ASSIGNMENT

Submitted By: Arnold Judd P. Salazar

LlB-II

Western Leyte College of Ormoc City Inc.

School Of Law
 McDonald’s Corporation vs L.C. Big Mak

FACTS: Petitioner McDonald's Corporation is a corporation which operates, by itself or through its
franchisees, a global chain of fast-food restaurants. McDonald's owns a family of marks including the
"Big Mac" mark for its "double-decker hamburger sandwich." McDonald's registered this trademark with
the United States Trademark Registry on 16 October 1979. 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 , now the Intellectual Property Office. 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.

Petitioner McGeorge Food Industries, a domestic corporation, is McDonald's Philippine franchisee.

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food outlets and
snack vans in Metro Manila and nearby provinces. Respondent corporation's menu includes hamburger
sandwiches and other food items

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 of its exclusive right to the "Big Mac" mark
and requested him to desist from using the "Big Mac" mark or any similar mark.

Hence, an trademark infringement and unfair competition were filed.

RTC rendered judgment finding respondent corporation liable for trademark infringement and unfair
competition which the Court of Appeals reversed.

ISSUE: Whether or not respondent corporation is liable for trademark infringement and unfair
competition.

HELD: The Supreme Court held there were trademark infringement and unfair competition present.
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." Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.

A mark is valid if it is "distinctive" and thus not barred from registration. However, once
registered, not only the mark's validity but also the registrant's ownership of the mark is
prima facie presumed. The Court also finds that petitioners have duly established
McDonald's exclusive ownership of the "Big Mac" mark.

In this case, McDonald's has exclusive ownership of the "Big Mac" mark as it was registered
with the PBPTT on 1985. The Court said that once registered, not only the mark's validity
but also the registrant's ownership of the mark is prima facie presumed.

In determining likelihood of confusion, jurisprudence has developed two tests, the

dominancy test and the holistic test. The dominancy test focuses on the similarity of
the prevalent features of the competing trademarks that might cause confusion. In contrast,
the holistic test requires the court to consider the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity.

The 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 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 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."

Thus, according to the Court, it is clear that 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 since 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."
 PHILIPPINE NUT INDUSTRY, INC., petitioner,
vs.
STANDARD BRANDS INCORPORATED and TIBURCIO S. EVALLE as Director of
Patents, respondents.

FACTS: Petitioner, Philippine Nut Industry , a domestic corporation, obtained from the
Patent Office on August 10, 1961, Certificate of Registration No. SR-416 covering the
trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," the label used on its product of
salted peanuts.

On May 14, 1962, Standard Brands a foreign corporation, 1 filed with the Director of Patents
Inter Partes asking for the cancellation of Philippine Nut's certificate of registration on the
ground that "the registrant was not entitled to register the mark at the time of its
application for registration thereof" for the reason that it (Standard Brands) is the owner of
the trademark "PLANTERS COCKTAIL PEANUTS" covered by Certificate of Registration No.
SR-172, issued by the Patent Office on July 28, 1958. Standard Brands alleged in its petition
that Philippine Nut's trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" closely
resembles and is confusingly similar to its trademark "PLANTERS COCKTAIL PEANUTS" used
also on salted peanuts, and that the registration of the former is likely to deceive the buying
public and cause damage to it.

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

Petitioner further contends that Standard Brands' use of the trademark PLANTERS was
interrupted during the Japanese occupation and in fact was discontinued when the
importation of peanuts was prohibited by Central Bank regulations effective July 1, 1953,
hence it cannot be presumed that it has acquired a secondary meaning.

Director of Patents orders the cancellation of Certificate of Registration No. SR-416 issued in
favor of herein petitioner Philippine Nut Industry, Inc. (hereinafter called Philippine Nut) for
the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," upon complaint of Standard
Brands Inc. (hereinafter to be called Standard Brands). Hence, this petitioner filed a petition
for review.

ISSUES:

1. Whether there is a confusing similarity in the trademarks of the parties?

2. Whether or not the doctrine of secondary meaning is applicable in the case at bar?

HELD:

1. Yes. Director of Patent's decision is based not only on the fact that petitioner herein
adopted the same dominant mark of Standard Brands, that is, the word PLANTERS,
but that it also used in its label the same coloring scheme of gold, blue, and white,
 and basically the same lay-out of words such as "salted peanuts" and "vacuum
packed" with similar type and size of lettering as appearing in Standard Brands' own
trademark, all of which result in a confusing similarity between the two labels.

Based on the picture which was produced, the striking similarity between the two
labels is quite evident not only in the common use of PLANTERS but also in the other
words employed. As a matter of fact, the capital letter "C" of petitioner's "Cordial" is
alike to the capital "C" of Standard's "Cocktail", with both words ending with an "l".

2. Yes. The applicability of the doctrine of secondary meaning to the situation is

appropriate because there is oral and documentary evidence showing that the word
PLANTERS has been used by and closely associated with Standard Brands for its
canned salted peanuts since 1938 in this country. Not only is that fact admitted by
petitioner in the amended stipulation of facts but the matter has been established by
testimonial and documentary evidence consisting of invoices covering the sale of
"PLANTERS cocktail peanuts. In other words, there is evidence to show that the term
PLANTERS has become a distinctive mark or symbol insofar as salted peanuts are
concerned, and by priority of use dating as far back as 1938, respondent Standard
Brands has acquired a preferential right to its adoption as its trademark warranting
protection against its usurpation by another. Ubi jus ibi remedium. Where there is a
right there is a remedy. Standard Brands has shown the existence of a property
right. Thus, r We hold otherwise. Respondent Director correctly applied the rule that
non-use of a trademark on an article of merchandize due to legal restrictions or
circumstances beyond one's control is not to be considered as an abandonment

The court affirmed the decision of the Director of Patents provided they are
supported by substantial evidence. The testimonial and documentary evidence in
addition to the stipulation of facts submitted by the parties fully support the findings
of respondent Director that(1) there is a confusing similarity between the labels or
trademarks of Philippine Nut and Standard Brands used in their respective canned
salted peanuts; (2) respondent Standard Brands has priority of adoption and use of
the label with PLANTERS as the dominant feature and the same has acquired
secondary meaning in relation to salted peanuts; and (3) there has been no
abandonment or non-use of said trademark by Standard Brands which would justify
its adoption by petitioner or any other competitor for the sale of salted peanuts in
the market.
 ACOJE MINING CO. INC. VS THE DIRECTOR OF PATENTS

FACTS: On September 14, 1965, Acoje Mining Co., Inc. a domestic corporation, filed an
application for registration of the trademark LOTUS, used on Soy Sauce, Class 47. Use in
commerce in the Philippines since June 1, 1965 is asserted. The Chief trademark Examiner
finally rejected the application by reason of confusing similarity with the trademark LOTUS
registered in this Office under Certificate of Registration No. 12476 issued in favor of
Philippine Refining CO., Inc., another domestic corporation. The cited mark is being used on
edible oil, Class 47." The matter was then elevated to respondent Director of Patents who,
on January 31, 1968, upheld the view of the Chief Trademark Examiner and rejected the
application of Petitioner on the ground that while there is a difference between soy sauce
and edible oil and there were dissimilarities in the trademarks due to type of letters used as
well as in the size, color and design employed, still the close relationship of the products,
soy sauce and edible oil, is such "that purchasers would be misled into believing that they
have a common source.

ISSUES:

1. Can it be said then that petitioner's application would be likely to cause confusion
or mistake on the part of the buying public?
2. May petitioner Acoje Mining Company register for the purpose of advertising its
product, soy sauce, the trademark LOTUS, there being already in existence one
such registered in favor of the Philippine Refining Company for its product, edible
oil, it being further shown that the trademark applied for is in smaller type,
colored differently, set on a background which is dissimilar as to yield a distinct
appearance?

HELD:

1. NO. It does not defy common sense to assert that a purchaser would be
cognizant of the product he is buying. There is quite difference between soy
sauce and edible oil. If one is in the market for the former, he is not likely to
purchase the latter just because of the trademark LOTUS. Even on the rare
occasions that a mistake does occur, it can easily be rectified. Moreover, there is
no denying that the possibility of confusion is remote considering the difference
in the type used, the coloring, the petitioner's trademark being in yellow and red
while that of the Philippine Refining Company being in green and yellow, and the
much smaller size of petitioner's trademark. When regard is had for the principle
that the two trademarks in their entirety as they appear in their respective labels
should be considered in relation to the goods advertised before registration could
be denied, the conclusion is inescapable that respondent Director ought to have
reached a different conclusion
2. YES. The Acoje Mining Company may register the trademark LOTUS.
The decisive test as to whether an application for a trademark should be
affirmatively acted upon or not is clearly set forth in the decision already referred
to, promulgated barely a year ago. In the language of Justice J. B. L. Reyes, who
spoke for the Court in American Wire & Cable Co. v. Director of Patents: "It is
clear from the above-quoted provision that the determinative factor in a contest
involving registration of trade mark is not whether the challenging mark
would actually cause confusion or deception of the purchasers but whether the
use of such mark would likely cause confusion or mistake on the part of the
buying public. In short, to constitute an infringement of an existing trade-mark
patent and warrant a denial of an application for registration, the law does not
require that the competing trademarks must be so identical as to produce actual
error or mistake; it would be sufficient, for purposes of the law, that the
similarity between the two labels, is such that there is a possibility or likelihood of
the purchaser of the older brand mistaking the newer brand for it.
Again, there is quite difference between soy sauce and edible oil. If one is in the
market for the former, he is not likely to purchase the latter just because of the
trademark LOTUS. Even on the rare occasions that a mistake does occur, it can
easily be rectified. Moreover, there is no denying that the possibility of confusion
is remote considering the difference in the type used, the coloring, the
petitioner's trademark being in yellow and red while that of the Philippine
Refining Company being in green and yellow, and the much smaller size of
petitioner's trademark.
 PHILIPPINE REFINING CO., INC.,
vs.
NG SAM and THE DIRECTOR OF PATENTS

FACTS: On November 25, 1960, respondent Ng Sam, a citizen residing in Iloilo City, filed an application
with the Philippine Patent office for registration of the Identical trademark "CAMIA" for his product, ham,
which likewise falls under Class 47. Alleged date of first use of the trademark by respondent was on
February 10, 1959.

After due publication of the application, petitioner filed an opposition, in accordance with Section 8 of
Republic Act No. 166, otherwise known as the Trademark Law, as amended. Basis of petitioner's
opposition was Section 4(d) of said law, which provides as unregistrable:

A mark which consists of or comprises a mark or tradename which so resembles a mark or tradename
registered in the Philippines or a mark or 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 services
of the applicant, to cause confusion or mistake or to deceive purchasers.

Director of Patents rendered a decision allowing registration of the trademark "CAMIA" in favor of
NgSam finding that `the goods of the parties are not of a character which purchasers would be likely
toattribute to a common origin.

ISSUE: Whether or not the product of respondent, Ng Sam, which is ham, and those of petitioner
consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark
"CAMIA" on said goods would likely result in confusion as to their source or origin.

HELD: The business of the parties are non-competitive and their products so unrelated that the use of
Identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner

The right to a trademark is a limited one, in the sense that others may use the same mark on unrelated
goods. The mere fact that one person has adopted and used a trademark on his goods does not prevent
the adoption and use of the same trademark by others on articles of a different description. Where no
confusion is likely to arise, as in this case, registration of a similar or even identical mark may be
allowed. The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white flowers.
A trademark is designed to identify the user. But it should be so distinctive and sufficiently original as to
enable those who come into contact with it to recognize instantly the identity of the user. "It must be
affirmative and definite, significant and distinctive, capable to indicate origin .If a mark is so
commonplace that it cannot be readily distinguished from others, then it is apparent that it cannot
identify a particular business; and he who first adopted it cannot be injured by any subsequent
appropriation or imitation by others, and the public will not be deceived.

Mere classification of the goods cannot serve as the decisive factor in the resolution of whether or not
the goods a related. Emphasis should be on the similarity of products involved and not on arbitrary
classification of general description of their properties or characteristics.
 HICKOK MANUFACTURING CO., INC.VS. CA AND SANTOS LIM BUN LIONG

FACTS: Petitioner is a foreign corporation and all its products are manufactures by Quality
House Inc. The latter pays royalty to the petitioner. Hickok registered the trademark
'Hickok' earlier and used it in the sale of leather wallets, key cases, money folds, belts,
men’s underwear, neckties, hankies, and men's socks. While Sam Bun Liong used the same
trademark in the sale of Marikina shoes. Both products have different channels of trade. The
Patent Office did not grant the registration, but the Court of Appeals reversed the PPO
decision.

In petitioner-appellee's trademark for handkerchiefs (Exhibit 'Q'), the word 'HICKOK' is in red with
white background in the middle of two branches of laurel in light gold. At the lower part thereof is a
ribbon on which are the words 'POSITIVELY FINER' in light gold. In the trademark for underwear
(Exhibit 'R'), the word 'HICKOK' is also in red with white background in the middle of two branches
of laurel in dark gold with similar ribbons and the words 'POSITIVELY FINER' in dark gold. And in
the trademark for briefs (Exhibit 'S'), the word 'HICKOK' is in white but with red background in the
middle of two branches of laurel, the leaves being in dark gold with white edges, and with similar
ribbon and words 'POSITIVELY FINER' in dark gold. In contrast, in respondent-appellant's
trademark (Exhibit 'J'), the word 'HICKOK' is in white with gold background between the two
branches of laurel in red, with the word 'SHOES' also in red below the word 'HICKOK'. The ribbon is
in red with the words 'QUALITY AT YOUR FEET,' likewise in red.

ISSUE: Is there infringement in this case?

HELD: An examination of the trademark of petitioner-appellee and that of registrant-appellant

convinces us that there is a difference in the design and the coloring of, as well as in the words on the
ribbons, the two trademarks. that there must be not only resemblance between the trademark of the
plaintiff and that of the defendant, but also similarity of the goods to which the two trademarks are
respectively attached.

Since in this case the trademark of petitioner-appellee is used in the sale of leather wallets, key cases,
money folds made of leather, belts, men's briefs, neckties, handkerchiefs and men's socks, and the
trademark of registrant-appellant is used in the sale of shoes, which have different channels of trade,
the Director of Patents, as in the case of Acoje Mining Co., Inc. vs. Director of Patents, supra, 'ought to
have reached a different conclusion

Emphasis should be on the similarity of the products involves and not on the arbitrary classification or
the general description of their properties or characteristics. Also, the mere fact that one person has
adopted and used a trademark on his goods does not prevent the adoption and use of the same by
others on unrelated articles of different kind. There is a different design and coloring of the trademark
itself. The 'Hickok' trademark is in red with white background in the middle of 2 branches of laurel (in
light gold) while the one used by Sam Bun Liong is the word 'Hickok ' in white with gold background
between 2 branches of laurel in red with the word 'shoes' also in red placed below the word 'Hickok'.
 ESSO STANDARD EASTERN INC. VS CA

FACTS: Petitioner Esso Standard Eastern, Inc., then a foreign corporation duly licensed to do business
in the Philippines, is engaged in the sale of petroleum products which are Identified with its trademark
ESSO (which as successor of the defunct Standard Vacuum Oil Co. it registered as a business name with
the Bureaus of Commerce and Internal Revenue in April and May, 1962). Private respondent in turn is a
domestic corporation then engaged in the manufacture and sale of cigarettes, after it acquired in
November, 1963 the business, factory and patent rights of its predecessor La Oriental Tobacco
Corporation, one of the rights thus acquired having been the use of the trademark ESSO on its
cigarettes, for which a permit had been duly granted by the Bureau of Internal Revenue.

Barely had respondent as such successor started manufacturing cigarettes with the trademark ESSO,
when petitioner commenced a case for trademark infringement in the Court of First Instance of Manila.
The complaint alleged that the petitioner had been for many years engaged in the sale of petroleum
products and its trademark ESSO had acquired a considerable goodwill to such an extent that the buying
public had always taken the trademark ESSO as equivalent to high quality petroleum products.
Petitioner asserted that the continued use by private respondent of the same trademark ESSO on its
cigarettes was being carried out for the purpose of deceiving the public as to its quality and origin to the
detriment and disadvantage of its own products.

In its answer, respondent admitted that it used the trademark ESSO on its own product of cigarettes,
which was not Identical to those produced and sold by petitioner and therefore did not in any way
infringe on or imitate petitioner's trademark. Respondent contended that in order that there may be
trademark infringement, it is indispensable that the mark must be used by one person in connection or
competition with goods of the same kind as the complainant's

The Trial Court rendered a decision in favor of petitioner and ruled that respondent was guilty of
infringement of trademark.

The respondent Court of Appeals found that there was no trademark infringement and dismissed the
complaint. Reconsideration of the decision was denied.

ISSUE: Is there infringement committed by United Cigarette Corp?

HELD: NO INFRINGEMENT WAS COMMITTED. It is undisputed that the goods on which petitioner uses
the trademark ESSO, petroleum products, and the product of respondent, cigarettes, are non-
competing. But as to whether trademark infringement exists depends for the most part upon whether or
not the goods are so related that the public may be, or is actually, deceived and misled that they came
from the same maker or manufacturer. For non-competing goods may be those which, though they are
not in actual competition, are so related to each other that it might reasonably be assumed that they
originate from one manufacturer. Non-competing goods may also be those which, being
entirely unrelated, could notreasonably be assumed to have a common source. in the former case of
related goods, confusion of business could arise out of the use of similar marks; in the latter case of
non-related goods, it could not. The vast majority of courts today follow the modern theory or concept of
"related goods" which the Court has likewise adopted and uniformly recognized and applied.

The goods are obviously different from each other with "absolutely no iota of similitude" as stressed in
respondent court's judgment. They are so foreign to each other as to make it unlikely that purchasers
would think that petitioner is the manufacturer of respondent's goods. The mere fact that one person
has adopted and used a trademark on his goods does not prevent the adoption and use of the same
trademark by others on unrelated articles of a different kind.
Another factor that shows that the goods involved are non-competitive and non-related is the appellate
court's finding that they flow through different channels of trade, thus: "The products of each party
move along and are disposed through different channels of distribution. The petitioner's products are
distributed principally through gasoline service and lubrication stations, automotive shops and hardware
stores. On the other hand, the respondent's cigarettes are sold in sari-sari stores, grocery stores, and
other small distributor outlets. Respondent's cigarettes are even peddled in the streets while petitioner's
'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."