable purchaser attitude and habits, marketing
activities, retail outlets, and commercial impression likely to be conveyed by the trademarks if used
in conjunction with the respective goods of the parties, I believe that ham on one hand, and lard,
butter, oil, and soap on the other are products that would not move in the same manner through the
same channels of trade. They pertain to unrelated fields of manufacture, might be distributed and
marketed under dissimilar conditions, and are displayed separately even though they frequently may
be sold through the same retail food establishments. Opposers products are ordinary day-to-day
Page 50
household items whereas ham is not necessarily so. Thus, the goods of the parties are not of a
character which purchasers would likely attribute to a common origin.
The observations and conclusion of the Director of Patents are correct. The particular goods of the
parties are so unrelated that consumers, would not, in any probability mistake one as the source of
origin of the product of the other. (Emphasis supplied).
The same is true in the present case. Wines and cigarettes are non-competing and are totally
unrelated products not likely to cause confusion vis--vis the goods or the business of the petitioners
and respondents.
Wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages and
smoked. There is a whale of a difference between their descriptive properties, physical attributes or
essential characteristics like form, composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are patronized by
middle-to-high-income earners while GALLO cigarettes appeal only to simple folks like farmers,
fishermen, laborers and other low-income workers.[116] Indeed, the big price difference of these
two products is an important factor in proving that they are in fact unrelated and that they travel in
different channels of trade. There is a distinct price segmentation based on vastly different social
classes of purchasers.[117]
GALLO cigarettes and GALLO wines are not sold through the same channels of trade. GALLO
cigarettes are Philippine-made and petitioners neither claim nor pass off their goods as imported or
emanating from Gallo Winery. GALLO cigarettes are distributed, marketed and sold through
ambulant and sidewalk vendors, small local sari-sari stores and grocery stores in Philippine rural
areas, mainly in Misamis Oriental, Pangasinan, Bohol, and Cebu.[118] On the other hand, GALLO
wines are imported, distributed and sold in the Philippines through Gallo Winerys exclusive contracts
with a domestic entity, which is currently Andresons. By respondents own testimonial evidence,
GALLO wines are sold in hotels, expensive bars and restaurants, and high-end grocery stores and
supermarkets, not through sari-sari stores or ambulant vendors.[119]
Furthermore, the Makati RTC and the CA erred in relying on Carling Brewing Company vs. Philip
Morris, Inc.[120] to support its finding that GALLO wines and GALLO cigarettes are related
goods. The courts a quo should have taken into consideration the subsequent case of IDV North
America, Inc. and R & A Bailey Co. Limited vs. S & M Brands, Inc.:[121]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
IDV correctly acknowledges, however, that there is no per se rule that the use of the same mark on
alcohol and tobacco products always will result in a likelihood of confusion. Nonetheless, IDV relies
heavily on the decision in John Walker & Sons, Ltd. vs. Tampa Cigar Co., 124 F. Supp. 254, 256 (S.D.
Fla. 1954), affd, 222 F. 2d 460 (5th Cir. 1955), wherein the court enjoined the use of the mark
JOHNNIE WALKER on cigars because the fame of the plaintiffs mark for scotch whiskey and because
the plaintiff advertised its scotch whiskey on, or in connection with tobacco products. The court,
in John Walker & Sons, placed great significance on the finding that the infringers use was a
deliberate attempt to capitalize on the senior marks fame. Id. At 256. IDV also relies on Carling
Brewing Co. v. Philip Morris, Inc., 297 F. Supp. 1330, 1338 (N.D. Ga. 1968), in which the court
enjoined the defendants use of the mark BLACK LABEL for cigarettes because it was likely to cause
confusion with the plaintiffs well-known mark BLACK LABEL for beer.
xxx xxx xxx
Those decisions, however, must be considered in perspective of the principle that tobacco products
and alcohol products should be considered related only in cases involving special
circumstances.Schenley Distillers, Inc. v. General Cigar Co., 57C.C.P.A. 1213, 427 F. 2d 783, 785
(1970). The presence of special circumstances has been found to exist where there is a finding of
unfair competition or where a famous or well-known mark is involved and there is a demonstrated
intent to capitalize on that mark. For example, in John Walker & Sons, the court was persuaded to
find a relationship between products, and hence a likelihood of confusion, because of the plaintiffs
long use and extensive advertising of its mark and placed great emphasis on the fact that the
defendant used the trademark Johnnie Walker with full knowledge of its fame and reputation and
with the intention of taking advantage thereof. John Walker & Sons, 124 F. Supp. At 256; see
Mckesson & Robbins, Inc. v. P. Lorillard Co.,1959 WL 5894, 120 U.S.P.Q. 306, 307 (1959) (holding that
the decision in John Walker & Sons was merely the law on the particular case based upon its own
peculiar facts); see also Alfred Dunhill, 350 F. Supp. At 1363 (defendants adoption of Dunhill mark
was not innocent). However, in Schenley, the court noted that the relation between tobacco and
whiskey products is significant where a widely known arbitrary mark has long been used for
diversified products emanating from a single source and a newcomer seeks to use the same mark on
unrelated goods. Schenley, 427 F.2d. at 785. Significantly, inSchenley, the court looked at the
industry practice and the facts of the case in order to determine the nature and extent of the
relationship between the mark on the tobacco product and the mark on the alcohol product.
The record here establishes conclusively that IDV has never advertised BAILEYS liqueurs in
conjunction with tobacco or tobacco accessory products and that IDV has no intent to do so. And,
unlike the defendant in Dunhill, S & M Brands does not market bar accessories, or liqueur related
Page 51
products, with its cigarettes. The advertising and promotional materials presented a trial in this
action demonstrate a complete lack of affiliation between the tobacco and liqueur products bearing
the marks here at issue.
xxx xxx xxx
Of equal significance, it is undisputed that S & M Brands had no intent, by adopting the family
name Baileys as the mark for its cigarettes, to capitalize upon the fame of the BAILEYS mark for
liqueurs. See Schenley, 427 F. 2d at 785. Moreover, as will be discussed below, and as found
in Mckesson & Robbins, the survey evidence refutes the contention that cigarettes and alcoholic
beverages are so intimately associated in the public mind that they cannot under any circumstances
be sold under the same mark without causing confusion. See Mckesson & Robbins, 120 U.S.P.Q. at
308.
Taken as a whole, the evidence here demonstrates the absence of the special circumstances in which
courts have found a relationship between tobacco and alcohol products sufficient to tip the similarity
of goods analysis in favor of the protected mark and against the allegedly infringing mark. It is true
that BAILEYS liqueur, the worlds best selling liqueur and the second best selling in the United States,
is a well-known product. That fact alone, however, is insufficient to invoke the special circumstances
connection here where so much other evidence and so many other factors disprove a likelihood of
confusion. The similarity of products analysis, therefore, augers against finding that there is a
likelihood of confusion. (Emphasis supplied).
In short, tobacco and alcohol products may be considered related only in cases involving special
circumstances which exist only if a famous mark is involved and there is a demonstrated intent to
capitalize on it. Both of these are absent in the present case.
THE GALLO WINE TRADEMARK IS NOT A
WELL-KNOWN MARK IN THE CONTEXT
OF THE PARIS CONVENTION IN THIS CASE
SINCE WINES AND CIGARETTES ARE NOT
IDENTICAL OR SIMILAR GOODS
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
First, the records bear out that most of the trademark registrations took place in the late 1980s and
the 1990s, that is, after Tobacco Industries use of the GALLO cigarette trademark in 1973 and
petitioners use of the same mark in 1984.
GALLO wines and GALLO cigarettes are neither the same, identical, similar nor related goods,
a requisite element under both the Trademark Law and the Paris Convention.
Second, the GALLO trademark cannot be considered a strong and distinct mark in the Philippines.
Respondents do not dispute the documentary evidence that aside from Gallo Winerys GALLO
trademark registration, the Bureau of Patents, Trademarks and Technology Transfer also issued on
September 4, 1992 Certificate of Registration No. 53356 under the Principal Register
approving Productos Alimenticios Gallo, S.As April 19, 1990 application for GALLO trademark
registration and use for its noodles, prepared food or canned noodles, ready or canned sauces for
noodles, semolina, wheat flour and bread crumbs, pastry, confectionery, ice cream, honey, molasses
syrup, yeast, baking powder, salt, mustard, vinegar, species and ice.[122]
Third and most important, pursuant to our ruling in Canon Kabushiki Kaisha vs. Court of Appeals and
NSR Rubber Corporation,[123] GALLO cannot be considered a well-known mark within the
contemplation and protection of the Paris Convention in this case since wines and cigarettes are not
identical or similar goods:
We agree with public respondents that the controlling doctrine with respect to the applicability of
Article 8 of the Paris Convention is that established in Kabushi Kaisha Isetan vs. Intermediate
Appellate Court (203 SCRA 59 [1991]). As pointed out by the BPTTT:
Regarding the applicability of Article 8 of the Paris Convention, this Office believes that there is no
automatic protection afforded an entity whose tradename is alleged to have been infringed through
the use of that name as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No. 75420, 15 November
1991, the Honorable Supreme Court held that:
The Paris Convention for the Protection of Industrial Property does not automatically exclude all
countries of the world which have signed it from using a tradename which happens to be used in one
country. To illustrate if a taxicab or bus company in a town in the United Kingdom or India happens
to use the tradename Rapid Transportation, it does not necessarily follow that Rapid can no longer
be registered in Uganda, Fiji, or the Philippines.
Page 52
This office is not unmindful that in (sic) the Treaty of Paris for the Protection of Intellectual Property
regarding well-known marks and possible application thereof in this case. Petitioner, as this office
sees it, is trying to seek refuge under its protective mantle, claiming that the subject mark is well
known in this country at the time the then application of NSR Rubber was filed.
However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin, issued a
memorandum dated 25 October 1983 to the Director of Patents, a set of guidelines in the
implementation of Article 6bis of the Treaty of Paris. These conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or anything else;
c) the mark must be for use in the same or similar kinds of goods; and
d) the person claiming must be the owner of the mark (The Parties Convention Commentary on the
Paris Convention. Article by Dr. Bogsch, Director General of the World Intellectual Property
Organization, Geneva, Switzerland, 1985)
From the set of facts found in the records, it is ruled that the Petitioner failed to comply with the
third requirement of the said memorandum that is the mark must be for use in the same or similar
kinds of goods. The Petitioner is using the mark CANON for products belonging to class 2 (paints,
chemical products) while the Respondent is using the same mark for sandals (class 25).
Hence, Petitioner's contention that its mark is well-known at the time the Respondent filed its
application for the same mark should fail. (Emphasis supplied.)
Consent of the Registrant and
Other air, Just and Equitable
Considerations
Each trademark infringement case presents a unique problem which must be answered by weighing
the conflicting interests of the litigants.[124]
Respondents claim that GALLO wines and GALLO cigarettes flow through the same channels of trade,
that is, retail trade. If respondents assertion is true, then both goods co-existed peacefully for a
considerable period of time. It took respondents almost 20 years to know about the existence of
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
GALLO cigarettes and sue petitioners for trademark infringement. Given, on one hand, the long
period of time that petitioners were engaged in the manufacture, marketing, distribution and sale of
GALLO cigarettes and, on the other, respondents delay in enforcing their rights (not to mention
implied consent, acquiescence or negligence) we hold that equity, justice and fairness require us to
rule in favor of petitioners. The scales of conscience and reason tip far more readily in favor of
petitioners than respondents.
Moreover, there exists no evidence that petitioners employed malice, bad faith or fraud, or that they
intended to capitalize on respondents goodwill in adopting the GALLO mark for their cigarettes
which are totally unrelated to respondents GALLO wines. Thus, we rule out trademark infringement
on the part of petitioners.
PETITIONERS ARE ALSO NOT LIABLE
FOR UNFAIR COMPETITION
Under Section 29 of the Trademark Law, any person who employs deception or any other means
contrary to good faith by which he passes off the goods manufactured by him or in which he deals,
or his business, or services for those of the one having established such goodwill, or who commits
any acts calculated to produce said result, is guilty of unfair competition. It includes the following
acts:
(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the goods offered are
those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in
selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to induce
the false belief that such person is offering the services of another who has identified such services in
the mind of the public;
(c) Any person who shall make any false statement in the course of trade or who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or services of
another.
Page 53
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 constitutes unfair
competition. Actual or probable deception and confusion on the part of customers by reason of
defendants practices must always appear.[125] On this score, we find that petitioners never
attempted to pass off their cigarettes as those of respondents. There is no evidence of bad faith or
fraud imputable to petitioners in using their GALLO cigarette mark.
All told, after applying all the tests provided by the governing laws as well as those recognized by
jurisprudence, we conclude that petitioners are not liable for trademark infringement, unfair
competition or damages.
WHEREFORE, finding the petition for review meritorious, the same is hereby GRANTED. The
questioned decision and resolution of the Court of Appeals in CA-G.R. CV No. 65175 and the
November 26, 1998 decision and the June 24, 1999 order of the Regional Trial Court of Makati,
Branch 57 in Civil Case No. 93-850 are hereby REVERSED and SET ASIDE and the complaint against
petitioners DISMISSED.
Costs against respondents.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 143993 August 18, 2004
MCDONALD'S 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.
DECISION
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
CARPIO, J.:
The Case
This is a petition for review1 of the Decision dated 26 November 1999 of the Court of
Appeals2 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 Decision3 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 McDonald's Corporation ("McDonald's") is a corporation organized under the laws of
Delaware, United States. McDonald's operates, by itself or through its franchisees, a global chain of
fast-food restaurants. McDonald's4 owns a family of marks5 including the "Big Mac" mark for its
"double-decker hamburger sandwich."6McDonald's registered this trademark with the United States
Trademark Registry on 16 October 1979.7 Based on this Home Registration, McDonald's 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, McDonald's 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, McDonald's displays the "Big Mac" mark in items8 and paraphernalia9 in its
restaurants, and in its outdoor and indoor signages. From 1982 to 1990, McDonald's spent P10.5
million in advertisement for "Big Mac" hamburger sandwiches alone.10
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic corporation, is
McDonald's Philippine franchisee.11
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.12 Respondent
corporation's menu includes hamburger sandwiches and other food items.13 Respondents Francis B.
Page 54
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.14
On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the "Big
Mak" mark for its hamburger sandwiches. McDonald's opposed respondent corporation's application
on the ground that "Big Mak" was a colorable imitation of its registered "Big Mac" mark for the same
food products. McDonald's 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.15 On 16 August 1990, the RTC issued a writ of preliminary injunction
replacing the TRO.16
In their Answer, respondents admitted that they have been using the name "Big Mak Burger" for
their fast-food business. Respondents claimed, however, that McDonald's 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 McDonald's 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.17 Respondents sought damages in their counterclaim.
In their Reply, petitioners denied respondents' claim that McDonald's 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 McDonald's, the Isaiyas Group did so only in the Supplemental Register of
the PBPTT and such registration does not provide any protection. McDonald's disclosed that it
had acquired Topacio's rights to his registration in a Deed of Assignment dated 18 May 1981.18
The Trial Court's 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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 McDonald's, 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 McDonald's 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 McDonald's 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 corporation's 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 item a 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 McDonald's, 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. xxxx
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?
Page 55
The answer is in the affirmative. xxxx
The xxx provision of the law concerning unfair competition is broader and more inclusive than the
lawconcerning 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.
xxx 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 McDonald's. 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.19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs McDonald's 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
ofP400,000.00, exemplary damages in the amount of P100,000.00, and attorney's 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 asfor insufficiency of evidence.20
Respondents appealed to the Court of Appeals.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 McDonald's 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 name the 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 McDonald's 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
upper case 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.
Page 56
xxxx
xxx [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 "McDonald's" logo and trademark in red, bl[o]ck
capital letters printed thereon xxx 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 "McDonald's" restaurant usually located in a nearby commercial center, advertised and
identified by its logo - the umbrella "M", and its mascot "Ronald McDonald". A typical McDonald's
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 xxx. In
buying a "B[ig] M[ac]", it is necessary to specify it by its trademark. Thus, a customer needs to look
for a "McDonald's" 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 xxxx
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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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. 21
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 MCDONALD'S 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.22
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:
Page 57
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.23
The Court's 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")24 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. 25
Here, petitioners raise questions of fact and law in assailing the Court of Appeals' findings on
respondent corporation's 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 1.26 We took a similar course of action in Asia Brewery, Inc. v.
Court of Appeals27 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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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.28 Respondents'
cash invoices simply refer to their hamburger sandwiches as "Big Mak."29 It is respondents' snack
vans that carry the words "L.C. Big Mak Burger, Inc."30
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.31 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,32defines trademark infringement as follows:
Infringement, what constitutes. Any person who [1] shall use, without the consent of the
registrant, anyreproduction, 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 withwhich 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 usedupon 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.33
Petitioners base their cause of action under the first part of Section 22, 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
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in "likelihood of confusion."34 Of these, it is the element
of likelihood of confusion that is the gravamen of trademark infringement.35
Page 58
On the Validity of the "Big Mac"Mark
and McDonald's Ownership of such Mark
A mark is valid if it is "distinctive" and thus not barred from registration under Section 436 of RA 166
("Section 4").However, once registered, not only the mark's validity but also the registrant's
ownership of the mark is prima facie presumed.37
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."38
The contention has no merit. The "Big Mac" mark, which should be treated in its entirety and not
dissected word for word,39 is neither generic nor descriptive. Generic marks are commonly used as
the name or description of akind of goods,40 such as "Lite" for beer41 or "Chocolate Fudge" for
chocolate soda drink.42 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,43 such
as "Arthriticare" for arthritis medication.44 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.45 As such, it is highly distinctive and thus
valid. Significantly, the trademark "Little Debbie" for snack cakes was found arbitrary or fanciful.46
The Court also finds that petitioners have duly established McDonald's exclusive ownership of the
"Big Mac" mark. Although Topacio and the Isaiyas Group registered the "Big Mac" mark ahead of
McDonald's, Topacio, as petitioners disclosed, had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark only in the Supplemental Register. A mark
which is not registered in the PrincipalRegister, and thus not distinctive, has no real
protection.47 Indeed, we have held that registration in the Supplemental Register is not even a
prima facie evidence of the validity of the registrant's exclusive right to use the mark on the goods
specified in the certificate.48
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.,49 the Court distinguished these two types of confusion, thus:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
[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." xxx The other is the confusion of business: "Here though the goods of the
parties are different, the defendant's 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. 666,50 the first trademark law, infringement was limited to confusion of goods only,
when the infringing mark is used on "goods of a similar kind."51 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."52Thus, 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.53
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 McDonald's 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.54 (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:
Page 59
1.10. For some period of time, and without the consent of plaintiff McDonald's nor its
licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs' exclusive right to
use and/or appropriate the McDonald's 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 defendant's 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
McDonald's mark "B[ig] M[ac]", xxx. Defendant Big Mak Burger has thus unjustly created the
impression that its business is approved and sponsored by, or affiliated with, plaintiffs. xxxx
2.2 As a consequence of the acts committed by defendants, which unduly prejudice and
infringe upon the property rights of plaintiffs McDonald's and McGeorge as the real owner and
rightful proprietor, and the licensee/franchisee, respectively, of the McDonald's 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 damagesin the form of injury to their business reputation and goodwill, and
of the dilution of the distinctive quality of the McDonald's marks, in particular, the mark "B[ig]
M[ac]".55 (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 "McDonald's" logo and trademark in red, block letters at a price
more expensive than the hamburgers of respondents. In contrast, respondents sell their Big Mak
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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).56 (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.57 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
Page 60
Appeals ruled that "it is not sufficientthat 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.58
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 theadoption of the dominant features of the registered
mark, disregarding minor differences.59 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,60 the Court ruled:
xxx 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 itnecessary 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; xxx) (Emphasis supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director of Patents,61 Phil. Nut Industry, Inc.
v. Standard Brands Inc.,62 Converse Rubber Corporation v. Universal Rubber Products,
Inc.,63 and Asia Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des Produits Nestl,
S.A. v. Court of Appeals,65 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,
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
connotative comparisons and overall impressions engendered by the marks in controversy as they
are encounteredin 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 xxx 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 the same as "Big Mac." Second, the first word
in "Big Mak" is exactlythe same as the first word in "Big Mac." Third, the first two letters in "Mak" are
the same as the first two letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds the
same as "c" when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in
spelling, thus "Caloocan" is spelled "Kalookan."
In short, aurally the two marks are the same, with the first word of both marks phonetically the
same, and the second word of both marks also phonetically the same. Visually, the two marks
have both two words and six letters, with the first word of both marks having the same letters and
the second word having the same first two letters. In spelling, considering the Filipino language, even
the last letters of both marks are the same.
Clearly, respondents have adopted in "Big Mak" not only the dominant but also almost all the
features of "Big Mac." Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind.
The Court has taken into account the aural effects of the words and letters contained in the marks
in determining the issue of confusing similarity. Thus, in Marvex Commercial Co., Inc. v. Petra Hawpia
& Co., et al.,66 the Court held:
The following random list of confusingly similar sounds in the matter of trademarks, culled from
Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that "SALONPAS"
and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop"; "Jantzen" and "Jass-
Sea"; "Silver Flash" and "Supper Flash"; "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 "Trade-Mark Law and Practice", pp. 419-421, cities,
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
Page 61
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. (Emphasis supplied)
Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater confusion, not only aurally
but also visually.
Indeed, a person cannot distinguish "Big Mac" from "Big Mak" by their sound. When one hears a "Big
Mac" or "Big Mak" hamburger advertisement over the radio, one would not know whether the
"Mac" or "Mak" ends with a "c" or a "k."
Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their advertisement expenses,
has built goodwill and reputation for such mark making it one of the easily recognizable marks in the
market today. Thisincreases the likelihood that consumers will mistakenly associate petitioners'
hamburgers and business with those of respondents'.
Respondents' inability to explain sufficiently how and why they came to choose "Big Mak" for their
hamburger sandwiches indicates their intent to imitate petitioners' "Big Mac" mark. Contrary to the
Court of Appeals' finding, respondents' claim that their "Big Mak" mark was inspired by the first
names of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As petitioners well
noted:
[R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at a more creative choice
for a corporate name by using the names of his parents, especially since he was allegedly driven by
sentimental reasons. For one, he could have put his father's name ahead of his mother's, as is usually
done in this patriarchal society, and derived letters from said names in that order. Or, he could have
taken an equalnumber of letters (i.e., two) from each name, as is the more usual thing done. Surely,
the more plausible reason behind Respondents' choice of the word "M[ak]", especially when taken in
conjunction with the word "B[ig]", was their intent to take advantage of Petitioners' xxx "B[ig] M[ac]"
trademark, with their allegedsentiment-focused "explanation" merely thought of as a
convenient, albeit unavailing, excuse or defense for such an unfair choice of name.67
Absent proof that respondents' adoption of the "Big Mak" mark was due to honest mistake or was
fortuitous,68 the inescapable conclusion is that respondents adopted the "Big Mak" mark to "ride on
the coattails" of the more established "Big Mac" mark.69 This saves respondents much of the
expense in advertising to create market recognition of their mark and hamburgers.70
Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners' claim of
trademark infringement.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
On the Lack of Proof of
Actual Confusion
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,71 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.72
On the Issue of Unfair Competition
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
xxxx
Any person who will employ deception or any other means contrary to good faith by which
he shall pass off the goods manufactured by him or in which he deals, or his business, or services for
those of the one having established such goodwill, or who shall commit any acts calculated to
produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.
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 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. (Emphasis supplied)
Page 62
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.74 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.75 Actual fraudulent intent need not be shown.76
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.77 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.78
To support their claim of unfair competition, petitioners allege that respondents fraudulently passed
off their hamburgers as "Big Mac" hamburgers. Petitioners add that respondents' fraudulent intent
can be inferred from the similarity of the marks in question.79
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.80 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.
The RTC described the respective marks and the goods of petitioners and respondents in this wise:
The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
sandwich. The packaging material is a styrofoam box with the McDonald's logo and trademark in red
with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are also in red and block
capital letters. On the other hand, defendants' "B[ig] M[ak]" script print is in orange with only the
letter "B" and "M" being capitalized and the packaging material is plastic wrapper. xxxx Further,
plaintiffs' logo and mascot are the umbrella "M" and "Ronald McDonald's", respectively, compared
to the mascot of defendant Corporation which is a chubby boy called "Macky" displayed or printed
between the words "Big" and "Mak."81 (Emphasis supplied)
Respondents point to these dissimilarities as proof that they did not give their hamburgers the
general appearance of petitioners' "Big Mac" hamburgers.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The dissimilarities in the packaging are minor compared to the stark similarities in the words that
give respondents' "Big Mak" hamburgers the general appearance of petitioners' "Big Mac"
hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the
goods may be in the "devices or words" used on the wrappings. Respondents have applied on their
plastic wrappers and bags almost the same wordsthat petitioners use on their styrofoam box. What
attracts the attention of the buying public are the words "Big Mak" which are almost the same,
aurally and visually, as the words "Big Mac." The dissimilarities in the material and other devices are
insignificant compared to the glaring similarity in the words used in the wrappings.
Section 29(a) also provides that the defendant gives "his goods the general appearance of goods of
another manufacturer." Respondents' goods are hamburgers which are also the goods of petitioners.
If respondents sold egg sandwiches only instead of hamburger sandwiches, their use of the "Big
Mak" mark would not give their goods the general appearance of petitioners' "Big Mac" hamburgers.
In such case, there is only trademark infringement but no unfair competition. However, since
respondents chose to apply the "Big Mak" mark on hamburgers, just like petitioner's use of the "Big
Mac" mark on hamburgers, respondents have obviously clothed their goods with the general
appearance of petitioners' goods.
Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big
Mak Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with the words
"L.C. Big Mak Burger, Inc." to inform the public of the name of the seller of the
hamburgers. However, petitioners introduced during the injunctive hearings plastic wrappers and
bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc." Respondents' belated
presentation of plastic wrappers and bags bearing the name of "L.C. Big Mak Burger, Inc." as the
seller of the hamburgers is an after-thought designed to exculpate them from their unfair business
conduct. As earlier stated, we cannot consider respondents' evidence since petitioners' complaint
was based on facts existing before and during the injunctive hearings.
Thus, there is actually no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big
Mak Burger, Inc." and not those of petitioners who have the exclusive right to the "Big Mac" mark.
This clearly shows respondents' intent to deceive the public. Had respondents' placed a notice on
their plastic wrappers and bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.", then
they could validly claim that they did not intend to deceive the public. In such case, there is only
trademark infringement but no unfair competition.82Respondents, however, did not give such
notice. We hold that as found by the RTC, respondent corporation is liable for unfair competition.
The Remedies Available to Petitioners
Page 63
Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a plaintiff who successfully Chairman,
maintains trademark infringement and unfair competition claims is entitled to injunctive and
monetary reliefs. Here, the RTC did not err in issuing the injunctive writ of 16 August 1990 (made Sandoval-Gutierrez,
permanent in its Decision of 5 September 1994) and in ordering the payment
- versus - Corona,
of P400,000 actual damages in favor of petitioners. The injunctive writ is indispensable to prevent
further acts of infringement by respondent corporation. Also, the amount of actual damages is a Carpio Morales, and
reasonable percentage (11.9%) of respondent corporation's gross sales for three (1988-1989 and
1991) of the six years (1984-1990) respondents have used the "Big Mak" mark.84 Garcia, JJ

The RTC also did not err in awarding exemplary damages by way of correction for the public Promulgated:
good85 in view ofthe finding of unfair competition where intent to deceive the public is essential.
UNIVERSAL CANNING, INC.,*
The award of attorney's fees and expenses of litigation is also in order.86
Respondent. October 11, 2005
WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision dated 26 November 1999 of
the Court of Appeals and its Resolution dated 11 July 2000 and REINSTATE the Decision dated 5 x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- -- -- -- x
September 1994 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak
Burger, Inc. liable for trademark infringement and unfair competition.

SO ORDERED. DECISION

PANGANIBAN, J.:

THIRD DIVISION

T he Rules on voluntary inhibition do not give judges the unfettered discretion to desist from
hearing a case. The motion for inhibition must be grounded on just and valid causes. The mere
imputation of bias or partiality is not enough basis for them to inhibit, especially when the charge is
groundless.
PAGODA PHILIPPINES, INC., G.R. No. 160966
The Case
Petitioner,

Present:
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, challenging the August 14,
Panganiban, J.,
2003 Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 77514 and the November 24, 2003

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 64

LAW ON INTELLECTUAL PROPERTY SET CASES
Resolution[3] denying petitioners Motion for Reconsideration. The decretal portion or fallo of the
assailed Decision reads as follows:
After hearing, [Judge Eugenio] issued a temporary restraining order enjoining [petitioner] to use the
trademark Family.

WHEREFORE, foregoing considered, the instant petition for mandamus is hereby GRANTED. Public
respondents Order dated May 22, 2003, voluntarily inhibiting himself from the case is hereby SET
ASIDE. Public respondent is DIRECTED to continue hearing the case and dispose of the same with On March 21, 2003, [Judge Eugenio] dismissed without prejudice, [petitioners] complaint on the
utmost dispatch. ground of insufficient verification as invoked by [respondent].

[Respondent] filed a motion for reconsideration of the Order dismissing [petitioners] complaint,
claiming that the defect in the verification has been rendered moot and academic by subsequent
The Facts rulings respective to the application for preliminary injunction and that the attending circumstances
of the case warrant liberal compliance [with] the rule.

The facts are narrated by the CA as follows:

[Petitioner] filed a Motion for Voluntary Inhibition, requesting [Judge Eugenio] to inhibit himself
from proceeding to hear, try and decide the pending incidents of the case to afford [petitioner] an
impartial trial.
[Petitioner] filed a civil complaint against [respondent] for Trademark Infringement, False
Representation and Unfair Competition with Damages and Injunction. The case was docketed as Civil
Case [N]o. 02-102988.
[Respondent] opposed [petitioners] Motion for Voluntary Inhibition.
[Petitioner] claimed that [respondents] Familys Brand Sardines is confusingly similar with
[petitioners] Family Brand Sardines. [Petitioner] insisted that it has superior right to use the
trademark Family than [respondent].
On May 22, 2003, [Judge Eugenio] issued an Order voluntarily inhibiting himself from further hearing
[Respondent] filed an Answer with Compulsory Counter-claim and Motion to Dismiss and Prayer for the case.
the Issuance of a Temporary Restraining Order and/or Preliminary Injunction.

Hence, [the] petition [filed with the CA] by [respondent] for mandamus to compel [Judge Eugenio] to
[Respondent] prayed that [petitioner] be enjoined from using the trademark Family and to pay continue to hear the pending incidents of the case.[4]
damages. [Respondent] further asked [Judge Antonio M. Eugenio, Jr.] to set the hearing for its
motion to dismiss the action on the grounds of lack of authority of the affiant of the complaint to
institute the action, insufficient verification and failure to exhaust administrative remedies.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 65

LAW ON INTELLECTUAL PROPERTY SET CASES

Ruling of the Court of Appeals
Finding no valid and just reason for the voluntary inhibition of Judge Eugenio, the CA issued the writ
of mandamus. It ruled that the present case fell within the exception that mandamus would lie in
instances of gross abuse of discretion.
Hence, this Petition.[5]
Issue
The issue was worded by petitioner in this wise:
The principal issue raised by the petitioner for this Honorable Court to resolve is whether or not a
petition for mandamus is the proper remedy to assail a purely discretionary act of Judge Antonio
Eugenio, Jr. of voluntarily inhibiting himself from hearing Civil Case No. 02-102988 and corollary
thereto, whether Judge Eugenio, Jr. who inhibited himself in accordance with the law and the Rules,
can be compelled to perform an act he had already decided not to do with the intention of assuring
the litigants of an impartial trial.[6]
The Court believes that there are actually two issues to be settled in this case: first, whether
mandamus is the proper remedy to assail an order of voluntary inhibition; and second, whether
there was a valid and just reason for the voluntary inhibition of the trial court judge.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The Courts Ruling
The Petition is unmeritorious.
First Issue:
Remedy Against the
Order of Voluntary Inhibition
At the outset, we note that petitioner, in an effort to cover its bases, filed the present Petition
as both a petition for review under Rule 45 and a petition for certiorari under Rule 65 of the Rules of
Court. The applicable rule is Rule 45, which clearly provides that decisions, final orders or resolutions
of the CA in any case -- regardless of the nature of the action or proceeding involved -- may be
appealed to this Court through a petition for review. This remedy is a continuation of the appellate
process over the original case.[7] It is basic that where Rule 45 is available, and in fact availed of as a
remedy -- as in this case -- recourse under Rule 65 cannot be allowed either as an add-on or as a
substitute for appeal.[8]
The procedural infirmity notwithstanding, this Court shall deal with this Petition as one filed under
Rule 45 only and shall treat the alleged grave abuse of discretion on the part of the CA as an
allegation of reversible error.
Petitioner claims that respondent erred when the latter questioned the trial judges Order of
Voluntary Inhibition --supposedly a purely discretionary act -- through a Petition for Mandamus filed
with the CA.
Page 66
While, ordinarily, mandamus will not prosper to compel a discretionary act, the writ shall issue in
instances of gross abuse of discretion, manifest injustice or palpable excess of authority, equivalent
to denial of a settled right to which petitioner is entitled; and when there is no other plain, speedy
and adequate remedy.[9]This Court has recognized that [a] judges decision to refuse to act on
account of some disqualification is not conclusive, and his competency may be determined on an
application for mandamus to compel him to act.[10]
Second Issue:
Inhibition
Section 1 of Rule 137 of the Rules of Court provides:
Section 1. Disqualification of judges. No judge or judicial officer shall sit in any case in which he, or
his wife or child, is pecuniarily interested as heir, legatee, creditor or otherwise, or in which he is
related to either party within the sixth degree of consanguinity or affinity, or to counsel within the
fourth degree, computed according to the rules of the civil law, or in which he has been executor,
administrator, guardian, trustee or counsel, or in which he has presided in any inferior court when
his ruling or decision is the subject of review, without the written consent of all parties in interest,
signed by them and entered upon the record.
A judge may, in the exercise of his sound discretion, disqualify himself from sitting in a case, for just
or valid reasons other than those mentioned above.
The Rules contemplate two kinds of inhibition: compulsory and voluntary. Under the first paragraph
of the cited Rule, it is conclusively presumed that judges cannot actively and impartially sit in the
instances mentioned. The second paragraph, which embodies voluntary inhibition, leaves to the
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
sound discretion of the judges concerned whether to sit in a case for other just and valid reasons,
with only their conscience as guide.[11]
In Umale v. Villaluz,[12] the Court traced the history of the second paragraph of the above-quoted
provision, which had been added only as an amendment to the Rules of Court in 1964. Prior to that
year, the question on whether to take cognizance of the case did not depend upon the discretion of
the judges not legally disqualified to sit in a given case. If those concerned were not disqualified, it
was their official duty to proceed with the case or else risk being called upon to account for their
dereliction. They could not voluntarily inhibit themselves on grounds of prejudice or bias, extreme
delicacy, or even if they themselves took great interest and an active part in the filing of the
case. Gutierrez v. Santos[13] and Del Castillo v. Javelona[14] paved the way for the recognition of
other circumstances for disqualification --those that depended upon the exercise of discretion of the
judges concerned.
The judges right, however, must be weighed against their duty to decide cases without fear of
repression. Verily, the second paragraph of Section 1 of Rule 137 does not give judges the unfettered
discretion to decide whether to desist from hearing a case. The inhibition must be for just and valid
causes. The mere imputation of bias or partiality is not enough ground for them to inhibit, especially
when the charge is without basis. This Court has to be shown acts or conduct clearly indicative of
arbitrariness or prejudice before it can brand them with the stigma of bias or partiality. [15]
A perusal of the records of the case fails to reveal that any bias or prejudice motivated Judge Eugenio
in issuing the Writ of Preliminary Injunction in favor of respondent or in dismissing petitioners
Complaint. Neither did this Court find any questionable or suspicious circumstances leading to the
issuance of those Orders, as suggested by petitioner.
This Court has repeatedly held that for bias and prejudice to be considered valid reasons for the
voluntary inhibition of judges, mere suspicion is not enough. Bare allegations of their partiality will
not suffice in the absence of clear and convincing evidence to overcome the presumption that a
Page 67
judge will undertake his noble role to dispense justice according to law and evidence and without Ynares-Santiago, J. (Chairperson),
fear or favor. [16]
- versus - Austria-Martinez,

Chico-Nazario,
In his questioned Order of Inhibition, Judge Eugenio himself satisfactorily clarified his actuations and
the circumstances leading to the issuance of the questioned injunction and Order of dismissal. Nachura, and
Obviously not believing that he had been motivated by bias or prejudice, he nonetheless granted
Reyes, JJ.
petitioners Motion to Inhibit. Understandably, he did so with the intention to uphold the integrity of
the judiciary as an institution worthy of public trust and confidence. Under the circumstances, IN-N-OUT BURGER, INC.,
however, to affirm his Order of Inhibition would open the floodgates to a form of forum-shopping, in
which litigants would be allowed to shop for a judge more sympathetic to their cause.[17] Such Respondent. Promulgated:
action would be antithetical to the speedy and fair administration of justice.

October 15, 2007

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against
x ---------------------------------------------------------------------------------------- x
petitioner.

**********************
DECISION

YNARES-SANTIAGO, J.:

THIRD DIVISION
This petition for review assails the Decision[1] of the Court of Appeals in CA-G.R. SP No. 88004 dated
October 21, 2005, which affirmed the December 7, 2004 Order[2] of Director General Emma C.
Francisco of the Intellectual Property Office (IPO), in Appeal No. 14-2004-0004 finding that
petitioners appeal was filed out of time, as well as the Resolution[3] dated January 12, 2006 denying
SEHWANI, INCORPORATED G.R. No. 171053 the motion for reconsideration.

and/or BENITAS FRITES, INC.,

Petitioner, Present:

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 68

LAW ON INTELLECTUAL PROPERTY SET CASES
Respondent IN-N-OUT Burger, Inc., a foreign corporation organized under the laws of California,
U.S.A., and not doing business in the Philippines, filed before the Bureau of Legal Affairs of the IPO
(BLA-IPO), an administrative complaint against petitioners Sehwani, Inc. and Benitas Frites, Inc. for
violation of intellectual property rights, attorneys fees and damages with prayer for the issuance of a
restraining order or writ of preliminary injunction.[4]
Respondent alleged that it is the owner of the tradename IN-N-OUT and trademarks IN-N-OUT, IN-N-
OUT Burger & Arrow Design and IN-N-OUT Burger Logo, which are used in its business since 1948 up
to the present. These tradename and trademarks were registered in the United States as well as in
other parts of the world.[5]
On June 2, 1997, respondent applied with the IPO for the registration of its trademark IN-N-OUT
Burger & Arrow Design and servicemark IN-N-OUT. In the course of its application, respondent
discovered that petitioner Sehwani, Inc. had obtained Trademark Registration No. 56666 for the
mark IN N OUT (THE INSIDE OF THE LETTER O FORMED LIKE A STAR) on December 17, 1993 without
its authority.[6] Respondent thus demanded that petitioner Sehwani, Inc. desist from claiming
ownership of the mark IN-N-OUT and to voluntarily cancel its Trademark Registration No.
56666. Petitioner Sehwani, Inc. however refused to accede to the demand and even entered into a
Licensing Agreement granting its co-petitioner Benitas Frites, Inc. license to use for a period of five
years the trademark IN-N-OUT BURGER in its restaurant in Pasig City.[7] Hence, respondent filed a
complaint for violation of intellectual property rights.
In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to sue
because it was not doing business in the Philippines and that it has no cause of action because its
mark is not registered or used in the Philippines. Petitioner Sehwani, Inc. also claimed that as the
registered owner of the IN-N-OUT mark, it enjoys the presumption that the same was validly
acquired and that it has the exclusive right to use the mark. Moreover, petitioners argued that other
than the bare allegation of fraud in the registration of the mark, respondent failed to show the
existence of any of the grounds for cancellation thereof under Section 151 of Republic Act (R.A.) No.
8293, otherwise known as The Intellectual Property Code of the Philippines.[8]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
On December 22, 2003, Bureau Director Estrellita Beltran-Abelardo rendered Decision No. 2003-02
finding that respondent has the legal capacity to sue and that it is the owner of the internationally
well-known trademarks; however, she held that petitioners are not guilty of unfair competition,
thus:
With the foregoing disquisition, Certificate of Registration No. 56666 dated 17 December 1993 for
the mark IN-N-OUT (the inside of the letter O formed like a star) issued in favor of Sehwani,
Incorporated is hereby CANCELLED. Consequently, Respondents Sehwani, Inc. and Benitas Frites are
hereby ordered to permanently cease and desist from using the mark IN-N-OUT and IN-N-OUT
BURGER LOGO on its goods and in its business. With regard to mark Double-Double, considering that
as earlier discussed, the mark has been approved by this Office for publication and that as shown by
the evidence, Complainant is the owner of the said mark, Respondents are also ordered to
permanently cease and desist from using the mark Double-Double.NO COSTS.
SO ORDERED.[9]
Petitioners filed a motion for reconsideration[10] insisting that respondent has no legal capacity to
sue, that no ground for cancellation was duly proven, and that the action is barred by laches; while
respondent moved for partial reconsideration[11] assailing the finding that petitioners are not guilty
of unfair competition. Both, however, were denied in Resolution No. 2004-18 dated October 28,
2004[12] and Resolution No. 2005-05 dated April 25, 2005,[13] respectively.
On separate dates, the parties appealed to the Office of the Director General which rendered an
Order dated December 7, 2004,[14] in Appeal No. 14-2004-0004, dismissing petitioners appeal for
being filed out of time, thus:
WHEREFORE, premises considered, the MOTION TO ADMIT COPY OF DECISION NO. 2003-02 is
hereby granted. The instant appeal, however, is hereby DISMISSED for having been filed out of
time.[15]
Page 69
Aggrieved, petitioners filed a petition before the Court of Appeals which was dismissed for lack of
merit. It held that the right to appeal is not a natural right or a part of due process, but a procedural
remedy of statutory origin, hence, its requirements must be strictly complied with. The appeal being
filed out of time, the December 22, 2003 Decision and the October 28, 2004 Orders of Bureau
Director Beltran-Abelardo are now final and executory.[16]
Meanwhile, respondent filed a Manifestation with the Court of Appeals that on December 23, 2005,
Director General Adrian S. Cristobal, Jr. had rendered a Decision in Appeal10-05-01 finding
petitioners guilty of unfair competition.[17]
Petitioners motion for reconsideration was denied; hence, the instant petition raising the following
issues:
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN UPHOLDING THE IPO DIRECTOR GENERALS
DISMISSAL OF APPEAL NO. 14-2004-0004 ON A MERE TECHNICALITY.
SUBSTANTIAL JUSTICE WOULD BE BETTER SERVED IF THE COURT OF APPEALS AND THE IPO
DIRECTOR GENERAL ENTERTAINED PETITIONERS APPEAL AS THE BUREAU OF LEGAL AFFAIRS
DECISION AND RESOLUTION (1) CANCELING PETITIONER SEHWANIS CERTIFICATE OF REGISTRATION
FOR THE MARK IN-N-OUT, AND (2) ORDERING PETITIONERS TO PERMANENTLY CEASE AND DESIST
FROM USING THE SUBJECT MARK ON ITS GOODS AND BUSINESS ARE CONTRARY TO LAW AND/OR
NOT SUPPORTED BY EVIDENCE.[18]
Petitioners contend that the Court of Appeals erred when it dismissed the petition on mere
technicality which resulted in a miscarriage of justice and deprivation of intellectual property
rights. They claim that their counsel believed in good faith that Resolution No. 2004-18
dated October 28, 2004, denying the motion for reconsideration, was received only on November 3,
2004, thus, they have until November 18, 2004 within which to file an appeal memorandum with the
Office of the Director General. They claim that they should not be prejudiced by their counsels
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
mistake in computing the period to appeal; besides, the same is understandable and excusable as
their counsel is a solo practitioner with only a handful of non-legal staff assisting him. They also
reiterate their position that respondent has no legal capacity to sue, that no ground for cancellation
was duly proven, and that the complaint is barred by laches, if not, by prescription.[19]
The petition has no merit.
The Court has invariably ruled that perfection of an appeal within the statutory or reglementary
period is not only mandatory but also jurisdictional; failure to do so renders the questioned
decision/final order final and executory, and deprives the appellate court of jurisdiction to alter the
judgment or final order, much less to entertain the appeal.[20]True, this rule had been relaxed but
only in highly meritorious cases to prevent a grave injustice from being done.[21] Such does not
obtain in this case.
Director General Francisco, as affirmed by the Court of Appeals, correctly held:
[T]hat the appeal must be dismissed outright. Section 2 of the Uniform Rules on Appeal (Office Order
no. 12, s. 2002) states that:
Section 2. Appeal to the Director General. The decisions or final orders of the Bureau Director shall
become final and executory thirty (30) days after receipt of a copy thereof by the appellant or
appellants unless, within the same period, a motion for reconsideration is filed with the Bureau
Director or an appeal to the Director General has been perfected; Provided, that only one (1) motion
for reconsideration of the decision or order of the Bureau Director shall be allowed, and, in case the
motion for reconsideration is denied, the appellant or appellants has/have the balance of the period
prescribed above within which to file the appeal.
Page 70
Considering that the Respondent-Appellants received a copy of the appealed Decision on 15 January
2004 and filed their MOTION FOR RECONSIDERATION on 30 January 2004, said parties had a balance
of 15 days from their receipt of the Resolution denying said motion within which to file the APPEAL
MEMORANDUM. Per records of the Bureau of Legal Affairs, the Respondents-Appellants received a
copy of the Resolution on 29 October 2004. Hence the deadline for the filing of the APPEAL
MEMORANDUM was on 13 November 2004. Since said date fell on a Saturday, the appeal should
have been filed on the ensuing working day, that is, 15 November 2004.
On this score, Section 5(c) of the Uniform Rules on Appeal provides:
Section 5. Action on the Appeal Memorandum The Director General shall:
xxxx
c) Dismiss the appeal for being patently without merit, provided that the dismissal shall be outright if
the appeal is not filed within the prescribed period or for failure of the appellant to pay the required
fee within the period of appeal.[22] (Underscoring supplied)
Petitioners allegation that they honestly believed that they received Resolution No. 2004-18
dated October 28, 2004 on November 3, 2004 and not on October 29, 2004, as what appears on the
records of the BLA-IPO, is self-serving and unbelievable. The inadvertent computation of the period
for one to file a pleading is inexcusable, and has become an all too familiar and ready excuse on the
part of lawyers remiss in their bounden duty to comply with the mandatory periods.[23]
This Court has always reminded the members of the legal profession that every case they handle
deserves full and undivided attention, diligence, skill and competence, regardless of its
importance.[24] A lawyer has the responsibility of monitoring and keeping track of the period of time
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
left to file pleadings and to see to it that said pleadings are filed before the lapse of the period. If he
fails to do so, his client is bound by his conduct, negligence and mistakes.[25] This responsibility is
imposed on all lawyers notwithstanding the presence or absence of staff assisting them in the
discharge thereof.
Thus, as correctly held by the Court of Appeals, petitioners belated filing of an appeal memorandum
rendered the December 22, 2003 Decision and the October 28, 2004Order of Bureau Director
Beltran-Abelardo final and executory.
At this point, the Court could very well write finis to this petition. However, in disposing of the
instant case, we shall resolve the principal issues raised by petitioners.
Contrary to petitioners argument, respondent has the legal capacity to sue for the protection of its
trademarks, albeit it is not doing business in the Philippines. Section 160 in relation to Section 3 of
R.A. No. 8293, provides:
SECTION 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement
Action. Any foreign national or juridical person who meets the requirements of Section 3 of this Act
and does not engage in business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or false designation of
origin and false description, whether or not it is licensed to do business in the Philippines under
existing laws.
Section 3 thereof provides:
SECTION 3. International Conventions and Reciprocity. Any person who is a national or who is
domiciled or has a real and effective industrial establishment in a country which is a party to any
Page 71
convention, treaty or agreement relating to intellectual property rights or the repression of unfair
competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the
Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision
of such convention, treaty or reciprocal law, in addition to the rights to which any owner of an
intellectual property right is otherwise entitled by this Act.
Respondent anchors its causes of action under Articles 6bis and 8 of The Convention of Paris for the
Protection of Industrial Property, otherwise known as the Paris Convention, wherein both the United
States and the Philippines are signatories.[26] The Articles read:
Article 6bis
(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of
an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark
which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark
considered by the competent authority of the country of registration or use to be well known in that
country as being already the mark of a person entitled to the benefits of this Convention and used
for identical or similar goods. These provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an imitation liable to create confusion
therewith.
x x x x.
Article 8
A tradename shall be protected in all countries of the Union without the obligation of filing or
registration whether or not it forms part of a trademark.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Article 6bis which governs the protection of well-known trademarks, is a self-executing provision and
does not require legislative enactment to give it effect in the member country. It may be applied
directly by the tribunals and officials of each member country by the mere publication or
proclamation of the Convention, after its ratification according to the public law of each state and
the order for its execution. The essential requirement under this Article is that the trademark to be
protected must be "well-known" in the country where protection is sought. The power to determine
whether a trademark is well-known lies in the competent authority of the country of registration or
use. This competent authority would be either the registering authority if it has the power to decide
this, or the courts of the country in question if the issue comes before a court.[27]
The question of whether or not respondents trademarks are considered well-known is factual in
nature, involving as it does the appreciation of evidence adduced before the BLA-IPO. The settled
rule is that the factual findings of quasi-judicial agencies, like the IPO, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally accorded not only respect,
but, at times, even finality if such findings are supported by substantial evidence.[28]
Director Beltran-Abelardo found that:
Arguing mainly that it is the owner of an internationally well-known mark, complainant presented its
United States trademark registrations, namely: United States Trademark Registration No. 1,514,689
for the mark IN-N-OUT Burger and Arrow Design under class 25 dated November 29, 1988 for the
shirts (Exhibit L); United States Trademark Registration No. 1,528,456 for the mark IN-N-OUT Burger
and Arrow Design under Class 29, 30, 32 and 42 dated March 7, 1989 for milk and french-
fried potatoes for consumption on or off the premises, for hamburger sandwiches, cheeseburger
sandwiches, hot coffee and milkshakes for consumption on or off the premises, lemonade and
softdrinks for consumption on and off the premises, restaurant services respectively (Exhibit M); US
Trademark Registration No. 1,101,638 for the mark IN-N-OUT under Class No. 30 dated September 5,
1978 for cheeseburgers, hamburgers, hot coffee and milkshake for consumption on or off premises
(Exhibit N); US Trademark Registration No. 1,085,163 IN-N-OUT under Class 42 dated February 7,
1978 for Restaurant Services and carry-out restaurant services (Exhibit Q). For its mark Double-
Double it submitted Certificates of Registration of said mark in several countries (Exhibits MM and
submarkings).
Page 72

xxxx
Moreover, complainant also cites our decision in Inter Pares Case No. 14-1998-00045 dated 12
September 2000, an opposition case involving the mark IN-N-OUT between IN-N-OUT Burger (herein
complainant) and Nestor SJ Bonjales where we ruled:
And last but not the lease, the herein Opposer was able to prove substantially that its mark IN-N-
OUT Burger and Arrow Design is an internationally well known mark as evidenced by its trademark
registrations around the world and its comprehensive advertisements therein.
The nub of complainants reasoning is that the Intellectual Property Office as a competent authority
had declared in previous inter partes case that IN-N-OUT Burger and Arrow Design is an
internationally well known mark.
In the aforementioned case, we are inclined to favor the declaration of the mark IN-N-OUT as an
internationally well-known mark on the basis of registrations in various countries around the world
and its comprehensive advertisements therein.
The Ongpin Memorandum dated 25 October 1983 which was the basis for the decision in the
previous inter partes case and which set the criteria for determining whether a mark is well known,
takes into consideration the extent of registration of a mark. Similarly, the implementing rules of
Republic Act 8293, specifically Section (e) Rule 102 Criteria for determining whether a mark is well
known, also takes into account the extent to which the mark has been registered in the world in
determining whether a mark is well known.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Likewise, as shown by the records of the instant case, Complainant submitted evidence consisting of
articles about IN-N-OUT Burger appearing in magazines, newspapers and print-out of what appears
to be printed representations of its internet website (www.innout.com) (Exhibits CCC to QQQ), as
well as object evidence consisting of videotapes of famous celebrities mentioning IN-N-OUT burgers
in the course of their interviews (Exhibits EEEE and FFFF) showing a tremendous following among
celebrities.
The quality image and reputation acquired by the complainants IN-N-OUT mark is
unmistakable. With this, complainants mark have met other criteria set in the Implementing Rules of
Republic Act 8293, namely, a and d of Rule 102, to wit:
Rule 102:
(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 publicity and the presentation
at fairs or exhibitions, of the goods and/or services to which the mark applies;
xxxx
(d) the quality image or reputation acquired by the mark
Hence, on the basis of evidence presented consisting of worldwide registration of mark IN-N-OUT
almost all of which were issued earlier than the respondents date of filing of its application and the
subsequent registration of the mark IN-N-OUT in this Office, as well as the advertisements therein by
the complainant, this Office hereby affirms its earlier declaration that indeed, the mark IN-N-OUT
BURGER LOGO is an internally well-known mark.[29]
Page 73
We find the foregoing findings and conclusions of Director Beltran-Abelardo fully substantiated by
the evidence on record and in accord with law.
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. (Underscoring supplied)
Moreover, petitioners claim that no ground exists for the cancellation of their registration lacks
merit. Section 151(b) of RA 8293 provides:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
SECTION 151. Cancellation. 151.1. A petition to cancel a registration of a mark under this Act may be
filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the
registration of a mark under this Act as follows:
xxxx
(b) At any time, if the registered mark becomes the generic name for the goods or services, or a
portion thereof, for which it is registered, or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source of the goods or services on or
in connection with which the mark is used. x x x.
The evidence on record shows that not only did the petitioners use the IN-N-OUT Burger trademark
for the name of their restaurant, but they also used identical or confusingly similar mark for their
hamburger wrappers and french-fries receptacles, thereby effectively misrepresenting the source of
the goods and services.[30]
Finally, petitioners contention that respondent is precluded from asserting its claim by laches, if not
by prescription, lacks basis. Section 151(b) of R.A. No. 8293 specifically provides that a petition to
cancel the registration of a mark which is registered contrary to the provisions thereof, or which is
used to misrepresent the source of the goods or services, may be filed at any
time. Moreover, laches may not prevail against a specific provision of law, since equity, which has
been defined as justice outside legality is applied in the absence of and not against statutory law or
rules of procedure.[31] Aside from the specific provisions of R.A. No. 8293, the Paris Convention and
the WIPO Joint Recommendation have the force and effect of law, for under Section 2, Article II of
the Constitution, the Philippines adopts the generally accepted principles of international law as part
of the law of the land. To rule otherwise would be to defeat the equitable consideration that no one
other than the owner of the well-known mark shall reap the fruits of an honestly established
goodwill.
Page 74
 VELASCO, JR.,

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. - versus - LEONARDO - DE CASTRO,
SP No. 88004, dated October 21, 2005 and January 16, 2006, affirming the December 7, 2004 Order
of Director General Emma C. Francisco, in Appeal No. 14-2004-0004, and denying the motion for DEL CASTILLO, and
reconsideration, respectively, areAFFIRMED.
PEREZ, JJ.

SHEN DAR ELECTRICITY AND Promulgated:

SO ORDERED.
MACHINERY CO., LTD.,
********************
Respondent. October 20, 2010

x-----------------------------------------------------------------------------------------x
Republic of the Philippines

SUPREME COURT
DECISION
Manila

VELASCO, JR., J.:

FIRST DIVISION

The Case

This Petition for Review on Certiorari under Rule 45 seeks to nullify and reverse the February 21,
E.Y. INDUSTRIAL SALES, INC. G.R. No. 184850 2008 Decision[1] and the October 6, 2008 Resolution[2] rendered by the Court of Appeals (CA) in CA-
G.R. SP No. 99356 entitled Shen Dar Electricity and Machinery Co., Ltd. v. E.Y. Industrial Sales, Inc.
and ENGRACIO YAP, and Engracio Yap.

Petitioners, Present:

CORONA, C.J., Chairperson, The assailed decision reversed the Decision dated May 25, 2007[3] issued by the Director General of
the Intellectual Property Office (IPO) in Inter Partes Case No. 14-2004-00084. The IPO Director

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 75

LAW ON INTELLECTUAL PROPERTY SET CASES
General upheld Certificate of Registration (COR) No. 4-1999-005393 issued by the IPO for the
trademark VESPA in favor of petitioner E.Y. Industrial Sales, Inc. (EYIS), but ordered the cancellation
of COR No. 4-1997-121492, also for the trademark VESPA, issued in favor of respondent Shen Dar
Electricity and Machinery Co., Ltd. (Shen Dar). The Decision of the IPO Director General, in effect,
affirmed the Decision dated May 29, 2006[4] issued by the Director of the Bureau of Legal Affairs
(BLA) of the IPO.
The Facts
EYIS is a domestic corporation engaged in the production, distribution and sale of air compressors
and other industrial tools and equipment.[5] Petitioner Engracio Yap is the Chairman of the Board of
Directors of EYIS.[6]
Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of air
compressors.[7]
Both companies claimed to have the right to register the trademark VESPA for air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales contracts. In the
Sales Contract dated April 20, 2002,[8] for example, Shen Dar would supply EYIS in one (1) year with
24 to 30 units of 40-ft. containers worth of air compressors identified in the Packing/Weight Lists
simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In the corresponding Bill of Ladings,
the items were described merely as air compressors.[9] There is no documentary evidence to show
that such air compressors were marked VESPA.
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-121492 with the IPO for the
mark VESPA, Chinese Characters and Device for use on air compressors and welding machines.[10]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-005393, also for the mark
VESPA, for use on air compressors.[11] On January 18, 2004, the IPO issued COR No. 4-1999-005393
in favor of EYIS.[12] Thereafter, on February 8, 2007, Shen Dar was also issued COR No. 4-1997-
121492.[13]
In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS COR with the
BLA.[14] In the Petition, Shen Dar primarily argued that the issuance of the COR in favor of EYIS
violated Section 123.1 paragraphs (d), (e) and (f) of Republic Act No. (RA) 8293, otherwise known as
the Intellectual Property Code (IP Code), having first filed an application for the mark. Shen Dar
further alleged that EYIS was a mere distributor of air compressors bearing the mark VESPA which it
imported from Shen Dar. Shen Dar also argued that it had prior and exclusive right to the use and
registration of the mark VESPA in the Philippines under the provisions of the Paris Convention.[15]
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners of the mark VESPA
being the sole assembler and fabricator of air compressors since the early 1990s. They further
alleged that the air compressors that Shen Dar allegedly supplied them bore the mark SD for Shen
Dar and not VESPA. Moreover, EYIS argued that Shen Dar, not being the owner of the mark, could
not seek protection from the provisions of the Paris Convention or the IP Code.[16]
Thereafter, the Director of the BLA issued its Decision dated May 29, 2006 in favor of EYIS and
against Shen Dar, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition for Cancellation is, as it is hereby, DENIED.
Consequently, Certificate of Registration No. 4-1999-[005393] for the mark VESPA granted in the
name of E.Y. Industrial Sales, Inc. on 9 January 2007 is hereby upheld.
Page 76
Let the filewrapper of VESPA subject matter of this case be forwarded to the Administrative,
Financial and Human Resource Development Services Bureau for issuance and appropriate action in
accordance with this DECISION and a copy thereof furnished to the Bureau of Trademarks for
information and update of its records.
SO ORDERED.[17]
Let a copy of this Decision as well as the records of this case 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, the Administrative, Financial and Human Resources Development Services
Bureau, and the Documentation, Information and Technology Transfer Bureau be furnished a copy of
this Decision for information, guidance, and records purposes.[19]

Shen Dar appealed the above decision of the IPO Director General to the CA where Shen Dar raised
Shen Dar appealed the decision of the BLA Director to the Director General of the IPO. In the appeal, the following issues:
Shen Dar raised the following issues:

1. Whether Shen Dar is guilty of forum shopping;

1. Whether the BLA Director erred in ruling that Shen Dar failed to present evidence;
2. Whether the first-to-file rule applies to the instant case;

3. Whether Shen Dar presented evidence of actual use;

2. Whether the registration of EYIS application was proper considering that Shen Dar was the first
to file an application for the mark; and 4. Whether EYIS is the true owner of the mark VESPA;

5. Whether the IPO Director General erred in cancelling Shen Dars COR No. 4-1997-121492
without a petition for cancellation; and
3. Whether the BLA Director correctly ruled that EYIS is the true owner of the mark.[18]
6. Whether Shen Dar sustained damages.[20]
Later, the IPO Director General issued a Decision dated May 25, 2007 upholding the COR issued in
favor of EYIS while cancelling the COR of Shen Dar, the dispositive portion of which reads:

WHEREFORE, premises considered, the appeal is DENIED. Certificate of Registration No. 4-1999-
005393 for the mark VESPA for air compressor issued in favor of Appellee is hereby upheld.
Consequently, Certificate of Registration No. 4-1997-121492 for the mark VESPA, Chinese Characters
& Device for goods air compressor and spot welding machine issued in favor of Appellant is hereby
ordered cancelled.
In the assailed decision, the CA reversed the IPO Director General and ruled in favor of Shen Dar. The
dispositive portion states:
WHEREFORE, premises considered, the petition is GRANTED. Consequently, the assailed decision of
the Director General of the Intellectual Property Office dated May 25, 2007 is hereby REVERSED and
SET ASIDE. In lieu thereof, a new one is entered: a) ordering the cancellation of Certificate of

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 77

LAW ON INTELLECTUAL PROPERTY SET CASES
Registration No. 4-1999-005393 issued on January 19, 2004 for the trademark VESPA in favor of E.Y.
Industrial Sales, Inc.; b) ordering the restoration of the validity of Certificate of Registration No. 4-
1997-121492 for the trademark VESPA in favor of Shen Dar Electricity and Machinery Co., Ltd. No A. Whether the Director General of the IPO correctly upheld the rights of Petitioners over
pronouncement as to costs. the trademark VESPA.

SO ORDERED.[21] B. Whether the Director General of the IPO can, under the circumstances, order the
cancellation of Respondents certificate of registration for VESPA, which has been fraudulently
obtained and erroneously issued.

In ruling for Shen Dar, the CA ruled that, despite the fact that Shen Dar did not formally offer its C. Whether the Honorable Court of Appeals was justified in reversing the findings of fact of
evidence before the BLA, such evidence was properly attached to the Petition for Cancellation. As the IPO, which affirm the rights of Petitioner EYIS over the trademark VESPA and when such findings
such, Shen Dars evidence may be properly considered. The CA also enunciated that the IPO failed to are supported by the evidence on record.
properly apply the provisions of Sec. 123.1(d) of RA 8293, which prohibits the registration of a
trademark in favor of a party when there is an earlier filed application for the same mark. The CA
further ruled that Shen Dar should be considered to have prior use of the mark based on the
D. Whether this Honorable Court may review questions of fact considering that the findings
statements made by the parties in their respective Declarations of Actual Use. The CA added that
of the Court of Appeals and the IPO are in conflict and the conclusions of the appellee court are
EYIS is a mere importer of the air compressors with the mark VESPA as may be gleaned from its
contradicted by the evidence on record.[23]
receipts which indicated that EYIS is an importer, wholesaler and retailer, and therefore, cannot be
considered an owner of the mark.[22]

EYIS filed a motion for reconsideration of the assailed decision which the CA denied in the assailed The Ruling of the Court
resolution.

The appeal is meritorious.

Hence, the instant appeal.

First Issue:
Issues
Whether this Court may review the questions of fact presented

EYIS and Yap raise the following issues in their petition:

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 78
LAW ON INTELLECTUAL PROPERTY SET CASES
Petitioners raise the factual issue of who the true owner of the mark is. As a general rule, this Court
is not a trier of facts. However, such rule is subject to exceptions.
Second Issue:

Whether evidence presented before the BLA must be formally offered

In New City Builders, Inc. v. National Labor Relations Commission,[24] the Court ruled that:

We are very much aware that the rule to the effect that this Court is not a trier of facts admits of
exceptions. As we have stated in Insular Life Assurance Company, Ltd. vs. CA: Preliminarily, it must be noted that the BLA ruled that Shen Dar failed to adduce evidence in support
of its allegations as required under Office Order No. 79, Series of 2005, Amendments to the
Regulations on Inter Partes Proceedings, having failed to formally offer its evidence during the
proceedings before it. The BLA ruled:
[i]t is a settled rule that in the exercise of the Supreme Courts power of review, the Court is not a
trier of facts and does not normally undertake the re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings of facts of the CA are
conclusive and binding on the Court. However, the Court had recognized several exceptions to this At the outset, we note petitioners failure to adduce any evidence in support of its allegations in the
rule, to wit: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) Petition for Cancellation. Petitioner did not file nor submit its marked evidence as required in this
when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse Bureaus Order No. 2006-157 dated 25 January 2006 in compliance with Office Order No. 79, Series of
of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of 2005, Amendments to the Regulations on Inter Partes Proceedings.[25] x x x
facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to the trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the In reversing such finding, the CA cited Sec. 2.4 of BLA Memorandum Circular No. 03, Series of 2005,
findings of fact are premised on the supposed absence of evidence and contradicted by the evidence which states:
on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not
Section 2.4. In all cases, failure to file the documentary evidences in accordance with Sections 7 and
disputed by the parties, which, if properly considered, would justify a different conclusion. (Emphasis
8 of the rules on summary proceedings shall be construed as a waiver on the part of the parties. In
supplied.)
such a case, the original petition, opposition, answer and the supporting documents therein shall
constitute the entire evidence for the parties subject to applicable rules.

In the instant case, the records will show that the IPO and the CA made differing conclusions on the
issue of ownership based on the evidence presented by the parties.Hence, this issue may be the
The CA concluded that Shen Dar needed not formally offer its evidence but merely needed to attach
subject of this Courts review.
its evidence to its position paper with the proper markings,[26] which it did in this case.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 79

LAW ON INTELLECTUAL PROPERTY SET CASES

The IP Code provides under its Sec. 10.3 that the Director General of the IPO shall establish the
procedure for the application for the registration of a trademark, as well as the opposition to it:
Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall have the following functions:
xxxx
10.3. The Director General may by Regulations establish the procedure to govern the
implementation of this Section.
Thus, the Director General issued Office Order No. 79, Series of 2005 amending the regulations
on Inter Partes Proceedings, Sec. 12.1 of which provides:
Section 12. Evidence for the Parties
12.1. The verified petition or opposition, reply if any, duly marked affidavits of the witnesses, and the
documents submitted, shall constitute the entire evidence for the petitioner or opposer. The verified
answer, rejoinder if any, and the duly marked affidavits and documents submitted shall constitute
the evidence for the respondent. Affidavits, documents and other evidence not submitted and duly
marked in accordance with the preceding sections shall not be admitted as evidence.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The preceding sections referred to in the above provision refer to Secs. 7.1, 8.1 and 9 which, in turn,
provide:
Section 7. Filing of Petition or Opposition
7.1. The petition or opposition, together with the affidavits of witnesses and originals of the
documents and other requirements, shall be filed with the Bureau, provided, that in case of public
documents, certified copies shall be allowed in lieu of the originals. The Bureau shall check if the
petition or opposition is in due form as provided in the Regulations particularly Rule 3, Section 3;
Rule 4, Section 2; Rule 5, Section 3; Rule 6, Section 9; Rule 7, Sections 3 and 5; Rule 8, Sections 3 and
4. For petition for cancellation of layout design (topography) of integrated circuits, Rule 3, Section 3
applies as to the form and requirements. The affidavits, documents and other evidence shall be
marked consecutively as Exhibits beginning with the letter A.
Section 8. Answer
8.1. Within three (3) working days from receipt of the petition or opposition, the Bureau shall issue
an order for the respondent to file an answer together with the affidavits of witnesses and originals
of documents, and at the same time shall notify all parties required to be notified in the IP Code and
these Regulations, provided, that in case of public documents, certified true copies may be
submitted in lieu of the originals. The affidavits and documents shall be marked consecutively as
Exhibits beginning with the number 1.
Section 9. Petition or Opposition and Answer must be verified Subject to Rules 7 and 8 of these
regulations, the petition or opposition and the answer must be verified. Otherwise, the same shall
not be considered as having been filed.
Page 80
In other words, as long as the petition is verified and the pieces of evidence consisting of the
affidavits of the witnesses and the original of other documentary evidence are attached to the
petition and properly marked in accordance with Secs. 7.1 and 8.1 abovementioned, these shall be
considered as the evidence of the petitioner. There is no requirement under the abovementioned
rules that the evidence of the parties must be formally offered to the BLA.
In any case, as a quasi-judicial agency and as stated in Rule 2, Sec. 5 of the Regulations on Inter
Partes Proceedings, the BLA is not bound by technical rules of procedure. The evidence attached to
the petition may, therefore, be properly considered in the resolution of the case.
Third Issue:
Whether the IPO Director General can
validly cancel Shen Dars Certificate of Registration
In his Decision, the IPO Director General stated that, despite the fact that the instant case was for
the cancellation of the COR issued in favor of EYIS, the interests of justice dictate, and in view of its
findings, that the COR of Shen Dar must be cancelled. The Director General explained:
Accordingly, while the instant case involves a petition to cancel the registration of the Appellees
trademark VESPA, the interest of justice requires that Certificate of Registration No. 4-1997-121492
be cancelled. While the normal course of proceedings should have been the filing of a petition for
cancellation of Certificate of Registration No. 4-1997-121492, that would involve critical facts and
issues that have already been resolved in this case. To allow the Applicant to still maintain in the
Trademark Registry Certificate of Registration No. 4-1997-121492 would nullify the exclusive rights
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
of Appellee as the true and registered owner of the mark VESPA and defeat the purpose of the
trademark registration system.[27]
Shen Dar challenges the propriety of such cancellation on the ground that there was no petition for
cancellation as required under Sec. 151 of RA 8293.
Office Order No. 79, Series of 2005, provides under its Sec. 5 that:
Section 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases.The rules
of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases. The
Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technical rules of
procedure and evidence but may adopt, in the absence of any applicable rule herein, such mode of
proceedings which is consistent with the requirements of fair play and conducive to the just, speedy
and inexpensive disposition of cases, and which will give the Bureau the greatest possibility to focus
on the contentious issues before it. (Emphasis supplied.)
The above rule reflects the oft-repeated legal principle that quasi-judicial and administrative bodies
are not bound by technical rules of procedure. Such principle, however, is tempered by fundamental
evidentiary rules, including due process. Thus, we ruled in Aya-ay, Sr. v. Arpaphil Shipping Corp.:[28]
That administrative quasi-judicial bodies like the NLRC are not bound by technical rules of procedure
in the adjudication of cases does not mean that the basic rules on proving allegations should be
entirely dispensed with. A party alleging a critical fact must still support his allegation with
Page 81
substantial evidence. Any decision based on unsubstantiated allegation cannot stand as it will offend right to due process was respected. The IPO Director Generals disregard of the procedure for the
due process. cancellation of a registered mark was a valid exercise of his discretion.

x x x The liberality of procedure in administrative actions is subject to limitations imposed by basic

requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in
administrative procedure does not go so far as to justify orders without a basis in evidence having
rational probative value. More specifically, as held in Uichico v. NLRC:
Fourth Issue:
It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical
Whether the factual findings of the IPO are binding on the CA
rules of procedure in the adjudication of cases. However, this procedural rule should not be
construed as a license to disregard certain fundamental evidentiary rules.

This was later reiterated in Lepanto Consolidated Mining Company v. Dumapis:[29]
Next, petitioners challenge the CAs reversal of the factual findings of the BLA that Shen Dar and not
EYIS is the prior user and, therefore, true owner of the mark. In arguing its position, petitioners cite
numerous rulings of this Court where it was enunciated that the factual findings of administrative
bodies are given great weight if not conclusive upon the courts when supported by substantial
evidence.

While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by the
technical rules of procedure in the adjudication of cases, this procedural rule should not be We agree with petitioners that the general rule in this jurisdiction is that the factual findings of
construed as a license to disregard certain fundamental evidentiary rules. The evidence presented administrative bodies deserve utmost respect when supported by evidence.However, such general
must at least have a modicum of admissibility for it to have probative value. Not only must there be rule is subject to exceptions.
some evidence to support a finding or conclusion, but the evidence must be substantial. Substantial
evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. Thus, even though technical rules of evidence are not In Fuentes v. Court of Appeals,[30] the Court established the rule of conclusiveness of factual
strictly complied with before the LA and the NLRC, their decision must be based on evidence that findings of the CA as follows:
must, at the very least, be substantial.

The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not
preclude the cancellation of Shen Dars COR. It must be emphasized that, during the hearing for the
cancellation of EYIS COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true
owner of the mark VESPA and, thus, entitled to have it registered. Shen Dar had more than sufficient
opportunity to present its evidence and argue its case, and it did. It was given its day in court and its
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Jurisprudence teaches us that (a)s a rule, the jurisdiction of this Court in cases brought to it from the
Court of Appeals x x x is limited to the review and revision of errors of law allegedly committed by
the appellate court, as its findings of fact are deemed conclusive. As such this Court is not duty-
bound to analyze and weigh all over again the evidence already considered in the proceedings
below. This rule, however, is not without exceptions. The findings of fact of the Court of Appeals,
which are as a general rule deemed conclusive, may admit of review by this Court:
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
Page 82
(2) when the findings are grounded entirely on speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken,
absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such
findings are contrary to the admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will
justify a different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the specific evidence on which they
are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but
such findings are contradicted by the evidence on record. (Emphasis supplied.)
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Thereafter, in Villaflor v. Court of Appeals,[31] this Court applied the above principle to factual
findings of quasi-judicial bodies, to wit:
Proceeding by analogy, the exceptions to the rule on conclusiveness of factual findings of the Court
of Appeals, enumerated in Fuentes vs. Court of Appeals, can also be applied to those of quasi-judicial
bodies x x x. (Emphasis supplied.)
Here, the CA identified certain material facts that were allegedly overlooked by the BLA and the IPO
Director General which it opined, when correctly appreciated, would alter the result of the case. An
examination of the IPO Decisions, however, would show that no such evidence was overlooked.
First, as to the date of first use of the mark by the parties, the CA stated:
To begin with, when respondents-appellees filed its application for registration of the VESPA
trademark on July 28, 1999, they stated under oath, as found in their DECLARATION OF ACTUAL USE,
that their first use of the mark was on December 22, 1998. On the other hand, [Shen Dar] in its
application dated June 09, 1997 stated, likewise under oath in their DECLARATION OF ACTUAL USE,
that its first use of the mark was in June 1996. This cannot be made any clearer. [Shen Dar] was not
only the first to file an application for registration but likewise first to use said registrable mark.[32]
Evidently, the CA anchors its finding that Shen Dar was the first to use the mark on the statements of
the parties in their respective Declarations of Actual Use. Such conclusion is premature at best. While
a Declaration of Actual Use is a notarized document, hence, a public document, it is not conclusive as
to the fact of first use of a mark. The declaration must be accompanied by proof of actual use as of
Page 83
the date claimed. In a declaration of actual use, the applicant must, therefore, present evidence of Moreover, the discrepancy in the date provided in the Declaration of Actual Use filed by EYIS and the
such actual use. proof submitted was appropriately considered by the BLA, ruling as follows:

The BLA ruled on the same issue, as follows: On the contrary, respondent EY Industrial was able to prove the use of the mark VESPA on the
concept of an owner as early as 1991. Although Respondent E.Y. indicated in its trademark
application that its first use was in December 22, 1998, it was able to prove by clear and positive
evidence of use prior to such date.

More importantly, the private respondents prior adoption and continuous use of the mark VESPA on
air compressors is bolstered by numerous documentary evidence consisting of sales invoices issued In Chuang Te v. Ng Kian-Guiab and Director of Patents, L-23791, 23 November 1966, the High Court
in the name of E.Y. Industrial and Bill of Lading (Exhibits 4 to 375). Sales Invoice No. 12075 dated clarified: Where an applicant for registration of a trademark states under oath the date of his earliest
March 27, 1995 antedates petitioners date of first use on January 1, 1997 indicated in its trademark use, and later on he wishes to carry back his first date of use to an earlier date, he then takes on the
application filed on June 9, 1997 as well as the date of first use in June of 1996 as indicated in the greater burden of presenting clear and convincing evidence of adoption and use as of that earlier
Declaration of Actual Use submitted on December 3, 2001 (Exhibit 385). The use by respondent date. (B.R. Baker Co. vs. Lebrow Bros., 150 F. 2d 580.)[35]
registrant in the concept of owner is shown by commercial documents, sales invoices unambiguously
describing the goods as VESPA air compressors. Private respondents have sold the air compressors
bearing the VESPA to various locations in the Philippines, as far as Mindanao and the Visayas since
the early 1990s. We carefully inspected the evidence consisting of three hundred seventy-one (371)
invoices and shipment documents which show that VESPA air compressors were sold not only in
The CA further found that EYIS is not a manufacturer of air compressors but merely imports and sells
Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City, Zamboanga City, Cagayan de
them as a wholesaler and retailer. The CA reasoned:
Oro City, Davao City, to name a few. There is no doubt that it is through private respondents efforts
that the mark VESPA used on air compressors has gained business goodwill and reputation in the
Philippines for which it has validly acquired trademark rights. Respondent E.Y. Industrials right has
been preserved until the passage of RA 8293 which entitles it to register the same.[33]

Conversely, a careful perusal of appellees own submitted receipts shows that it is not manufacturer
but an importer, wholesaler and retailer. This fact is corroborated by the testimony of a former
employee of appellees. Admittedly too, appellees are importing air compressors from [Shen Dar]
from 1997 to 2004. These matters, lend credence to [Shen Dars] claim that the letters SD followed by
Comparatively, the BLAs findings were founded upon the evidence presented by the parties. An
a number inscribed in the air compressor is only to describe its type, manufacturer business name
example of such evidence is Invoice No. 12075 dated March 29, 1995[34]where EYIS sold four units
and capacity. The VESPA mark is in the sticker which is attached to the air compressors. The ruling of
of VESPA air compressors to Veteran Paint Trade Center. Shen Dar failed to rebut such evidence. The
the Supreme Court, in the case of UNNO Commercial Enterprises, Inc. vs. General Milling
truth, as supported by the evidence on record, is that EYIS was first to use the mark.
Corporation et al., is quite enlightening, thus We quote:

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 84

LAW ON INTELLECTUAL PROPERTY SET CASES
The term owner does not include the importer of the goods bearing the trademark, trade name,
service mark, or other mark of ownership, unless such importer is actually the owner thereof in the
country from which the goods are imported. Thus, this Court, has on several occasions ruled that
where the applicants 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.[36]
This is a non sequitur. It does not follow. The fact that EYIS described itself in its sales invoice as an
importer, wholesaler and retailer does not preclude its being a manufacturer. Sec. 237 of the
National Internal Revenue Code states:
Section 237. Issuance of Receipts or Sales or Commercial Invoices.All persons subject to an internal
revenue tax shall, for each sale and transfer of merchandise or for services rendered valued at
Twenty-five pesos (P25.00) or more, issue duly registered receipts or sale or commercial invoices,
prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of
merchandise or nature of service: Provided, however, That where the receipt is issued to cover
payment made as rentals, commissions, compensation or fees, receipts or invoices shall be issued
which shall show the name, business style, if any, and address of the purchaser, customer or client.
The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time
the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep
and preserve the same in his place of business for a period of three (3) years from the close of the
taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and
preserved by the issuer, also in his place of business, for a like period.
The Commissioner may, in meritorious cases, exempt any person subject to an internal revenue tax
from compliance with the provisions of this Section. (Emphasis supplied.)
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Correlatively, in Revenue Memorandum No. 16-2003 dated May 20, 2003, the Bureau of Internal
Revenue defined a Sales Invoice and identified its required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) is written account of goods sold or services rendered and the
prices charged therefor used in the ordinary course of business evidencing sale and transfer or
agreement to sell or transfer of goods and services. It contains the same information found in the
Official Receipt.
Official Receipt (OR) is a receipt issued for the payment of services rendered or goods sold. It
contains the following information:
a. Business name and address;
b. Taxpayer Identification Number;
c. Name of printer (BIR Permit No.) with inclusive serial number of booklets and date of issuance
of receipts.
There is no requirement that a sales invoice should accurately state the nature of all the businesses
of the seller. There is no legal ground to state that EYIS declaration in its sales invoices that it is an
importer, wholesaler and retailer is restrictive and would preclude its being a manufacturer.
From the above findings, there was no justifiable reason for the CA to disregard the factual findings
of the IPO. The rulings of the IPO Director General and the BLA Director were supported by clear and
convincing evidence. The facts cited by the CA and Shen Dar do not justify a different conclusion
from that of the IPO. Hence, the findings of the BLA Director and the IPO Director General must be
deemed as conclusive on the CA.
Page 85
 Under this provision, the registration of a mark is prevented with the filing of an earlier application
for registration. This must not, however, be interpreted to mean that ownership should be based
Fifth Issue: upon an earlier filing date. While RA 8293 removed the previous requirement of proof of actual use
prior to the filing of an application for registration of a mark, proof of prior and continuous use is
Whether EYIS is the true owner of the mark VESPA
necessary to establish ownership of a mark. Such ownership constitutes sufficient evidence to
oppose the registration of a mark.

In any event, given the length of time already invested by the parties in the instant case, this Court
must write finis to the instant controversy by determining, once and for all, the true owner of the
Sec. 134 of the IP Code provides that any person who believes that he would be damaged by the
mark VESPA based on the evidence presented.
registration of a mark x x x may file an opposition to the application. The term any person
RA 8293 espouses the first-to-file rule as stated under Sec. 123.1(d) which states: encompasses the true owner of the markthe prior and continuous user.

Section 123. Registrability. - 123.1. A mark cannot be registered if it: Notably, the Court has ruled that the prior and continuous use of a mark may even overcome the
presumptive ownership of the registrant and be held as the owner of the mark. As aptly stated by
the Court in Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies,
Inc.:[37]
xxxx

Registration, without more, does not confer upon the registrant an absolute right to the registered
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier
mark. The certificate of registration is merely a prima facie proof that the registrant is the owner of
filing or priority date, in respect of:
the registered mark or trade name. Evidence of prior and continuous use of the mark or trade name
by another can overcome the presumptive ownership of the registrant and may very well entitle the
former to be declared owner in an appropriate case.
(i) The same goods or services, or

(ii) Closely related goods or services, or

xxxx
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion. (Emphasis
supplied.)

Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption
and use in trade or commerce. As between actual use of a mark without registration, and
registration of the mark without actual use thereof, the former prevails over the latter. For a rule
widely accepted and firmly entrenched, because it has come down through the years, is thatactual
use in commerce or business is a pre-requisite to the acquisition of the right of ownership.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 86

LAW ON INTELLECTUAL PROPERTY SET CASES

xxxx
By itself, registration is not a mode of acquiring ownership. When the applicant is not the owner of
the trademark being applied for, he has no right to apply for registration of the same. Registration
merely creates a prima facie presumption of the validity of the registration, of the registrants
ownership of the trademark and of the exclusive right to the use thereof. Such presumption, just like
the presumptive regularity in the performance of official functions, is rebuttable and must give way
to evidence to the contrary.
Here, the incontrovertible truth, as established by the evidence submitted by the parties, is that EYIS
is the prior user of the mark. The exhaustive discussion on the matter made by the BLA sufficiently
addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a legitimate corporation engaged in buying,
importing, selling, industrial machineries and tools, manufacturing, among others since its
incorporation in 1988. (Exhibit 1). Indeed private respondents have submitted photographs (Exhibit
376, 377, 378, 379) showing an assembly line of its manufacturing or assembly process.
More importantly, the private respondents prior adoption and continuous use of the mark VESPA on
air compressors is bolstered by numerous documentary evidence consisting of sales invoices issued
in the name of respondent EY Industrial and Bills of Lading. (Exhibits 4 to 375). Sales Invoice No.
12075 dated March 27, 1995 antedates petitioners date of first use in January 1, 1997 indicated in its
trademark application filed in June 9, 1997 as well as the date of first use in June of 1996 as indicated
in the Declaration of Actual Use submitted on December 3, 2001 (Exhibit 385). The use by
respondent-registrant in the concept of owner is shown by commercial documents, sales invoices
unambiguously describing the goods as VESPA air compressors. Private respondents have sold the air
compressors bearing the VESPA to various locations in the Philippines, as far as Mindanao and the
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Visayas since the early 1990s. We carefully inspected the evidence consisting of three hundred
seventy one (371) invoices and shipment documents which show that VESPA air compressors were
sold not only in Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City, Zamboanga
City, Cagayan de Oro City, Davao City to name a few. There is no doubt that it is through private
respondents efforts that the mark VESPA used on air compressors has gained business goodwill and
reputation in the Philippines for which it has validly acquired trademark rights. Respondent EY
Industrials right has been preserved until the passage of RA 8293 which entitles it to register the
same. x x x[38]
On the other hand, Shen Dar failed to refute the evidence cited by the BLA in its decision. More
importantly, Shen Dar failed to present sufficient evidence to prove its own prior use of the mark
VESPA. We cite with approval the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the trademark VESPA used on air
compressors. The thrust of [Shen Dars] argument is that respondent E.Y. Industrial Sales, Inc. is a
mere distributor of the VESPA air compressors. We disagree.
This conclusion is belied by the evidence. We have gone over each and every document attached as
Annexes A, A 1-48 which consist of Bill of Lading and Packing Weight List. Not one of these
documents referred to a VESPA air compressor. Instead, it simply describes the goods plainly as air
compressors which is type SD and not VESPA. More importantly, the earliest date reflected on the
Bill of Lading was on May 5, 1997. (Annex A-1). [Shen Dar] also attached as Annex B a purported
Sales Contract with respondent EY Industrial Sales dated April 20, 2002. Surprisingly, nowhere in the
document does it state that respondent EY Industrial agreed to sell VESPA air compressors. The
document only mentions air compressors which if genuine merely bolsters respondent Engracio Yaps
contention that [Shen Dar] approached them if it could sell the Shen Dar or SD air compressor.
(Exhibit 386) In its position paper, [Shen Dar] merely mentions of Bill of Lading constituting
respondent as consignee in 1993 but never submitted the same for consideration of this Bureau. The
document is also not signed by [Shen Dar]. The agreement was not even drafted in the letterhead of
either [Shen Dar] nor [sic] respondent registrant. Our only conclusion is that [Shen Dar] was not able
Page 87
to prove to be the owner of the VESPA mark by appropriation. Neither was it able to prove actual
commercial use in the Philippines of the mark VESPA prior to its filing of a trademark application in 9
June 1997.[39] CORONA, J.,

Chairperson,

As such, EYIS must be considered as the prior and continuous user of the mark VESPA and its true - versus - CHICO-NAZARIO,
owner. Hence, EYIS is entitled to the registration of the mark in its name.
VELASCO, JR.,
WHEREFORE, the petition is hereby GRANTED. The CAs February 21, 2008 Decision and October 6,
NACHURA, and
2008 Resolution in CA-G.R. SP No. 99356 are hereby REVERSEDand SET ASIDE. The Decision dated
May 25, 2007 issued by the IPO Director General in Inter Partes Case No. 14-2004-00084 and the PERALTA, JJ.
Decision dated May 29, 2006 of the BLA Director of the IPO are hereby REINSTATED.

HORPHAG RESEARCH MANAGEMENT SA, Promulgated:

No costs.
Respondent.

November 25, 2009

SO ORDERED.

x------------------------------------------------------------------------------------x

THIRD DIVISION

DECISION

NACHURA, J.:
PROSOURCE INTERNATIONAL, INC., G.R. No. 180073

Petitioner,

Present:

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 88

LAW ON INTELLECTUAL PROPERTY SET CASES

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and
set aside the Court of Appeals (CA) Decision[1] dated July 27, 2007 and Resolution[2] dated October
15, 2007 in CA-G.R. CV No. 87556. The assailed decision affirmed the Regional Trial Court
(RTC)[3] Decision[4] dated January 16, 2006 and Order[5] dated May 3, 2006 in Civil Case No. 68048;
while the assailed resolution denied petitioners motion for reconsideration.
The facts are as follows:
Respondent Horphag Research Management SA is a corporation duly organized and existing under
the laws of Switzerland and the owner[6] of trademark PYCNOGENOL, a food supplement sold and
distributed by Zuellig Pharma Corporation. Respondent later discovered that petitioner Prosource
International, Inc. was also distributing a similar food supplement using the mark PCO-GENOLS since
1996.[7] This prompted respondent to demand that petitioner cease and desist from using the
aforesaid mark.[8]
Without notifying respondent, petitioner discontinued the use of, and withdrew from the market,
the products under the name PCO-GENOLS as of June 19, 2000. It, likewise, changed its mark from
PCO-GENOLS to PCO-PLUS.[9]
On August 22, 2000, respondent filed a Complaint[10] for Infringement of Trademark with Prayer for
Preliminary Injunction against petitioner, praying that the latter cease and desist from using the
brand PCO-GENOLS for being confusingly similar with respondents trademark PYCNOGENOL. It,
likewise, prayed for actual and nominal damages, as well as attorneys fees.[11]
In its Answer,[12] petitioner contended that respondent could not file the infringement case
considering that the latter is not the registered owner of the trademark PYCNOGENOL, but one
Horphag Research Limited. It, likewise, claimed that the two marks were not confusingly
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
similar. Finally, it denied liability, since it discontinued the use of the mark prior to the institution of
the infringement case. Petitioner thus prayed for the dismissal of the complaint. By way of
counterclaim, petitioner prayed that respondent be directed to pay exemplary damages and
attorneys fees.[13]
During the pre-trial, the parties admitted the following:
1. Defendant [petitioner] is a corporation duly organized and existing under the laws of the Republic
of the Philippines with business address at No. 7 Annapolis Street, Greenhills, San Juan, Metro
Manila;
2. The trademark PYCNOGENOL of the plaintiff is duly registered with the Intellectual Property Office
but not with the Bureau of Food and Drug (BFAD).
3. The defendants product PCO-GENOLS is duly registered with the BFAD but not with the
Intellectual Property Office (IPO).
4. The defendant corporation discontinued the use of and had withdrawn from the market the
products under the name of PCO-GENOLS as of June 19, 2000, with its trademark changed from PCO-
GENOLS to PCO-PLUS.
5. Plaintiff corporation sent a demand letter to the defendant dated 02 June 2000.[14]
On January 16, 2006, the RTC decided in favor of respondent. It observed that PYCNOGENOL and
PCO-GENOLS have the same suffix GENOL which appears to be merely descriptive and thus open for
trademark registration by combining it with other words. The trial court, likewise, concluded that the
Page 89
marks, when read, sound similar, and thus confusingly similar especially since they both refer to food
supplements. The court added that petitioners liability was not negated by its act of pulling out of
the market the products bearing the questioned mark since the fact remains that from 1996 until
June 2000, petitioner had infringed respondents product by using the trademark PCO-GENOLS. As
respondent manifested that it was no longer interested in recovering actual damages, petitioner was
made to answer only for attorneys fees amounting to P50,000.00.[15] For lack of sufficient factual
and legal basis, the court dismissed petitioners counterclaim. Petitioners motion for reconsideration
was likewise denied.
On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court explained
that under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively similar to PYCNOGENOL. It
also found just and equitable the award of attorneys fees especially since respondent was compelled
to litigate.[16]
Hence, this petition, assigning the following errors:
I. THAT THE COURT OF APPEALS ERRED IN AFFRIMING THE RULING OF THE LOWER
[COURT] THAT RESPONDENTS TRADEMARK P[YC]NOGENOLS (SIC) WAS INFRINGED BY PETITIONERS
PCO-GENOLS.
II. THAT THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ATTORNEYS FEES IN
FAVOR OF RESPONDENT HORPHAG RESEARCH MANAGEMENT S.A. IN THE AMOUNT OF
Php50,000.00.[17]
The petition is without merit.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
It must be recalled that respondent filed a complaint for trademark infringement against petitioner
for the latters use of the mark PCO-GENOLS which the former claimed to be confusingly similar to its
trademark PYCNOGENOL. Petitioners use of the questioned mark started in 1996 and ended in June
2000. The instant case should thus be decided in light of the provisions of Republic Act (R.A.) No.
166[18] for the acts committed until December 31, 1997, and R.A. No. 8293[19] for those committed
from January 1, 1998 until June 19, 2000.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination
thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others. Inarguably, a trademark deserves
protection.[20]
Section 22 of R.A. No. 166, as amended, and Section 155 of R.A. No. 8293 define what constitutes
trademark infringement, as follows:
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
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 of 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, shall be liable to a civil action by the registrant for any or all of the remedies herein
provided.
Sec. 155. Remedies; Infringement. Any person who shall, without the consent of the owner of the
registered mark:
Page 90
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered or in connection with such goods, business or services as to likely cause confusion or mistake or to
mark or the same container or a dominant feature thereof in connection with the sale, offering for deceive purchasers[;]
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
(c) [T]he trademark is used for identical or similar goods[;] and

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
(d) [S]uch act is done without the consent of the trademark registrant or assignee.[21]
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 On the other hand, the elements of infringement under R.A. No. 8293 are as follows:
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
(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
forth: Provided, That infringement takes place at the moment any of the acts stated in Subsection
infringement of trade name, the same need not be registered;
155.1 or this subsection are committed regardless of whether there is actual sale of goods or
services using the infringing material.

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the
infringer;

In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20 thereof, the
following constitute the elements of trademark infringement:
(a) A trademark actually used in commerce in the Philippines and registered in the principal register
of the Philippine Patent Office[;]
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark or trade name is applied to
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or
in connection with such goods, business or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion or
(b) [It] is used by another person in connection with the sale, offering for sale, or advertising of any mistake or to deceive purchasers or others as to the goods or services themselves or as to the source
goods, business or services or in connection with which such use is likely to cause confusion or or origin of such goods or services or the identity of such business; and
mistake or to deceive purchasers or others as to the source or origin of such goods or services, or
identity of such business; or such trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied (5) It is without the consent of the trademark or trade name owner or the assignee thereof.[22]
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 91

LAW ON INTELLECTUAL PROPERTY SET CASES

In the foregoing enumeration, it is the element of likelihood of confusion that is the gravamen of
trademark infringement. But likelihood of confusion is a relative concept.The particular, and
sometimes peculiar, circumstances of each case are determinative of its existence. Thus, in
trademark infringement cases, precedents must be evaluated in the light of each particular case.[23]
In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the
Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the
prevalent features of the competing trademarks that might cause confusion and deception, thus
constituting infringement.[24] If the competing trademark contains the main, essential and
dominant features of another, and confusion or 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. The question is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or to deceive purchasers.[25] 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.[26]
In contrast, the Holistic Test entails a consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity.[27] The discerning
eye of the observer must focus not only on the predominant words but also on the other features
appearing on both labels in order that the observer may draw his conclusion whether one is
confusingly similar to the other.[28]
The trial and appellate courts applied the Dominancy Test in determining whether there was a
confusing similarity between the marks PYCNOGENOL and PCO-GENOL.Applying the test, the trial
court found, and the CA affirmed, that:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Both the word[s] PYCNOGENOL and PCO-GENOLS have the same suffix GENOL which on evidence,
appears to be merely descriptive and furnish no indication of the origin of the article and hence,
open for trademark registration by the plaintiff thru combination with another word or phrase such
as PYCNOGENOL, Exhibits A to A-3. Furthermore, although the letters Y between P and C, N between
O and C and S after L are missing in the [petitioners] mark PCO-GENOLS, nevertheless, when the two
words are pronounced, the sound effects are confusingly similar not to mention that they are both
described by their manufacturers as a food supplement and thus, identified as such by their public
consumers. And although there were dissimilarities in the trademark due to the type of letters used
as well as the size, color and design employed on their individual packages/bottles, still the close
relationship of the competing products name in sounds as they were pronounced, clearly indicates
that purchasers could be misled into believing that they are the same and/or originates from a
common source and manufacturer.[29]
We find no cogent reason to depart from such conclusion.
This is not the first time that the Court takes into account the aural effects of the words and letters
contained in the marks in determining the issue of confusing similarity. InMarvex Commercial Co.,
Inc. v. Petra Hawpia & Co., et al.,[30] cited in McDonalds Corporation v. L.C. Big Mak Burger,
Inc.,[31] the Court held:
The following random list of confusingly similar sounds in the matter of trademarks, culled from
Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that SALONPAS and
LIONPAS are confusingly similar in sound: Gold Dust and Gold Drop; Jantzen and Jass-Sea; Silver Flash
and Supper Flash; 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
Trade-Mark Law and Practice, pp. 419-421, cities, 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.[32]
Page 92
 6. In actions for legal support;

Finally, we reiterate that the issue of trademark infringement is factual, with both the trial and
appellate courts finding the allegations of infringement to be meritorious. As we have consistently
held, factual determinations of the trial court, concurred in by the CA, are final and binding on this 7. In actions for the recovery of wages of household helpers, laborers and skilled workers;
Court.[33] Hence, petitioner is liable for trademark infringement.

8. In actions for indemnity under workmens compensation and employers liability laws;
We, likewise, sustain the award of attorneys fees in favor of respondent. Article 2208 of the Civil
Code enumerates the instances when attorneys fees are awarded, viz.:
9. In a separate civil action to recover civil liability arising from a crime;

Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial
costs, cannot be recovered, except: 10. When at least double judicial costs are awarded;

1. When exemplary damages are awarded; 11. In any other case where the court deems it just and equitable that attorneys fees and expenses
of litigation should be recovered.

2. When the defendants act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest; In all cases, the attorneys fees and expenses of litigation must be reasonable.

3. In criminal cases of malicious prosecution against the plaintiff; As a rule, an award of attorneys fees should be deleted where the award of moral and exemplary
damages is not granted.[34] Nonetheless, attorneys fees may be awarded where the court deems it
just and equitable even if moral and exemplary damages are unavailing.[35] In the instant case, we
4. In case of a clearly unfounded civil action or proceeding against the plaintiff; find no reversible error in the grant of attorneys fees by the CA.

5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals
plainly valid, just and demandable claim; Decision dated July 27, 2007 and its Resolution dated October 15, 2007 in CA-G.R. CV No. 87556
are AFFIRMED.

SO ORDERED.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 93

LAW ON INTELLECTUAL PROPERTY SET CASES
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6235 March 28, 1955
ONG AI GUI alias TAN AI GUI, applicant-petitioner,
vs.
the Director of the Philippines Patent Office, respondent.
E. I. DU PONT DE NEMOURS AND COMPANY, intervenor.
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 woman'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. De 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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 trade-name, 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.
xxx xxx xxx
But even if the trade-name here in question were applied for under the said subsection (f), "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."
Again 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
Page 94
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 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.)
. distinctive of the applicant's business or services. Furthermore, the use of the term "nylon" in the
. . . 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. Salfield (C. C. A.) 198, 369. Other 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. (sd) 598.)
. . . The so-called descriptive terms, which may be used to described 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.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
. . . 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 then descriptive
word or term id 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 (f)
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
trade-name 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 of 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 id
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
Page 95
his behalf who knows the facts, and shall specify the grounds on which it is based and include a We, therefore, find that the errors assigned in the appeal have not been committed id hereby
statement of the facts relied upon. Copies of certificates of registration of marks or trade-names respondent Director of Patents. His decision is hereby affirmed, with costs against the applicant-
registered in other countries or other supporting documents mentioned in the opposition shall be appellant.
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; 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 publication. SECOND DIVISION
(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.
(Sec. 9, Id.) It is the decision of the Director, given after this hearing, or opportunity to every
COFFEE PARTNERS, INC., G.R. No. 169504
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 Petitioner,
published. (Sec. 10, Id.)
Present:
It is evident that the decision of the Director after 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 CARPIO, J., Chairperson,
decision, giving course to the publication? His first decision is merely provisional, in the sense that
VELASCO, JR.,*
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 DEL CASTILLO,
allowed to take part.
- versus - ABAD, and
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 PEREZ, JJ.
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?

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 96

LAW ON INTELLECTUAL PROPERTY SET CASES
SAN FRANCISCO COFFEE & Promulgated: Petitioner Coffee Partners, Inc. is a local corporation engaged in the business of establishing and
maintaining coffee shops in the country. It registered with the Securities and Exchange Commission
ROASTERY, INC., (SEC) in January 2001. It has a franchise agreement[6] with Coffee Partners Ltd. (CPL), a business
entity organized and existing under the laws of British Virgin Islands, for a non-exclusive right to
Respondent. March 3, 2010
operate coffee shops in the Philippines using trademarks designed by CPL such as SAN FRANCISCO
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x COFFEE.

Respondent is a local corporation engaged in the wholesale and retail sale of coffee. It registered
with the SEC in May 1995. It registered the business name SAN FRANCISCO COFFEE & ROASTERY,
DECISION INC. with the Department of Trade and Industry (DTI) in June 1995. Respondent had since built a
customer base that included Figaro Company, Tagaytay Highlands, Fat Willys, and other coffee
companies.

CARPIO, J.:
In 1998, respondent formed a joint venture company with Boyd Coffee USA under the company
name Boyd Coffee Company Philippines, Inc. (BCCPI). BCCPI engaged in the processing, roasting, and
wholesale selling of coffee. Respondent later embarked on a project study of setting up coffee carts
in malls and other commercial establishments in Metro Manila.

The Case

This is a petition for review[1] of the 15 June 2005 Decision[2] and the 1 September 2005
Resolution[3] of the Court of Appeals in CA-G.R. SP No. 80396. In its 15 June 2005 Decision, the Court
of Appeals set aside the 22 October 2003 Decision[4] of the Office of the Director General-
Intellectual Property Office and reinstated the 14 August 2002 Decision[5] of the Bureau of Legal
Affairs-Intellectual Property Office. In its 1 September 2005 Resolution, the Court of Appeals denied
petitioners motion for reconsideration and respondents motion for partial reconsideration.
In June 2001, respondent discovered that petitioner was about to open a coffee shop under the
name SAN FRANCISCO COFFEE in Libis, Quezon City. According to respondent, petitioners shop
caused confusion in the minds of the public as it bore a similar name and it also engaged in the
business of selling coffee. Respondent sent a letter to petitioner demanding that the latter stop using
the name SAN FRANCISCO COFFEE. Respondent also filed a complaint with the Bureau of Legal
Affairs-Intellectual Property Office (BLA-IPO) for infringement and/or unfair competition with claims
for damages.

In its answer, petitioner denied the allegations in the complaint. Petitioner alleged it filed with the
The Facts Intellectual Property Office (IPO) applications for registration of the mark SAN FRANCISCO COFFEE &
DEVICE for class 42 in 1999 and for class 35 in 2000. Petitioner maintained its mark could not be
confused with respondents trade name because of the notable distinctions in their appearances.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 97

LAW ON INTELLECTUAL PROPERTY SET CASES
Petitioner argued respondent stopped operating under the trade name SAN FRANCISCO COFFEE doing research on the retailing of coffee and the setting up of coffee carts. The BLA-IPO ruled that for
when it formed a joint venture with Boyd Coffee USA. Petitioner contended respondent did not cite abandonment to exist, the disuse must be permanent, intentional, and voluntary.
any specific acts that would lead one to believe petitioner had, through fraudulent means, passed off
its mark as that of respondent, or that it had diverted business away from respondent.
The BLA-IPO held that petitioners use of the trademark SAN FRANCISCO COFFEE will likely cause
confusion because of the exact similarity in sound, spelling, pronunciation, and commercial
Mr. David Puyat, president of petitioner corporation, testified that the coffee shop in Libis, Quezon impression of the words SAN FRANCISCO which is the dominant portion of respondents trade name
City opened sometime in June 2001 and that another coffee shop would be opened in Glorietta Mall, and petitioners trademark. It held that no significant difference resulted even with a diamond-
Makati City. He stated that the coffee shop was set up pursuant to a franchise agreement executed shaped figure with a cup in the center in petitioner's trademark because greater weight is given to
in January 2001 with CPL, a British Virgin Island Company owned by Robert Boxwell. Mr. Puyat said words the medium consumers use in ordering coffee products.
he became involved in the business when one Arthur Gindang invited him to invest in a coffee shop
and introduced him to Mr. Boxwell. For his part, Mr. Boxwell attested that the coffee shop SAN
FRANCISCO COFFEE has branches in Malaysia and Singapore. He added that he formed CPL in 1997
On the issue of unfair competition, the BLA-IPO absolved petitioner from liability. It found that
along with two other colleagues, Shirley Miller John and Leah Warren, who were former managers of
petitioner adopted the trademark SAN FRANCISCO COFFEE because of the authority granted to it by
Starbucks Coffee Shop in the United States. He said they decided to invest in a similar venture and
its franchisor. The BLA-IPO held there was no evidence of intent to defraud on the part of petitioner.
adopted the name SAN FRANCISCO COFFEE from the famous city in California where he and his
former colleagues once lived and where special coffee roasts came from.

The BLA-IPO also dismissed respondents claim of actual damages because its claims of profit loss
were based on mere assumptions as respondent had not even started the operation of its coffee
The Ruling of the Bureau of Legal Affairs-Intellectual Property Office
carts. The BLA-IPO likewise dismissed respondents claim of moral damages, but granted its claim of
attorneys fees.

In its 14 August 2002 Decision, the BLA-IPO held that petitioners trademark infringed on respondents
trade name. It ruled that the right to the exclusive use of a trade name with freedom from
Both parties moved for partial reconsideration. Petitioner protested the finding of infringement,
infringement by similarity is determined from priority of adoption. Since respondent registered its
while respondent questioned the denial of actual damages. The BLA-IPO denied the parties partial
business name with the DTI in 1995 and petitioner registered its trademark with the IPO in 2001 in
motion for reconsideration. The parties appealed to the Office of the Director General-Intellectual
the Philippines and in 1997 in other countries, then respondent must be protected from
Property Office (ODG-IPO).
infringement of its trade name.

The Ruling of the Office of the Director General-

The BLA-IPO also held that respondent did not abandon the use of its trade name as substantial
evidence indicated respondent continuously used its trade name in connection with the purpose for Intellectual Property Office
which it was organized. It found that although respondent was no longer involved in blending,
roasting, and distribution of coffee because of the creation of BCCPI, it continued making plans and

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 98

LAW ON INTELLECTUAL PROPERTY SET CASES
In its 22 October 2003 Decision, the ODG-IPO reversed the BLA-IPO. It ruled that petitioners use of
the trademark SAN FRANCISCO COFFEE did not infringe on respondent's trade name. The ODG-IPO
found that respondent had stopped using its trade name after it entered into a joint venture with
Boyd Coffee USA in 1998 while petitioner continuously used the trademark since June 2001 when it
opened its first coffee shop in Libis, Quezon City. It ruled that between a subsequent user of a trade
name in good faith and a prior user who had stopped using such trade name, it would be inequitable
to rule in favor of the latter.
The Ruling of the Court of Appeals
In its 15 June 2005 Decision, the Court of Appeals set aside the 22 October 2003 decision of the ODG-
IPO in so far as it ruled that there was no infringement. It reinstated the 14 August 2002 decision of
the BLA-IPO finding infringement. The appellate court denied respondents claim for actual damages
and retained the award of attorneys fees. In its 1 September 2005 Resolution, the Court of Appeals
denied petitioners motion for reconsideration and respondents motion for partial reconsideration.
The Issue
The sole issue is whether petitioners use of the trademark SAN FRANCISCO COFFEE constitutes
infringement of respondents trade name SAN FRANCISCO COFFEE & ROASTERY, INC., even if the
trade name is not registered with the Intellectual Property Office (IPO).
The Courts Ruling
The petition has no merit.
Petitioner contends that when a trade name is not registered, a suit for infringement is not available.
Petitioner alleges respondent has abandoned its trade name. Petitioner points out that respondents
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
registration of its business name with the DTI expired on 16 June 2000 and it was only in 2001 when
petitioner opened a coffee shop in Libis, Quezon City that respondent made a belated effort to seek
the renewal of its business name registration. Petitioner stresses respondents failure to continue the
use of its trade name to designate its goods negates any allegation of infringement. Petitioner claims
no confusion is likely to occur between its trademark and respondents trade name because of a wide
divergence in the channels of trade, petitioner serving ready-made coffee while respondent is in
wholesale blending, roasting, and distribution of coffee. Lastly, petitioner avers the proper noun San
Francisco and the generic word coffee are not capable of exclusive appropriation.
Respondent maintains the law protects trade names from infringement even if they are not
registered with the IPO. Respondent claims Republic Act No. 8293 (RA 8293)[7]dispensed with
registration of a trade name with the IPO as a requirement for the filing of an action for
infringement. All that is required is that the trade name is previously used in trade or commerce in
the Philippines. Respondent insists it never abandoned the use of its trade name as evidenced by its
letter to petitioner demanding immediate discontinuation of the use of its trademark and by the
filing of the infringement case. Respondent alleges petitioners trademark is confusingly similar to
respondents trade name. Respondent stresses ordinarily prudent consumers are likely to be misled
about the source, affiliation, or sponsorship of petitioners coffee.
As to the issue of alleged abandonment of trade name by respondent, the BLA-IPO found that
respondent continued to make plans and do research on the retailing of coffee and the
establishment of coffee carts, which negates abandonment. This finding was upheld by the Court of
Appeals, which further found that while respondent stopped using its trade name in its business of
selling coffee, it continued to import and sell coffee machines, one of the services for which the use
of the business name has been registered. The binding effect of the factual findings of the Court of
Appeals on this Court applies with greater force when both the quasi-judicial body or tribunal like
the BLA-IPO and the Court of Appeals are in complete agreement on their factual findings. It is also
settled that absent any circumstance requiring the overturning of the factual conclusions made by
the quasi-judicial body or tribunal, particularly if affirmed by the Court of Appeals, the Court
necessarily upholds such findings of fact.[8]
Page 99
Coming now to the main issue, in Prosource International, Inc. v. Horphag Research Management
SA,[9] this Court laid down what constitutes infringement of an unregistered trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the
infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark or trade name is applied to
labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or
in connection with such goods, business, or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services themselves or as to the source
or origin of such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee
thereof.[10] (Emphasis supplied)
Clearly, a trade name need not be registered with the IPO before an infringement suit may be filed
by its owner against the owner of an infringing trademark. All that is required is that the trade name
is previously used in trade or commerce in the Philippines.[11]
Section 22 of Republic Act No. 166,[12] as amended, required registration of a trade name as a
condition for the institution of an infringement suit, to wit:
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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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. (Emphasis supplied)
HOWEVER, RA 8293, WHICH TOOK EFFECT ON 1 JANUARY 1998, HAS DISPENSED WITH THE
REGISTRATION REQUIREMENT. SECTION 165.2 OF RA 8293 CATEGORICALLY STATES THAT TRADE
NAMES SHALL BE PROTECTED, EVEN PRIOR TO OR WITHOUT REGISTRATION WITH THE IPO, AGAINST
ANY UNLAWFUL ACT INCLUDING ANY SUBSEQUENT USE OF THE TRADE NAME BY A THIRD PARTY,
WHETHER AS A TRADE NAME OR A TRADEMARK LIKELY TO MISLEAD THE PUBLIC. THUS:
SEC. 165.2 (A) NOTWITHSTANDING ANY LAWS OR REGULATIONS PROVIDING FOR ANY OBLIGATION
TO REGISTER TRADE NAMES, SUCH NAMES SHALL BE PROTECTED, EVEN PRIOR TO OR WITHOUT
REGISTRATION, AGAINST ANY UNLAWFUL ACT COMMITTED BY THIRD PARTIES.
(B) IN PARTICULAR, ANY SUBSEQUENT USE OF A TRADE NAME BY A THIRD PARTY, WHETHER AS A
TRADE NAME OR A MARK OR COLLECTIVE MARK, OR ANY SUCH USE OF A SIMILAR TRADE NAME OR
MARK, LIKELY TO MISLEAD THE PUBLIC, SHALL BE DEEMED UNLAWFUL. (EMPHASIS SUPPLIED)
IT IS THE LIKELIHOOD OF CONFUSION THAT IS THE GRAVAMEN OF INFRINGEMENT. BUT THERE IS NO
ABSOLUTE STANDARD FOR LIKELIHOOD OF CONFUSION. ONLY THE PARTICULAR, AND SOMETIMES
PECULIAR, CIRCUMSTANCES OF EACH CASE CAN DETERMINE ITS EXISTENCE. THUS, IN
INFRINGEMENT CASES, PRECEDENTS MUST BE EVALUATED IN THE LIGHT OF EACH PARTICULAR
CASE.[13]
IN DETERMINING SIMILARITY AND LIKELIHOOD OF CONFUSION, OUR JURISPRUDENCE HAS
DEVELOPED TWO TESTS: THE DOMINANCY TEST AND THE HOLISTIC TEST. THE DOMINANCY TEST
Page 100
FOCUSES ON THE SIMILARITY OF THE PREVALENT FEATURES OF THE COMPETING TRADEMARKS RESPONDENTS TRADE NAME IN ITS COFFEE BUSINESS, THAT IS PROTECTED AGAINST INFRINGEMENT
THAT MIGHT CAUSE CONFUSION AND DECEPTION, THUS CONSTITUTING INFRINGEMENT. IF THE ON MATTERS RELATED TO THE COFFEE BUSINESS TO AVOID CONFUSING OR DECEIVING THE PUBLIC.
COMPETING TRADEMARK CONTAINS THE MAIN, ESSENTIAL, AND DOMINANT FEATURES OF
ANOTHER, AND CONFUSION OR DECEPTION IS LIKELY TO RESULT, INFRINGEMENT OCCURS. EXACT
DUPLICATION OR IMITATION IS NOT REQUIRED. THE QUESTION IS WHETHER THE USE OF THE MARKS
IN PHILIPS EXPORT B.V. V. COURT OF APPEALS,[17] THIS COURT HELD THAT A CORPORATION HAS AN
INVOLVED IS LIKELY TO CAUSE CONFUSION OR MISTAKE IN THE MIND OF THE PUBLIC OR TO DECEIVE
EXCLUSIVE RIGHT TO THE USE OF ITS NAME. THE RIGHT PROCEEDS FROM THE THEORY THAT IT IS A
CONSUMERS.[14]
FRAUD ON THE CORPORATION WHICH HAS ACQUIRED A RIGHT TO THAT NAME AND PERHAPS
CARRIED ON ITS BUSINESS THEREUNDER, THAT ANOTHER SHOULD ATTEMPT TO USE THE SAME
NAME, OR THE SAME NAME WITH A SLIGHT VARIATION IN SUCH A WAY AS TO INDUCE PERSONS TO
IN CONTRAST, THE HOLISTIC TEST ENTAILS A CONSIDERATION OF THE ENTIRETY OF THE MARKS AS DEAL WITH IT IN THE BELIEF THAT THEY ARE DEALING WITH THE CORPORATION WHICH HAS GIVEN A
APPLIED TO THE PRODUCTS, INCLUDING THE LABELS AND PACKAGING, IN DETERMINING REPUTATION TO THE NAME.[18]
CONFUSING SIMILARITY.[15] THE DISCERNING EYE OF THE OBSERVER MUST FOCUS NOT ONLY ON
THE PREDOMINANT WORDS BUT ALSO ON THE OTHER FEATURES APPEARING ON BOTH MARKS IN
ORDER THAT THE OBSERVER MAY DRAW HIS CONCLUSION WHETHER ONE IS CONFUSINGLY SIMILAR
THIS COURT IS NOT JUST A COURT OF LAW, BUT ALSO OF EQUITY. WE CANNOT ALLOW PETITIONER
TO THE OTHER.[16]
TO PROFIT BY THE NAME AND REPUTATION SO FAR BUILT BY RESPONDENT WITHOUT RUNNING
AFOUL OF THE BASIC DEMANDS OF FAIR PLAY. NOT ONLY THE LAW BUT EQUITY CONSIDERATIONS
HOLD PETITIONER LIABLE FOR INFRINGEMENT OF RESPONDENTS TRADE NAME.
APPLYING EITHER THE DOMINANCY TEST OR THE HOLISTIC TEST, PETITIONERS SAN FRANCISCO
COFFEE TRADEMARK IS A CLEAR INFRINGEMENT OF RESPONDENTS SAN FRANCISCO COFFEE &
ROASTERY, INC. TRADE NAME. THE DESCRIPTIVE WORDS SAN FRANCISCO COFFEE ARE PRECISELY
THE COURT OF APPEALS WAS CORRECT IN SETTING ASIDE THE 22 OCTOBER 2003 DECISION OF THE
THE DOMINANT FEATURES OF RESPONDENTS TRADE NAME. PETITIONER AND RESPONDENT ARE
OFFICE OF THE DIRECTOR GENERAL-INTELLECTUAL PROPERTY OFFICE AND IN REINSTATING THE 14
ENGAGED IN THE SAME BUSINESS OF SELLING COFFEE, WHETHER WHOLESALE OR RETAIL. THE
AUGUST 2002 DECISION OF THE BUREAU OF LEGAL AFFAIRS-INTELLECTUAL PROPERTY OFFICE.
LIKELIHOOD OF CONFUSION IS HIGHER IN CASES WHERE THE BUSINESS OF ONE CORPORATION IS
THE SAME OR SUBSTANTIALLY THE SAME AS THAT OF ANOTHER CORPORATION. IN THIS CASE, THE
CONSUMING PUBLIC WILL LIKELY BE CONFUSED AS TO THE SOURCE OF THE COFFEE BEING SOLD AT
PETITIONERS COFFEE SHOPS. PETITIONERS ARGUMENT THAT SAN FRANCISCO IS JUST A PROPER WHEREFORE, WE DENY THE PETITION FOR REVIEW. WE AFFIRM THE 15 JUNE 2005 DECISION AND 1
NAME REFERRING TO THE FAMOUS CITY IN CALIFORNIA AND THAT COFFEE IS SIMPLY A GENERIC SEPTEMBER 2005 RESOLUTION OF THE COURT OF APPEALS IN CA-G.R. SP NO. 80396.
TERM, IS UNTENABLE. RESPONDENT HAS ACQUIRED AN EXCLUSIVE RIGHT TO THE USE OF THE TRADE
NAME SAN FRANCISCO COFFEE & ROASTERY, INC. SINCE THE REGISTRATION OF THE BUSINESS NAME
WITH THE DTI IN 1995. THUS, RESPONDENTS USE OF ITS TRADE NAME FROM THEN ON MUST BE COSTS AGAINST PETITIONER.
FREE FROM ANY INFRINGEMENT BY SIMILARITY. OF COURSE, THIS DOES NOT MEAN THAT
RESPONDENT HAS EXCLUSIVE USE OF THE GEOGRAPHIC WORD SAN FRANCISCO OR THE GENERIC
WORD COFFEE. GEOGRAPHIC OR GENERIC WORDS ARE NOT, PER SE, SUBJECT TO EXCLUSIVE
APPROPRIATION. IT IS ONLY THE COMBINATION OF THE WORDS SAN FRANCISCO COFFEE, WHICH IS SO ORDERED.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 101

LAW ON INTELLECTUAL PROPERTY SET CASES
**************************** DECISION

FIRST DIVISION

CARPIO, J.:

The Case
TANDUAY DISTILLERS, INC., G.R. NO. 164324
TANDUAY DISTILLERS, INC. (TANDUAY) FILED THIS PETITION FOR REVIEW ON
Petitioner,
CERTIORARI[1] ASSAILING THE COURT OF APPEALS DECISION DATED 9 JANUARY 2004[2] AS WELL AS
PRESENT: THE RESOLUTION DATED 2 JULY 2004[3] IN CA-G.R. SP NO. 79655 DENYING THE MOTION FOR
RECONSIDERATION. IN THE ASSAILED DECISION, THE COURT OF APPEALS (CA) AFFIRMED THE
REGIONAL TRIAL COURTS ORDERS[4] DATED 23 SEPTEMBER 2003 AND 17 OCTOBER 2003 WHICH
RESPECTIVELY GRANTED GINEBRA SAN MIGUEL, INC.S (SAN MIGUEL) PRAYER FOR THE ISSUANCE OF
- versus - PUNO, C.J., CHAIRPERSON,
A TEMPORARY RESTRAINING ORDER (TRO) AND WRIT OF PRELIMINARY INJUNCTION. THE REGIONAL
CARPIO, TRIAL COURT OF MANDALUYONG CITY, BRANCH 214 (TRIAL COURT), ENJOINED TANDUAY FROM
COMMITTING THE ACTS COMPLAINED OF, AND, SPECIFICALLY, TO CEASE AND DESIST FROM
CORONA, MANUFACTURING, DISTRIBUTING, SELLING, OFFERING FOR SALE, ADVERTISING, OR OTHERWISE
USING IN COMMERCE THE MARK GINEBRA, AND MANUFACTURING, PRODUCING, DISTRIBUTING, OR
LEONARDO-DE CASTRO, AND OTHERWISE DEALING IN GIN PRODUCTS WHICH HAVE THE GENERAL APPEARANCE OF, AND WHICH
ARE CONFUSINGLY SIMILAR WITH, SAN MIGUELS MARKS, BOTTLE DESIGN, AND LABEL FOR ITS GIN
GINEBRA SAN MIGUEL, INC., BERSAMIN, JJ.
PRODUCTS.[5]
RESPONDENT.

PROMULGATED:
THE FACTS
AUGUST 14, 2009

X--------------------------------------------------X Tanduay, a corporation organized and existing under Philippine laws, has been engaged in the liquor
business since 1854. In 2002, Tanduay developed a new gin product distinguished by its sweet smell,
smooth taste, and affordable price. Tanduay claims that it engaged the services of an advertising firm
to develop a brand name and a label for its new gin product. The brand name eventually chosen was

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 102

LAW ON INTELLECTUAL PROPERTY SET CASES
Ginebra Kapitan with the representation of a revolutionary Kapitan on horseback as the dominant
feature of its label. Tanduay points out that the label design of Ginebra Kapitan in terms of color
scheme, size and arrangement of text, and other label features were precisely selected to distinguish
it from the leading gin brand in the Philippine market, Ginebra San Miguel. Tanduay also states that
the Ginebra Kapitan bottle uses a resealable twist cap to distinguish it from Ginebra San Miguel and
other local gin products with bottles which use the crown cap or tansan.[6]
AFTER FILING THE TRADEMARK APPLICATION FOR GINEBRA KAPITAN WITH THE INTELLECTUAL
PROPERTY OFFICE (IPO) AND AFTER SECURING THE APPROVAL OF THE PERMIT TO MANUFACTURE
AND SELL GINEBRA KAPITAN FROM THE BUREAU OF INTERNAL REVENUE, TANDUAY BEGAN SELLING
GINEBRA KAPITAN IN NORTHERN AND SOUTHERN LUZON AREAS IN MAY 2003. IN JUNE 2003,
GINEBRA KAPITAN WAS ALSO LAUNCHED IN METRO MANILA.[7]
ON 13 AUGUST 2003, TANDUAY RECEIVED A LETTER FROM SAN MIGUELS COUNSEL. THE LETTER
INFORMED TANDUAY TO IMMEDIATELY CEASE AND DESIST FROM USING THE MARK GINEBRA AND
FROM COMMITTING ACTS THAT VIOLATE SAN MIGUELS INTELLECTUAL PROPERTY RIGHTS.[8]
ON 15 AUGUST 2003, SAN MIGUEL FILED A COMPLAINT FOR TRADEMARK INFRINGEMENT, UNFAIR
COMPETITION AND DAMAGES, WITH APPLICATIONS FOR ISSUANCE OF TRO AND WRIT OF
PRELIMINARY INJUNCTION AGAINST TANDUAY BEFORE THE REGIONAL TRIAL COURT OF
MANDALUYONG. THE CASE WAS RAFFLED TO BRANCH 214 AND DOCKETED AS IP CASE NO. MC-03-
01 AND CIVIL CASE NO. MC-03-073.[9]
ON 25 AND 29 AUGUST AND 4 SEPTEMBER 2003, THE TRIAL COURT CONDUCTED HEARINGS ON THE
TRO. SAN MIGUEL SUBMITTED FIVE AFFIDAVITS, BUT ONLY ONE AFFIANT, MERCEDES ABAD, WAS
PRESENTED FOR CROSS-EXAMINATION BECAUSE THE TRIAL COURT RULED THAT SUCH
EXAMINATION WOULD BE INCONSISTENT WITH THE SUMMARY NATURE OF A TRO
HEARING.[10] SAN MIGUEL SUBMITTED THE FOLLOWING PIECES OF EVIDENCE:[11]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
1. Affidavit of Mercedes Abad, President and Managing Director of the research firm NFO Trends,
Inc. (NFO Trends), to present, among others, market survey results which prove that gin drinkers
associate the term Ginebra with San Miguel, and that the consuming public is being misled that
Ginebra Kapitan is a product of San Miguel;
2. MARKET SURVEY RESULTS CONDUCTED BY NFO TRENDS TO DETERMINE THE BRAND
ASSOCIATIONS OF THE MARK GINEBRA AND TO PROVE THAT THE CONSUMING PUBLIC IS CONFUSED
AS TO THE MANUFACTURER OF GINEBRA KAPITAN;
3. AFFIDAVIT OF RAMON CRUZ, SAN MIGUELS GROUP PRODUCT MANAGER, TO PROVE, AMONG
OTHERS, THE PRIOR RIGHT OF SAN MIGUEL TO THE MARK GINEBRA AS SHOWN IN VARIOUS
APPLICATIONS FOR, AND REGISTRATIONS OF, TRADEMARKS THAT CONTAIN THE MARK GINEBRA. HIS
AFFIDAVIT INCLUDED DOCUMENTS SHOWING THAT THE MARK GINEBRA HAS BEEN USED ON SAN
MIGUELS GIN PRODUCTS SINCE 1834;
4. AFFIDAVITS OF LEOPOLDO GUANZON, JR., SAN MIGUELS TRADE AND PROMO MERCHANDISING
HEAD FOR NORTH LUZON AREA, AND JUDERICK CRESCINI, SAN MIGUELS DISTRICT SALES
SUPERVISOR FOR SOUTH LUZON-EAST AREA, TO PROVE, AMONG OTHERS, THAT TANDUAYS
SALESMEN OR DISTRIBUTORS MISREPRESENT GINEBRA KAPITAN AS SAN MIGUELS PRODUCT AND
THAT NUMEROUS RETAILERS OF SAN MIGUELS GIN PRODUCTS ARE CONFUSED AS TO THE
MANUFACTURER OF GINEBRA KAPITAN; AND
5. AFFIDAVIT OF JOSE REGINALD PASCUAL, SAN MIGUELS DISTRICT SALES SUPERVISOR FOR THE
NORTH-GREATER MANILA AREA, TO PROVE, AMONG OTHERS, THAT GIN DRINKERS CONFUSE SAN
MIGUEL TO BE THE MANUFACTURER OF GINEBRA KAPITAN DUE TO THE USE OF THE DOMINANT
FEATURE GINEBRA.
Tanduay filed a Motion to Strike Out Hearsay Affidavits and Evidence, which motion was denied by
the trial court. Tanduay presented witnesses who affirmed their affidavits in open court, as
follows:[12]
1. RAMONCITO BUGIA, GENERAL SERVICES MANAGER OF TANDUAY. ATTACHED TO HIS AFFIDAVIT
WERE VARIOUS CERTIFICATES OF REGISTRATION OF TRADEMARKS CONTAINING THE WORD
GINEBRA OBTAINED BY TANDUAY AND OTHER LIQUOR COMPANIES, TO PROVE THAT THE WORD
GINEBRA IS REQUIRED TO BE DISCLAIMED BY THE IPO. THE AFFIDAVIT ALSO ATTESTED THAT THERE
Page 103
ARE OTHER LIQUOR COMPANIES USING THE WORD GINEBRA AS PART OF THEIR TRADEMARKS FOR
GIN PRODUCTS ASIDE FROM SAN MIGUEL AND TANDUAY.
2. HERBERT ROSALES, VICE PRESIDENT OF J. SALCEDO AND ASSOCIATES, INC., THE ADVERTISING AND
PROMOTIONS COMPANY HIRED BY TANDUAY TO DESIGN THE LABEL OF GINEBRA KAPITAN. HIS
AFFIDAVIT ATTESTED THAT THE LABEL WAS DESIGNED TO MAKE IT LOOK ABSOLUTELY DIFFERENT
FROM THE GINEBRA SAN MIGUEL LABEL.
ON 23 SEPTEMBER 2003, THE TRIAL COURT ISSUED A TRO PROHIBITING TANDUAY FROM
MANUFACTURING, SELLING AND ADVERTISING GINEBRA KAPITAN.[13] THE DISPOSITIVE PORTION
READS IN PART:
WHEREFORE, the application for temporary restraining order is hereby GRANTED and made effective
immediately. Plaintiff is directed to post a bond of ONE MILLION PESOS (Php 1,000,000.00) within
five (5) days from issuance hereof, otherwise, this restraining order shall lose its efficacy.
Accordingly, defendant Tanduay Distillers, Inc., and all persons and agents acting for and in behalf
are enjoined to cease and desist from manufacturing, distributing, selling, offering for sale and/or
advertising or otherwise using in commerce the mark GINEBRA KAPITAN which employs, thereon, or
in the wrappings, sundry items, cartons and packages thereof, the mark GINEBRA as well as from
using the bottle design and labels for its gin products during the effectivity of this temporary
restraining order unless a contrary order is issued by this Court.[14]
On 3 October 2003, Tanduay filed a petition for certiorari with the CA.[15] Despite Tanduays Urgent
Motion to Defer Injunction Hearing, the trial court continued to conduct hearings on 8, 9, 13 and 14
October 2003 for Tanduay to show cause why no writ of preliminary injunction should be
issued.[16] On 17 October 2003, the trial court granted San Miguels application for the issuance of a
writ of preliminary injunction.[17] The dispositive portion of the Order reads:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
WHEREFORE, the plaintiffs application for a writ of preliminary injunction is GRANTED. Upon
plaintiffs filing of an injunctive bond executed to the defendant in the amount of P20,000,000.00
(TWENTY MILLION) PESOS, let a Writ of Preliminary Injunction issue enjoining the defendant, its
employees, agents, representatives, dealers, retailers or assigns, and any all persons acting on its
behalf, from committing the acts complained of, and, specifically, to cease and desist from
manufacturing, distributing, selling, offering for sale, advertising, or otherwise using in commerce
the mark GINEBRA, and manufacturing, producing, distributing or otherwise dealing in gin products
which have the general appearance of, and which are confusingly similar with, plaintiffs marks,
bottle design and label for its gin products.
SO ORDERED.[18]
On 22 October 2003, Tanduay filed a supplemental petition in the CA assailing the injunction
order. On 10 November 2003, the CA issued a TRO enjoining the trial court from implementing its
injunction order and from further proceeding with the case.[19] On 23 December 2003, the CA
issued a resolution directing the parties to appear for a hearing on 6 January 2004 to determine the
need for the issuance of a writ of preliminary injunction.[20]
ON 9 JANUARY 2004, THE CA RENDERED A DECISION DISMISSING TANDUAYS PETITION AND
SUPPLEMENTAL PETITION. ON 28 JANUARY 2004, TANDUAY MOVED FOR RECONSIDERATION WHICH
WAS DENIED IN A RESOLUTION DATED 2 JULY 2004.[21]
AGGRIEVED BY THE DECISION DISMISSING THE PETITION AND SUPPLEMENTAL PETITION AND BY THE
RESOLUTION DENYING THE MOTION FOR RECONSIDERATION, TANDUAY ELEVATED THE CASE
BEFORE THIS COURT.
Page 104
THE TRIAL COURTS ORDERS
In the Order dated 23 September 2003, the trial court stated that during the hearings conducted on
25 and 29 August and on 4 and 11 September 2003, the following facts have been established:
1. San Miguel has registered the trademark Ginebra San Miguel;
2. THERE IS A CLOSE RESEMBLANCE BETWEEN GINEBRA SAN MIGUEL AND GINEBRA KAPITAN;
3. THE CLOSE SIMILARITY BETWEEN GINEBRA SAN MIGUEL AND GINEBRA KAPITAN MAY GIVE RISE
TO CONFUSION OF GOODS SINCE SAN MIGUEL AND TANDUAY ARE COMPETITORS IN THE BUSINESS
OF MANUFACTURING AND SELLING LIQUORS; AND
GINEBRA, WHICH IS A WELL-KNOWN TRADEMARK, WAS ADOPTED BY TANDUAY TO BENEFIT FROM
THE REPUTATION AND ADVERTISEMENT OF THE ORIGINATOR OF THE MARK GINEBRA SAN MIGUEL,
AND TO CONVEY TO THE PUBLIC THE IMPRESSION OF SOME SUPPOSED CONNECTION BETWEEN THE
MANUFACTURER OF THE GIN PRODUCT SOLD UNDER THE NAME GINEBRA SAN MIGUEL AND THE
NEW GIN PRODUCT GINEBRA KAPITAN.[22]
Based on these facts, the trial court concluded that San Miguel had demonstrated a clear, positive,
and existing right to be protected by a TRO. Otherwise, San Miguel would suffer irreparable injury if
infringement would not be enjoined. Hence, the trial court granted the application for a TRO and set
the hearing for preliminary injunction.[23]
IN THE ORDER DATED 17 OCTOBER 2003, THE TRIAL COURT GRANTED THE APPLICATION FOR A WRIT
OF PRELIMINARY INJUNCTION. THE TRIAL COURT RULED THAT WHILE A CORPORATION ACQUIRES A
TRADE NAME FOR ITS PRODUCT BY CHOICE, IT SHOULD NOT SELECT A NAME THAT IS CONFUSINGLY
SIMILAR TO ANY OTHER NAME ALREADY PROTECTED BY LAW OR IS PATENTLY DECEPTIVE,
CONFUSING, OR CONTRARY TO EXISTING LAW.[24]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
THE TRIAL COURT POINTED OUT THAT SAN MIGUEL AND ITS PREDECESSORS HAVE CONTINUOUSLY
USED GINEBRA AS THE DOMINANT FEATURE OF ITS GIN PRODUCTS SINCE 1834. ON THE OTHER
HAND, TANDUAY FILED ITS TRADEMARK APPLICATION FOR GINEBRA KAPITAN ONLY ON 7 JANUARY
2003. THE TRIAL COURT DECLARED THAT SAN MIGUEL IS THE PRIOR USER AND REGISTRANT OF
GINEBRA WHICH HAS BECOME CLOSELY ASSOCIATED TO ALL OF SAN MIGUELS GIN PRODUCTS,
THEREBY GAINING POPULARITY AND GOODWILL FROM SUCH NAME.[25]
THE TRIAL COURT NOTED THAT WHILE THE SUBJECT TRADEMARKS ARE NOT IDENTICAL, IT IS
OBVIOUSLY CLEAR THAT THE WORD GINEBRA IS THE DOMINANT FEATURE IN THE TRADEMARKS. THE
TRIAL COURT STATED THAT THERE IS A STRONG INDICATION THAT CONFUSION IS LIKELY TO OCCUR
SINCE ONE WOULD INEVITABLY BE LED TO CONCLUDE THAT BOTH PRODUCTS ARE AFFILIATED WITH
SAN MIGUEL DUE TO THE DISTINCTIVE MARK GINEBRA WHICH IS READILY IDENTIFIED WITH SAN
MIGUEL. THE TRIAL COURT CONCLUDED THAT ORDINARY PURCHASERS WOULD NOT EXAMINE THE
LETTERINGS OR FEATURES PRINTED ON THE LABEL BUT WOULD SIMPLY BE GUIDED BY THE
PRESENCE OF THE DOMINANT MARK GINEBRA. ANY DIFFERENCE WOULD PALE IN SIGNIFICANCE IN
THE FACE OF EVIDENT SIMILARITIES IN THE DOMINANT FEATURES AND OVERALL APPEARANCE OF
THE PRODUCTS. THE TRIAL COURT EMPHASIZED THAT THE DETERMINATIVE FACTOR WAS WHETHER
THE USE OF SUCH MARK WOULD LIKELY CAUSE CONFUSION ON THE PART OF THE BUYING PUBLIC,
AND NOT WHETHER IT WOULD ACTUALLY CAUSE CONFUSION ON THE PART OF THE PURCHASERS.
THUS, TANDUAYS CHOICE OF GINEBRA AS PART OF THE TRADEMARK OF GINEBRA KAPITAN TENDED
TO SHOW TANDUAYS INTENTION TO RIDE ON THE POPULARITY AND ESTABLISHED GOODWILL OF
GINEBRA SAN MIGUEL.[26]
THE TRIAL COURT HELD THAT TO CONSTITUTE TRADEMARK INFRINGEMENT, IT WAS NOT NECESSARY
THAT EVERY WORD SHOULD BE APPROPRIATED; IT WAS SUFFICIENT THAT ENOUGH BE TAKEN TO
DECEIVE THE PUBLIC IN THE PURCHASE OF A PROTECTED ARTICLE.[27]
THE TRIAL COURT CONCEDED TO TANDUAYS ASSERTION THAT THE TERM GINEBRA IS A GENERIC
WORD; HENCE, IT IS NON-REGISTRABLE BECAUSE GENERIC WORDS ARE BY LAW FREE FOR ALL TO
USE. HOWEVER, THE TRIAL COURT RELIED ON THE PRINCIPLE THAT EVEN IF A WORD IS INCAPABLE
OF APPROPRIATION AS A TRADEMARK, THE WORD MAY STILL ACQUIRE A PROPRIETARY
CONNOTATION THROUGH LONG AND EXCLUSIVE USE BY A BUSINESS ENTITY WITH REFERENCE TO
Page 105
ITS PRODUCTS. THE PURCHASING PUBLIC WOULD ASSOCIATE THE WORD TO THE PRODUCTS OF A
BUSINESS ENTITY. THE WORD THUS ASSOCIATED WOULD BE ENTITLED TO PROTECTION AGAINST
INFRINGEMENT AND UNFAIR COMPETITION. THE TRIAL COURT HELD THAT THIS PRINCIPLE COULD BE
MADE TO APPLY TO THIS CASE BECAUSE SAN MIGUEL HAS SHOWN THAT IT HAS ESTABLISHED
GOODWILL OF CONSIDERABLE VALUE, SUCH THAT ITS GIN PRODUCTS HAVE ACQUIRED A WELL-
KNOWN REPUTATION AS JUST GINEBRA. IN ESSENCE, THE WORD GINEBRA HAS BECOME A POPULAR
BY-WORD AMONG THE CONSUMERS AND THEY HAD CLOSELY ASSOCIATED IT WITH SAN
MIGUEL.[28]
ON THE OTHER HAND, THE TRIAL COURT HELD THAT TANDUAY FAILED TO SUBSTANTIATE ITS CLAIM
AGAINST THE ISSUANCE OF THE INJUNCTIVE RELIEF.[29]
THE CA OBSERVED THAT THE GIN PRODUCTS OF GINEBRA SAN MIGUEL AND GINEBRA KAPITAN
POSSESS THE SAME PHYSICAL ATTRIBUTES WITH REFERENCE TO THEIR FORM, COMPOSITION,
TEXTURE, OR QUALITY. THE CA UPHELD THE TRIAL COURTS RULING THAT SAN MIGUEL HAS
SUFFICIENTLY ESTABLISHED ITS RIGHT TO PRIOR USE AND REGISTRATION OF THE MARK GINEBRA AS
A DOMINANT FEATURE OF ITS TRADEMARK. GINEBRA HAS BEEN IDENTIFIED WITH SAN MIGUELS
GOODS, THEREBY, IT ACQUIRED A RIGHT IN SUCH MARK, AND IF ANOTHER INFRINGED THE
TRADEMARK, SAN MIGUEL COULD INVOKE ITS PROPERTY RIGHT.[33]

THE RULING OF THE COURT OF APPEALS The Issue

In resolving the petition and supplemental petition, the CA stated that it is constrained to limit itself The central question for resolution is whether San Miguel is entitled to the writ of preliminary
to the determination of whether the TRO and the writ of preliminary injunction were issued by the injunction granted by the trial court as affirmed by the CA. For this reason, we shall deal only with
trial court with grave abuse of discretion amounting to lack of jurisdiction.[30] the questioned writ and not with the merits of the case pending before the trial court.

TO WARRANT THE ISSUANCE OF A TRO, THE CA RULED THAT THE AFFIDAVITS OF SAN MIGUELS
WITNESSES AND THE FACT THAT THE REGISTERED TRADEMARK GINEBRA SAN MIGUEL EXISTS ARE
The Ruling of the Court
ENOUGH TO MAKE A FINDING THAT SAN MIGUEL HAS A CLEAR AND UNMISTAKABLE RIGHT TO
PREVENT IRREPARABLE INJURY BECAUSE GIN DRINKERS CONFUSE SAN MIGUEL TO BE THE
MANUFACTURER OF GINEBRA KAPITAN.[31]
Clear and Unmistakable Right
THE CA ENUMERATED THE REQUISITES FOR AN INJUNCTION: (1) THERE MUST BE A RIGHT IN ESSE OR
THE EXISTENCE OF A RIGHT TO BE PROTECTED AND (2) THE ACT AGAINST WHICH THE INJUNCTION IS
TO BE DIRECTED IS A VIOLATION OF SUCH RIGHT. THE CA STATED THAT THE TRADEMARKS GINEBRA
SECTION 1, RULE 58 OF THE RULES OF COURT DEFINES A PRELIMINARY INJUNCTION AS AN ORDER
SAN MIGUEL AND GINEBRA KAPITAN ARE NOT IDENTICAL, BUT IT IS CLEAR THAT THE WORD
GRANTED AT ANY STAGE OF A PROCEEDING PRIOR TO THE JUDGMENT OR FINAL ORDER, REQUIRING
GINEBRA IS THE DOMINANT FEATURE IN BOTH TRADEMARKS. THERE WAS A STRONG INDICATION
A PARTY OR A COURT, AGENCY, OR A PERSON TO REFRAIN FROM A PARTICULAR ACT OR ACTS.
THAT CONFUSION WAS LIKELY TO OCCUR. ONE WOULD BE LED TO CONCLUDE THAT BOTH
PRODUCTS ARE AFFILIATED WITH SAN MIGUEL BECAUSE THE DISTINCTIVE MARK GINEBRA IS A PRELIMINARY INJUNCTION IS A PROVISIONAL REMEDY FOR THE PROTECTION OF SUBSTANTIVE
IDENTIFIED WITH SAN MIGUEL. IT IS THE MARK WHICH DRAWS THE ATTENTION OF THE BUYER AND RIGHTS AND INTERESTS. IT IS NOT A CAUSE OF ACTION IN ITSELF BUT MERELY AN ADJUNCT TO THE
LEADS HIM TO CONCLUDE THAT THE GOODS ORIGINATED FROM THE SAME MANUFACTURER.[32] MAIN CASE. ITS OBJECTIVE IS TO PREVENT A THREATENED OR CONTINUOUS IRREPARABLE INJURY TO
SOME OF THE PARTIES BEFORE THEIR CLAIMS CAN BE THOROUGHLY INVESTIGATED AND ADVISEDLY
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 106
LAW ON INTELLECTUAL PROPERTY SET CASES
ADJUDICATED. IT IS RESORTED TO ONLY WHEN THERE IS A PRESSING NEED TO AVOID INJURIOUS
CONSEQUENCES WHICH CANNOT BE REMEDIED UNDER ANY STANDARD COMPENSATION.[34]
Section 3, Rule 58 of the Rules of Court provides:
SECTION 3. GROUNDS FOR ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.A PRELIMINARY
INJUNCTION MAY BE GRANTED WHEN IT IS ESTABLISHED:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists
in restraining the commission or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.
Before an injunctive writ is issued, it is essential that the following requisites are present: (1) the
existence of a right to be protected and (2) the acts against which the injunction is directed are
violative of the right. The onus probandi is on the movant to show that the invasion of the right
sought to be protected is material and substantial, that the right of the movant is clear and
unmistakable, and that there is an urgent and paramount necessity for the writ to prevent serious
damage.[35]
San Miguel claims that the requisites for the valid issuance of a writ of preliminary injunction were
clearly established. The clear and unmistakable right to the exclusive use of the mark Ginebra was
proven through the continuous use of Ginebra in the manufacture, distribution, marketing and sale
of gin products throughout the Philippines since 1834. To the gin-drinking public, the word Ginebra
does not simply indicate a kind of beverage; it is now synonymous with San Miguels gin products.[36]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
San Miguel contends that Ginebra can be appropriated as a trademark, and there was no error in the
trial courts provisional ruling based on the evidence on record. Assuming that Ginebra is a generic
word which is proscribed to be registered as a trademark under Section 123.1(h)[37] of Republic Act
No. 8293 or the Intellectual Property Code (IP Code),[38] it can still be appropriated and registered
as a trademark under Section 123.1(j)[39] in relation to Section 123.2[40] of the IP Code, considering
that Ginebra is also a mark which designates the kind of goods produced by San Miguel.[41] San
Miguel alleges that although Ginebra, the Spanish word for gin, may be a term originally incapable of
exclusive appropriation, jurisprudence dictates that the mark has become distinctive of San Miguels
products due to its substantially exclusive and continuous use as the dominant feature of San
Miguels trademarks since 1834. Hence, San Miguel is entitled to a finding that the mark is deemed to
have acquired a secondary meaning.[42] San Miguel states that Tanduay failed to present any
evidence to disprove its claims; thus, there is no basis to set aside the grant of the TRO and writ of
preliminary injunction.[43]
San Miguel states that its disclaimer of the word Ginebra in some of its registered marks is without
prejudice to, and did not affect, its existing or future rights over Ginebra, especially since Ginebra has
demonstrably become distinctive of San Miguels products.[44] San Miguel adds that it did not
disclaim Ginebra in all of its trademark registrations and applications like its registration for Ginebra
Cruz de Oro, Ginebra Ka Miguel, Ginebra San Miguel bottle, Ginebra San Miguel, and Barangay
Ginebra.[45]
Tanduay asserts that not one of the requisites for the valid issuance of a preliminary injunction is
present in this case. Tanduay argues that San Miguel cannot claim the exclusive right to use the
generic word Ginebra for its gin products based on its registration of the composite marks Ginebra
San Miguel, Ginebra S. Miguel 65, and La Tondea Cliq! Ginebra Mix, because in all of these
registrations, San Miguel disclaimed any exclusive right to use the non-registrable word Ginebra for
gin products.[46] Tanduay explains that the word Ginebra, which is disclaimed by San Miguel in all of
its registered trademarks, is an unregistrable component of the composite mark Ginebra San Miguel.
Tanduay argues that this disclaimer further means that San Miguel does not have an exclusive right
to the generic word Ginebra.[47] Tanduay states that the word Ginebra does not indicate the source
of the product, but it is merely descriptive of the name of the product itself and not the
manufacturer thereof.[48]
Page 107

Tanduay submits that it has been producing gin products under the brand names Ginebra 65,
Ginebra Matador, and Ginebra Toro without any complaint from San Miguel. Tanduay alleges that
San Miguel has not filed any complaint against other liquor companies which use Ginebra as part of
their brand names such as Ginebra Pinoy, a registered trademark of Webengton Distillery; Ginebra
Presidente and Ginebra Luzon as registered trademarks of Washington Distillery, Inc.; and Ginebra
Lucky Nine and Ginebra Santiago as registered trademarks of Distileria Limtuaco & Co.,
Inc.[49] Tanduay claims that the existence of these products, the use and registration of the word
Ginebra by other companies as part of their trademarks belie San Miguels claim that it has been the
exclusive user of the trademark containing the word Ginebra since 1834.
Tanduay argues that before a court can issue a writ of preliminary injunction, it is imperative that
San Miguel must establish a clear and unmistakable right that is entitled to protection. San Miguels
alleged exclusive right to use the generic word Ginebra is far from clear and unmistakable. Tanduay
claims that the injunction issued by the trial courtwas based on its premature conclusion that
Ginebra Kapitan infringes Ginebra San Miguel.[50]
In Levi Strauss & Co. v. Clinton Apparelle, Inc.,[51] we held:
While the matter of the issuance of a writ of preliminary injunction is addressed to the sound
discretion of the trial court, this discretion must be exercised based upon the grounds and in the
manner provided by law. The exercise of discretion by the trial court in injunctive matters is
generally not interfered with save in cases of manifest abuse. And to determine whether there was
grave abuse of discretion, a scrutiny must be made of the bases, if any, considered by the trial court
in granting injunctive relief. Be it stressed that injunction is the strong arm of equity which must be
issued with great caution and deliberation, and only in cases of great injury where there is no
commensurate remedy in damages.[52]
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The CA upheld the trial courts ruling that San Miguel has sufficiently established its right to prior use
and registration of the word Ginebra as a dominant feature of its trademark.The CA ruled that based
on San Miguels extensive, continuous, and substantially exclusive use of the word Ginebra, it has
become distinctive of San Miguels gin products; thus, a clear and unmistakable right was shown.
We hold that the CA committed a reversible error. The issue in the main case is San Miguels right to
the exclusive use of the mark Ginebra. The two trademarks Ginebra San Miguel and Ginebra Kapitan
apparently differ when taken as a whole, but according to San Miguel, Tanduay appropriates the
word Ginebra which is a dominant feature of San Miguels mark.
It is not evident whether San Miguel has the right to prevent other business entities from using the
word Ginebra. It is not settled (1) whether Ginebra is indeed the dominant feature of the
trademarks, (2) whether it is a generic word that as a matter of law cannot be appropriated, or (3)
whether it is merely a descriptive word that may be appropriated based on the fact that it has
acquired a secondary meaning.
The issue that must be resolved by the trial court is whether a word like Ginebra can acquire a
secondary meaning for gin products so as to prohibit the use of the word Ginebra by other gin
manufacturers or sellers. This boils down to whether the word Ginebra is a generic mark that is
incapable of appropriation by gin manufacturers.
In Asia Brewery, Inc. v. Court of Appeals,[53] the Court ruled that pale pilsen are generic words, pale
being the actual name of the color and pilsen being the type of beer, a light bohemian beer with a
strong hops flavor that originated in Pilsen City in Czechoslovakia and became famous in the Middle
Ages, and hence incapable of appropriation by any beer manufacturer.[54] Moreover, Section
123.1(h) of the IP Code states that a mark cannot be registered if it consists exclusively of signs that
are generic for the goods or services that they seek to identify.
Page 108
In this case, a cloud of doubt exists over San Miguels exclusive right relating to the word Ginebra. San
Miguels claim to the exclusive use of the word Ginebra is clearly still in dispute because of Tanduays
claim that it has, as others have, also registered the word Ginebra for its gin products. This issue can
be resolved only after a full-blown trial.
In Ong Ching Kian Chuan v. Court of Appeals,[55] we held that in the absence of proof of a legal right
and the injury sustained by the movant, the trial courts order granting the issuance of an injunctive
writ will be set aside, for having been issued with grave abuse of discretion.
We find that San Miguels right to injunctive relief has not been clearly and unmistakably
demonstrated. The right to the exclusive use of the word Ginebra has yet to be determined in the
main case. The trial courts grant of the writ of preliminary injunction in favor of San Miguel, despite
the lack of a clear and unmistakable right on its part, constitutes grave abuse of discretion
amounting to lack of jurisdiction.
Prejudging the Merits of the Case
Tanduay alleges that the CA, in upholding the issuance of the writ of preliminary injunction, has
prejudged the merits of the case since nothing is left to be decided by the trial court except the
amount of damages to be awarded to San Miguel.[56]
San Miguel claims that neither the CA nor the trial court prejudged the merits of the case. San
Miguel states that the CA did not rule on the ultimate correctness of the trial courts evaluation and
appreciation of the evidence before it, but merely found that the assailed Orders of the trial court
are supported by the evidence on record and that Tanduay was not denied due process.[57] San
Miguel argues that the CA only upheld the trial courts issuance of the TRO and writ of preliminary
injunction upon a finding that there was sufficient evidence on record, as well as legal authorities, to
warrant the trial courts preliminary findings of fact.[58]
The instructive ruling in Manila International Airport Authority v. Court of Appeals[59] states:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Considering the far-reaching effects of a writ of preliminary injunction, the trial court should have
exercised more prudence and judiciousness in its issuance of the injunction order. We remind trial
courts that while generally the grant of a writ of preliminary injunction rests on the sound discretion
of the court taking cognizance of the case, extreme caution must be observed in the exercise of such
discretion. The discretion of the court a quo to grant an injunctive writ must be exercised based on
the grounds and in the manner provided by law. Thus, the Court declared inGarcia v. Burgos:
It has been consistently held that there is no power the exercise of which is more delicate, which
requires greater caution, deliberation and sound discretion, or more dangerous in a doubtful case,
than the issuance of an injunction. It is the strong arm of equity that should never be extended
unless to cases of great injury, where courts of law cannot afford an adequate or commensurate
remedy in damages.
Every court should remember that an injunction is a limitation upon the freedom of action of the
defendant and should not be granted lightly or precipitately. It should be granted only when the
court is fully satisfied that the law permits it and the emergency demands it. (Emphasis in the
original)
WE BELIEVE THAT THE ISSUED WRIT OF PRELIMINARY INJUNCTION, IF ALLOWED, DISPOSES OF THE
CASE ON THE MERITS AS IT EFFECTIVELY ENJOINS THE USE OF THE WORD GINEBRA WITHOUT THE
BENEFIT OF A FULL-BLOWN TRIAL. IN RIVAS V. SECURITIES AND EXCHANGE COMMISSION,[60]WE
RULED THAT COURTS SHOULD AVOID ISSUING A WRIT OF PRELIMINARY INJUNCTION WHICH WOULD
IN EFFECT DISPOSE OF THE MAIN CASE WITHOUT TRIAL. THE ISSUANCE OF THE WRIT OF
PRELIMINARY INJUNCTION HAD THE EFFECT OF GRANTING THE MAIN PRAYER OF THE COMPLAINT
SUCH THAT THERE IS PRACTICALLY NOTHING LEFT FOR THE TRIAL COURT TO TRY EXCEPT THE
PLAINTIFFS CLAIM FOR DAMAGES.
Page 109
Irreparable Injury
TANDUAY POINTS OUT THAT THE SUPPOSED DAMAGES THAT SAN MIGUEL WILL SUFFER AS A
RESULT OF TANDUAYS INFRINGEMENT OR UNFAIR COMPETITION CANNOT BE CONSIDERED
IRREPARABLE BECAUSE THE DAMAGES ARE SUSCEPTIBLE OF MATHEMATICAL COMPUTATION.
TANDUAY INVOKES SECTION 156.1 OF THE IP CODE[61] AS THE BASIS FOR THE COMPUTATION OF
DAMAGES.[62]
SAN MIGUEL AVERS THAT IT STANDS TO SUFFER IRREPARABLE INJURY IF THE MANUFACTURE AND
SALE OF TANDUAYS GINEBRA KAPITAN ARE NOT ENJOINED. SAN MIGUEL CLAIMS THAT THE ROUGH
ESTIMATE OF THE DAMAGES[63] IT WOULD INCUR IS SIMPLY A GUIDE FOR THE TRIAL COURT IN
COMPUTING THE APPROPRIATE DOCKET FEES. SAN MIGUEL ASSERTS THAT THE FULL EXTENT OF THE
DAMAGE IT WOULD SUFFER IS DIFFICULT TO MEASURE WITH ANY REASONABLE ACCURACY BECAUSE
IT HAS INVESTED HUNDREDS OF MILLIONS OVER A PERIOD OF 170 YEARS TO ESTABLISH GOODWILL
AND REPUTATION NOW BEING ENJOYED BY THE GINEBRA SAN MIGUEL MARK.[64] SAN MIGUEL
REFUTES TANDUAYS CLAIM THAT THE INJURY WHICH SAN MIGUEL STANDS TO SUFFER CAN BE
MEASURED WITH REASONABLE ACCURACY AS THE LEGAL FORMULA TO DETERMINE SUCH INJURY IS
PROVIDED IN SECTION 156.1 OF THE IP CODE. SAN MIGUEL REASONS THAT IF TANDUAYS CLAIM IS
UPHELD, THEN THERE WOULD NEVER BE A PROPER OCCASION TO ISSUE A WRIT OF PRELIMINARY
INJUNCTION IN RELATION TO COMPLAINTS FOR INFRINGEMENT AND UNFAIR COMPETITION, AS THE
INJURY WHICH THE OWNER OF THE MARK SUFFERS, OR STANDS TO SUFFER, WILL ALWAYS BE
SUSCEPTIBLE OF MATHEMATICAL COMPUTATION.[65]
rests in the probability of irreparable injury, inadequacy of pecuniary compensation and the
prevention of the multiplicity of suits, and where facts are not shown to bring the case within these
conditions, the relief of injunction should be refused.
Based on the affidavits and market survey report submitted during the injunction hearings, San
Miguel has failed to prove the probability of irreparable injury which it will stand to suffer if the sale
of Ginebra Kapitan is not enjoined. San Miguel has not presented proof of damages incapable of
pecuniary estimation. At most, San Miguel only claims that it has invested hundreds of millions over
a period of 170 years to establish goodwill and reputation now being enjoyed by the Ginebra San
Miguel mark such that the full extent of the damage cannot be measured with reasonable accuracy.
Without the submission of proof that the damage is irreparable and incapable of pecuniary
estimation, San Miguels claim cannot be the basis for a valid writ of preliminary injunction.
WHEREFORE, WE GRANT THE PETITION. WE SET ASIDE THE DECISION OF THE COURT OF APPEALS
DATED 9 JANUARY 2004 AND THE RESOLUTION DATED 2 JULY 2004 IN CA-G.R. SP NO. 79655. WE
DECLARE VOID THE ORDER DATED 17 OCTOBER 2003 AND THE CORRESPONDING WRIT OF
PRELIMINARY INJUNCTION ISSUED BY BRANCH 214 OF THE REGIONAL TRIAL COURT OF
MANDALUYONG CITY IN IP CASE NO. MC-03-01 AND CIVIL CASE NO. MC-03-073.

IN LEVI STRAUSS & CO. V. CLINTON APPARELLE, INC.,[66] THIS COURT UPHELD THE APPELLATE
COURTS RULING THAT THE DAMAGES LEVI STRAUSS & CO. HAD SUFFERED OR CONTINUES TO
SUFFER MAY BE COMPENSATED IN TERMS OF MONETARY CONSIDERATION. THIS COURT,
QUOTINGGOVERNMENT SERVICE INSURANCE SYSTEM V. FLORENDO,[67] HELD:

x x x a writ of injunction should never issue when an action for damages would adequately
compensate the injuries caused. The very foundation of the jurisdiction to issue the writ of injunction

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 110

LAW ON INTELLECTUAL PROPERTY SET CASES
THE REGIONAL TRIAL COURT OF MANDALUYONG CITY, BRANCH 214, IS DIRECTED TO CONTINUE On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O.
EXPEDITIOUSLY WITH THE TRIAL TO RESOLVE THE MERITS OF THE CASE. Bersamira, dismissing SMC's 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
SO ORDERED. 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
Republic of the Philippines judgment entered in favor of the plaintiff and against the defendant as follows:
SUPREME COURT
Manila (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
EN BANC 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
G.R. No. 103543 July 5, 1993 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
ASIA BREWERY, INC., petitioner, plaintiff or which will enable others to substitute, sell or palm off the said beer of the defendant as
vs. and for the beer of the plaintiff-complainant.
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.
(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and pay the San
Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for petitioner. Miguel Corporation double any and all the payments derived by defendant from operations of its
business and the sale of goods bearing the mark "Beer Pale Pilsen" estimated at approximately Five
Roco, Bunag, Kapunan Law Office for private respondent. 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
GRIO-AQUINO, J.: making the same to the Court authorized to execute this judgment for destruction.

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as
(ABI) for infringement of trademark and unfair competition on account of the latter's BEER PALE moral damages and Half a Million Pesos (P5,000,000.00) by way of exemplary damages.
PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount of P250,000.00
for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case. No.
plus costs to this suit. (p. 90, Rollo.)
56390, RTC Branch 166, Pasig, Metro Manila.).

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 111

LAW ON INTELLECTUAL PROPERTY SET CASES
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 1 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, 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 if 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 2 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 attorney's 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 SMC's 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;
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
(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 petitioner's 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:
Page 112
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. (Emphasis 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 else's
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):
. . . . 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; Emphasis supplied.)
On the other hand, ABI's trademark, as described by the trial court, consists of:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
. . . 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 in 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; Emphasis supplied.)
Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's 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; . . . .) (Emphasis
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. . . . [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 SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the
Page 113
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 ABI's 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 SMC's trademark, just
as the words "SAN MIGUEL" do not appear in ABI's 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 SMC's 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 horizontalband. (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 ABI's bottle is printed in big, bold letters, under a row of flower buds and leaves,
its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's 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.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
(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 ABI's trademark does not constitute an infringement
of SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive of the
color ("pale"), of a type of beer ("pilsen"), which is a light bohemian beer with a strong hops flavor
that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle Ages.
(Webster's Third New International Dictionary of the English Language, Unabridged. Edited by Philip
Babcock Gove. Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily
geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of
R.A. No. 638) hence, non-registerable and not appropriable by any beer manufacturer. The
Trademark Law provides:
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to distinguish his goods,
business or services from the goods, business or services of others shall have the right to register the
same [on the principal register], unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when applied to or used in connection with the goods,
business or services of the applicant is merely descriptive or deceptively misdescriptive of them, or
when applied to or used in connection with the goods, business or services of the applicant
isprimarily geographically descriptive or deceptively misdescriptive of them, or is primarily merely a
surname." (Emphasis supplied.)
The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of
its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as
"evaporated milk," "tomato ketchup," "cheddar cheese," "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"
Page 114
as his trademark because that would be merely descriptive and it would be unjust to deprive other
dealers in leather shoes of the right to use the same words with reference to their merchandise. No
one may appropriate generic or descriptive words. They belong to the public domain (Ong Ai Gui vs.
Director of Patents, 96 Phil. 673, 676 [1955]):
A word or a combination of words which is merely descriptive of an article of trade, or of its
composition, characteristics, or qualities, cannot be appropriated and protected as a trademark to
the exclusion of its use by others. . . . inasmuch as all persons have an equal right to produce and
vend similar articles, they also have the right to describe them properly and to use any appropriate
language or words for that purpose, and no person can appropriate to himself exclusively any word
or expression, properly descriptive of the article, its qualities, ingredients or characteristics, and thus
limit other persons in the use of language appropriate to the description of their manufactures, the
right to the use of such language being common to all. This rule excluding descriptive terms has also
been held to apply to trade-names. As to whether words employed fall within this prohibition, it is
said that the true test is not whether they are exhaustively descriptive of the article designated, but
whether in themselves, and as they are commonly used by those who understand their meaning,
they are reasonably indicative and descriptive of the thing intended. If they are thus descriptive, and
not arbitrary, they cannot be appropriated from general use and become the exclusive property of
anyone. (52 Am. Jur. 542-543.)
. . . . Others may use the same or similar descriptive word in connection with their own wares,
provided they take proper steps to prevent the public being deceived. (Richmond Remedies Co. vs.
Dr. Miles Medical Co., 16 E. [2d] 598.)
. . . . A descriptive word may be admittedly distinctive, especially if the user is the first creator of the
article. It will, however, be denied protection, not because it lacks distinctiveness, but rather because
others are equally entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-870.)"
(Emphasis 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 SMC's charge that ABI dishonestly and fraudulently intends to palm
off its BEER PALE PILSEN as SMC's 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 PALE PILSEN for SAN MIGUEL PALE PILSEN.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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. . . .
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 SMC's beer, or whether ABI is passing off its BEER PALE PILSEN as
SMC's SAN MIGUEL PALE PILSEN.
Page 115
. . ..The universal test question is whether the public is likely to be deceived. Nothing less than
conduct tending to pass off one man's goods or business as that of another will constitute unfair
competition. Actual or probable deception and confusion on the part of the customers by reason of
defendant's practices must always appear. (Shell Co., of the Philippines, Ltd. vs. Insular Petroleum
Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle,
is not unlawful. As pointed out by ABI's 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 SMC's bottle
The court agrees with defendant that there is no infringement of plaintiff's bottle, firstly, because
according to plaintiff's 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 Manufacturer's 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 defendant's
bottle is much larger and has a distinct bulge in its uppermost part. (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the exclusive property of
any one beer manufacturer is well taken. SMC's 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 (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
. . . 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.)
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which
has a fat bulging neck to differentiate it from SMC's 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 amber-colored 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 SMC's bottle 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 ABI's 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 form 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:
. . . . 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.
Page 116
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 SMC's complaint if not infringement of its trademark, but unfair competition
arising form the allegedly "confusing similarity" in the general appearance or trade dress of ABI's
BEER PALE PILSEN beside SMC's 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 SMC's 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
SMC's 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 SMC's 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 standards 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 ABI's BEER PALE PILSEN is sold,
like SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.
The record does not bear out SMC's 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 ABI's counsel, in supermarkets and tiendas, beer is ordered by
brand, and the customer surrenders his empty replacement bottles or pays a deposit to guarantee
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 gardens beer 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 ABI's 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, 3 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.
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 Monte's label, we held that there was infringement of Del
Monte's trademark and unfair competition by Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf but
ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by ABI's mark:
"BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a bulging neck to differentiate
Page 117
it from SMC's bottle, and prints ABI's name in three (3) places on said bottle (front, back and bottle
cap) to prove that it has no intention to pass of 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 SMC's trademark nor committed unfair competition with the
latter's 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
SMC's 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.
Feliciano, J., took no part.
Separate Opinions
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 ownponencia in Del Monte Corporation vs. Court of Appeals, 181 SCRA 410,
concurred in by Justices Narvasa, Gancayco, Grio-Aquino and Medialdea, where we declared:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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 aside 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 petitioner's 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
Page 118
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.
# Separate Opinions
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 ownponencia 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 aside 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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
the respondent must rely upon his memory of the petitioner's 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.
THIRD DIVISION
G.R. No. 209843, March 25, 2015
TAIWAN KOLIN CORPORATION, LTD., Petitioner, v. KOLIN ELECTRONICS CO., INC., Respondent.
DECISION
VELASCO JR., J.:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by petitioner
Taiwan Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013 Decision1 of the Court of
Appeals (CA) in CA-G.R. SP No. 122565 and its subsequent November 6, 2013 Resolution.2 The
Page 119
assailed issuances effectively denied petitioners trademark application for the use of KOLIN on its
television and DVD players.chanroblesvirtuallawlibrary
The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of
Patents, Trademarks, and Technology Transfer, a trademark application, docketed as Application No.
4-1996-106310, for the use of KOLIN on a combination of goods, including colored televisions,
refrigerators, window-type and split-type air conditioners, electric fans and water dispensers. Said
goods allegedly fall under Classes 9, 11, and 21 of the Nice Classification (NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins failure
to respond to IPOs Paper No. 5 requiring it to elect one class of good for its coverage. However, the
same application was subsequently revived through Application Serial No. 4-2002-011002,3 with
petitioner electing Class 9 as the subject of its application, particularly: television sets, cassette
recorder, VCD Amplifiers, camcorders and other audio/video electronic equipment, flat iron, vacuum
cleaners, cordless handsets, videophones, facsimile machines, teleprinters, cellular phones and
automatic goods vending machine. The application would in time be duly published.4cralawred
On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners
revived application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark Taiwan
Kolin seeks to register is identical, if not confusingly similar, with its KOLIN mark registered on
November 23, 2003, covering the following products under Class 9 of the NCL: automatic voltage
regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down
transformer, and PA amplified AC-DC.5cralawred
To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a prior legal
dispute between the parties in Inter Partes Case No. 14-1998-00050 before the IPO. In the said case,
Kolin Electronics own application was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed, the
prior registrant and user of the KOLIN trademark, having registered the same in Taipei, Taiwan on
December 1, 1988. The Bureau of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority
right to Taiwan Kolins Taipei registration absent evidence to prove that it has already used the said
mark in the Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPOs
Decision. Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin Electronics
was able to register the KOLIN trademark on November 23, 2003 for its products.6 Subsequently,
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
the CA, on July 31, 2006, affirmed7 the Decision of the Director General.
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner argued that
it should be accorded the benefits of a foreign-registered mark under Secs. 3 and 131.1 of Republic
Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines (IP Code);8 that it
has already registered the KOLIN mark in the Peoples Republic of China, Malaysia and Vietnam, all
of which are parties to the Paris Convention for the Protection of Industrial Property (Paris
Convention) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);and
that benefits accorded to a well-known mark should be accorded to petitioner.9cralawred
Ruling of the BLA-IPO
By Decision10 dated August 16, 2007, the BLA-IPO denied petitioners application disposing as
follows:chanRoblesvirtualLawlibrary
In view of all the foregoing, the instant Opposition is as, it is hereby SUSTAINED. Accordingly,
application bearing Serial No. 4-1996-106310 for the mark KOLIN filed in the name of TAIWAN
KOLIN., LTD. on February 29, 1996 for goods falling under Class 09 of the International Classification
of Goods such as cassette recorder, VCD, woofer, amplifiers, camcorders and other audio/video
electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile
machines, teleprinters, cellular phones, automatic goods vending machines and other electronic
equipment is herebyREJECTED.
Let the file wrapper of KOLIN, subject of this case be forwarded to the Bureau of Trademarks (BOT)
for appropriate action in accordance with this Decision.
SO ORDERED.cralawlawlibrary
Citing Sec. 123(d) of the IP Code,11 the BLA-IPO held that a mark cannot be registered if it is identical
with a registered mark belonging to a different proprietor in respect of the same or closely-related
goods. Accordingly, respondent, as the registered owner of the mark KOLIN for goods falling under
Class 9 of the NCL, should then be protected against anyone who impinges on its right, including
petitioner who seeks to register an identical mark to be used on goods also belonging to Class 9 of
the NCL.12 The BLA-IPO also noted that there was proof of actual confusion in the form of
consumers writing numerous e-mails to respondent asking for information, service, and complaints
Page 120
about petitioners products.13cralawred
Petitioner moved for reconsideration but the same was denied on January 26, 2009 for lack of
merit.14 Thus, petitioner appealed the above Decision to the Office of the Director General of the
IPO.chanroblesvirtuallawlibrary
Ruling of the IPO Director General
On November 23, 2011, the IPO Director General rendered a Decision15 reversing that of the BLA-
IPO in the following wise:chanRoblesvirtualLawlibrary
Wherefore, premises considered, the appeal is hereby GRANTED. The Appellants Trademark
Application No. 4-1996-106310 is hereby GIVEN DUE COURSE subject to the use limitation or
restriction for the goods television and DVD player. Let a copy of this Decision as well as the
trademark application and records be furnished and returned to the Director of the Bureau of Legal
Affairs for appropriate action. Further, let the Director of the Bureau of Trademarks and the library
of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this
Decision for information, guidance, and records purposes.
SO ORDERED.cralawlawlibrary
In so ruling, the IPO Director General ratiocinated that product classification alone cannot serve as
the decisive factor in the resolution of whether or not the goods are related and that emphasis
should be on the similarity of the products involved and not on the arbitrary classification or general
description of their properties or characteristics. As held, the mere fact that one person has adopted
and used a particular trademark for his goods does not prevent the adoption and use of the same
trademark by others on articles of a different description.16cralawred
Aggrieved, respondent elevated the case to the CA.chanroblesvirtuallawlibrary
Ruling of the Court of Appeals
In its assailed Decision, the CA found for Kolin Electronics, on the strength of the following premises:
(a) the mark sought to be registered by Taiwan Kolin is confusingly similar to the one already
registered in favor of Kolin Electronics; (b) there are no other designs, special shape or easily
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
identifiable earmarks that would differentiate the products of both competing companies;17 and (c)
the intertwined use of television sets with amplifier, booster and voltage regulator bolstered the fact
that televisions can be considered as within the normal expansion of Kolin Electronics,18 and is
thereby deemed covered by its trademark as explicitly protected under Sec. 13819 of the IP
Code.20Resultantly, the CA granted respondents appeal thusly:chanRoblesvirtualLawlibrary
WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of the Director General of
the Intellectual Property Office in Inter Partes Case No. 14-2006-0096 is REVERSED and SET
ASIDE. The September 17, 2007 Decision of the Bureau of Legal Affairs of the same office
is REINSTATED.
SO ORDERED.cralawlawlibrary
Petitioner moved for reconsideration only to be denied by the CA through its equally assailed
November 6, 2013 Resolution. Hence, the instant recourse.chanroblesvirtuallawlibrary
The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its
trademark registration of KOLIN over its specific goods of television sets and DVD players.
Petitioner postulates, in the main, that its goods are not closely related to those of Kolin Electronics.
On the other hand, respondent hinges its case on the CAs findings that its and petitioners products
are closely-related. Thus, granting petitioners application for trademark registration, according to
respondent, would cause confusion as to the public.
The Courts Ruling
The petition is impressed with merit.
Identical marks may be registered for
products from the same classification
To bolster its opposition against petitioners application to register trademark KOLIN, respondent
maintains that the element of mark identity argues against approval of such application,quoting the
BLA IPOs ruling in this regard:21cralawred
Page 121
Indubitably, Respondent-Applicants [herein petitioner] mark is identical to the registered mark of
herein Opposer [herein respondent] and the identical mark is used on goods belonging to Class 9 to
which Opposers goods are also classified. On this point alone, Respondent-Applicants application
should already be denied.cralawlawlibrary
The argument is specious.
The parties admit that their respective sets of goods belong to Class 9 of the NCL, which includes the
following:22cralawred
Class 9
Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring,
signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and
instruments for conducting, switching, transforming, accumulating, regulating or controlling
electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data
carriers, recording discs; compact discs, DVDs and other digital recording media; mechanisms for
coin-operated apparatus; cash registers, calculating machines, data processing equipment,
computers; computer software; fire-extinguishing apparatus.cralawlawlibrary
But mere uniformity in categorization, by itself, does not automatically preclude the registration of
what appears to be an identical mark, if that be the case. In fact, this Court, in a long line of cases,has
held that such circumstance does not necessarily result in any trademark infringement. The survey of
jurisprudence cited in Mighty Corporation v. E. & J Gallo Winery23 is enlightening on this
point:chanRoblesvirtualLawlibrary
(a) in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered the approval of Acoje Minings
application for registration of the trademark LOTUS for its soy sauce even though Philippine
Refining Company had prior registration and use of such identical mark for its edible oil which,
like soy sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents,25 we upheld the Patent
Directors registration of the same trademark CAMIA for Ng Sams ham under Class 47, despite
Philippine Refining Companys prior trademark registration and actual use of such mark on its
lard, butter, cooking oil (all of which belonged to Class 47), abrasive detergents, polishing
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
materials and soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun Liong,26we dismissed
Hickoks petition to cancel private respondents HICKOK trademark registration for its Marikina
shoes as against petitioners earlier registration of the same trademark for handkerchiefs,
briefs, belts and wallets.
cralawlawlibrary
Verily, whether or not the products covered by the trademark sought to be registered by Taiwan
Kolin, on the one hand, and those covered by the prior issued certificate of registration in favor of
Kolin Electronics, on the other, fall under the same categories in the NCL is not the sole and decisive
factor in determining a possible violation of Kolin Electronics intellectual property right should
petitioners application be granted. It is hornbook doctrine, as held in the above-cited cases, that
emphasis should be on the similarity of the products involved and not on the arbitrary classification
or general description of their properties or characteristics. The mere fact that one person has
adopted and used a trademark on his goods would not, without more, prevent the adoption and use
of the same trademark by others on unrelated articles of a different kind.27cralawred
The CA erred in denying petitioners
registration application
Respondent next parlays the idea of relation between products as a factor militating against
petitioners application. Citing Esso Standard Eastern, Inc. v. Court of Appeals,28 respondent argues
that the goods covered by petitioners application and those covered by its registration are actually
related belonging as they do to the same class or have the same physical characteristics with
reference to their form, composition, texture, or quality, or if they serve the same purpose.
Respondent likewise draws parallelisms between the present controversy and the following
cases:29cralawred
(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits were held related to milk because
they were both food products;
(b) In Chua Che vs. Phil. Patents Office,31 soap and perfume, lipstick and nail polish are held to be
similarly related because they are common household items;
Page 122
(c) In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and slippers was disallowed to be
used for shirts and pants because they belong to the same general class of goods; and
(d) In Khe vs. Lever Bros. Co.,33 soap and pomade, although non-competitive, were held to be
similar or belong to the same class, since both are toilet articles.
cralawlawlibrary
Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not only
because both fall under Class 9 of the NCL, but mainly because they both relate to electronic
products, instruments, apparatus, or appliances.34 Pushing the point, respondent would argue that
Taiwan Kolin and Kolin Electronics goods are inherently similar in that they are all plugged into
electric sockets and perform a useful function.35 Furthermore, respondent echoes the appellate
courts ratiocination in denying petitioners application, viz:36cralawred
Significantly, Kolin Electronics goods (automatic voltage regulator; converter; recharger; stereo
booster; AC-DC regulated power supply; step-down transformer; and PA amplified AC-DC) and
Taiwan Kolins television sets and DVD players are both classified under class 9 of the NICE
agreement. At first glance, it is also evident that all these goods are generally described as electrical
devices.x x x [T]he goods of both Kolin Electronics and Taiwan Kolin will inevitably be introduced to
the public as KOLIN products and will be offered for sale in the same channels of trade. Contrary to
Taiwan Kolins claim, power supply as well as audio and stereo equipment like booster and amplifier
are not only sold in hardware and electrical shops. These products are commonly found in appliance
stores alongside television sets and DVD players. With the present trend in todays entertainment of
having a home theater system, it is not unlikely to see a stereo booster, amplifier and automatic
voltage regulator displayed together with the television sets and DVD players. With the intertwined
use of these products bearing the identical KOLIN mark, the ordinary intelligent consumer would
likely assume that they are produced by the same manufacturer.
In sum, the intertwined use, the same classification of the products as class 9 under the NICE
Agreement, and the fact that they generally flow through the same channel of trade clearly establish
that Taiwan Kolins television sets and DVD players are closely related to Kolin Electronics goods. As
correctly pointed out by the BLA-IPO, allowing Taiwan Kolins registration would only confuse
consumers as to the origin of the products they intend to purchase. Accordingly, protection should
be afforded to Kolin Electronics, as the registered owner of the KOLIN trademark.37 (emphasis
added)cralawlawlibrary
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The CAs approach and reasoning to arrive at the assailed holding that the approval of petitioners
application is likely to cause confusion or deceive fail to persuade.
The products covered by petitioners
application and respondents
registration are unrelated
A certificate of trademark registration confers upon the trademark owner the exclusive right to sue
those who have adopted a similar mark not only in connection with the goods or services specified in
the certificate, but also with those that are related thereto.38cralawred
In resolving one of the pivotal issues in this casewhether or not the products of the parties
involved are relatedthe doctrine in Mighty Corporation is authoritative. There, the Court held that
the goods should be tested against several factors before arriving at a sound conclusion on the
question of relatedness. Among these are:chanRoblesvirtualLawlibrary
(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the products quality, quantity, or size, including the nature of the package, wrapper or
container;
(d) the nature and cost of the articles;
(e) the descriptive properties, physical attributes or essential characteristics with reference to their
form, composition, texture or quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is, day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are distributed, marketed,
displayed and sold.39cralawlawlibrary
As mentioned, the classification of the products under the NCL is merely part and parcel of the
factors to be considered in ascertaining whether the goods are related. It is not sufficient to state
that the goods involved herein are electronic products under Class 9 in order to establish relatedness
between the goods, for this only accounts for one of many considerations enumerated in Mighty
Corporation.In this case, credence is accorded to petitioners assertions that:40cralawred
Page 123
Taiwan Kolins goods are classified as home appliances as opposed to Kolin Electronics goods which
are power supply and audio equipment accessories;ChanRoblesVirtualawlibrary
Taiwan Kolins television sets and DVD players perform distinct function and purpose from Kolin
Electronics power supply and audio equipment; and
Taiwan Kolin sells and distributes its various home appliance products on wholesale and to
accredited dealers, whereas Kolin Electronics goods are sold and flow through electrical and
hardware stores.
Clearly then, it was erroneous for respondent to assume over the CA to conclude that all electronic
products are related and that the coverage of one electronic product necessarily precludes the
registration of a similar mark over another. In this digital age wherein electronic products have not
only diversified by leaps and bounds, and are geared towards interoperability, it is difficult to assert
readily, as respondent simplistically did, that all devices that require plugging into sockets are
necessarily related goods.
It bears to stress at this point that the list of products included in Class 941 can be sub-categorized
into five (5) classifications, namely: (1) apparatus and instruments for scientific or research purposes,
(2) information technology and audiovisual equipment, (3) apparatus and devices for controlling the
distribution and use of electricity, (4) optical apparatus and instruments, and (5) safety
equipment.42 From this sub-classification, it becomes apparent that petitioners products, i.e.,
televisions and DVD players, belong to audiovisiual equipment, while that of respondent, consisting
of automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply,
step-down transformer, and PA amplified AC-DC, generally fall under devices for controlling the
distribution and use of electricity.
The ordinarily intelligent buyer
is not likely to be confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to
another, no rigid set rules can plausible be formulated. Each case must be decided on its merits,
with due regard to the goods or services involved, the usual purchasers character and attitude,
among others. In such cases, even more than in any other litigation, precedent must be studied in
the light of the facts of a particular case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point.43cralawred
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
For a clearer perspective and as matter of record, the following image on the left44 is the trademark
applied for by petitioner, while the image juxtaposed to its right45 is the trademark registered by
respondent:
(please see image in G.R. No. 209843 page 10)
While both competing marks refer to the word KOLIN written in upper case letters and in bold
font, the Court at once notes the distinct visual and aural differences between them: Kolin
Electronics mark is italicized and colored black while that of Taiwan Kolin is white in pantone red
color background. The differing features between the two, though they may appear minimal, are
sufficient to distinguish one brand from the other.
It cannot be stressed enough that the products involved in the case at bar are, generally speaking,
various kinds of electronic products. These are not ordinary consumable household items, like
catsup, soy sauce or soap which are of minimal cost.46 The products of the contending parties are
relatively luxury items not easily considered affordable. Accordingly, the casual buyer is predisposed
to be more cautious and discriminating in and would prefer to mull over his purchase. Confusion and
deception, then, is less likely.47 As further elucidated in Del Monte Corporation v. Court of
Appeals:48cralawred
x x x Among these, what essentially determines the attitudes of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies
will not exercise as much care as one who buys an expensive watch. As a general rule, an ordinary
buyer does not exercise as much prudence in buying an article for which he pays a few centavos as
he does in purchasing a more valuable thing. Expensive and valuable items are normally bought only
after deliberate, comparative and analytical investigation. But mass products, low priced articles in
wide use, and matters of everyday purchase requiring frequent replacement are bought by the
casual consumer without great care x x x.(emphasis added)cralawlawlibrary
Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that they
involved common household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet articles,
respectivelywhereas the extant case involves luxury items not regularly and inexpensively
purchased by the consuming public. In accord with common empirical experience, the useful lives of
televisions and DVD players last for about five (5) years, minimum, making replacement purchases
very infrequent. The same goes true with converters and regulators that are seldom replaced despite
Page 124
the acquisition of new equipment to be plugged onto it. In addition, the amount the buyer would be
parting with cannot be deemed minimal considering that the price of televisions or DVD players can
exceed todays monthly minimum wage.In light of these circumstances, it is then expected that the
ordinary intelligent buyer would be more discerning when it comes to deciding which electronic
product they are going to purchase, and it is this standard which this Court applies here in in
determining the likelihood of confusion should petitioners application be granted.
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v. Court
of Appeals,49 wherein the opposing trademarks are that of Emerald Garment Manufacturing
Corporations Stylistic Mr. Lee and H.D. Lees LEE. In the said case, the appellate court affirmed combination of the three colors. It is to be pointed out that not even a shade of these colors appears
the decision of the Director of Patents denying Emerald Garments application for registration due to
confusing similarity with H.D. Lees trademark. This Court, however, was of a different beat and ruled
that there is no confusing similarity between the marks, given that the products covered by the
trademark, i.e., jeans, were,at that time, considered pricey, typically purchased by intelligent buyers
familiar with the products and are more circumspect, and, therefore, would not easily be deceived.
As held:chanRoblesvirtualLawlibrary
Finally, in line with the foregoing discussions, more credit should be given to the ordinary
purchaser. Cast in this particular controversy, the ordinary purchaser is not the completely unwary
consumer but is the ordinarily intelligent buyer considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to the present case. There,
the ordinary purchaser was defined as one accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of fraudulent simulation is to be found in the likelihood
of the deception of some persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been associated. The test is not
found in the deception, or the possibility of deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent between that and the other. The
simulation, in order to be objectionable, must be such as appears likely to mislead the ordinary
intelligent buyer who has a need to supply and is familiar with the article that he seeks to
purchase.51 (emphasis added)cralawlawlibrary
Consistent with the above ruling, this Court finds that the differences between the two marks, subtle
as they may be, are sufficient to prevent any confusion that may ensue should petitioners
trademark application be granted.As held in Esso Standard Eastern, Inc.:52cralawred
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
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
on the trademark of the appellants cigarette. The only color that the appellant uses in its trademark
is green.
Even the lower court, which ruled initially for petitioner, found that a noticeable difference
between the brand ESSO being used by the defendants and the trademark ESSO of the plaintiff is
that the former has a rectangular background, while in that of the plaintiff the word ESSO is enclosed
in an oval background.cralawlawlibrary
All told, We are convinced that petitioners trademark registration not only covers unrelated good,
but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be
thought of as having, and credited with, at least a modicum of intelligence to be able to see the
differences between the two trademarks in question.53cralawred
Questions of fact may still be entertained
On a final note, the policy according factual findings of courts a quo great respect, if not finality, is
not binding where they have overlooked, misapprehended, or misapplied any fact or circumstance of
weight and substance.54 So it must be here; the nature of the products involved materially affects
the outcome of the instant case. A reversal of the appellate courts Decision is then in order.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and November 6,
2013, respectively, are hereby REVERSED and SET ASIDE. Accordingly, the Decision of the Intellectual
Property Office Director General in Inter Partes Case No. 14-2006-00096, dated November 23, 2011,
is hereby REINSTATED.
Page 125

SO ORDERED.cralawlawlibrary
FIRST DIVISION
G.R. No. 198889, January 20, 2016
UFC PHILIPPINES, INC. (NOW MERGED WITH NUTRI-ASIA, INC., WITH NUTRI-ASIA, INC. AS THE
SURVIVING ENTITY), Petitioner, v. FIESTA BARRIO MANUFACTURING CORPORATION,Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
For our disposition is a petition for review on certiorari under Rule 45 seeking to annul and set aside
the June 23, 2011 Decision1 and the October 4, 2011 Resolution2 of the Court of Appeals in CA-G.R.
SP No. 107570, which reversed and set aside the March 26, 2008 Decision3 of the Bureau of Legal
Affairs of the Intellectual Property Office (IPO-BLA) and the January 29, 2009 Decision4 of the
Director General of the IPO. Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized
and existing under Philippine laws.5 It is the emergent entity in a merger with UFC Philippines, Inc.
that was completed on February 11, 2009.6 Respondent Barrio Fiesta Manufacturing Corporation
(respondent) is likewise a corporation organized and existing under Philippine laws.
On April 4, 2002, respondent filed Application No. 4-2002-002757 for the mark "PAPA BOY &
DEVICE" for goods under Class 30, specifically for "lechon sauce."7 The Intellectual Property Office
(IPO) published said application for opposition in the IP Phil. e-Gazette released on September 8,
2006. The mark appears as follows:
(Please see image G.R. No. 198889 pg. 2)
On December 11, 2006, petitioner filed with the IPO-BLA a Verified Notice of Opposition to the
above-mentioned application and alleged that:
The mark "PAPA" for use on banana catsup and other similar goods was first used [in] 1954 by Neri
Papa, and thus, was taken from his surname;
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
After using the mark "PAPA" for about twenty-seven (27) years, Neri Papa subsequently assigned the
mark "PAPA" to Hernan D. Reyes who, on September 17, 1981, filed an application to register said
mark "PAPA" for use on banana catsup, chili sauce, achara, banana chips, and instant ube powder;
On August 14, 1983, Hernan D. Reyes was issued Certificate of Registration No. 32416;
[Certificate of] Registration No. 32416 was subsequently assigned to the following in successive
fashion: Acres & Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC Philippines, Inc., and Opposer
UFC Philippines, Inc.;
Last October 28, 2005, Heinz-UFC Philippines, Inc. filed Application Serial No. 4-2005-010788 which,
in effect, is a re- registration of Registration No. 32416 which expired on August 11, 2003;
Hernan D. Reyes also filed on March 04, 1982 an application to register in the Supplemental Register
the "PAPA BANANA CATSUP Label";
On August 11, 1983, Hernan D. Reyes was issued Certificate of Registration No. SR-6282 which was
subsequently assigned to Acres & Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC Philippines,
Inc.;
After its expiration, Opposer filed on November 15, 2006 Trademark Application Serial No. 4-2006-
012346 for the re-registration of the "PAPA Label Design";
The mark "PAPA KETSARAP" for use on banana sauce falling under Class 30 was also registered in
favor of Acres & Acres Food, Inc. under Registration No. 34681 issued on August 23, 1985 and
renewed last August 23, 2005 by Heinz-UFC Philippines, Inc. for ten (10) years;
On November 07, 2006, Registration No. 34681 was assigned to Opposer;
Opposer has not abandoned the use of the mark "PAPA" and the variations thereof as Opposer has
continued their use up to the present;
The mark "PAPA BOY & DEVICE" is identical to the mark "PAPA" owned by Opposer and duly
registered in its favor, particularly the dominant feature thereof;
[With the] dominant feature of respondent-applicant's mark "PAPA BOY & DEVICE", which is
Opposer's "PAPA" and the variations thereof, confusion and deception is likely to result: The
consuming public, particularly the unwary customers, will be deceived, confused, and mistaken into
believing that respondent-applicant's goods come from Opposer or are authorized by Opposer to
Page 126
Opposer's prejudice, which is particularly true considering that Opposer's sister company, Southeast
Asia Food, Inc., and its predecessors-in-interest have been major manufacturers and distributors of
lechon sauce and other table sauces since 1965 under its registered mark "Mang Tomas";
Respondent-applicant's mark "PAPA BOY & DEVICE" which nearly resembles Opposer's mark "PAPA"
and the variations thereof will impress upon the gullible or unsuspecting public that it is the same or
related to Opposer as to source because its dominant part is the same as Opposer's mark and, thus,
will likely be mistaken to be the mark, or related to, or a derivative or variation of, Opposer's mark;
The goods covered by respondent-applicant's application fall under Class 30, the same Class under
which Opposer's goods enumerated in its earlier issued registrations;
The test of dominancy is now explicitly incorporated into law in Section 155.1 of the IP Code which
defines infringement as the colorable imitation of a registered mark or a dominant feature thereof,
and is provided for by jurisprudence;
As a corporation also engaged in the food business, Respondent- applicant knew and/or ought to
know that Opposer and its predecessors-in-interest have been using the mark "PAPA" and the
variations thereof for the last fifty-two (52) years while its sister company is engaged in the business
of manufacturing and distributing "lechon sauce" and other table sauces for the last forty-one (41)
years;
The approval of the subject application will violate Opposer's right to the exclusive use of its
registered mark "PAPA" and the variations thereof per Section 13 8 of the IP Code;
The approval of the subject application has caused and will continue to cause great and irreparable
damage and injury to Opposer;
Respondent-applicant filed the subject application fraudulently and in bad faith; and
Respondent-applicant is not entitled to register the subject mark in its favor.8
In its verified opposition before the IPO, petitioner contended that "PAPA BOY & DEVICE" is
confusingly similar with its "PAPA" marks inasmuch as the former incorporates the term "PAPA,"
which is the dominant feature of petitioner's "PAPA" marks. Petitioner averred that respondent's use
of "PAPA BOY & DEVICE" mark for its lechon sauce product, if allowed, would likely lead the
consuming public to believe that said lechon sauce product originates from or is authorized by
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
petitioner, and that the "PAPA BOY & DEVICE" mark is a variation or derivative of petitioner's "PAPA"
marks. Petitioner argued that this was especially true considering that petitioner's ketchup product
and respondent's lechon sauce product are related articles that fall under the same Class
30.9chanroblesvirtuallawlibrary
Petitioner alleged that the registration of respondent's challenged mark was also likely to damage
the petitioner, considering that its former sister company, Southeast Asia Food, Inc., and the latter's
predecessors-in-interest, had been major manufacturers and distributors of lechon and other table
sauces since 1965, such as products employing the registered "Mang Tomas" mark.
In its Verified Answer, respondent argued that there is no likelihood of confusion between
petitioner's family of "PAPA" trademarks and respondent's "PAPA BOY & DEVICE" trademark.
Respondent raised affirmative defenses and we quote the relevant ones below:
3. Opposer cites several of its following marks in support of its opposition to the application but an
examination of said marks [reveals] that these have already expired and/or that no confusing
similarity exists x xx;
4. Assuming that the mark "PAPA KETSARAP" had been timely renewed on August 23, 2005 for
"banana sauce" under Class 30, the same is not a hindrance to the successful registration of the mark
"PAPA BOY & DEVICE": Jurisprudence provides that a certificate of registration confers upon the
trademark owner the exclusive right to use its own symbol only to those goods specified in the
certificate subject to the conditions and limitations stated therein;
5. As a result, Opposer's right to use the mark "PAPAKETSARAP" is limited to the products covered by
its certificate of registration which is Class 30 for banana sauce;
6. Contrary to Opposer's belief, the dominant features of Respondent-applicant's mark "PAPA BOY &
DEVICE" are the words "PAPA BOY" and the representation of a smiling hog-like character gesturing
the thumbs-up sign and wearing a traditional Filipino hat and scarf while the dominant feature of
Opposer's mark "PAPA KETSARAP" are the words "Papa" and "Ketsarap", not the word "Papa"; and
the word "Ketsarap " is more prominently printed and displayed in the foreground than the word
"Papa" for which reasons opposer's reference to the Dominancy Test fails;
7. Opposer's allegation that the registration of Respondent-applicant's mark "PAPA BOY & DEVICE"
will damage and prejudice the mark "MANG TOMAS" is irrelevant considering that Opposer's basis
Page 127
for filing this opposition is the alleged confusing similarity between Respondent-applicant's mark and
Opposer's mark "PAPA KETSARAP", not the mark "MANG TOMAS";
8. Respondent-applicant's mark "PAPA BOY & DEVICE" is neither identical nor confusingly similar to
Opposer's mark "PAPA KETSARAP": Respondent-applicant's mark "PAPABOY & DEVICE" is an
arbitrary mark which differs in overall sound, spelling, meaning, style, configuration, presentation,
and appearance from Opposer's mark "PAPA KETSARAP";
9. The dissimilarities between the marks are so distinct, thus, confusion is very unlikely: While
Opposer's mark is a plain word mark, Respondent-applicant's mark "PAPA BOY & DEVICE" is much
more intricate and distinctive such as Opposer's mark not having the words "Lechon Sauce" printed
inside a blue ribbon-like device which is illustrated below the words "PAPA BOY", Opposer's mark not
having a prominent smiling hog-like character gesturing a thumbs-up sign and wearing a Filipino hat
and scarf stands beside the words "PAPA BOY", and Opposer's mark not having the words "Barrio
Fiesta" albeit conspicuously displayed above the mark, all which leave no doubt in the consumer's
mind on the product that he is purchasing;
10. Aside from the fact that Respondent-applicant's mark "PAPA BOY & DEVICE" is distinct and
different in appearance, spelling, sound, meaning, and style from Opposer's mark "PAPA KETSARAP",
the difference in the goods covered by both marks is obvious: Since the goods covered by
Respondent-applicant's mark is unrelated and non- competing to those covered by Opposer's mark,
the doctrine allowing the registrations of marks covering unrelated and non-competing goods as
enunciated by the Supreme Court is therefore applicable in this case;
11. Respondent-applicant's mark cannot be confusingly similar to Opposer's mark considering that
the products covered by these marks are different: While Respondent-applicant's mark "PAPA BOY &
DEVICE" covers lechon sauce under Class 30, Opposer's mark "PAPA KETSARAP" covers banana
sauce;
12. If a consumer is in the market for banana sauce, he will not buy lechon sauce and vice-versa and
as a result, the margin of error in the acquisition of one from the other is simply remote;
13. Respondent-applicant is the exclusive owner of the mark "PAPA BOY & DEVICE" for lechon sauce
under Class 30: The words "PAPA BOY" is a combination of the nickname of Bonifacio Ongpauco who
is one of Respondent-applicant's incorporators and founders- "BOY"- and the word "PAPA" as
Bonifacio Ongpauco's mother, Sixta P. Evangelista, had been fondly known as "Mama Chit", making
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Respondent-applicant the prior adopter, user, and applicant of the mark "PAPA BOY & DEVICE" in
the Philippines;
14. To protect its ownership over the mark "PAPA BOY & DEVICE" considering that it is the first to
adopt and use said mark, Respondent-applicant applied for its registration under Application Serial
No. 4-2002-002757 for Class 30, and said application was found registrable by the Examiner as a
consequence of which the same was recommended for allowance after undergoing a thorough
process of examination, which recommendation was then approved by the Director of the Bureau of
Trademarks (BOT);
15. Respondent-applicant's mark "PAPA BOY & DEVICE" has been commercially used in the
Philippines;
16. Respondent-applicant's mark "PAPA BOY & DEVICE" has been promoted and advertised for a
considerable duration of time and over wide geographical areas: Respondent-applicant has invested
tremendous amount of resources in the promotion of its mark "PAPA BOY & DEVICE" through
various media including print publications and promotional materials;
17. The widespread local commercial use of the subject mark by Respondent-applicant to distinguish
and identify its various high-quality consumer products has earned Respondent-applicant a well-
deserved business reputation and goodwill;
18. Respondent-applicant's mark is distinctive and capable of identifying its goods and distinguishing
them from those offered for sale by others in the market including Opposer's goods for which reason
no confusion will result because Respondent-applicant's mark is for lechon sauce while Opposer's
mark is for banana sauce; and
19. The presence of a common prefix "PAPA" in the marks of both parties does not render said marks
identical or confusingly similar: Opposer cannot exclusively appropriate said prefix considering that
other marks such as "Papa Heinz Pizza", "Papa Heinz Sausage", "Papa Beaver", "Papa Pop", "Pizza
Papa John's & Design", "Papadoods", and "Papa in Wine and Device" are valid and
active.10chanrobleslaw
Petitioner's mark and its variations appear as follows:
Page 128
1. "PAPA" under Registration No. 32416 for Class 29 goods;11
(Please see image G.R. No. 198889 page 7.)
The mark "PAPA" as it appeared upon re-registration of Certificate No. 32416, under Application No.
4-2005-010788 for Classes 29 and 30 goods;12
(Please see image G.R. No. 198889 page 7.)
"PAPA LABEL DESIGN" under Registration No. 4-2006-012364;13 and
(Please see image G.R. No. 198889 page 7.)
"PAPA KETSARAP" under Certificate of Registration No. 34681, for banana sauce (Class 30).14
(Please see image G.R. No. 198889 page 8.)
PROCEEDINGS BEFORE THE INTELLECTUAL PROPERTY OFFICE
The case was referred to mediation but the parties failed to arrive at an amicable settlement. The
case was thus set for preliminary conference. Subsequently, the IPO-BLA directed the parties to file
their respective position papers and draft decisions.
The IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's Opposition and rejecting
respondent's application for "PAPA BOY & DEVICE." The fallo of said decision reads as follows:
WHEREFORE, the VERIFIED NOTICE OF OPPOSITION filed by UFC Philippines, Inc. is, as it is hereby,
SUSTAINED. Consequently, Application Serial No. 4-2002-002757 for the mark "PAPA BOY & DEVICE"
for lechon sauce under Class 30 filed on April 04, 2002 by Barrio Fiesta Manufacturing Corporation,
is, as it is hereby, REJECTED. Let the file wrapper of PAPA BOY & Device subject matter of this case be
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
forwarded to the Bureau of Trademarks (BOT) for appropriate action in accordance with this
Decision.15chanrobleslaw
Respondent filed an appeal before the IPO Director General, who found it unmeritorious, and
disposed of the case in the following manner:
WHEREFORE, the instant appeal is hereby DISMISSED. Let a copy of this Decision as well as the
trademark application and records be furnished and returned to the Director of the Bureau of Legal
Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the
library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of
this Decision for information, guidance, and records purposes."16
DECISION OF THE COURT OF APPEALS
Respondent then filed a petition with the Court of Appeals, questioning the above decision of the
IPO Director General that affirmed the decision of the IPO Bureau of Legal Affairs Director, which
disallowed respondent's application for trademark registration. Respondent's arguments before the
Court of Appeals are quoted below:
A.
REGISTRATION NOS. 32416 AND 42005010788 ISSUED FOR THE "PAPA" MARK AND REGISTRATION
NOS. SR-6282 AND 42006012364 ISSUED FOR THE TRADEMARK "PAPA BANANA CATSUP LABEL/PAPA
LABEL DESIGN" SHOULD NOT BE USED AS BASIS IN DETERMINING THE EXISTENCE OF CONFUSING
SIMILARITY.
B.
THERE IS NO CONFUSING SIMILARITY BETWEEN PETITIONER-APPLICANT'S "PAPA BOY & DEVICE"
AND RESPONDENT'S "PAPA KETSARAP" MARK.
Page 129
C.
PETITIONER-APPLICANT IS ENTITLED TO THE REGISTRATION OF THE MARK "PAPA BOY & DEVICE."
D.
THE OPPOSITION STATES NO CAUSE OF ACTION, AND HENCE, SHOULD BE DENIED
OUTRIGHT.17chanrobleslaw
As regards the first ground, the Court of Appeals held:
Records show that respondent UFC has Certificates of Registration for the trademarks PAPA, PAPA
BANANA CATSUP label and PAPA KETSARAP. A closer look at the respective Certificate[s] of
Registration of the aforementioned marks, however, reveals that at the time the trademark
application of petitioner was published in the IPO e-Gazette on September 8, 2006, the duration of
the trademark registration of respondent over the marks PAPA and PAPA BANANA CATSUP have
already expired. On the other hand, the mark PAPA KETSARAP was timely renewed by respondent as
shown by the Certificate of Renewal of Registration issued on September 1, 2006 by the Director of
the Bureau of Trademarks.
Under R.A. No. 8293, as amended by R.A. No. 9150, the duration of a trademark registration is 10
years, renewable for periods of 10 years each renewal. The request for renewal must be made within
6 months before or after the expiration of the registration. Respondent's PAPA mark was not
renewed within the period provided for under RA No. 8293. Its registered term ended on August 11,
2003 but was reapplied for registration only on April 4, 2005. Meanwhile, the mark PAPA BANANA
CATSUP was registered by respondent only in the Supplemental Register, hence, was not provided
any protection, x x x. It is noted that the PAPA BANANA CATSUP label was applied for registration on
November 15, 2006, over three years after the expiration of its registration in the Supplemental
Register of the Philippine Patent Office on August 11, 2003. Thus, while petitioner has a point that
the marks PAPA and PAPA BANANA CATSUP have already expired and the latter having been
afforded no protection at all and should not be juxtaposed with petitioner's trademark, respondent
can still use the marks PAPA KETSARAP and PAPA BANANA CATSUP, it appearing that the Intellectual
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Property Office issued a Certificate of Registration No. 4-2006-012364 for the latter on April 30,
2007, to bar the registration of petitioner's "PAPA BOY & DEVICE" mark.18 (Emphases supplied,
citations omitted.)
Anent the second ground, the Court of Appeals ruled in the following manner:
After taking into account the aforementioned doctrines and the factual circumstances of the case at
bar, this Court, after considering the trademarks involved as a whole, is of the view that petitioner's
trademark "PAPA BOY & DEVICE" is not confusingly similar to respondent's "PAPA KETSARAP" and
"PAPA BANANA CATSUP" trademark. Petitioner's trademark is "PAPA BOY" as a whole as opposed to
respondent's "PAPA". Although on its label the word "PAPA" is prominent, the trademark should be
taken as a whole and not piecemeal. The difference between the two marks are conspicuous and
noticeable. While respondent's products are both labeled as banana sauces, that of petitioner Barrio
Fiesta is labeled as lechon sauce.
Moreover, it appears on the label of petitioner's product that the said lechon sauce is manufactured
by Barrio Fiesta thus, clearly informing the public [of) the identity of the manufacturer of the lechon
sauce. As claimed by respondent, its products have been in commercial use for decades. It is safe to
assume then that the consumers are already aware that "PAPA KETSARAP" and "PAPA BANANA
CATSUP" are products of UFC and not of petitioner or the other way around. In addition, as correctly
pointed out by petitioner, if a consumer is in the market for banana sauce, he will not buy lechon
sauce and vice-versa because aside from the fact that the labels of both parties' products contain the
kind of sauce they are marketing, the color of the products is visibly different. An ordinary consumer
is familiar with the fact that the color of a banana sauce is red while a lechon sauce is dark brown.
There can be no deception as both products are marketed in bottles making the distinction visible to
the eye of the consumer and the likelihood of acquiring a wrong sauce, remote. Even if the products
are placed side by side, the dissimilarities between the two marks are conspicuous, noticeable and
substantial enough to matter especially in the light of the following variables that must be factored
in.
Lastly, respondent avers that the word "PAPA" was coined after the surname of the person who first
created and made use of the mark. Admittedly, while "PAPA" is a surname, it is more widely known
as a term of endearment for one's father. Respondent cannot, therefore, claim exclusive ownership
over and singular use of [the] term. Petitioner was able to explain that it adopted the word "PAPA" in
parallel to the nickname of the founder of Barrio fiesta which is "MAMA CHIT". "PAPA BOY" was
Page 130
derived from the nickname of one of the incorporators of herein petitioner, a certain Bonifacio
Ongpauco, son of Mama Chit.19(Emphasis ours, citation omitted.)
THEORY OF PETITIONER
Thus, petitioner came to this Court, seeking the reversal of the questioned decision and resolution of
the Court of Appeals, and the reinstatement of the decision of the IPO Director General affirming the
decision of the IPO-BLA. Petitioner raises the following grounds:
I.
The court a quo erred in applying the "holistic test" to determine whether there is confusing
similarity between the contending marks, and in reversing the IPO-BLA and the Director General's
application of the "dominancy test."
II.
The court a quo erred in holding that there is no likelihood of confusion between the contending
marks given that the "PAPA BOY & DEVICE" mark is used on lechon sauce, as opposed to ketchup
products.
III.
The court a quo erred in holding that Petitioner cannot claim exclusive ownership and use of the
"PAPA" mark for its sauce products because "PAPA" is supposedly a common term of endearment
for one's father.20chanrobleslaw
Under the first ground, petitioner submitted the following arguments:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The findings of administrative agencies, if supported by substantial evidence, are binding upon the
courts.21
Petitioner alleges that the Court of Appeals should have respected the ruling of the IPO Director
General, which was consistent with the ruling of the IPO-BLA and supported by substantial evidence,
instead of substituting its findings of fact for those of the Director General and the IPO-BLA.
The dominancy test should have been applied to determine if there is confusing similarity between
the competing marks.22
Petitioner points out that the Director General and the IPO-BLA found that the dominant feature of
the competing marks is the word "PAPA" and the minor additions to respondent's "PAPA BOY &
DEVICE" mark do not negate likelihood of confusion caused by the latter's use of the dominant word
"PAPA." Petitioner claims that even compared solely to petitioner's "PAPA KETSARAP" mark
(Registration No. 34681), which is conceded to have been timely renewed and to have never expired,
respondent's "PAPA BOY & DEVICE" would still create the likelihood of
confusion.23chanroblesvirtuallawlibrary
According to petitioner, the Court of Appeals based its decision on Mead Johnson & Co. v. N.V.J. Van
Dorp, Ltd.,24 a case decided almost five decades ago, long before Republic Act No. 8293 or the 1998
Intellectual Property Code was enforced. Thus, the Court of Appeals erroneously applied the holistic
test since given the nature of the products bearing the competing marks, the dominancy test should
have been applied.
Petitioner claims that "[k]etchup and lechon sauce are common and inexpensive household products
that are sold in groceries and regularly encountered by the ordinary or common purchaser who is
not expected to examine, scrutinize, and compare the details of the competing marks."25cralawred
Petitioner distinguishes this case from Mead Johnson and claims that the ordinary purchaser of
ketchup or lechon sauce is not likely to closely scrutinize each mark as a whole, for the latter is
"undiscerningly rash" and usually in a hurry, and cannot be expected to take note of the smiling hog-
like character or the blue ribbon-like device with the words "Lechon Sauce." Petitioner argues that
under the Intellectual Property Code, it is not necessary for one to colorably imitate the competing
trademark as a whole. It is sufficient that one imitates a "dominant feature" of the mark to
Page 131
constitute trademark infringement.
Petitioner asserts that as the IPO-BLA and the Director General observed that the ordinary purchaser
is most likely to notice the words "PAPA BOY," which, in turn, may lead him to believe that there is a
connection between respondent's lechon sauce and petitioner's ketchup products.
Under the second ground, petitioner argues that the Court of Appeals seemed to be unmindful that
two kinds of confusion may arise from the use of similar or colorable imitation marks, i.e., confusion
of goods (product confusion) and confusion of business (source or origin confusion). Petitioner
claims that it is reasonable to assume that it may expand its business to producing lechon sauce,
inasmuch as it already produces food sauce products and its Articles of Incorporation authorizes it to
do so.
Petitioner alleges that the IPO-BLA recognized that confusion of business may arise from
respondent's use of its "PAPA BOY & DEVICE" mark for lechon sauce products, and that the Director-
General agreed with the IPO-BLA's findings on this issue.
Petitioner asserts that ketchup and lechon sauce are undeniably related goods; that they belong to
the same class, i.e., Class 30 of the Nice Classifications; that they serve practically the same
purpose,i.e., to spice up dishes; and that they are sold in similar bottles in the same shelves in
grocery stores. Petitioner argues that the Court of Appeals had absolutely no basis for stating that a
person who is out to buy ketchup is not likely to buy lechon sauce by mistake, as this analysis
allegedly only applies to "product confusion" and does not consider confusion of business. Petitioner
alleges that "[t]here equally is actionable confusion when a buyer purchases Respondent's 'PAPA
BOY' lechon sauce believing that the said product is related to or associated with the famous 'PAPA
KETSUP' makers." Petitioner further alleges that "it is reasonable and likely for a consumer to believe
that Respondent's 'PAPA BOY' lechon sauce originated from or is otherwise connected with
Petitioner's line of sauces" and that this is "the precise evil that recognition of confusion of business
seeks to prevent."26chanroblesvirtuallawlibrary
Petitioner avers that "PAPA" is a well-known mark and that it has been in commercial use as early as
1954 on banana ketchup and similar goods. The "PAPA" mark is also registered as a trademark and in
commercial use in other parts of the world such as the United States of America and the Middle East.
Petitioner claims that "[bjeing a trademark that is registered and well-known both locally and
internationally, Petitioner's 'PAPA' marks cannot be appropriated by another person or entity not
only with respect to goods similar to those with respect to which it is registered, but also with
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
respect to goods which are not similar to those for which the 'PAPA' marks are
registered."27chanroblesvirtuallawlibrary
Under the third ground, petitioner claims that the fact that the word "PAPA" is a known term of
endearment for fathers does not preclude it from being used as a mark to identify goods. Petitioner
claims that their mark falls under a type of mark known as "arbitrary or fanciful marks," which are
"marks that bear no logical relation to the actual characteristics of the products they represent," are
"highly distinctive and valid," and "are entitled to the greatest
protection."28chanroblesvirtuallawlibrary
Petitioner claims that the mark "PAPA" falls under this class of arbitrary marks, even if "PAPA" is also
a common term of endearment for one's father. Petitioner states that there is no logical connection
between one's father and food sauces, such as ketchup; thus, with respect to ketchup, food sauces,
and their related products, and for the purpose of identifying its products, petitioner claims exclusive
ownership of the term "PAPA" as an arbitrary mark.
Petitioner alleges that if respondent "has a good faith and proud desire to unmistakably and
distinctly identify its lechon sauce product out in the market, it should have coined a mark that
departs from and is distinguished from those of its competitors." Petitioner claims that respondent,
with full knowledge of the fame and the decades-long commercial use of petitioner's "PAPA" marks,
opted for "PAPA BOY & DEVICE," which obviously is just a "colorable imitation."29
THEORY OF RESPONDENT
In its Comment,30 respondent claims that petitioner's marks have either expired and/or "that no
confusing similarity exists between them and respondent's "PAPA BOY & DEVICE' mark." Respondent
alleges that under Section 15 of Republic Act No. 166, a renewal application should be filed within six
months before the expiration of the period or within three months after such expiration.
Respondent avers that the expiration of the 20-year term for the "PAPA" mark under Registration
No. 32416 issued on August 11, 1983 was August 11, 2003. The sixth month before August 11, 2003
was February 11, 2003 and the third month after August 11, 2003 was November 11, 2003.
Respondent claims that the application that petitioner filed on October 28, 2005 was almost two
years late. Thus, it was not a renewal application, but could only be considered a new application
under the new Trademark Law, with the filing date reckoned on October 28, 2005. The registrability
of the mark under the new application was examined again, and any certificate issued for the
registration of "PAPA" could not have been a renewal certificate.
Page 132

As for petitioner's other mark "PAPA BANANA CATSUP LABEL," respondent claims that its 20-year
term also expired on August 11, 2003 and that petitioner only filed its application for the new "PAPA
LABEL DESIGN" on November 15, 2006. Having been filed three years beyond the renewal
application deadline, petitioner was not able to renew its application on time, and cannot claim a
"continuous existence of its rights over the 'PAPA BANANA CATSUP LABEL.'" Respondent claims that
the two marks are different from each other and that the registration of one is independent of the
other. Respondent concludes that the certificate of registration issued for "PAPA LABEL DESIGN" is
"not and will never be a renewal certificate."31chanroblesvirtuallawlibrary
Respondent also avers as follows:
1.3. With regard to the two new registrations of petitioner namely: "PAPA" (Reg. No. 4-2005-010788)
and "PAPA LABEL DESIGN" (Reg. No. 4-2006-012364), these were filed on October 28, 2005 and
November 15, 2006, respectively, under the Intellectual Property Code (RA 8293), which follows the
"first to file" rule, and were obviously filed later than respondent's "PAPA BOY & DEVICE" mark filed
on April 4, 2002. These new marks filed much later than the opposed "PAPA BOY & DEVICE" mark
cannot, therefore, be used as basis for the opposition and should in fact, be denied outrightly.
xxxx
A search of the Online Trademark Database of Intellectual Property Office (IPO) will show that only
Registration No. 34681 issued for "PAPA KETSARAP" was properly renewed on August 23, 2005. x x x
Clearly, the registrations of "PAPA" and "PAPA BANANA CATSUP LABEL" marks under registration
nos. 32416 and SR-6282 respectively, have already expired when Petitioner filed its opposition
proceeding against Respondent's trademark on December 11, 2006. Having expired, and therefore,
no longer legally existing, the "PAPA" and "PAPA BANANA CATSUP LABEL" marks CANNOT BAR the
registration of respondent's mark. To allow petitioner's expired marks to prevent respondent's
distinct "PAPA BOY & DEVICE" mark from being registered would be the ultimate
absurdity.32chanrobleslaw
Respondent posits that the Court of Appeals did not err in reversing the decisions of the
administrative agencies, alleging that "[while] it is true that the general rule is that the factual
findings of administrative bodies deserve utmost respect when supported by evidence, the same is
subject to exceptions,"33 and that the Court of Appeals had justifiable reasons to disregard the
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
factual finding of the IPO. Here, the Court of Appeals wisely identified certain material facts that
were overlooked by the IPO-BLA and the IPO Director General which it opined, when correctly
appreciated, would alter the result of the case.
Respondent alleges that the IPO-BLA erroneously considered petitioner's marks "PAPA" and "PAPA
BANANA CATSUP LABEL" when it applied the dominancy test in determining whether petitioner's
marks are confusingly similar to those of respondent's mark "PAPA BOY & DEVICE."
Respondent avers that the IPO-BLA absurdly took emphasis on the mark "PAPA" to arrive at its
decision and did not take into consideration that petitioner's mark was already expired when
respondent applied for the registration of its "PAPA BOY & DEVICE" mark. Respondent compares its
"PAPA BOY & DEVICE" with the only mark that respondent allegedly has, "PAPA KETSARAP," and
found no confusing similarity between the two.
We quote below respondent's discussion of its application of the dominancy test to the marks in
question:
Applying the Dominancy test, as correctly emphasized by the Court of Appeals, the dominant feature
in respondent's mark is "PAPA BOY" and not "PAPA". It can be gleaned from respondent's mark that
the word "PAPA" was written in the same font, style and color as the word "BOY". There is also the
presence of a "smiling hog-like character" which is positioned very prominently, both in size and
location in said mark, at glance (sic) even more dominant than the word "PAPA BOY".
xxxx
On the other hand, the dominant feature in petitioner's mark is "KETSARAP", not "PAPA". Even an
ordinary examiner could observe that the word "KETSARAP" in petitioner's mark is more prominently
printed than the word "PAPA".
xxxx
In a dominancy test, the prominent feature of the competing trademarks must be similar to cause
confusion or deception, x x x.
Verily, respondent's dominant feature "PAPA BOY" and the smiling hog-like character and
petitioner's dominant feature "KETSARAP", being the word written in a larger font, are neither
Page 133
confusing nor deceiving to the public. In fact, the differences between their dominant marks are very
noticeable and conspicuous to every purchaser.
Furthermore, the Supreme Court in Societe des Produits Nestle, S.A. v. Dy [641 Phil. 345], applied the
dominancy test by taking into account the aural effects of the words and letters contained in the
marks in determining the issue of confusing similarity. Obviously, petitioners' "PAPA KETSARAP"
mark does not in any way sounds (sic) like respondent's "PAPA BOY" mark. The common prefix
"PAPA" does not render the marks aurally the same. As discussed above, the dominant feature in
petitioner's mark is "KETSARAP" and the dominant feature in respondent's mark is "PAPA BOY".
Thus, the words "KETSARAP" and "PAPA BOY" in petitioner's and respondent's respective marks are
obviously different in sound, making "PAPA BOY & DEVICE" even more distinct from petitioner's
"PAPA KETSARAP" mark.35chanrobleslaw
Using the holistic test, respondent further discusses the differences in the marks in this wise:
Even the use of the holistic test x x x takes into consideration the entirety of the marks in question
[to] be considered in resolving confusing similarity. The differences are again very obvious.
Respondent's mark has (1) the word "lechon sauce" printed inside a blue ribbon-like device which is
illustrated below the word "PAPA BOY"; (2) a prominent smiling hog-like character gesturing a
thumbs-up sign and wearing a Filipino hat and scarf stands beside the word "PAPA BOY"; and the
word "BARRIO FIESTA" conspicuously displayed above the said trademark which leaves no doubt in
the consumer's mind on the product that he or she is purchasing. On the other hand, petitioner's
mark is the word "PAPA" enclosed by a cloud on top of the word "KETSARAP' enclosed by a
geometrical figure.
xxxx
In the instant case, the respective marks are obviously different in color scheme, logo, spelling,
sound, meaning and connotation. Thus, yet again, under the holistic test there can be no confusion
or deception between these marks.
It also bears stressing that petitioner's "PAPA KETSARAP" mark covers "banana catsup" while
respondent's "PAPA BOY & DEVICE" covers "lechon sauce", thereby obliterating any confusion of
products of both marks as they travel different channels of trade. If a consumer is in the market for
banana catsup, he or she will not buy lechon sauce and vice-versa. As a result, the margin of error in
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
the acquisition of one for the other is simply remote. Lechon sauce which is liver sauce is distinct
from catsup extracted/ made from banana fruit. The flavor and taste of a lechon sauce are far from
those of a banana catsup. Lechon sauce is sauce for "lechon" while banana catsup is apparently
catsup made from banana.36chanrobleslaw
Respondent also contends that "PAPA BOY & DEVICE" mark is not confusingly similar to petitioner's
trademark "PAPA KETSARAP" in terms of appearance, sound, spelling and meaning. The difference in
nature, usage, taste and appearance of products decreases the possibility of deception among
buyers.37chanroblesvirtuallawlibrary
Respondent alleges that since petitioner merely included banana catsup as its product in its
certificate, it cannot claim any further right to the mark "PAPA KETSARAP" on products other than
banana catsup. Respondent also alleges that petitioner cannot raise "international notoriety of the
mark" for the first time on appeal and that there is no proof that petitioner's mark is internationally
well-known.38chanroblesvirtuallawlibrary
Furthermore, respondent argues that petitioner cannot claim exclusive ownership over the use of
the word "PAPA," a term of endearment for one's father. Respondent points out that there are
several other valid and active marks owned by third parties which use the word "PAPA," even in
classes of goods similar to those of petitioner's. Respondent avers that petitioner's claim that its
"PAPA" mark is an arbitrary mark is belatedly raised in the instant petition, and cannot be allowed
because the "PAPA KETSARAP" mark would immediately bring the consuming public to thinking that
the product involved is catsup and the description of said catsup is "masarap" (delicious) and due to
the logical relation of the petitioner's mark to the actual product, it being descriptive or generic, it is
far from being arbitrary or fanciful.39chanroblesvirtuallawlibrary
Lastly, respondent claims that the Court of Appeals correctly ruled that respondent's product cannot
be confused as originating from the petitioner. Since it clearly appears in the product label of the
respondent that it is manufactured by Barrio Fiesta, the public is dutifully informed of the identity of
the lechon sauce manufacturer. The Court of Appeals further took into account the fact that
petitioner's products have been in commercial use for decades.40chanroblesvirtuallawlibrary
Petitioner, in its Reply41 to respondent's Comment, contends that respondent cannot invoke a prior
filing date for the "PAPA BOY" mark as against Petitioner's "PAPA" and "PAPA BANANA CATSUP
LABEL" marks, because the latter marks were still registered when respondent applied for
Page 134
registration of its "PAPA BOY" mark. Thus, the IPO-BLA and Director General correctly considered
them in deciding whether the "PAPA BOY" mark should be registered, using the "first to file" rule
under Section 123.1(d) of Republic Act No. 8293, or the Intellectual Property Code (IP Code).
Petitioner reiterates its argument that the Court of Appeals erred in applying the holistic test and
that the proper test under the circumstances is the dominancy test, which was correctly applied by
the IPO-BLA and the Director General.42
THIS COURT'S RULING
The petition has merit. We find that the Court of Appeals erred in applying the holistic test and in
reversing and setting aside the decision of the IPO-BLA and that of the IPO Director General, both of
which rejected respondent's application for the mark "PAPA BOY & DEVICE."
In Dermaline, Inc. v. Myra Pharmaceuticals, Inc.,43 we defined a trademark as "any distinctive word,
name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify and distinguish them from those manufactured,
sold, or dealt by others." We held that a trademark is "an intellectual property deserving protection
by law."
The rights of the trademark owner are found in the Intellectual Property Code, which provides:
Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall have the exclusive right
to prevent all third parties not having the owner's consent from using in the course of trade identical
or similar signs or containers for goods or services which are identical or similar to those in respect of
which the trademark is registered where such use would result in a likelihood of confusion. In case of
the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.
Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who has
identified in the mind of the public the goods he manufactures or deals in, his business or services
from those of others, whether or not a registered mark is employed, has a property right in the
goodwill of the said goods, business or services so identified, which will be protected in the same
manner as other property rights.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
The guideline for courts in determining likelihood of confusion is found in A.M. No. 10-3-10-SC, or
the Rules of Procedure for Intellectual Property Rights Cases, Rule 18, which provides:
RULE 18
Evidence in Trademark Infringement and Unfair Competition Cases SECTION 1.Certificate of
Registration. A certificate of registration of a mark shall be prima facieevidence of:
a) the validity of the registration; b) the registrant's ownership of the mark; and
c) the registrant's exclusive right to use the same in connection with the goods or services and those
that are related thereto specified in the certificate.
xxxx
SECTION 3. Presumption of Likelihood of Confusion. Likelihood of confusion shall be presumed in
case an identical sign or mark is used for identical goods or services.
SECTION 4. Likelihood of Confusion in Other Cases. In determining whether one trademark is
confusingly similar to or is a colorable imitation of another, the court must consider 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. Visual, aural,
connotative comparisons and overall impressions engendered by the marks in controversy as they
are encountered in the realities of the marketplace must be taken into account. Where there are
both similarities and differences in the marks, these must be weighed against one another to see
which predominates.
In determining likelihood of confusion between marks used on non-identical goods or services,
several factors may be taken into account, such as, but not limited to:
a) the strength of plaintiff s mark;
b) the degree of similarity between the plaintiffs and the defendant's marks;
Page 135

c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or h) the sophistication of the buyers.
"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.
SECTION 5. Determination of Similar and Dissimilar Goods or Services. Goods or services may not
be considered as being similar or dissimilar to each other on the ground that, in any registration or
publication by the Office, they appear in different classes of the Nice Classification.
In this case, the findings of fact of the highly technical agency, the Intellectual Property Office, which
has the expertise in this field, should have been given great weight by the Court of Appeals. As we
held in Berris Agricultural Co., Inc. v. Abyadang44:
R.A. No. 8293 defines a "mark" as any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or marked container of goods. It
also defines a "collective mark" as any visible sign designated as such in the application for
registration and capable of distinguishing the origin or any other common characteristic, including
the quality of goods or services of different enterprises which use the sign under the control of the
registered owner of the collective mark.
On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or
merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt by
another. A trademark, being a special property, is afforded protection by law. But for one to enjoy
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
this legal protection, legal protection ownership of the trademark should rightly be established.
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. Section 122 of R.A.. No. 8293
provides that the rights in a mark shall be acquired by means of its valid registration with the IPO. A
certificate of registration of a mark, once issued, constitutes prima facie evidence of the validity of
the registration, of the registrant's ownership of the mark, and of the registrant's exclusive right to
use the same in connection with the goods or services and those that are related thereto specified in
the certificate. R.A. No. 8293, however, requires the applicant for registration or the registrant to file
a declaration of actual use (DAU) of the mark, with evidence to that effect, within three (3) years
from the filing of the application for registration; otherwise, the application shall be refused or the
mark shall be removed from the register. In other words, the prima facie presumption brought about
by the registration of a mark may be challenged and overcome, in an appropriate action, by proof of
the nullity of the registration or of non-use of the mark, except when excused. Moreover, the
presumption may likewise be defeated by evidence of prior use by another person, i.e., it will
controvert a claim of legal appropriation or of ownership based on registration by a subsequent user.
This is because a trademark is a creation of use and belongs to one who first used it in trade or
commerce.
The determination of priority of use of a mark is a question of fact. Adoption of the mark alone does
not suffice. One may make advertisements, issue circulars, distribute price lists on certain goods, but
these alone will not inure to the claim of ownership of the mark until the goods bearing the mark are
sold to the public in the market. Accordingly, receipts, sales invoices, and testimonies of witnesses as
customers, or orders of buyers, best prove the actual use of a mark in trade and commerce during a
certain period of time.
xxxx
Verily, 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. On this matter of particular concern, administrative agencies, such as the IPO, by reason of
their special knowledge and expertise over matters falling under their jurisdiction, are in a better
position to pass judgment thereon. Thus, their findings of fact in that regard are generally accorded
great respect, if not finality by the courts, as long as they are supported by substantial evidence,
even if such evidence might not be overwhelming or even preponderant. It is not the task of the
Page 136
appellate court to weigh once more the evidence submitted before the administrative body and to
substitute its own judgment for that of the administrative agency in respect to sufficiency of
evidence. (Emphasis added, citations omitted.)
In trademark controversies, each case must be scrutinized according to its peculiar circumstances,
such that jurisprudential precedents should only be made to apply if they are specifically in
point.45The cases discussed below are mentioned only for purposes of lifting the applicable
doctrines, laws, and concepts, but not for their factual circumstances, because of the uniqueness of
each case in controversies such as this one.
There are two tests used in jurisprudence to determine likelihood of confusion, namely the
dominancy test used by the IPO, and the holistic test adopted by the Court of Appeals. In Skechers,
U.S.A., Inc. v. Inter Pacific Industrial Trading Corp.,46 we held:
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
tests the 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.
xxxx
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
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioner's stylized "S" is within an oval design, to this Court's 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 petitioner's 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 petitioner's 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 petitioner's trademark.
Indubitably, the likelihood of confusion is present as purchasers will associate the respondent's use
of the stylized "S" as having been authorized by petitioner or that respondent's product is connected
with petitioner's business.
XXXX
While there may be dissimilarities between the appearances of the shoes, to this Court's mind such
dissimilarities do not outweigh the stark and blatant similarities in their general features, x x x.
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 respondent's products will cause confusion and mistake in the
eyes of the public. Respondent's shoes may not be an exact replica of petitioner's shoes, but the
features and overall design are so similar and alike that confusion is highly likely.
Page 137

xxxx
Neither can the difference in price be a complete defense in trademark infringement. InMcDonald's
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 petitioner's
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. While respondent's shoes contain some dissimilarities with petitioner's shoes, this Court
cannot close its eye to the fact that for all intents and purpose, respondent had deliberately
attempted to copy petitioner's 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. 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. (Citations omitted.)
The Court discussed the concept of confusion of business in the case of Societe Des Produits Nestle,
S.A. v. Dy, Jr.,47 as quoted below:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
Among the elements, the element of likelihood of confusion is the gravamen of trademark
infringement. There are two types of confusion in trademark infringement: confusion of goods and
confusion of business. In Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, the Court distinguished the two types of confusion:
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." In which case, "defendant's goods are then bought as the plaintiffs, and the
poorer quality of the former reflects adversely on the plaintiffs reputation." The other is
the confusion of business: "Here though the goods of the parties are different, the defendant's
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."
There are two tests to determine likelihood of confusion: the dominancy test and holistic test. The
dominancy test focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement takes place when the competing
trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause confusion or deceive purchasers.
xxxx
In cases involving trademark infringement, no set of rules can be deduced. Each case must be
decided on its own merits. Jurisprudential precedents must be studied in the light of the facts of
each particular case. In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court held:
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to
another, no set rules can be deduced because each case must be decided on its merits. In such cases,
even more than in any other litigation, precedent must be studied in the light of the facts of the
particular case. That is the reason why in trademark cases, jurisprudential precedents should be
applied only to a case if they are specifically in point.
In the light of the facts of the present case, the Court holds that the dominancy test is applicable. In
recent cases with similar factual milieus, the Court has consistently applied the dominancy test, x x x.
Page 138
xxxx
In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy test in
holding that "MACJOY" is confusingly similar to "MCDONALD'S." The Court held:
While we agree with the CA's detailed enumeration of differences between the two (2) competing
trademarks herein involved, we believe that the holistic test is not the one applicable in this case, the
dominancy test being the one more suitable. In recent cases with a similar factual milieu as here, the
Court has consistently used and applied the dominancy test in determining confusing similarity or
likelihood of confusion between competing trademarks.
xxxx
Applying the dominancy test to the instant case, the Court finds that herein petitioner's
"MCDONALD'S" and respondent's "MACJOY" marks are confusingly similar with each other that an
ordinary purchaser can conclude an association or relation between the marks.
To begin with, both marks use the corporate "M" design logo and the prefixes "Me" and/or "Mac" as
dominant features, x x x.
For sure, it is the prefix "Me," and abbreviation of "Mac," which visually and aurally catches the
attention of the consuming public. Verily, the word "MACJOY" attracts attention the same way as did
"McDonalds," "Mac Fries," "Me Spaghetti," "McDo," "Big Mac" and the rest of the MCDONALD'S
marks which all use the prefixes Me and/or Mac.
Besides and most importantly, both trademarks are used in the sale of fastfood products.
Indisputably, the respondent's trademark application for the "MACJOY & DEVICE" trademark covers
goods under Classes 29 and 30 of the International Classification of Goods, namely, fried chicken,
chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner's trademark registration for
the MCDONALD'S marks in the Philippines covers goods which are similar if not identical to those
covered by the respondent's application.
In McDonald's Corporation v. L.C. Big Mak Burger, Inc., the Court applied the dominancy test in
holding that "BIG MAK" is confusingly similar to "BIG MAC." The Court held:
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
This Court x x x 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)
xxxx
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 featurethereof."
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 the same as "Big Mac." Second, the first word
in "Big Mak" is exactly the same as the first word in "Big Mac." Third, the first two letters in "Mak"
are the same as the first two letters in "Mac." Fourth, the last letter "Mak" while a "k" sounds the
same as "c" when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in
spelling, thus "Caloocan" is spelled "Kalookan."
In Societe Des Produits Nestle, S.A. v. Court of Appeals, the Court applied the dominancy test in
Page 139
holding that "FLAVOR MASTER" is confusingly similar to "MASTER ROAST" and "MASTER BLEND." The
Court held:
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:
xxxx
The scope of protection afforded to registered trademark owners is not limited to protection from
infringers with identical goods. The scope of protection extends to protection from infringers with
related goods, and to market areas that are the normal expansion of business of the registered
trademark owners. Section 138 of R.A. No. 8293 states:
Certificates of Registration. A certificate of registration of a mark shall be prima facie evidence of
validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive
right to use the same in connection with the goods or services and those that are related thereto
specified in the certificate, x x x.
In Mighty Corporation v. E. & J. Gallo Winery, the Court held that, "Non-competing goods may be
those which, though they are not in actual competition, are so related to each other that it can
reasonably be assumed that they originate from one manufacturer, in which case, confusion of
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
business can arise out of the use of similar marks." In that case, the Court enumerated factors in
determining whether goods are related: (1) classification of the goods; (2) nature of the goods; (3)
descriptive properties, physical attributes or essential characteristics of the goods, with reference to
their form, composition, texture or quality; and (4) style of distribution and marketing of the goods,
including how the goods are displayed and sold.
xxxx
xxx. However, as the registered owner of the "NAN" mark, Nestle should be free to use its mark on
similar products, in different segments of the market, and at different price levels. In McDonald's
Corporation v. L.C. Big Mak Burger, Inc., the Court held that the scope of protection afforded to
registered trademark owners extends to market areas that are the normal expansion of business:
xxxx
Even respondent's 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 sq; 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).
(Emphases supplied, citations omitted.)
Page 140

Again, this Court discussed the dominancy test and confusion of business in Dermaline, Inc. v. Myra
Pharmaceuticals, Inc.,48 and we quote:
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion or deception. It is applied when the trademark sought to be registered
contains the main, essential and dominant features of the earlier registered trademark, and
confusion or deception is likely to result. Duplication or imitation is not even required; neither is it
necessary that the label of the applied mark for registration should suggest an effort to imitate. The
important issue is whether the use of the marks involved would likely cause confusion or mistake in
the mind of or deceive the ordinary purchaser, or one who is accustomed to buy, and therefore to
some extent familiar with, the goods in question. Given greater consideration are 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. The test of dominancy is now explicitly incorporated into
law in Section 155.1 of R.A. No. 8293 which provides
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 x x x.
xxxx
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.
xxxx
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while there are no
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
set rules that can be deduced as what constitutes a dominant feature with respect to trademarks
applied for registration; usually, what are taken into account are signs, color, design, peculiar shape
or name, or some special, easily remembered earmarks of the brand that readily attracts and catches
the attention of the ordinary consumer.
xxxx
Further, Dermaline's stance that its product belongs to a separate and different classification from
Myra's products with the registered trademark does not eradicate the possibility of mistake on the
part of the purchasing public to associate the former with the latter, especially considering that both
classifications pertain to treatments for the skin.
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 Court is cognizant that the registered trademark
owner enjoys protection in product and market areas that are the normal potential expansion of his
business. Thus, we have 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).
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such
that, considering the current proliferation of health and beauty products in the market, the
purchasers would likely be misled that Myra has already expanded its business through Dermaline
from merely carrying pharmaceutical topical applications for the skin to health and beauty services.
Verily, when one applies for the registration of a trademark or label which is almost the same or that
very closely resembles one already used and registered by another, the application should be
rejected and dismissed outright, even without any opposition on the part of the owner and user of a
previously registered label or trademark. This is intended not only to avoid confusion on the part of
Page 141
the public, but also to protect an already used and registered trademark and an established goodwill.
(Citations omitted.)
Section 123. l(d) of the IP Code provides:
A mark cannot be registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier
filing or priority date, in respect of:
The same goods or services, or
Closely related goods or services, or
If it nearly resembles such a mark as to be likely to deceive or cause confusion[.]
A scrutiny of petitioner's and respondent's respective marks would show that the IPO-BLA and the
IPO Director General correctly found the word "PAPA" as the dominant feature of petitioner's mark
"PAPA KETSARAP." Contrary to respondent's contention, "KETSARAP" cannot be the dominant
feature of the mark as it is merely descriptive of the product. Furthermore, it is the "PAPA" mark that
has been in commercial use for decades and has established awareness and goodwill among
consumers.
We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature of
respondent's "PAPA BOY & DEVICE" mark subject of the application, such that "the word 'PAPA' is
written on top of and before the other words such that it is the first word/figure that catches the
eyes."49 Furthermore, as the IPO Director General put it, the part of respondent's mark which
appears prominently to the eyes and ears is the phrase "PAPA BOY" and that is what a purchaser of
respondent's product would immediately recall, not the smiling hog.
We quote the relevant portion of the IPO-BLA decision on this point below:
A careful examination of Opposer's and Respondent-applicant's respective marks shows that the
word "PAPA" is the dominant feature: In Opposer's marks, the word "PAPA" is either the mark by
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
itself or the predominant word considering its stylized font and the conspicuous placement of the
word "PAPA" before the other words. In Respondent-applicant's mark, the word "PAPA" is written on
top of and before the other words such that it is the first word figure that catches the eyes. The
visual and aural impressions created by such dominant word "PAPA" at the least is that the
respective goods of the parties originated from the other, or that one party has permitted or has
been given license to the other to use the word "PAPA" for the other party's product, or that there is
a relation/connection between the two parties when, in fact, there is none. This is especially true
considering that the products of both parties belong to the same class and are closely related:
Catsup and lechon sauce or liver sauce are both gravy-like condiments used to spice up dishes. Thus,
confusion of goods and of business may likely result.
Under the Dominancy Test, the dominant features of the competing marks are considered in
determining whether these competing marks are confusingly similar. Greater weight is given to the
similarity of the appearance of the products arising from the adoption of the dominant features of
the registered mark, disregarding minor differences. The visual, aural, connotative, and overall
comparisons and impressions engendered by the marks in controversy as they are encountered in
the realities of the marketplace are the main considerations (McDonald's Corporation, et al., v. L. C.
Big Mak Burger, Inc., et al., G. R. No. 143993, August 18, 2004; Societe Des Produits Nestle, S. A." et
al. v. Court of Appeals, et al., G. R. No. 112012, April 4, 2001). 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. (Lim Hoa v. Director of Patents, 100 Phil. 214 [1956]); Co Tiong Sa v.
Director of Patents, et al., G. R. No. L-5378, May 24, 1954). Duplication or imitation is not necessary;
nor is it necessary that the infringing label should suggest an effort to imitate (Lim Hoa v. Director of
Patents, supra, and Co Liong Sa v. Director of Patents, supra). Actual confusion is not required: Only
likelihood of confusion on the part of the buying public is necessary so as to render two marks
confusingly similar so as to deny the registration of the junior mark (Sterling Products International,
Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 137 Phil. 838 [1969]).
As to the first issue of whether PAPA BOY is confusingly similar to Opposer's PAPA mark, this Bureau
rules in the affirmative.
The records bear the following:
1. Registration No. 32416 issued for the mark "PAPA" under Class 29 goods was deemed expired as
of February 11, 2004 (Exhibit "A" attached to the VERIFIED NOTICE OF OPPOSITION). Application
Serial No. 4- 2005-010788 was filed on October 28, 2005 for the same mark "PAPA" for Class 30
Page 142
goods and Registration No. 42005010788 was issued on March 19,2007;
2. Opposer was issued for the mark "PAPA BANANA CATSUP LABEL" on August 11, 1983 Registration
No. SR-6282 for Class 30 goods in the Supplemental Register, which registration expired in 2003.
Application Serial No. 4-2006-012364 was filed for the mark "PAPA LABEL DESIGN" for Class 30 goods
on November 15, 2006, and Registration No. 42006012364 was issued on April 30, 2007; and
3. Lastly, Registration No. 34681 for the mark "PAPA KETSARAP" for Class 30 goods was issued on
August 23, 1985 and was renewed on August 23, 2005.
Though Respondent-applicant was first to file the subject application on April 04, 2002 vis-a-vis the
mark "PAPA" the filing date of which is reckoned on October 28, 2005, and the mark "PAPA LABEL
DESIGN" the filing date of which is reckoned on November 15, 2006, Opposer was able to secure a
registration for the mark "PAPA KETSARAP" on August 23, 1985 considering that Opposer was the
prior registrant and that its renewal application timely filed on August 23, 2005.
xxxx
Pursuant to [Section 123.l(d) of the IP Code], the application for registration of the subject mark
cannot be allowed considering that Opposer was earlier registrant of the marks PAPA and PAPA
KETSARAP which registrations were timely renewed upon its expiration. Respondent-applicant's
mark "PAPA BOY & DEVICE" is confusingly similar to Opposer's mark "PAPA KETSARAP" and is applied
to goods that are related to Opposer's goods, but Opposer's mark "PAPA KETSARAP" was registered
on August 23, 1985 per Certificate of Registration No. 34681, which registration was renewed for a
period of 10 years counted from August 23, 2005 per Certificate of Renewal of Registration No.
34681 issued on August 23, 2005. To repeat, Opposer has already registered a mark which
Respondent-applicant's mark nearly resembles as to likely deceive or cause confusion as to origin
and which is applied to goods to which respondent-applicant's goods under Class 30 are closely
related.
Section 138 of the IP Code provides that a certificate of registration of a mark is prima facie evidence
of the validity of the registration, the registrant's ownership of the mark, and of the registrant's
exclusive right to use the same in connection with the goods and those that are related thereto
specified in the certificate.
CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW
LAW ON INTELLECTUAL PROPERTY SET CASES
We agree that respondent's mark cannot be registered. Respondent's mark is related to a product,
lechon sauce, an everyday all-purpose condiment and sauce, that is not subjected to great scrutiny
and care by the casual purchaser, who knows from regular visits to the grocery store under what
aisle to find it, in which bottle it is contained, and approximately how much it costs. Since
petitioner's product, catsup, is also a household product found on the same grocery aisle, in similar
packaging, the public could think that petitioner had expanded its product mix to include lechon
sauce, and that the "PAPA BOY" lechon sauce is now part of the "PAPA" family of sauces, which is not
unlikely considering the nature of business that petitioner is in. Thus, if allowed registration,
confusion of business may set in, and petitioner's hard-earned goodwill may be associated to the
newer product introduced by respondent, all because of the use of the dominant feature of
petitioner's mark on respondent's mark, which is the word "PAPA." The words "Barrio Fiesta" are not
included in the mark, and although printed on the label of respondent's lechon sauce packaging, still
do not remove the impression that "PAPA BOY" is a product owned by the manufacturer of "PAPA"
catsup, by virtue of the use of the dominant feature. It is possible that petitioner could expand its
business to include lechon sauce, and that would be well within petitioner's rights, but the existence
of a "PAPA BOY" lechon sauce would already eliminate this possibility and deprive petitioner of its
rights as an owner of a valid mark included in the Intellectual Property Code.
The Court of Appeals likewise erred in finding that "PAPA," being a common term of endearment for
one's father, is a word over which petitioner could not claim exclusive use and ownership. The
Merriam-Webster dictionary defines "Papa" simply as "a person's father." True, a person's father has
no logical connection with catsup products, and that precisely makes "PAPA" as an arbitrary mark
capable of being registered, as it is distinctive, coming from a family name that started the brand
several decades ago. What was registered was not the word "Papa" as defined in the dictionary, but
the word "Papa" as the last name of the original owner of the brand. In fact, being part of several of
petitioner's marks, there is no question that the IPO has found "PAPA" to be a registrable mark.
Respondent had an infinite field of words and combinations of words to choose from to coin a mark
for its lechon sauce. While its claim as to the origin of the term "PAPA BOY" is plausible, it is not a
strong enough claim to overrule the rights of the owner of an existing and valid mark. Furthermore,
this Court cannot equitably allow respondent to profit by the name and reputation carefully built by
petitioner without running afoul of the basic demands of fair play.51
WHEREFORE, we hereby GRANT the petition. We SET ASIDE the June 23, 2011 Decision and the
October 4, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 107570, and REINSTATE the
Page 143
March 26, 2008 Decision of the Bureau of Legal Affairs of the Intellectual Property Office (IPO-BLA)
and the January 29, 2009 Decision of the Director General of the IPO.

SO ORDERED.

CAYEN CERVANCIA CABIGUEN, MLQU SCHOOL OF LAW Page 144

LAW ON INTELLECTUAL PROPERTY SET CASES