INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINESv.HON.

PAQUITO OCHOA, IN HIS CAPACITY AS

EXECUTIVE SECRETARY, ET AL.
G.R. No. 204605, 19 July 2016, EN BANC (Bersamin, J.)

DOCTRINE OF THE CASE

The registration of trademarks and copyrights have been the subject of executive agreements entered into

without the concurrence of the Senate. Some executive agreements have been concluded in conformity with the policies

declared in the acts of Congress with respect to the general subject matter.

FACTS
The Madrid System for the International Registration of Marks (Madrid System), which is the centralized system
providing a one-stop solution for registering and managing marks worldwide, allows the trademark owner to file one
application in one language, and to pay one set of fees to protect his mark in the territories of up to 97 member-states.
The Madrid System is governed by the Madrid Agreement, concluded in 1891, and the Madrid Protocol, concluded in
1989.The Madrid Protocol has two objectives, namely: (1) to facilitate securing protection for marks; and (2) to make the
management of the registered marks easier in different countries.

In 2004, the Intellectual Property Office of the Philippines (IPOPHL),began considering the country's accession to
the Madrid Protocol. After a campaign for information dissemination, and a series of consultations with stakeholders,
IPOPHL ultimately arrived at the conclusion that accession would benefit the country and help raise the level of
competitiveness for Filipino brands. Hence, it recommended to the Department of Foreign Affairs (DFA) that the
Philippines should accede to the Madrid Protocol. After its own review, the DFA endorsed to the President the country's
accession to the Madrid Protocol. The DFA determined that the Madrid Protocol was an executive agreement.

On March 27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, which was deposited with the Director General of the World Intellectual Property Organization (WIPO) on April
25, 2012. The Madrid Protocol entered into force in the Philippines on July 25, 2012.

Thus, the Intellectual Property Association of the Philippines (IPAP)commenced this special civil action for
certiorari and prohibition to challenge the validity of the President's accession to the Madrid Protocol without the
concurrence of the Senate. According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement; hence,
respondent DFA Secretary Albert Del Rosario acted with grave abuse of discretion in determining the Madrid Protocol as
an executive agreement. Also, the IPAP has argued that the implementation of the Madrid Protocol in the Philippines;
specifically the processing of foreign trademark applications, conflicts with the Intellectual Property Code of the
Philippines.

ISSUE
Is the Madrid Protocol unconstitutional for lack of concurrence by the Senate?

RULING
NO. The Court finds and declares that the Presidents ratification is valid and constitutional because the Madrid
Protocol, being an executive agreement as determined by the Department of Foreign Affairs, does not require the
concurrence of the Senate.

Under prevailing jurisprudence, the registration of trademarks and copyrights have been the subject of executive
agreements entered into without the concurrence of the Senate. Some executive agreements have been concluded in
conformity with the policies declared in the acts of Congress with respect to the general subject matter.
Accordingly, DFA Secretary Del Rosarios determination and treatment of the Madrid Protocol as an executive
agreement; being in apparent contemplation of the express state policies on intellectual property as well as within his
power under Executive Order No. 459, are upheld.

The Court observed that there are no hard and fast rules on the propriety of entering into a treaty or an executive
agreement on a given subject as an instrument of international relations. The primary consideration in the choice of the
form of agreement is the parties intent and desire to craft their international agreement in the form they so wish to further
their respective interests. The matter of form takes a back seat when it comes to effectiveness and binding effect of the
enforcement of a treaty or an executive agreement; inasmuch as all the parties; regardless of the form, become obliged to
comply conformably with the time-honored principle of pacta sunt servanda. The principle binds the parties to perform in
good faith their parts in the agreements.

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Birkenstock Orthopaedie GMBH and Co. KG (formerly Birkenstock Orthopaedie GMBH) vs. Philippine
Stock Expo Marketing Corporation
15 SCRA 469

FACTS:
 Petitioner, a corporation duly organized and existing under the laws of Germany applied for various trademark
registrations before the Intellectual Property Office (IPO). However, the applications were suspended in view of the
existing registration of the mark BIRKENSTOCK AND DEVICE under Registration No. 56334 dated October 21, 1993 in
the name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of respondent Philippine
Shoe Expo Marketing Corporation.

On May 27, 1997, petitioner filed a petition (Cancellation Case) for cancellation of Registration No. 564334 on the
ground that it is the lawful and rightful owner of the Birkenstock marks. During its pendency, however, respondent and/or it
predecessor-in-interest failed to file the required 10 th Year Declaration of Actual Use (10 th Year DAU) for Registration No.
56334 on or before October 21, 2004, thereby resulting the cancellation of such mark. Accordingly, the cancellation case
was dismissed for being moot and academic thereby paving the way for the publication of the subject applications.

In response, respondent filed with the Bureau of Legal Affairs (BLA) of the IPO three separate verified notices of
opposition to the subject applications docketed as Inter Partes Cases claiming, among others, it, together with its
predecessor-in-interest, has been using the Birkenstock marks in the Philippines for more than 16 years through the mark
BIRKENSTOCK AND DEVICE. In its Decision, theBLA of the IPO sustained respondents opposition, thus ordering the
rejection of the subject applications. Aggrieved, petitioner appealed to the IPO Director General whereby in its decision,
the latter reversed and set aside the ruling of the BLA thus allowing the registration of the subject applications.

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition for review with
the Court of Appeals. In its decision dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director
General and reinstated that of the BLA. The petitioner filed a Motion for Reconsideration but was denied by the CA.
Hence , this petition to the Supreme Court.

ISSUE:

1. Whether or not the petitioners documentary evidence, although photocopies, are admissible in court?
2. Whether or not the subject marks should be allowed registration in the name of the petitioner?

HELD:

1. The court ruled yes. It is a well-settled principle that the rules of procedure are mere tools aimed at facilitating the
attainment of justice, rather than its frustration. A strict and rigid application of the rules must always be eschewed
when it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite justice. In the
light of this, Section 5 of the Rules on Inter Partes Proceedings provides that, 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 the Bureau the greatest possibility to focus on the contentious
issues before it.

In the case at bar, it should be noted that the IPO had already obtained the originals of such documentary
evidence in the related Cancellation Case earlier before it. Under the circumstance and the merits of the instant
case as will be subsequently discussed, the Court holds that the IPO Director Generals relaxation of procedure
was a valid exercise of his discretion in the interest of substantial justice.

2. The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it provides that, Each certificate
of registration shall remain in force for twenty years: Provided, that the registration under the provisions of this Act
shall be cancelled by the Director, unless within one year following the fifth, tenth and fifteenth anniversaries of the
date of issue of the certificate of registration, the registrant shall file in the Patent Office an affidavit showing that
the mark or trade-name is still in use or showing that its non-use is due to special circumstance which excuse
such non-use and is not due to any intention to abandon the same, and pay the required fee.

In the case at bar, respondent admitted that it failed to file the 10 th Year DAU for Registration No. 56334 within the
requisite period, or on or before October 21, 2004. As a consequence, it was deemed to have abandoned or
withdrawn any right or interest over the mark BIRKENSTOCK. It must be emphasized that registration of a
trademark, by itself, is not a mode of acquiring ownership. If the applicant is not the owner of the trademark, he
has no right to apply for its registration. Registration merely creates a prima facie presumption of the validity of the
registration. Such presumption, just like the presumptive regularity in the performance of official functions, is
rebuttable and must give way to evidence to the contrary. Besides, petitioner has duly established its true and
lawful ownership of the mark BIRKENSTOCK. It submitted evidence relating to the origin and history of
BIRKENSTOCK and it use in commerce long before respondent was able to register the same here in the
Philippines. Petitioner also submitted various certificates of registration of the mark BIRKENSTOCK in various
countries and that it has used such mark in different countries worldwide, including the Philippines.

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Chester Uyco v. Vicente Lo

28 January 2013; Brion, J.
I. Facts
1. The disputed marks in this case are the HIPOLITO & SEA HORSE & TRIANGULAR DEVICE, FAMA, and
other related marks, service marks and trade names of Casa Hipolito S.A. Portugal appearing in kerosene
 burners.
2. Respondent Vicente Lo and Philippine Burners Manufacturing Corporation (PBMC) filed a complaint against
petitioners, officers of Wintrade Industrial Sales Corporation (Wintrade) and of National Hardware for violation of
Sec. 169.1, in relation to Sec. 170 of RA 8293, which punishes any person who uses in commerce any false
designation of origin which is likely to cause confusion or mistake as to the origin of the product.
3. Lo claimed that Gasirel-Industria de Comercio e Componentes para Gass, Lda. (Gasirel), the owner of the
disputed marks, assigned the above marks in his favor, to be used in all countries except for those in Europe and
America. However, when Lo did a test buy of the kerosene burners manufactured by Wintrade, it found that the
said burners contained the subject marks and the designations Made in Portugal and Original Portugal in the
wrappers, notwithstanding that as the assignee for the trademarks, he had not authorized Wintrade to use these
marks, nor had Casa Hipolito S.A. Portugal.
4. It appears that a prior authority to that effect was given to Wintrades predecessor-in-interest, Wonder Project &
Development Corporation (Wonder); however, Casa Hipolito S.A. Portugal had already revoked this authority
through a letter of cancellation dated May 31, 1993.
5. Thus, law claimed that Wintrades kerosene burners have caused confusion, mistake and deception on the part of
the buying public.
6. Petitioners countered that Wintrade owns the subject trademarks and their variants, pursuant to certificates of
registration issued by the IPO. They alleged that their authority to use the marks from Casa Hipolito S.A. Portugal
was derived from Wonder, their predecessor-in-interest. At the same time, they averred that that the products
bought during the test buy bearing the trademarks in question were not manufactured by, or in any way connected
with, the petitioners and/or Wintrade. Finally, they argued that the marks Made in Portugal and Original
Portugal are merely descriptive and refer to the source of the design and the history of manufacture, and were
not meant to cause deception among the public.
7. The Chief State Prosecutor found probable cause against petitioners. The DOJ affirmed.
8. The CA, and ultimately the SC affirmed. Thus, petitioners filed the instant MR, reiterating their earlier arguments.
se of the Courts discretionary power.
II. Issues
WON the finding of probable cause against petitioners for violation of Sec. 169.1 in relation to Sec. 170 of Ra 8293 should
be reversed NO.
III. Holding
MR denied.
IV. Ratio
1. Contrary to petitioners assertion, they made admissions in their joint affidavit, which, in effect, controvert their
argument that they have not manufactured the products bearing the marks Made in Portugal and Original
Portugal that were bought by Lo during the test buy.
2. Said admissions show Wintrades former association with Casa Hipolito S.A. Portugal; their decision to produce
the burners in the Philippines; their use of the disputed marks; and their justification for their use.
3. Thus, the evidence shows that petitioners, who are officers of Wintrade, placed the words Made in Portugal and
"Original Portugal" with the disputed marks knowing fully well because of their previous dealings with the
Portuguese company that these were the marks used in the products of Casa Hipolito S.A. Portugal.
4. More importantly, the products that Wintrade sold were admittedly produced in the Philippines, with no authority
from Casa Hipolito S.A. Portugal.
5. The law on trademarks and trade names precisely precludes a person from profiting from the business reputation
built by another and from deceiving the public as to the origins of products. These facts support the consistent
findings of the State Prosecutor, the DOJ and the CA that probable cause exists to charge the petitioners with
false designation of origin.
6. The fact that the evidence did not come from Lo, but had been given by the petitioners, is of no significance.
7. The argument that the words Made in Portugal and Original Portugal refer to the origin of the design and not to
the origin of the goods does not negate the finding of probable cause; nevertheless, petitioners are not precluded
from raising such argument as a defense during the hearing of the case on the merits.
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025Levi Strauss & Co. vs. Clinton Apparelle

G.R. No. 138900 September 20, 2005

Topic:Issuance of the writ of preliminary injunction; Trademark dilution

Ponente:Tinga, J.

DOCTRINE:

According to Section 138 of Republic Act No. 8293, [the Certificate of Registration] is prima facie evidence of the validity
of the registration, the registrants ownership of the mark and of the exclusive right to use the same in connection with the
goods or services and those that are related thereto specified in the certificate. Section 147.1 of said law likewise grants
the owner of the registered mark the exclusive right to prevent all third parties not having the owners consent from using
in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of
which the trademark is registered if such use results in a likelihood of confusion.

Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish good or services; To be
eligible for the protection from dilution, there has to be a finding that: (1) the trademark sought to be protected is famous
and distinctive; (2) the use by another began after the owners mark became famous; and (3) such subsequent use
defames the owners mark.

____________________________________________________________________________________

FACTS:

Petitioners LS & Co. and LSPI filed a Complaint for Trademark Infringement, Injunction and Damages against respondent
Clinton Apparelle, Inc. together with an alternative defendant, Olympian Garments, Inc. before the RTC.The complaint
alleged that LS & Co., a foreign corporation duly organized and existing under the laws of the State of Delaware, U.S.A.,
and engaged in the apparel business, is the owner by prior adoption and use since 1986 of the internationally famous
Dockers and Design trademark. This ownership is evidenced by its valid and existing registrations in various member
countries of the Paris Convention. In the Philippines, it has a Certificate of Registration No. 46619 in the Principal Register
for use of said trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and jackets under Class 25.

The Dockers and Design trademark was first used in the Philippines in or about May 1988, by LSPI, a domestic
corporation engaged in the manufacture, sale and distribution of various products bearing trademarks owned by LS & Co.
LS & Co. and LSPI further alleged that they discovered the presence in the local market of jeans under the brand name
Paddocks using a device which is substantially, if not exactly, similar to the Dockers and Design trademark owned by and
registered in the name of LS & Co., without its consent. Based on their information and belief, Clinton Apparelle
manufactured and continues to manufacture such Paddocks jeans and other apparel.

The petitioners prayed for the issuance of a TRO. On the date of the hearing for the issuance of the TRO,
respondentsClinton Apparelle and Olympian Garmentsfailed to appear despite notice. Clinton Apparelle claimed that it
was not notified of such hearing. Only Olympian Garments allegedly had been issued with summons. Despite the
absence of the defendants, the hearing on the application for the issuance of a TRO continued.

The RTC then issued a TRO and a writ of preliminary injuction. The evidence considered by the trial court in granting
injunctive relief were as follows:

(1) a certified true copy of the certificate of trademark registration for Dockers and Design; (2) a pair of DOCKERS pants
bearing the Dockers and Design trademark; (3) a pair of Paddocks pants bearing respondents assailed logo; (4) the
Trends MBL Survey Report purportedly proving that there was confusing similarity between two marks; (5) the affidavit of
one Bernabe Alajar which recounted petitioners prior adoption, use and registration of the Dockers and Design trademark;
and (6) the affidavit of one Mercedes Abad of Trends MBL, Inc. which detailed the methodology and procedure used in
their survey and the results thereof.

On appeal, the CA held that the trial court did not follow the procedure required by law for the issuance of a TRO as
Clinton Apparelle was not duly notified of the date of the summary hearing for its issuance. Thus, the CA ruled that the
TRO had been improperly issued. The CA also held that the issuance of the writ of preliminary injunction is questionable.
According to the CA, petitionersLS & Co. and LSPI failed to sufficiently establish its material and substantial right to have
the writ issued.

ISSUE:Whether the issuance of the writ of preliminary injunction by the trial court was proper and whether the Court of
Appeals erred in setting aside the orders of the trial court.

No.After a careful consideration of the facts and arguments of the parties, the Court finds that petitioners did not
adequately prove their entitlement to the injunctive writ. In the absence of proof of a legal right and the injury sustained by
the applicant, an order of the trial court granting the issuance of an injunctive writ will be set aside for having been issued
with grave abuse of discretion. Conformably, the Court of Appeals was correct in setting aside the assailed orders of the
trial court.

____________________________________________________________________________________

RULING:Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at any stage of an
action prior to the judgment or final order requiring a party or a court, agency or a person to refrain from a particular act or
acts. An extraordinary remedy, injunction is designed to preserve or maintain the status quo of things and is generally
availed of to prevent actual or threatened acts until the merits of the case can be heard. It is resorted to only when there is
a pressing necessity to avoid injurious consequences, which cannot be remedied under any standard compensation. The
resolution of an application for a writ of preliminary injunction rests upon the existence of an emergency or of a special
recourse before the main case can be heard in due course of proceedings.Section 3, Rule 58, of the Rules of Court
enumerates the grounds for the issuance of a preliminary injunction:

(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.

Under the cited provision, a clear and positive right especially calling for judicial protection must be shown. Injunction is
not a remedy to protect or enforce contingent, abstract, or future rights. There must exist an actual right.There must be a
patent showing by the complaint that there exists a right to be protected and that the acts against which the writ is to be
directed are violative of said right.

The Court of Appeals did not err in reviewing proof adduced by petitioners to support its application for the issuance of the
writ. 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.

In the present case, we find that there was scant justification for the issuance of the writ of preliminary
injunction.Petitioners anchor their legal right to Dockers and Design trademark on the Certificate of Registration issued in
their favor by the Bureau of Patents, Trademarks and Technology Transfer.* According to Section 138 of Republic Act No.
8293, this Certificate of Registration is prima facie evidence of the validity of the registration, the registrants ownership of
the mark and of the exclusive right to use the same in connection with the goods or services and those that are related
thereto specified in the certificate. Section 147.1 of said law likewise grants the owner of the registered mark the exclusive
right to prevent all third parties not having the owners consent from using in the course of trade identical or similar signs
for goods or services which are identical or similar to those in respect of which the trademark is registered if such use
results in a likelihood of confusion.

However, attention should be given to the fact that petitioners registered trademark consists of two elements: (1) the word
mark Dockers and (2) the wing-shaped design or logo. Notably, there is only one registration for both features of the
trademark giving the impression that the two should be considered as a single unit. Clinton Apparelles trademark, on the
other hand, uses the Paddocks word mark on top of a logo which according to petitioners is a slavish imitation of the
Dockers design. The two trademarks apparently differ in their word marks (Dockers and Paddocks), but again according
to petitioners, they employ similar or identical logos. It could thus be said that respondent only appropriates petitioners
logo and not the word mark Dockers; it uses only a portion of the registered trademark and not the whole.

Given the single registration of the trademark Dockers and Design and considering that respondent only uses the assailed
device but a different word mark, the right to prevent the latter from using the challenged Paddocks device is far from
clear. Stated otherwise, it is not evident whether the single registration of the trademark Dockers and Design confers on
the owner the right to prevent the use of a fraction thereof in the course of trade. It is also unclear whether the use without
the owners consent of a portion of a trademark registered in its entirety constitutes material or substantial invasion of the
owners right.

It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant or central feature of
petitioners trademark the feature that prevails or is retained in the minds of the publican imitation of which creates the
likelihood of deceiving the public and constitutes trademark infringement. In sum, there are vital matters which have yet
and may only be established through a full-blown trial.

From the above discussion, we find that petitioners right to injunctive relief has not been clearly and unmistakably
demonstrated. The right has yet to be determined. Petitioners also failed to show proof that there is material and
substantial invasion of their right to warrant the issuance of an injunctive writ. Neither were petitioners able to show any
urgent and permanent necessity for the writ to prevent serious damage.

Petitioners wish to impress upon the Court the urgent necessity for injunctive relief, urging that the erosion or dilution of
their trademark is protectable. They assert that a trademark owner does not have to wait until the mark loses its
distinctiveness to obtain injunctive relief, and that the mere use by an infringer of a registered mark is already actionable
even if he has not yet profited thereby or has damaged the trademark owner.

Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services,
regardless of the presence or absence of: (1) competition between the owner of the famous mark and other parties; or (2)
likelihood of confusion, mistake or deception. Subject to the principles of equity, the owner of a famous mark is entitled to
an injunction against another persons commercial use in commerce of a mark or trade name, if such use begins after the
mark has become famous and causes dilution of the distinctive quality of the mark. This is intended to protect famous
marks from subsequent uses that blur distinctiveness of the mark or tarnish or disparage it.

Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that : (1) the trademark sought
to be protected is famous and distinctive; (2) the use by respondent of Paddocks and Design began after the petitioners
mark became famous; and (3) such subsequent use defames petitioners mark. In the case at bar, petitioners have yet to
establish whether Dockers and Design has acquired a strong degree of distinctiveness and whether the other two
elements are present for their cause to fall within the ambit of the invoked protection. The Trends MBL Survey Report
which petitioners presented in a bid to establish that there was confusing similarity between two marks is not sufficient
proof of any dilution that the trial court must enjoin.

The Court also finds that the trial courts order granting the writ did not adequately detail the reasons for the grant. The
trial court in granting the injunctive relief tersely ratiocinated that the plaintiffs appear to be entitled to the relief prayed for
and this Court is of the considered belief and humble view that, without necessarily delving on the merits, the paramount
interest of justice will be better served if the status quo shall be maintained. Clearly, this statement falls short of the
requirement laid down. In addition, we agree with the Court of Appeals in its holding that the damages the petitioners had
suffered or continue to suffer may be compensated in terms of monetary consideration.

We also believe that the issued injunctive writ, if allowed, would dispose of the case on the merits as it would effectively
enjoin the use of the Paddocks device without proof that there is basis for such action. The prevailing rule is that courts
should avoid issuing a writ of preliminary injunction that would in effect dispose of the main case without trial. There would
be a prejudgment of the main case and a reversal of the rule on the burden of proof since it would assume the proposition
which petitioners are inceptively bound to prove.

DISPOSITIVE: WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated 21 December
1998 and its Resolution dated 10 May 1999 are AFFIRMED. Costs against petitioners.

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McDONALDS CORPORATION vs. MACJOY FASTFOOD CORPORATION

G.R. No. 166115. February 2, 2007

FACTS:

MacjoyFastfood Corporation (Macjoy), a corporation selling fried chicken, chicken barbeque, burgers, fries,
spaghetti, palabok, tacos, sandwiches, halo-halo and steaks (fastfood products) in Cebu City filed with the BPTT-IPO an
application for the registration of the trademark MACJOY & DEVICE.

McDonalds Corporation, a corporation organized under the laws of Delaware, USA opposed against the
respondents application claiming that such trademark so resembles its corporate logo (Golden Arches) design and its
McDONALDs marks such that when used on identical or related goods, the trademark applied for would confuse or
deceive purchasers into believing that the goods originated from the same source or origin.

Macjoy on the other hand averred that the it has used the mark MACJOY for tha past many years in good faith
and has spent considerable sums of money for extensive promotions x xx.

The IPO ratiocinated that the predominance of the letter M and the prefixes Mac/Mc in both the Macjoy and
McDonalds marks lead to the conclusion that there is confusing similarity between them x xx. Therefore, Macjoys
application was denied.

Upon appeal to the CA it favored with MacJoy and against McDonalds. The Court of Appeals, in ruling over the
case, actually used the holistic test (which is a test commonly used in infringement cases). The holistic test looks upon the
visual comparisons between the two trademarks.The justifications are the following:

1. The word MacJoy is written in round script while the word McDonalds is written in single stroke gothic;

2. The word MacJoy comes with the picture of a chicken head with cap and bowtie and wings sprouting on both
sides, while the word McDonalds comes with an arches M in gold colors, and absolutely without any picture of
a chicken;

3. The word MacJoy is set in deep pink and white color scheme while the word McDonalds is written in red,
yellow, and black color combination;

4. The facade of the respective stores of the parties, are entirely different.

ISSUE:
 Whether there is a confusing similarity between the McDonalds marks of the petitioner and the respondents
MACJOY & DEVICE trademark when it applied to classes 29 ad 30 of the International Classification of Goods.

RULING:

Yes. The Supreme Court ruled that the proper test to be used is the dominancy test. The dominancy test not only
looks at the visual comparisons between two trademarks but also the aural impressions created by the marks in the public
mind as well as connotative comparisons, giving little weight to factors like prices, quality, sales outlets and market
segments. In the case at bar, the Supreme Court ruled that McDonalds and MacJoy marks are confusingly similar with
each other such 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 Mc and/or Mac as dominant features. The first letter M
in both marks puts emphasis on the prefixes Mc and/or Mac by the similar way in which they are depicted i.e. in an
arch-like, capitalized and stylized manner. For sure, it is the prefix Mc, an 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, MacFries, McSpaghetti, McDo, Big Mac and the rest of the MCDONALDS marks which all use the
prefixes Mc and/or Mac. Besides and most importantly, both trademarks are used in the sale of fastfood products.

Further, the owner of MacJoy provided little explanation why in all the available names for a restaurant he chose
the prefix Mac to be the dominant feature of the trademark. The prefix Mac and Macjoy has no relation or similarity
whatsoever to the name Scarlett Yu Carcel, which is the name of the niece of MacJoys president whom he said was the
basis of the trademark MacJoy. By reason of the MacJoys implausible and insufficient explanation as to how and why out
of the many choices of words it could have used for its trade-name and/or trademark, it chose the word Macjoy, the only
logical conclusion deducible therefrom is that the MacJoy would want to ride high on the established reputation and
goodwill of the McDonalds marks, which, as applied to its restaurant business and food products, is undoubtedly beyond
question.

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Republic Gas Corporation v. Petron Corporation

G.R. No. 194062, 17 June 2013

Plaintiffs Petron Corporation (registered trademark owner of GASUL and GASUL cylinders, which are used on GASUL
LPG containers) and Shell Petroleum Corporation (authorized user of tradename, trademarks, symbols or designs of its
principal, Shell International Petroleum Limited, including the marks SHELLANE and SHELL) initiated criminal complaints
for trademark infringement and unfair competition against the defendants who were the directors and officers of Republic
Gas Corporation (REGASCO). The Complaint alleged that the REGASCO was engaged in refilling gas cylinders bearing
the marks GASUL and SHELLANE. The investigating prosecutor did not find probable cause, as well as the Department
of Justice (DOJ), which affirmed such finding. On appeal, the Court of Appeals reversed the DOJ.

HELD: There is probable cause to hold defendants liable. It is clear that they have actually committed trademark
infringement when they refilled, without the respondents consent, the LPG containers bearing the registered marks
Plaintiffs. By their acts, defendants will inevitably confuse the consuming public, since they have no way of knowing that
the gas contained in the LPG tanks bearing [plaintiffs] marks is in reality not the latters LPG product after the same had
been illegally refilled. The public will then be led to believe that [defendants] are authorized refillers and distributors of
[plaintiffs] LPG products, considering that they are accepting empty containers of [defendants] and refilling them for
resale.
In Sec. 155 of R.A. 8293, the mere unauthorized use of a container bearing a registered trademark in connection with the
sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the
buyers or consumers can be considered as trademark infringement. Moreover, Sec. 168.3 in relation to Sec. 170 of R.A.
8293, unfair competition which is the passing off[6] (or palming off) or attempting to pass off upon the public of the
goods or business of one person as the goods or business of another with the end and probable effect of deceiving the
public is prohibited.

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SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT V. DEVELOPERS GROUP OF COMPANIES (G.R. NO. 159938)

Facts:
Respondent DGCI applied for and was granted registration of the Shangri-La mark and S logo in its restaurant business.
Petitioner Shangri-La, chain of hotels and establishments owned by the Kuok family worldwide, moved to cancel the
registration of the mark on the ground that it was illegally and fraudulently obtained and appropriated by respondents.
Petitioner also moved to register the mark and logo in its own name. Later, respondent DGCI filed before the trial court a
complaint for infringement against petitioner alleging that DGCI had been the prior exclusive user and the registered
owner in the Philippines of said mark and logo. Petitioner Shangri-La argued that respondent had no right to apply for the
registration because it did not have prior actual commercial use thereof. The trial court found for respondent. CA affirmed.

Issue:
Whether or not respondents prior use of the mark is a requirement for its registration.

Ruling: YES.
While the present law on trademarks has dispensed with the requirement of prior actual use at the time of registration, the
law in force at the time of registration must be applied. Under the provisions of the former trademark law, R.A. No. 166, as
amended, hence, the law in force at the time of respondents application for registration of trademark, the root of
ownership of a trademark is actual use in commerce. Section 2 of said law requires that before a trademark can be
registered, it must have been actually used in commerce and service for not less than two months in the Philippines prior
to the filing of an application for its registration. Trademark is a creation of use and therefore actual use is a pre-requisite
to exclusive ownership and its registration with the Philippine Patent Office is a mere administrative confirmation of the
existence of such right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant, neither did respondent DGCI,
since the latter also failed to fulfill the 2-month actual use requirement. What is worse, DGCI was not even the owner of
the mark. For it to have been the owner, the mark must not have been already appropriated ( i.e., used) by someone else.
At the time of respondent DGCIs registration of the mark, the same was already being used by the petitioners, albeit
abroad, of which DGCIs president was fully aware.

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SKECHERS, U.S.A., INC. vs. INTER PACIFIC INDUSTRIAL TRADING CORP.

Petitioners claim: Skechers, USA contend that respondents are guilty of trademark infringement of their registered
trademark S (within an oval design).

Respondents claim: they argued that there was no confusing similarity between petitioners "Skechers" rubber shoes
and its "Strong" rubber shoes

Facts: Petitioner filed an application for the issuance of search warrants against an outlet and warehouse operated by
respondents for infringement of trademark under Section 155, in relation to Section 170 of Republic Act No. 8293, IP Code
of the Philippines. In the course of its business, petitioner has registered the trademark "SKECHERS" and the trademark
"S" (within an oval design) with the IPO. Two search warrants were issued and more than 6,000 pairs of shoes bearing the
S logo were seized. Respondents moved to quash the warrants arguing that there was no confusing similarity between
petitioners "Skechers" rubber shoes and its "Strong" rubber shoes. RTC granted the motion and quashed the search
warrants. Petitioner filed a petition for certiorari with the CA which affirmed the decision of the RTC. Thus, petitioner filed
the present petition with the SC assailing that the CA committed grave abuse of discretion when it considered matters of
defense in a criminal trial for trademark infringement in passing upon the validity of the search warrant when it should
have limited itself to a determination of whether the trial court committed grave abuse of discretion in quashing the
warrants. And that it committed grave abuse of discretion in finding that respondents are not guilty of trademark
infringement in the case where the sole triable issue is the existence of probable cause to issue a search warrant.
Subsequently, petitioner-intervenor filed a Petition-in-Intervention with the Court claiming to be the sole licensed distributor
of Skechers products here in the Philippines, but the same was dismissed. Both petitioner and petitioner-intervenor filed
separate motions for reconsideration.

Issue: whether or not respondent is guilty of trademark infringement.

Ruling: Yes. 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, two tests have been developed: (1)the Dominancy Test
which 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. (2) the Holistic or Totality Test which necessitates a consideration of the entirety of the
marks as applied to the products, including the labels and packaging, in determining confusing similarity. The discerning
eye of the observer must focus not only on the predominant words, but also on the other features appearing on both
labels so that the observer may draw conclusion on whether one is confusingly similar to the other.

There are two types of confusion: (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.

In the case at bar, the Court applied the Dominancy Test and found that the use of the stylized "S" by respondent in its
Strong rubber shoes infringes on the mark already registered by petitioner with the IPO. While it is undisputed that
petitioners stylized "S" is within an oval design, to this Courts mind, the dominant feature of the trademark is the stylized
"S," as it is precisely the stylized "S" which catches the eye of the purchaser. Thus, even if respondent did not use an oval
design, the mere fact that it used the same stylized "S", the same being the dominant feature of petitioners trademark,
already constitutes infringement under the Dominancy Test.

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 respondents shoes contain some dissimilarities with
petitioners shoes, this Court cannot close its eye to the fact that for all intents and purpose, respondent had deliberately
attempted to copy petitioners mark and overall design and features of the shoes. Let it be remembered, that defendants
in cases of infringement do not normally copy but only make colorable changes. 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.

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SOCIETE DES PRODUITS NESTLE, S.A., Petitioner, vs. MARTIN T. DY, JR., Respondent.

Facts

Martin Dy Jr., imports and repackages Sunny Powdered Milk from Australia and sells them under the name
NANNY. NANNY retails primarily in parts of Visayas and Mindanao.

Nestle, is a foreign corporation organized under the laws of Switzerland and owns the trademark NAN for its line
of infant formula. Nestle allocates a substantial amount of resources for the production and promotion of the NAN
product line.

Nestle wrote a letter to Dy Jr. asking him to stop using the name NANNY, they allege that it infringes upon the
trademark ownership of Nestle over the trademark NAN. He refused to recognize Nestles request and
continued using the name NANNY.

Nestle filed a case with the RTC of Dumaguete City. The case was dismissed and elevated to the CA, the
appellate court remanded the case to the trial court fo adjudication. It was assigned to the RTC-Cebu Special
Commercial Court.

The Commercial Court found Dy Jr., liable for trademark infringement on the grounds that even though it is not
apparent in the packaging of NANNY, the name itself relates to a childs nurse, which is closely related to the
product line of NAN catering to infants.

The case was then raised to the CA, which reversed the RTCs ruling. It stated that even though there is similarity
in the products, the lower price range of NANNY cautions and reminds the purchaser that it is different from NAN,
which is more expensive. This does not create confusion as to the consumers because the apparent difference in
price shows that they are two different products.

Issue:

W/N the product name NANNY infringes upon the trademark of Nestles NAN.

Held:
Yes, the decision of the RTC is reinstated. There is no question that the product will cause confusion within the
consuming public. The primary test that should be used in determining trademark infringement in this case is the
dominancy test. It is apparent that upon first glance or even at close inspection that there is confusing similarity between
NAN and NANNY. This is sufficient to establish trademark infringement.

The dominancy test states:

-- xx --

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.

-- xx --

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.

It is incorrect to consider the prices, which the CA utilized in its determination. It is enough that if both products
were placed in front of the consumer, confusion will most likely arise. From this either similarities or differences in the logo
or design are immaterial to the fact that co-relation and subsequently confusion, has been created in the minds of the
consumer.

-- xx --

The Court agrees with the lower courts that there are differences between NAN and NANNY: (1) NAN is
intended for infants while NANNY is intended for children past their infancy and for adults; and (2) NAN is
more expensive than NANNY. 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.

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UFC PHILIPPINES v BARRIO FIESTA

GR No. 198889

Facts:
Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organizedand existing under Philippine laws. It is the emergent
entity in a merger with UFC Philippines Inc. that was completed on Feb. 11, 2009.

On April 4, 2002, respondent Barrio Fiesta Manufacturing Coroporation filed ofr the mark PAPA BOY & DEVICE for
goods under Class 30, specifically for lechon sauce. The Intellectual Property Office (IPO) published said application for
opposition in the IP Phil e-Gazette on Sept. 8 2006.

Petitioner Nutri-asia filed with the IPO Bureau of Legal Affairs a Verified Notice of Opposition to the application alleging
that the mark PAPA is for use on banana catsup and other similar goods first used in 1954 by Neri Papa.

After using PAPA for 27 years, Neri Papa subsequently assigned the mark to Herman Reyes who filed an application to
register the said PAPA mark for use on banana catsup, chili sauce, achara, banana chips and instate ube powder.

On November 7, 2006 the registration was assigned to Nutri-Asia. The company has not abandoned the use of the mark
PAPA and the variations (such as PAPA BANANA CATSUP label and PAPA KETSARAP.) thereof as it continued the
use of the mark up to the present. Petitioner further allege that PAPA BOY & DEVICE is identical to the mark PAPA
owned by Nutri-Asia and duly registered in its favor. The petitioner contends that the use of PAPA by the respondent-
applicant would likely result in confusion and deception. The consuming public, particularly the unwary customers, will be
deceived, confused, and mistaken into believing that respondent-applicant's goods come from Nutri-Asia, which is
particularly true since Southeast Asia Food Inc, sister company of Nutri-Asia, have been major manufacturers and
distributors of lechon sauce since 1965 under the registered mark Mang Tomas.

The IPO-BLA rejected Barrio Fiestas application for PAPA BOY & DEVICE. Respondent appealed before the IPO
Director General, but the appeal was denied. The CA, however, reversed the decision of the IPO-BLA and ruled to grant
the application.

Petitioner brought the case before the Supreme Court, seeking the reversal of the decision and resolution of the CA.

Issue:
Whether or not by using the dominant feature of Nutri-Asias PAPA mark for PAPA BOY & DEVICE would constitute
trademark infringement.

Held:
Petition has merit.

In Dermaline, Inc. v. Myra Pharmaceuticals, Inc., 43 we defined atrademark as "any distinctive word, name, symbol,
emblem, sign, or device,or any combination thereof, adopted and used by a manufacturer ormerchant on his goods to
identify and distinguish them from thosemanufactured, sold, or dealt by others." We held that a trademark is
"anintellectual property deserving protection by law."

The Intellectual Property Code 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.

To determine the likelihood of confusion, the Rules of Procedure for Intellectual Property Rights Cases, Rule 18, 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 facie evidence 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.

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 plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendant's
marks;
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.

On the other hand, R.A. No. 166 defines a "trademark" as anydistinctive word, name, symbol, emblem, sign, or device, or
anycombination thereof, adopted and used by a manufacturer or merchant onhis 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 this legal protection, legal protection ownership of the trademark should right 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. The prima facie presumption brought by the registration of a mark may be
challenge in an appropriate action. Moreover the protection may likewise be defeated by evidence of prior use by another
person. This is because the trademark is a creation of use and belongs to one who first used it in trade or commerce.

The essential element of infringement under the law is that the infringing mark is likely to cause confusion.There
are two tests used to determine likelihood of confusion: the dominancy test and the holistic test. The dominancy test
applies to this case.

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.
xx xx

The Totality Test

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.

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 plaintiff's, and
the poorer quality of the former reflects adversely on the
plaintiff's 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."

In relation to this, the court has held that 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. The scope of protection thus extends to
protection from infringers with related goods.

It cannot be denied that since petitioners product, catsup, and respondents product, lechon sauce, are both household
products in similar packaging the public could think that petitioner Nutri-Asia has expanded its product mix to include
lechon sauce, which is not unlikely considering the nature of petitioners business.

Moreover, the CA erred in finding that PAPA is a common term of endearment for father and therefore could not be
claimed for exclusive use and ownership. What was registered was not Papa as denied in dictionary, but Papa as the
last name of the owner of the brand, making it a registrable mark.

Petition granted.
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WILLAWARE PRODUCTS CORPORATION vs.JESICHRIS MANUFACTURING CORPORATION

FACTS:

Respondent alleged that it is a duly registered partnership engaged in the manufacture and distribution of plastic and
metal products. Since its registration in 1992, [respondent] has been manufacturing in its Caloocan plant and distributing
throughout the Philippines plastic-made automotive parts. Petitioner, on the other hand, which is engaged in the
manufacture and distribution of kitchenware items made of plastic and metal has its office near that of [respondent].
[Respondent] further alleged that in view of the physical proximity of [petitioners] office to [respondents] office, and in
view of the fact that some of the [respondents] employees had transferred to [petitioner], [petitioner] had developed
familiarity with [respondents] products, especially its plastic-made automotive parts.

That sometime in November 2000, respondent discovered that petitioner had been manufacturing and distributing
the same automotive parts with exactly similar design, same material and colors but was selling these products
at a lower price as respondents plastic-made automotive parts and to the same customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the manufacture of automotive under
chassis parts such as spring eye bushing, stabilizer bushing, shock absorber bushing, center bearing cushions, among
others. Petitioners manufacture of the same automotive parts with plastic material was taken from respondents idea of
using plastic for automotive parts. Also, petitioner deliberately copied [respondents] products all of which acts constitute
unfair competition, is and are contrary to law, morals, good customs and public policy and have caused [respondent]
damages in terms of lost and unrealized profits in the amount of TWO MILLION PESOS as of the date of [respondents]
complaint.

Furthermore, petitioners tortuous conduct compelled respondent to institute this action. In its Answer, petitioner denies all
the allegations of the respondent except for the following facts: that it is engaged in the manufacture and distribution of
kitchenware items made of plastic and metal and that theres physical proximity of [petitioners] office to [respondent]s
office, and that some of respondents employees had transferred to [petitioner] and that over the years [petitioner] had
developed familiarity with [respondents] products, especially its plastic made automotive parts.
As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the plastic-made
automotive parts are mere reproductions of original parts and their construction and composition merely
conforms to the specifications of the original parts of motor vehicles they intend to replace. Thus, [respondent]
cannot claim that it "originated" the use of plastic for these automotive parts. Even assuming for the sake of argument that
[respondent] indeed originated the use of these plastic automotive parts, it still has no exclusive right to use, manufacture
and sell these as it has no patent over these products. Furthermore, [respondent] is not the only exclusive manufacturer of
these plastic-made automotive parts as there are other establishments which were already openly selling them to the
public.3

RTC DECISION: ruled in favor of respondent. It ruled that petitioner clearly invaded the rights or interest of respondent by
deliberately copying and performing acts amounting to unfair competition. The RTC further opined that under the
circumstances, in order for respondents property rights to be preserved, petitioners acts of manufacturing similar plastic-
made automotive parts such as those of respondents and the selling of the sameproducts to respondents customers,
which it cultivated over the years, will have to be enjoined.

ISSUE: whether or not petitioner committed acts amounting to unfair competition under Article 28 of the Civil Code.

RULING: Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code on
humanrelations, and not unfair competition under Republic Act No. 8293, 7 as the present suit is a damage suit and the
products are not covered by patent registration. A fortiori, the existence of patent registration is immaterial in the present
case.

The concept of "unfair competition"under Article 28 is very much broader than that covered by intellectual property laws.
Under the present article, which follows the extended concept of "unfair competition" in American jurisdictions, the term
coverseven cases of discovery of trade secrets of a competitor, bribery of his employees, misrepresentation of all kinds,
interference with the fulfillment of a competitors contracts, or any malicious interference with the latters business. 8

With that settled, we now come to the issue of whether or not petitioner committed acts amounting tounfair competition
under Article 28 of the Civil Code.

We find the petition bereft of merit.

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit, machination or any other unjust, oppressive or high-handed method shall
give rise to a right of action by the person who thereby suffers damage."

From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionpersebut the use of unjust,
oppressive or high- handed methods which may deprive others of a fair chance to engage in business or to earn a living.
Plainly,what the law prohibits is unfair competition and not competition where the means usedare fair and legitimate.

In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve an injury to a competitor
or trade rival, and (2) it must involve acts which are characterized as "contrary to good conscience," or "shocking to
judicial sensibilities," or otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or interest is a minor factor; the
essence of the matter appears to be a private wrong perpetrated by unconscionable means. 9

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the manufacture of plastic-made automotive
parts. Second, the acts of the petitioner were clearly "contrary to good conscience" as petitioner admitted having
employed respondents formeremployees, deliberately copied respondents products and even went to the extent of
selling these products to respondents customers.10

To bolster this point, the CA correctly pointed out that petitioners hiring of the former employees of respondent and
petitioners act of copying the subject plastic parts of respondent were tantamount to unfair competition, viz.:

The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with the business of
[respondent].1wphi1 [Petitioners] acts can be characterized as executed with mischievous subtle calculation. To
illustrate, in addition to the findings of the RTC, the Court observes that [petitioner] is engaged in the production of plastic
kitchenware previous to its manufacturing of plasticautomotive spare parts, it engaged the services of the then mold setter
and maintenance operator of [respondent], De Guzman, while he was employed by the latter. De Guzman was hired by
[petitioner] in order to adjust its machinery since quality plastic automotive spare parts were not being made. It baffles the
Court why [petitioner] cannot rely onits own mold setter and maintenance operator to remedy its problem. [Petitioners]
engagement of De Guzman indicates that it is banking on his experience gained from working for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and delivery man of [respondent], was fired because
he was blamed of spying in favor of [petitioner]. Despite this accusation, he did not get angry. Later on, he applied for and
was hired by [petitioner] for the same position he occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De Guzman. 11
Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of suddenly shifting his business
from manufacturing kitchenware to plastic-made automotive parts; his luring the employees of the respondent to transfer
to his employ and trying to discover the trade secrets of the respondent. 12

Moreover, when a person starts an opposing place of business, not for the sake of profit to himself, but regardless of loss
and for the sole purpose of driving his competitor out of business so that later on he can take advantage of the effects of
his malevolent purpose, he is guilty of wanton wrong. 13 As aptly observed by the courta quo, the testimony of petitioners
witnesses indicate that it acted in bad faith in competing with the business of respondent, to wit: [Petitioner], thru its
General Manager, William Salinas, Jr., admitted that it was never engaged in the business of plastic-made automotive
parts until recently, year 2000:

Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic) not? Manufacturer of
kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes, sir. Atty. Bautista: And you said you have known the
[respondent] Jesichris Manufacturing Co., you have known it to be manufacturing plastic automotive products, is it not?
Mr. Salinas: Yes, sir. Atty. Bautista: In fact, you have been (sic) physically become familiar with these products, plastic
automotive products of Jesichris? Mr. Salinas: Yes, sir.

How [petitioner] was able to manufacture the same products, in terms of color, size, shape and composition as those sold
by Jesichris was due largely to the sudden transfer ofJesichris employees to Willaware.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code

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