Doctrine of unfair competition
MANCHESTER & BOMBAY
G.R. No. L-31380 January 13, 1930
E. SPINNER and COMPANY, plaintiff-appellant,
vs.
NEUSS HESSLEIN CORPORATION, defendant-appellee.
Benj. S. Ohnick and John R. McFie, jr., for appellant.
Camus and Delgado for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of Manila on November 23, 1926, by E.
Spinner & Co., of Manchester, England, for the purpose of restraining the defendant, the Neuss
Hesslein Corporation, organized under the laws of the Philippine Islands, from using the word
"Wigan," as applied to khaki textiles sold by the defendant in the Philippine Islands, and to
recover damages for violation of the plaintiff's trade-mark right in the word "Wigan" and for
alleged unfair competition committed by the defendant in the use of the same. Upon hearing the
cause the trial court absolved the defendant from the complaint, with costs against the plaintiff,
and the plaintiff appealed.
There is little or no dispute upon the determinative facts of the case which are subtantially these:
E. Spinner & Co. is a copartnership with head offices in Manchester, England, and Bombay,
India, being represented in the Philippine Islands by Wise & Co., a domestic corporation with
principal office in the City of Manila; while the defendant is a corporation organized in December,
1922, under the laws of the Philippine Islands, with its principal office in the City of Manila. The
defendant is a subsidiary of Neuss Hesslein & Co., Inc., of New York, U. S. A., for whom it acts
as selling agent in the Philippine Islands. The plaintiff, E. Spinner & Co., has long been engaged
in the manufacture and sale of textile fabrics, including khaki cloth, with distributing business
connection in different parts of the world. Soon after the American occupation of the Philippine
Islands, or about 1900, the plaintiff began exporting its khaki into the Philippine Islands through
local firms, notable Holliday, Wise & Co., (now Wise & Co.), Smith, Bell & co., Ltd., and others.
Because of the superior qualities of its goods, such as the fastness of its color, the consistency
of its texture, and its proven durability, the plaintiff's khaki made favorable impression in the
Philippine market, enjoying a popular favor and preference which resulted in a lucrative trade.
Among the brands of khaki enjoying such favor was the grade indicated by the manufacturer as
"Wigan." A higher grade was marketed by the plaintiff under the brand "Stockport;" while still
other grades were put upon the market under the brands "Jackton" and "Ashford."
All of these different grades of khaki were marketed by the plaintiff under a common trade-mark,
which was first registered in the Bureau of Patents, Copyrights, and Trade-Marks of the
Philippine Government in the year 1905. This trade-mark consists of a large label representing
the profiles of two elephant heads placed close to each other in the upper middle center of the
label and looking in opposite directions, with trunks extending respectively to the right and left.
This device has for its rectangular border a garland of leaves; while over the point of union
between the two heads appear several flags. Inside the space formed by the trunks of the
elephants and the garland of leaves appears a label consisting of the following words:
LEEMANN & GATTY'S
ORIGINAL
PATENTED FAST
KHAKI DRILL
Agents: Messrs. E. SPINNER & CO.
Quality:................................Yds.
REGISTERED
No. 50,275.
This label was pasted on the outside of each bolt of khaki sold by the plaintiff, the different
grades being indicated by the words "Wigan," "Stockport," etc., inserted with stencil in the blank
space following the word "Quality." The trade-mark proper, as thus used, was a general mark
covering various brands. This practice was followed for more than twenty years, but the plaintiff
learned in 1924 that the defendant, the Neuss Hesslein Corporation, was selling a brand of khaki
in the Philippine Islands with the word "Wigan" stenciled on the bolts below the defendant's own
trade-mark. As thus employed by the defendant, the word "Wigan" purports to show the color of
the defendant's khaki, but the proof shows that the word was thus used by the defendant upon
khaki of different shades. After discovering this fact, the plaintiff, in April, 1925, caused its trade-
mark, consisting of the two elephant heads, to be again registered in the Bureau of Commerce
and Industry, as per certificate No. 4807. In its essential features, this trade-mark is identical with
the trade-mark registered by the plaintiff in 1905, but in the latter trade-mark the word "Wigan" is
inserted after the word "Quality." The purpose of this registration was of course to incorporate
the word "Wigan" as an integral part of the registered trade-mark.
As already stated, the defendant, the Neuss Hesslein Corporation, was organized in the
Philippine Islands in December, 1922, as subsidiary of Neuss Hesslein & Co., Inc., of New York;
and beginning with 1923, the defendant has been marketing khaki in the Philippine Islands for
the New York house. But before the organization of the defendant the New York house had, for
several years, been selling its khaki in the Philippine Islands, under two different brands. These
were known respectively as the "Five Soldiers" and the "Four Soldiers," the last named being
also known as the "Wide Awake" brand. The "Five Soldiers" trade-mark was registered in the
Bureau of Commerce and Industry in 1916, and the "Four Soldiers" trade-mark in February,
1923. These two grades of khaki are marketed at a much lower price than plaintiff's "Wigan,"
since it appears that the plaintiff's "Wigan" is sold in the Philippine market by Wise & Co. for 71
centavos per yard, and by other firms at 70 centavos a yard, while defendant's "Five Soldiers"
sells at from 54 centavos to 55 centavos, and its "Four Soldiers" from 35 centavos to 40
centavos a yard.
After the defendant corporation had assumed the agency in the Philippine Islands for the
products of the New York house, the manger of the defendant, at the request of Chinese
customers, began to give orders to the New York house for the printing of the word "Wigan"
conspicuously upon the bolts of khaki intended for sale in Philippine Islands; and in the latter
part of 1923 or in the early part of the year 1924, the defendant's khaki began to be marketed
here with the word "Wigan" thereon.
It appears that the words "Wigan," "Stockport," "Jackton," and "Ashford," adopted by the plaintiff
to indicate different qualities of khaki, are the names of manufacturing towns of minor
importance in England; but the brand of khaki with which the defendant associates the name
"Wigan" does not appear to be manufactured in the town of Wigan. It also appears that the term
"Wigan" is used in commercial parlance as the name of a canvass-like cotton fabric used to
stiffen parts of garments. But it is clear that in adopting the word "Wigan" to indicate a brand of
khaki, the plaintiff did not use the word "Wigan" either in its geographical sense or in the trade
sense of a material for stiffening. The use made by the plaintiff of the term "Wigan" is therefore
arbitrary and artificial, in that it departs from any previously accepted sense.
It will be noted that the plaintiff uses the word "Wigan" to indicate quality, while the defendant
purports to use the term to indicate color, though the defendant's practice in this usage is
somewhat loose. There is some proof in the record tending to show that American dealers are
accustomed to use the word "Wigan" to indicate a color or certain shades of color of khaki cloth.
But it is evident that the plaintiff first adopted the word "Wigan" in connection with khaki cloth,
and this was done for the purpose of indicating quality. In this sense the word "Wigan" has
accompanied the plaintiff's khaki for years in the different markets of the world, and the term has
become associated in the minds of merchants who deal in this material with the standard of
quality maintained by the plaintiff in the "Wigan" brand.
This action involves a question of trade-mark right and a further question of unfair competition,
and the problem is to determine whether, upon the facts above stated, the defendant corporation
has a right to use the word "Wigan" on khaki sold by it in the Philippine Islands. The law
governing trade-mark rights as well as unfair competition in this jurisdiction is found in Act No.
666 of the Philippine Commission, which is a reduction to statutory form of the jurisprudence
developed by the courts of England and the United States in connection with the subjects
mentioned; and to the summary of substantive law expressed in the statute are added the
provisions relative to the registration of trade-marks. Act No. 666 has been from time to time
amended, but none of the amendatory provisions adopted prior to the beginning of this lawsuit
have any bearing on the problem before us.
Though the law concerning infringement of trade-marks and that concerning unfair competition
have a common conception at their root, which is that one person shall not be permitted to
misrepresent that his goods or his business are the goods or the business of another, the law
concerning unfair competition is broader and more inclusive. On the other hand, the law
concerning the infringement of trade-mark is of more limited range, but within its narrower range
recognizes a more exclusive right derived from the adoption and registration of the trade-mark
by the person whose goods or business are first associated therewith. One who has identified a
peculiar symbol or mark with his goods thereby acquires a property right in such symbol or mark,
and if another infringes the trade-mark he thereby invades this property right. Unfair competition
cannot be placed on the plane of invasion of property right. The tort is strictly one of fraud. It
results that the law of trade-marks is specialized subject distinct from the law of unfair
competition, though, as stated above, the two subjects are entwined with each other and are
dealt with together in Act No. 666. Inasmuch as the principles applicable to trade-marks were
precisely defined at an earlier date than the principles applicable to unfair competition, it is not
surprising that confusion should be found in the earlier decisions between the legal doctrines
relating to the two subjects. Of late years, however, the term "trade-mark" has been restricted to
its proper technical meaning and the term "unfair competition" is used to include wrongful acts of
competition not involving any violation of trade-mark right proper. As the tort of unfair
competition is broader than the wrong involved in the infringement of a trade-mark, one who fails
to establish the exclusive property right which is essential to the validity of a trade-mark, may yet
frequently obtain relief on the ground of his competitor's unfairness or fraud. Any conduct may
be said to constitute unfair competition if the effect is to pass off on the public the goods of one
man as the goods of another. It is not necessary that any particular means should be used to
this end. The most usual devices are the simulation of labels and the reproduction of the form,
color and general appearance of the package used by the pioneer manufacturer or dealer. But
unfair competition is not limited to these forms. The general principle underlying the law of unfair
competition is that a competitor in business cannot be permitted to do acts which have deceived,
or are reasonably designed to deceive, the public into buying his goods as those of another.
As stated in section 7 of Act No. 666, a person is guilty of unfair competition who "in selling his
goods shall give them the general appearance of goods of another manufacturer or dealer,
either in the wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would be likely to influence
purchasers to believe that the goods offered are those of a manufacturer or dealer other than the
actual manufacturer or dealer," etc. This language is very broad; and as applied to the case
before us it is evident that, in using the word "Wigan" on the khaki cloth sold by it, the defendant
has appropriated a word likely to lead purchasers to believe that the goods sold by the
defendant are those of the plaintiff. The representation that the khaki sold by the defendant is of
the kind known to the trade as "Wigan" directly tends to deceive the purchaser and, therefore,
constitutes unfair competition as against the plaintiff.
It is no doubt true that the adoption of the word "Wigan" by the defendant does not deceive
merchants or tailors buying from the defendant. But the person most to be considered in this
connection is the consumer, and when the word "Wigan" is found upon a bolt of khaki, the
ultimate buyer, or consumer, would naturally be led to suppose that the goods sold under this
name is the goods sold by the plaintiff. In the case before us it is revealed that the word "Wigan"
was first stamped upon the khaki sold by the defendant at the suggestion or request of a
Chinese customer, presumably a tailor or merchant, and the purpose behind the suggestion
undoubtedly was that, if this term were found stamped upon the khaki thus sold it could be
represented to the ultimate purchaser that the khaki thus sold was the plaintiff's "Wigan." In this
connection it should be noted that, in the action to enjoin unfair competition, the fraudulent
intention on the part of the defendant may be inferred from the similarity of the goods offered for
sale by him to the goods of the plaintiff (Act No. 666, sec. 7, end). In the case before us the use
of the word "Wigan," stamped by the defendant upon the bolts of khaki sold by it, sufficiently
discloses an intention to mislead the consumer. Moreover, as was observed by the Court of
Appeals of the Third Circuit in Barton vs. Rex-Oil Co., (40 A. L. R., 424), it makes no difference
that dealers in the article are not deceived. They are informed and usually know what they are
buying. The law concerns itself with the casual purchaser who knows the commodity only by its
name. In obtaining what he asks for he is entitled to protection against unfair dealing. (Citing
National Biscuit Co. vs. Baker, 95 Fed., 135; Eli Lilly & Co., vs. Wm. R. Warner & Co., 275 Fed.,
752; William R. Warner & Co. vs. Eli Lilly & Co., 265 U. S., 526.)
With respect to the question of infringement of trade-mark right, it is clear that the appropriation
by the defendant of the word "Wigan" for use in the sale of its khaki did not constitute a violation
of trade-mark prior to April, 1925, when the word "Wigan" was first incorporated in the plaintiff's
registered trade-mark; but after that date it was certainly illegal for the defendant to use the word
"Wigan" stamped upon the khaki sold by it; and this act was an infringement of trade-mark right.
It is true that the plaintiff's trade-mark proper consisted of a pictorial representation of the heads
of two elephants, embelished by leaves, and the word "Wigan" was only a part of said trade-
mark. Nevertheless, the misappropriation of this word by the competitor was a violation of the
plaintiff's right. It has been held in the Supreme Court of the United States that the use of only
one of the words constituting a trade-mark may be sufficient to constitute an infringement, and it
is not necessary to this end that all of the words comprising the trade-mark should be
appropriated (Saxlehner vs. Eisner & Mendelson Co., 179 U.S., 20; 45 Law. ed., 60).
In section 2 of Act No. 666 it is declared that a designation or part of a designation which relates
only to the name, quality, or description of the merchandise, or geographical place of its
production or origin, cannot be made the subject of a trade-mark; and it seems to be supposed
by the defendant that this provision disables the plaintiff from complaining of the use made of the
word "Wigan" by the defendant. But it will be noted that the word "Wigan" as applied to quality, is
not an English word in common use for describing quality. The word "Wigan" is here used in an
entirely artificial sense and its association with quality had the origin exclusively in the use which
the plaintiff has made of it. The designation of name, quality, or description, as used in the
statute, has reference to linguistic terms in common use. In words of this character no particular
manufacturer can acquire an exclusive property right. Again, it will be noted that, although
"Wigan," being the name of a town, was an original geographical term, it is not used upon the
plaintiff's khaki to indicate the geographical place of production of the product. Even
geographical terms can be used in an arbitrary and artificial sense, and when so used by one
manufacturer the improper appropriation of the same term by another may be enjoined as an
invasion of trade-mark right. Of course, if the defendant were manufacturing its khaki in the town
of "Wigan," it would be entitled to use that name to indicate the place of manufacture of its
goods. But such is not the case here.
From what has been said it follows that the plaintiff is entitled to an injunction for the purpose of
restraining the defendant from using the word "Wigan" upon the bolts of khaki sold by it, whether
the wrongful act of the defendant be considered as an act of unfair competition or as an
infringement of the trade-mark registered by the plaintiff in April, 1925. But the plaintiff further
seeks to recover damages in the estimated amount of P15,000 for the injury sustained by the
plaintiff. As in Forbes, Munn & Co., vs. Ang San To (43 Phil., 724), the provision in the complaint
referring to damages should, we think, be interpreted as a prayer for an assessment of the
compensation to which the plaintiff might be entitled for the damage done to its business. The
proof, however, shows that the plaintiff's business has shown a healthy growth during the period
covered by the wrongful acts which are the subject of this action, and it is not proved that any
assessable damage has been inflicted upon the plaintiff by the wrongful acts of the defendant,
though the infringement of legal right is clear. We are therefore of the opinion that no damages
should be awarded to the plaintiff. It will be noted that Act No. 666 gives the plaintiff a right to
elect between the recovery of damages for the harm done to the plaintiff's business and the
enforcement of an accounting against the defendant for the profits which may be shown to have
accrued to it by reason of the sales made in violation of the plaintiff's right. But these two
remedies are different and, where the plaintiff has elected to sue for damages and no damages
are proved, none can be awarded. This makes it unnecessary to analyze the proof with a view to
discovering the profits which the defendant may have earned by the illegitimate sales.
The judgment appealed from will therefore be modified, and the defendant and its agents will be
enjoined, as they are hereby enjoined, from using the word "Wigan" upon the khaki sold by it in
the Philippine Islands, and from otherwise representing its khaki to be of the "Wigan" brand. In
absolving the defendant from the claim for damages, the judgment will be affirmed. So ordered,
without costs.
G.R. No. L-78325 January 25, 1990
DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION, petitioners,
vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
INDUSTRIES, respondents.
Bito, Misa & Lozada for petitioners.
Reynaldo F. Singson for private respondent.
CRUZ, J.:
The petitioners are questioning the decision of the respondent court upholding the dismissal by
the trial court of their complaint against the private respondent for infringement of trademark and
unfair competition.
Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines. Both the Philippines and the United
States are signatories to the Convention of Paris of September 27, 1965, which grants to the
nationals of the parties rights and advantages which their own nationals enjoy for the repression
of acts of infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized
under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.
On October 27,1965, Del Monte authorized Philpack to register with the Philippine Patent Office
the Del Monte catsup bottle configuration, for which it was granted Certificate of Trademark
Registration No. SR-913 by the Philippine Patent Office under the Supplemental Register. 1 On
November 20, 1972, Del Monte also obtained two registration certificates for its trademark "DEL
MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. 3
4
This logo was registered in the Supplemental Register on September 20, 1983.
The product itself was contained in various kinds of bottles, including the Del Monte bottle, which
the private respondent bought from the junk shops for recycling.
Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain
of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte
filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle and that its
logo was substantially different from the Del Monte logo and would not confuse the buying public
to the detriment of the petitioners. 6
After trial, the Regional Trial Court of Makati dismissed the complaint. It held that there were
substantial differences between the logos or trademarks of the parties; that the defendant had
ceased using the petitioners' bottles; and that in any case the defendant became the owner of
the said bottles upon its purchase thereof from the junk yards. Furthermore, the complainants
had failed to establish the defendant's malice or bad faith, which was an essential element of
infringement of trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now faulted in this petition
for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in part as follows:
Sec. 22. Infringement, what constitutes. — Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services or identity of such business; or reproduce,
counterfeit copy or colorably imitate any such mark or trade name and apply such
reproduction, counterfeit copy or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in connection
with such goods, business or services, shall be liable to a civil action by the registrant
for any or all of the remedies herein provided.
Sec. 29 of the same law states as follows: In the challenged decision, the respondent court cited the following test laid down by
this Court in a number of cases:
Sec. 29. Unfair competition, rights and remedies. — A person who has identified in the
mind of the public the goods he manufactures or deals in, his business or services In determining whether two trademarks are confusingly similar, the two
from those of others, whether or not a mark or tradename is employed, has a property marks in their entirety as they appear in the respective labels must be
right in the goodwill of the said goods, business or services so identified, which will be considered in relation to the goods to which they are attached; the
protected in the same manner as other property rights. Such a person shall have the discerning eye of the observer must focus not only on the predorninant
remedies provided in section twenty- three, Chapter V hereof. words but also on the other features appearing on both labels. 9

Any person who shall employ deception or any other means contrary to good faith by and applying the same, held that there was no colorable imitation of the petitioners'
which he shall pass off the goods manufactured by him or in which he deals, or his trademark and logo by the private respondent. The respondent court agreed with the
business, or services for those of the one having established such goodwill, or who findings of the trial court that:
shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
In order to resolve the said issue, the Court now attempts to make a comparison of the two
products, to wit:
In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
1. As to the shape of label or make:

(a) Any person, who in selling his goods shall give them the general
Del Monte: Semi-rectangular with a crown or tomato shape design on top of
appearance of goods of another manufacturer or dealer, either as to the
the rectangle.
goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of their
appearance, which would likely influence purchasers to believe that the Sunshine: Regular rectangle.
goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such
2. As to brand printed on label:
appearance as shall deceive the public and defraud another of his legitimate
trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose; Del Monte: Tomato catsup mark.

(b) Any person who by any artifice, or device, or who employs ally other Sunshine: Fruit catsup.
means calculated to induce the false belief that such person is offering the
services of another who has identified such services in the mind of the
public; or 3. As to the words or lettering on label or mark:

(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated
to discredit the goods, business or services of another.
To arrive at a proper resolution of this case, it is important to bear in mind the following
distinctions between infringement of trademark and unfair competition.
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated "made in the Philippines
by Sunshine Sauce Manufacturing Industries" No. 1 Del Monte Avenue,
Malabon, Metro Manila.

(1) Infringement of trademark is the unauthorized use of a trademark, 4. As to color of logo:

whereas unfair competition is the passing off of one's goods as those of
another. Del Monte: Combination of yellow and dark red, with words "Del Monte
Quality" in white.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in
unfair competition fraudulent intent is essential. Sunshine: White, light green and light red, with words "Sunshine Brand" in
yellow.
(3) In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is not 5. As to shape of logo:
necessary. 8
Del Monte: In the shape of a tomato.
 Sunshine: Entirely different in shape.
6. As to label below the cap:
Del Monte: Seal covering the cap down to the neck of the bottle, with picture
of tomatoes with words "made from real tomatoes."
Sunshine: There is a label below the cap which says "Sunshine Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree with the conclusion that
there was no infringement or unfair competition. It seems to us that the lower courts have been
so pre-occupied with the details that they have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test of similarity. 10 Such
comparison requires a careful scrutiny to determine in what points the labels of the products
differ, as was done by the trial judge. The ordinary buyer does not usually make such scrutiny
nor does he usually have the time to do so. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were browsing in a library. Where the housewife
has to return home as soon as possible to her baby or the working woman has to make quick
purchases during her off hours, she is apt to be confused by similar labels even if they do have
minute differences. The male shopper is worse as he usually does not bother about such
distinctions.
The question is not whether the two articles are distinguishable by their label when set side by
side but whether the general confusion made by the article upon the eye of the casual purchaser
who is unsuspicious and off his guard, is such as to likely result in his confounding it with the
original. 11 As observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the attention such purchasers
usually give in buying that class of goods is the touchstone. 12
It has been held that in making purchases, the consumer must depend upon his recollection of
the appearance of the product which he intends to purchase. 13 The buyer having in mind the
mark/label of the respondent must rely upon his memory of the petitioner's mark. 14 Unlike the
judge who has ample time to minutely examine the labels in question in the comfort of his sala,
the ordinary shopper does not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark has been infringed, we
must consider the mark as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it. 15 The court therefore should
be guided by its first impression, 16 for a buyer acts quickly and is governed by a casual glance,
the value of which may be dissipated as soon as the court assumes to analyze carefully the
respective features of the mark. 17
It has also been held that it is not the function of the court in cases of infringement and unfair
competition to educate purchasers but rather to take their carelessness for granted, and to be
ever conscious of the fact that marks need not be identical. A confusing similarity will justify the
intervention of equity. 18 The judge must also be aware of the fact that usually a defendant in
cases of infringement does not normally copy but makes only colorable changes. 19Well has it
been said that the most successful form of copying is to employ enough points of similarity to
confuse the public with enough points of difference to confuse the courts. 20
We also note that the respondent court failed to take into consideration several factors which
should have affected its conclusion, to wit: age, training and education of the usual purchaser,
the nature and cost of the article, whether the article is bought for immediate consumption and
also the conditions under which it is usually purchased . 21Among these, what essentially
determines the attitude of the purchaser, specifically his inclination to be cautious, is the cost of
the goods. To be sure, a person who buys a box of candies will not exercise as much care as
one who buys an expensive watch. As a general rule, an ordinary buyer does not exercise as
much prudence in buying an article for which he pays a few centavos as he does in purchasing a
more valuable thing. 22 Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation. But mass products, low priced articles in wide use, and
matters of everyday purchase requiring frequent replacement are bought by the casual
consumer without great care. 23 In this latter category is catsup.
At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label
is a colorable imitation of the Del Monte trademark. The predominant colors used in the Del
Monte label are green and red-orange, the same with Sunshine. The word "catsup" in both
bottles is printed in white and the style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not normally copy out but only
makes colorable changes, employing enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a boundless choice of words,
phrases, colors and symbols sufficient to distinguish his product from the others. When as in this
case, Sunshine chose, without a reasonable explanation, to use the same colors and letters as
those used by Del Monte though the field of its selection was so broad, the inevitable conclusion
is that it was done deliberately to deceive .24
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as
between a newcomer who by the confusion has nothing to lose and everything to gain and one
who by honest dealing has already achieved favor with the public, any doubt should be resolved
against the newcomer inasmuch as the field from which he can select a desirable trademark to
indicate the origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is not guilty of infringement
for having used the Del Monte bottle. The reason is that the configuration of the said bottle was
merely registered in the Supplemental Register. In the case of Lorenzana v. Macagba, 26 we
declared that:
(1) Registration in the Principal Register gives rise to a presumption of the validity of
the registration, the registrant's ownership of the mark and his right to the exclusive
use thereof. There is no such presumption in the registration in the Supplemental
Register.
(2) Registration in the Principal Register is limited to the actual owner of the trademark
and proceedings therein on the issue of ownership which may be contested through
opposition or interference proceedings or, after registration, in a petition for
cancellation.
 Registration in the Principal Register is constructive notice of the registrant's claim of
ownership, while registration in the Supplemental Register is merely proof of actual
use of the trademark and notice that the registrant has used or appropriated it. It is not
subject to opposition although it may be cancelled after the issuance. Corollarily,
registration in the Principal Register is a basis for an action for infringement while
registration in the Supplemental Register is not.
(3) In applications for registration in the Principal Register, publication of the
application is necessary. This is not so in applications for registrations in the
Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual use of the bottle's
configuration, the petitioners cannot claim exclusive use thereof because it has not been
registered in the Principal Register. However, we find that Sunshine, despite the many choices
available to it and notwithstanding that the caution "Del Monte Corporation, Not to be Refilled"
was embossed on the bottle, still opted to use the petitioners' bottle to market a product which
Philpack also produces. This clearly shows the private respondent's bad faith and its intention to
capitalize on the latter's reputation and goodwill and pass off its own product as that of Del
Monte.
The Court observes that the reasons given by the respondent court in resolving the case in favor
of Sunshine are untenable. First, it declared that the registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's product. Second, it held that the Sunshine label
was not improper because the Bureau of Patent presumably considered other trademarks before
approving it. Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where this Court
declared that selling oil in containers of another with markings erased, without intent to deceive,
was not unfair competition.
Regarding the fact of registration, it is to be noted that the Sunshine label was registered not in
the Principal Register but only in the Supplemental Register where the presumption of the
validity of the trademark, the registrant's ownership of the mark and his right to its exclusive use
are all absent.
Anent the assumption that the Bureau of Patent had considered other existing patents, it is
reiterated that since registration was only in the Supplemental Register, this did not vest the
registrant with the exclusive right to use the label nor did it give rise to the presumption of the
validity of the registration.
On the argument that no unfair competition was committed, the Shell Case is not on all fours
with the case at bar because:
(1) In Shell, the absence of intent to deceive was supported by the fact that the
respondent therein, before marketing its product, totally obliterated and erased the
brands/mark of the different companies stenciled on the containers thereof, except for
a single isolated transaction. The respondent in the present case made no similar
effort.
(2) In Shell, what was involved was a single isolated transaction. Of the many drums
used, there was only one container where the Shell label was not erased, while in the
case at hand, the respondent admitted that it made use of several Del Monte bottles
and without obliterating the embossed warning.
(3) In Shell, the product of respondent was sold to dealers, not to ultimate consumers.
As a general rule, dealers are well acquainted with the manufacturer from whom they
make their purchases and since they are more experienced, they cannot be so easily
deceived like the inexperienced public. There may well be similarities and imitations
which deceive all, but generally the interests of the dealers are not regarded with the
same solicitude as are the interests of the ordinary consumer. For it is the form in
which the wares come to the final buyer that is of significance. 28
As Sunshine's label is an infringement of the Del Monte's trademark, law and equity call for the
cancellation of the private respondent's registration and withdrawal of all its products bearing the
questioned label from the market. With regard to the use of Del Monte's bottle, the same
constitutes unfair competition; hence, the respondent should be permanently enjoined from the
use of such bottles.
The court must rule, however, that the damage prayed for cannot be granted because the
petitioner has not presented evidence to prove the amount thereof. Section 23 of R.A. No. 166
provides:
Sec. 23. Actions and damages and injunction for infringement. — Any person entitled
to the exclusive use of a registered mark or trade name may recover damages in a
civil action from any person who infringes his rights, and the measure of the damages
suffered shall be either the reasonable profit which the complaining party would have
made, had the defendant not infringed his said rights or the profit which the defendant
actually made out of the infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty the court may award as
damages reasonable percentage based upon the amount of gross sales of the
defendant or the value of the services in connection with which the mark or trade
name was used in the infringement of the rights of the complaining party. In cases
where actual intent to mislead the public or to defraud the complaining party shall be
shown, in the discretion of the court, the damages may be doubled.
The complaining party, upon proper showing may also be granted injunction.1âwphi1
Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil
Code, which provides:
Art. 2222. The court may award nominal damages in every obligation arising from any
source enumerated in Art. 1157, or in every case where any property right has been
invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal
damages in the amount of Pl,000.00.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated December
24, 1986 and the Resolution dated April 27,1987, are REVERSED and SET ASIDE and a new
judgment is hereby rendered:
(1) Canceling the private respondent's Certificate of Register No. SR-6310 and
permanently enjoining the private respondent from using a label similar to that of the
petitioners.
(2) Prohibiting the private respondent from using the empty bottles of the petitioners
as containers for its own products.
 (3) Ordering the private respondent to pay the petitioners nominal damages in the
amount of Pl,000.00, and the costs of the suit.
SO ORDERED.
Narvasa Gancayco, Griño-Aquino and Medialdea, JJ., concur.
G.R. No. L-39889 February 8, 1934
SEINOSUKE OGURA, plaintiff-appellee,
vs.
SOTERO CHUA and TOMAS CONFESOR, as Director of the Bureau of Commerce and
Industry of the Philippine Islands, defendants-appellants.
Leodegario Azarraga for appellant Chua.
Office of the Solicitor-General Hilado for appellant Confesor.
Adolfo A. Scheerer for appellee.
IMPERIAL, J.:
This is an appeal taken by the defendants from the judgment rendered by the Court of First
Instance of Manila, the dispositive part of which reads as follows:
Wherefore, the preliminary injunction issued in this case, whereby the defendant, his
attorneys agents, and representatives, were enjoined from using, selling or offering for
sale, or advertising or dealing in any manner whatsoever, in any kind of ink under the
name and label of "Bonton", and which was dissolved upon the filing of a bond, is
hereby given full force and effect and declared final and permanent. The defendant
Sotero Chua is hereby ordered to submit to this court a true and correct accounting,
under oath, of all profits realized upon all sales or any other dispositon of ink
manufactured and sold or disposed of by him under the trademark "Bonton", for the
purposes required by law, and the Director of the Bureau of Commerce and Industry
of the Philippine Islands is hereby ordered to cancel the registration of the trademark
"Bonton", No. 10066, in the name of the defendant, Sotero Chua, with the costs
against said defendant Sotero Chua. So ordered.
This action was brought by the plaintiff, who is a Japanese citizen, for the recovery from the
defendant Sotero Chua of damages for having sold, in Manila and in the provinces, ink similar to
and with the same label as that which said plaintiff has already been selling long before in the
same market, thus, engaging in an unfair competition with the latter. The Director of the Bureau
of Commerce and Industry was included therein as a defendant for the purpose of compelling
him to cancel the registration of the other defendant's trademark in his office.
The material facts established during the hearing are clearly stated in the opinion of the trial
court as follows:
1. That on February 8, 1922, the plaintiff registered in the Patent Office in Japan the
trademark "Bonton" with the figure of a Japanese bird called "Kiukwan" (Exhibit D) for
use in the sale of ink, which trademark has been used on ink-bottles similar to Exhibit
C to which the label, bearing said trademark "Bonton" and the figure of the bird
"Kiukwan", is affixed.
2. That from the year 1927, the plaintiff's attorney in fact known and registered as
Matsui, Sawamatsu & Mori, a co-partnership doing business in the Philippine Islands
under the name of Osaka Bazar, has been selling in Manila ink in bottles with the
trademark "Bonton" and the figure of the bird "Kiukwan", similar to Exhibit C.
3. That in the year 1928, the Osaka Bazar sold hundreds of bottles of ink similar to
Exhibit C, in the provinces, as evidenced by Exhibits G, F, G-1, H, I, G-2, J, K, and L.
4. That on July 18, 1929, the Osaka Bazar imported from Japan ten (10) cases, Nos.
2154 to 2163, each containing 60 dozen bottles of "Bonton" ink, purchased from
Ogura & Co., which arrived in Manila on the S. S. President McKinley, Exhibits M and
O. From said shipment, a sample bottle, Exhibit N, with the trademark "Bonton" and
the figure of the bird "Kiukwan", was kept in the customhouse.
5. That in or about the month of September 1930 Matsui, Sawamatsu & Mori, in
representation of the plaintiff filed an application in the Bureau of Commerce and
Industry for the registration of the trademark "Bonton" with the figure of the bird
"Kiukwan", a sample of which was attached to the petition Exhibit Q. Said petition,
however, was denied because it was proved that on May 28, 1930, the defendant
Sotero Chua, without the knowledge of the plaintiff or of his attorney in fact, Matsui,
Sawamatsu & Mori, had registered an imitation of the trademark "Bonton" with the
figure of the bird "Kiukwan", a sample of which is attached to the certificate Exhibit P.
6. The plaintiff, through his representative in Manila, the said partnership Matsui,
Sawamatsu & Mori, filed a criminal complaint, case No. 42023 of this court, against
the defendant Sotero Chua, for having illegally obtained registration of the trademark
"Bonton" in his name, in violation of section 18 of Act No. 666. Said complaint,
however, was dismissed on the ground that, as the trial court stated in its decision,
"while it is true that there is a marked similarity in many respects between the
trademark "Bonton" used and registered by the accused (the defendant herein) in his
name, and the trademark "Bonton" of the Ogura Chemical Factory of Japan, and that,
according to the evidence of the prosecution, the Osaka Bazar has been importing ink
in bottles bearing the trademark "Bonton" from Japan, nevertheless, it does not
necessarily and conclusively follow from such premises alone that the accused had
maliciously averred in his petition for registration of the trademark that he was the sole
owner thereof, much less prove that he knew that the trademark in question was being
used by and belonged to the Ogura Chemical Factory of Japan, Exhibit T."
7. A mere glance at the plaintiff's ink bottle Exhibit C and at that of the defendant
Chua, Exhibit E, readily shows the perfect similarity between the former's trademark
and that of the latter. The colors of the paper and of the ink used on the labels in
question, the names, the type used, the quotation marks, the size and color of the
bottle and even the stopper, the figure of the bird, the little crown on its head and the
branch on which it poses, indeed, absolutely everything is the same in both
trademarks. The one and only difference between the two consists in that the type
used in the words "Best Writing Ink", appearing on the trademark of the defendant
Chua, is a little heavier than that used in the corresponding of the plaintiff's trademark,
and that instead of the name "The Ogura Chemical Factory" appearing on the
plaintiff's trademark, that of "Philippine Chemical Factory" appears on that of the
defendant. Except for this detail the imitation is absolutely perfect as may be
confirmed by a mere examination of both trademarks.
8. The defendant Sotero Chua has been selling ink in bottles with the trademark
similar to Exhibit E since the month of August or September, 1930. From that time on
 the plaintiff's sale of ink similar to Exhibit C has greatly decreased inasmuch as the remedy by injunction similar to that provided for in cases of violation of trademarks.
defendant sold the ink with the imitated trademark at a much lower price. This section applies in cases where the deceitful appearance of the goods, misleading
as to origin or ownership, is effected not by means of technical trademarks, emblems,
signs, or devices, but by the general appearance of the package containing the goods,
In view of said facts, there is no doubt but that the label or trademark used by the defendant
or by the devices or words thereon, even though such packages, devices, or words
Chua on the ink he has been selling during the period above stated is clearly similar to that
are not by law capable of appropriation as trademarks; and in order that the action
already in use by the plaintiff, and that said defendant imitated the
shall lie under this section, actual intent to deceive the public and defraud competitor
trademark in question and use it on his merchandise with the avowed purpose of deceiving and
may be inferred from similarity in the appearance of the goods as packed or offered
misleading the public to believe that he was selling the same kind of ink which the plaintiff had
for sale to those of the complaining party.
succeeded in placing on the market, thus openly engaging in an unfair competition with the
latter.
It will be noted that according to the foregoing provisions an action for unfair competition may be
brought not only by persons who have registered their trademarks but also by those who have
The defendants-appellants assign several alleged errors in their brief. However, the real
long been using them although they may not have registered the same, the plaintiff being
questions raised in this appeal are as follows: (1) Whether or not the plaintiff's action for unfair
included in the latter case. Therefore, this court is of the opinion that the plaintiff herein can
competition lies, notwithstanding the fact that he had not succeeded in obtaining registration of
validly maintain the action he has brought, notwithstanding the fact that he has not registered his
his trademark in the Bureau of Commerce and Industry; (2) whether or not the fraud now
trademark in the office of the other defendant.
attributed to Chua already constitutes res judicata on the ground that he had been acquitted in
the criminal case brought against him for violation of the trademark in question; and (3) whether
or not the plaintiff is entitled to the registration of his trademark notwithstanding the fact that he is With respect to the second point, it appears that the defendant Chua was prosecuted for
a foreign subject and has not proven that his country affords similar privileges to citizens of the violation of section 18 of Act No. 666 by reason of his having fraudulently registered his
United States and of the Philippine Islands. aforesaid trademark, falsely stating therein that he was the sole owner thereof although he was
fully aware that he was not the first to have used it in this market. The information was dismissed
for insufficiency of proof on the ground that it was not established that said defendant was fully
The defendants-appellant base their contention that the plaintiff cannot maintain his action, on
aware of the use of said trademark by the plaintiff, the offended party herein, in this market. It is
the provisions of section 4 of Act No. 666, as amended by section 1 of Act No. 3332, which read
clear that there can be no res judicata between the questions involved in the two cases. All the
as follows:
element necessary for the application of the doctrine do not exist, and above all, the question of
whether or not said defendant had engaged in an unfair competition had not been raised nor
SEC. 4. No action shall be brought for damages for the violation of the rights to use decided in the aforesaid criminal case.
trademarks defined in the preceding sections nor shall criminal proceeding be
entertained as provided in section six of this Act, unless it be first shown that the
In support of the last question the appellants cite section 11 of said Act No. 666, as amended by
trademark or trade-name alleged to have been violated or which gave rise to the
Acts Nos. 1407 and 2728, which provides that owners of trademarks residing in foreign country
criminal action has been duly registered in the Bureau of Commerce and Industry, in
may obtain registration of such trademarks in accordance with the provisions of the law, only
accordance with the provisions of this Act.
when it is shown that said foreign country affords similar privileges to the citizens of the United
States or of the Philippine Islands. It is contended that inasmuch as the plaintiff has not proven
They contend that according to said section, it is necessary that a trademark should first be that his country affords similar rights and privileges to America and Filipino citizens, he cannot
registered before an action can be brought thereon. We agree with the trial court that the obtain registration of his trademark. In answer to this argument, suffice it to say that this is not a
provisions of the afore-cited section refer exclusively to actions based on the violation of the case involving an application for the registration of the plaintiff's trademark inasmuch as such
rights to use trademarks. However, the action brought by the plaintiff is not based on any remedy has not been prayed for in his complaint. The additional remedy prayed for and granted
violation or infringement of such rights but on fraudulent and unfair competition committed by the to him by the court was the cancellation of the registration obtained by Chua on the ground that
defendant Chua in imitating the former's trademark and introducing his to the public as if it were it was fraudulent.
the same as the plaintiff's. This action is governed by the provisions of section 7 of Act No. 666,
as amended by section 1 of Act No. 3423. Said section reads as follows:
Wherefore, the judgment appealed from is hereby affirmed, with the costs against the
appellants. So ordered.
SEC. 7. Any person who in selling his goods shall give them the general appearance
of goods of another manufacturer or dealer, either in the wrapping of the packages in
G.R. No. L-8937 March 21, 1914
which they are contained, or the devices or words thereon, or in the manner of their
manufacture, or in any other feature of their appearance, which be likely to influence
purchasers to believe that the goods offered are those of a manufacturer or dealer ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO., plaintiff-appellee,
who holds a duly registered patent therefor or who has long been accustomed to vs.
manufacture or sell such goods and who is other than the actual manufacturer or PEDRO N. MOJICA, defendant-appellant.
dealer, and who clothes the goods with such appearance for the purpose of deceiving
the public and depriving another of his legitimate trade, or any subsequent vendor of
Jose Varela y Calderon for appellant.
such goods or any agent of any vendor engaged in selling such goods with a like
Rohde & Wright for appellee.
purpose, shall be guilty of unfair competition, and shall be liable to an action for
damages, in which the measure shall be the same as that provided for a violation of a
trademark rights, together with discretionary power in the court to impose double MORELAND, J.:
damages if the circumstances call for the same. The injured party may also have a
This is an appeal from the judgment of the Court of First Instance of city of Manila declaring that
the cigar bands or rings attached to the complaint and those in evidence used by the defendant
upon his cigars bear such a close resemblance to those used on the cigars of the plaintiff that,
taken together with other circumstances, their use constituted unfair competition, and forever
prohibiting the defendant from using said bands or rings.
It appears from the evidence that the plaintiff has been manufacturing cigars of a certain kind
and form for a long period of years and during that time has used upon said cigars a paper ring
or band of a chocolate-brown color, with letters and lines upon it in gold. This ring or band,
having been used by the plaintiff for many years, had become well- known to the trade and was
of great value in the sale of its cigars.
Within the last year or two the defendant commenced to use a band or ring very similar to that of
the plaintiff, and it is upon this use that the present action is founded.
The band or ring of the plaintiff is of a dark brown color, about seven-sixteenths of an inch wide,
and divided into three parts or divisions by gold lines. In the first division is the word "Manila" in
capital letters of gold. In the second or middle division are two words, "Excelentes" and
"Alhambra," the former being above the latter, and the word "Alhambra" being enclosed in
quotation marks. In the third or last division or part are the capital letters "A. C. Cy.," of the same
size as are used in the word "Manila."
The bands or rings of the defendant, so far as they appear in the evidence, are of two different
colors but of the same shape and with substantially the same markings. they are about one-half
of an inch wide and, like those of the plaintiff, are divided into three parts. In the first part is the
word "Manila" in capital letters of the same form and of substantially the same size as used by
plaintiff are the words "Excelentes" and "La Progresiva," the former being above the latter and
the latter two words being enclosed in quotation marks. Here, again, the words "Excelentes" and
"La Progresiva" are in capital letters of the same form and of substantially the same size as used
by the plaintiff in the words "Excelentes" and "Alhambra." In the third or last division are the
words "I. Luzon." In another band used by the defendant we have the same style with the
exception of color, with the same kind of lines and divisions and the same markings, with the
exception that the word "Excelentes" is substituted by the words "Best Quality." The color of
defendant's bands, as shown by the exhibits, is either a brown exactly the shade of plaintiff's or
green with gold lines and gold letter marking s as already stated. The cigars sold by the
defendant with the bands described, whether of brown or of green, are formed almost exactly
like the cigars sold by the plaintiff, and with substantially the same color and style of wrapper.
In determining whether or not the defendant is guilty of unfair competition in using the bands, we
have the right and it is our duty to take into consideration all of the other features of the articles
offered for sale to ascertain whether, when taken together with the limited band, there is
likelihood that the public may be deceived as to the article it is purchasing. It is clear that, the
cigars having substantially the same appearance and color, the same size, the same shape, and
the same style and color of band, the deception is not only possible but is very probable. the
cigar put out by the defendant, taken as a whole, disarms and deceives the purchaser who is
desirous of purchasing cigars of plaintiff.
Section 7 of Act No. 666 reads:
Any person who is selling this goods shall given them the general appearance of
goods of another manufacturer or dealer, either in the wrapping of the packages in
which they are contained, or the devices of words thereon, or in any other feature of
their appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, and who clothes the goods with such appearance for the
purpose of deceiving the public and defrauding another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any other engaged in selling such
goods with a like purpose, shall be guilty of unfair competition, and shall be liable to an
action for damages, in which the measure shall be the same as that provided for a
violation of trademark rights, together with discretionary power in the court to impose
double damages, if the circumstances call for the same. The injured party may also
have a remedy by injunction similar to that provided for in cases of violation of
trademarks. This section applies in cases where the deceitful appearance of the
goods, misleading as to origin or ownership, is effected not by means of technical
trademarks, emblems, signs, or devices, but by the general appearance of the
package containing the goods, or by the devices or words thereon, even though such
packages, devices, or words are not by law capable of appropriation as trademarks;
and in order that the action shall lie under this section, actual intent to deceive the
public and defraud a competitor shall affirmatively appear on the part of the person
sought to be made liable, but such intent may be inferred from similarity in the
appearance of the goods as packed or offered for sale to those of the complaining
party.
The court found that: "An examination of the rings used upon the cigars by the defendant as
appears from the evidence in connection with the ring which the plaintiff has adopted and has
used for a long period of time before used by the defendant shows that there can be no doubt
but that those used by the defendant are similar to the mark used by plaintiff ands that they
would tend to deceive any purchaser using ordinary care in making a purchase. They are so
similar, packed as they are in a box, that one would have to examine closely the reading upon
the rings in order to distinguish the difference."
Unfair competition consists in passing off or attempting to pass off upon the public the goods or
business of one person as and for the goods or business of another. It consists essentially in the
conduct of a trade or business in such a manner that there is either an express or implied
representation to that effect. It may be stated broadly that any conduct the end and probable
effect of which is to deceive the public or pass off the goods or business of one person as and
for that of another, constitutes actionable unfair competition. Unfair competition, as thus defined,
is a legal wrong for which the courts afford a remedy. It is a tort and a fraud. The basic principle
is that no one has a right to dress up his goods or otherwise represent them in such a manner as
to deceive an intending purchaser and induce him to believe he is buying the goods of another.
Protection against unfair competition is not intended to create or foster a monopoly and the court
should always be careful not to interfere with free and fair competition, but should confine itself,
rather, to preventing fraud and imposition resulting from some real resemblance in made or
dress of goods. Nothing less than conduct tending to pass off one man's goods or business as
that of another will constitute unfair competition. Actual or probable deception and confusion on
the part of customers by reason of defendant's practices must always appear.
Relief against unfair competition is properly afforded upon the ground that one who has built up
a good will and reputation for his goods or business is entitled to all the benefits therefrom. Such
good will is property and, like other property, is protected against invasion. Deception of the
public injures the proprietor of the business by diverting his customers and depriving him of
sales which he otherwise would have made. This, rather than the protection of the public against
imposition, is the true basis for the private remedy, although it is often said that the remedy
proceeds in part upon the theory of protection to the public against fraud. No one has a right to
avail himself of another's favorable reputation in order to sell his own goods. A demand for
goods created belongs to the advertiser and he will be protected therein against unfair
competition by another who seeks in any way to take advantage of such advertisements to sell
his own goods.
In order to make it a case of unfair competition it is not necessary to show that any person has
been actually deceived by defendant's conduct and lead to purchase his goods in the belief that
they are the goods of plaintiff, or to deal with defendant thinking that he was dealing with plaintiff.
It is sufficient to show that such deception will be the natural and probable result of defendant's
acts. Either actual or probable deception and confusion must be shown, for if there is no
probability of deception there is no unfair competition. As in the case of infringement by imitation
of another's trademark, the true test of unfair competition is whether the acts of defendant are
such as are calculated to deceive the ordinary buyer making his purchases under the ordinary
conditions which prevail in the particular trade to which the controversy relates. This has been
said to include incautious, unwary or ignorant purchasers, but not careless purchasers who
make no examination. The fact that careful buyers, who scrutinize closely, are not deceived,
merely shows that the injury is less in degree. It does not show that the re is no injury . The fact
that careless purchasers are deceived simply by the use of ordinary and common forms of
putting up goods does not show unfair competition. The class of purchasers who buy the
particular kind of article manufactured, such as servants or children, upon the one hand, or
persons skilled in the particular trade, upon the other, must be considered by determining the
question of probable deception. Purchasers may be deceived and misled into purchasing the
goods of one person under the belief that they are purchasing the goods of another person
whose goods they intended to buy although they do not know who is the actual proprietor of the
genuine goods. They are so deceived when they have in mind to purchased goods coming from
a definite, although unknown, with which goods they are acquainted, although they neither know
nor care who is the actual proprietor of such goods. the ultimate purchaser is the one in view
and it is sufficient if he is liable to be deceived.
No inflexible rule can be laid down as to what will constitute unfair competition. Each case is, in
a measure, a law unto itself. Unfair competition is always a question of fact. The question to be
determined in every case is whether or not, as a matter of fact, the name or mark used by the
defendant has previously come to indicate and designate plaintiff's goods, to state it in another
way, whether defendant, as a matter of fact, is, by his conduct, passing off defendant's goods as
plaintiff's goods or his business as plaintiff's business. The universal test question is whether the
public is likely to be deceived.
It is often said that a fraudulent intent on the part of defendant to pass off his goods or business
as or for that of plaintiff is necessary to constitute unfair competition. We think the better view is,
however, that an actual fraudulent intent need not be shown where the necessary and probable
tendency of defendant's conduct is to deceive the public and pass off his goods or business as
and for that of another, especially where the only preventive relief against continuance of the
wrong is sought or granted. Even if the resemblance is accidental and not intentional, plaintiff is
entitled to protection against its injurious results to his trade.
Under the evidence in this case there is no doubt whatever in our minds that the use of the
chocolate-colored bands by the defendant, taken together with the other circumstances under
which the article in question is sold, constitutes unfair competition. We do not believe, however,
that the complaint against the green band is well founded. That is clearly and easily
distinguishable from the band used by the plaintiff; and the ordinary purchaser of plaintiff's goods
would be able, at a glance, to distinguish defendant's cigars, when surrounded by the green
band, from those of plaintiff.
The judgment appealed from is affirmed in all particulars except that with reference to the green
band, and in that regard is reversed; with costs against the appellant.
G.R. No. L-6623 January 26, 1912
INCHAUSTI & COMPANY, plaintiffs-appellees,
vs.
SONG FO & COMPANY, ET AL., defendants-appellants.
Chicote & Miranda, for appellants.
Haussermann, Cohn & Fisher for appellees.
CARSON, J.:
This is a suit brought under the provisions of Act No. 666 of the Philippine Commission, in which
the plaintiffs seek to enjoin the defendants in the use of a certain trade-mark, and for damages
consequent upon the alleged illegal use of the same. The plaintiff company is a general
partnership duly organized under the laws of the Philippine Islands and is the owner of a
distillery in the city of Manila known as the "Destileria de Tanduay." The defendants are the
members of a general partnership duly organized according to the provisions of law, and are the
owners and operators of a distillery in the city of Manila known as the "Destileria La Tondeña."
Both firms are extensively engaged in the manufacture and sale of alcoholic liquors.
On October 6, 1903, plaintiffs caused to be registered in the division of archieves, patents,
copyrights and trademarks of the Government of the Philippine Islands a trade-mark for
"anisados y alcoholes" as shown by Exhibit B. A sample or facsimile of this trade-mark is a part
to be a circular design inclosed within two concentric circles with the symbol of a demijohn in the
center; across the face of the design, running in a horizontal direction are two parallel lines, and
between these lines the word "Tanduay" is placed thus: TANDUAY; this horizontal design serves
to divide the trade-mark into an upper and lower section; in the upper part between the two
circles appears the word "Inchausti" and in the lower arc of the design in a similar position is the
word "Compañia." "Y" appears just underneath the symbol of the demijohn within the smaller
circle. Labels bearing this trade-mark were affixed to the corks used by plaintiff in the bottling of
their products.
The defendants since 1906 have been using, among other labels, affixed to the corks used in
the bottling of their products, a circular label bearing a design substantially similar to the
registered trade-mark of plaintiffs. It is a label of practically the same size as that of plaintiffs. It
main features are two concentric circles having the symbol of demijohn in the center; running
across the face of the inner circle is a horizontal design similar to the plaintiffs' registered trade-
mark in which is written the abbreviation for factory, thus: FACT. The main difference in the two
horizontal designs lies in the fact that in plaintiffs' registered trade-mark the horizontal design
passes across the entire face of both circles, while in the trade-mark used by the defendants the
horizontal design passes only across the face of the inner circle. The wording of the two designs
is different, but the general position of the wording is the same in both designs. The trade-marks
appear to have been used in different colors and for the same purpose by both parties. The
trade-mark used by defendants is shown in Exhibits C, CC, and CCC of the record. These trade-
marks are the same in general design, but vary in color and wording.
Reference to the certificate of registration (Exhibit B) which was granted to the plaintiff company
by the division of archives, patents, copyrights and trade-marks of the Government of the
Philippine Islands and to the facsimile copy of the trade-mark filed therewith shows that all the
requirements of law were duly complied with, and that all the statements and declarations
relating thereto, together with facsimile copies of the trade-mark, were duly registration
proceedings. The facsimile of the trade-mark which was presented for registration and which is
affixed to the copy of the registration proceedings (Exhibit B) is substantially identical in all
respects to the trade-mark shown in Exhibit A. It is maintained with considerable zeal in
appellants' brief that the description of the trade- mark as shown in the registration proceedings
is not an accurate description of all details of the trade-mark claimed by appellees (Exhibit A)
and that the granting of a certificate of registration for the trade-mark described in Exhibit B
would not cover plaintiffs' trade-mark (Exhibit A). To determine this point we do not look alone to
the description given in the registration proceedings; we must look to the whole record. A
facsimile copy of the trade-mark sought to the registered was filed with the registration office,
and it is now a part of the certified copy of the registration proceedings (Exhibit B) before us. As
we have already stated, this facsimile copy which is an integral part of the registration records is
substantially identically in all respects to plaintiffs' trade-mark (Exhibit A). We do not feel
therefore that it is necessary to discuss appellants' contention that the description as given in the
registration proceedings does not in all of its details cover plaintiffs' Exhibit A. The certified
facsimile speaks for itself, and this together with the description is conclusive upon this point.
Defendants' counsel insist that Inchausti & Co. did not have the right to adopt as their exclusive
trade-mark the design shown in Exhibit A, and that it was error on the part of the lower court to
adjudge that they had such a right.
In support of this contention they rely upon the generally accepted the rule that a symbol which
represents something in universal use by the public generally, or by a particular class of people,
is not the subject of an exclusive trade-mark. It is shown by Exhibit 9 that many other firms and
business houses in the Philippine Islands use circular labels; some of these having designs of
which two or more concentric circles form a constitute element, others having horizontal lines
across the face of a circular design somewhat similar to plaintiffs' design in this respect. It is
urged that the demijohn is the only distinguishing element in plaintiffs' trademark upon which
they could have been granted an exclusive trade-mark; and it is further contended that a
demijohn being well-known and generally used receptacle for alcoholic liquors, and being
universally used by the distilling trade, plaintiffs for that reason are not entitled to the use of the
same as a distinguishing symbol and trade-mark for their products. Many citations are given in
support of this contention, and we do not question the soundness of the doctrine laid down in
most of these cases.
But the plaintiffs are entitled to the exclusive use of the above-described trade-mark upon their
products does not seem to us to be open to question. While the symbol of the demijohn alone
might not be the subject of an exclusive trade-mark, yet we think that the demijohn used as it is
in plaintiffs' trade-mark in combination with the other distinguishing elements therein may fairly
be made the subject of an exclusive trade-mark. The component elements of a design are not to
be considered separate and apart; we must look to the design as a whole; to the combination of
those component elements. We are of opinion that the design shown in Exhibit A is the subject
of an exclusive trade-mark, and that the plaintiffs have the exclusive ownership and right of use
in the same by reason of the registration thereof and their use of this trade-mark in the sale of
their products for many years.
We are now to consideration of the question whether or not the trade-marks used by defendants
shown in Exhibits C, CC, and CCC are infringements of plaintiffs' registration trade-mark. The
court below predicated its decision upon sections 3 and 4 of Act No. 666 of the Philippine
Commission. These sections relate to the violation of trade-mark rights and to remedies
thereunder. Among the other provisions of section 3 of the trade-mark law is the following:
. . . any person entitled to the exclusive use of a trade-mark to designate the origin or
ownership of goods he has made or deals in may recover damages in a civil action
from any person who has sold goods of a similar kind, bearing such trade-mark, . . . .
The section further provides for the method of determining the damages, and also concedes to
the injury party the right to have an injunction restraining the further use of the trade-mark. The
court below was evidently of the opinion that the trade-mark used by the defendants not only
closes simulated the registered trade-mark of plaintiffs, but that they were in reality one in the
same trade-mark and that the defendants were guilty of selling goods of a similar kind to those
sold by plaintiffs and bearing the registered trade-mark used by plaintiffs. An examination of the
two trade-marks in question reveals a striking similarity in the two designs, but we are not
prepared to say that the likeness is such that the two designs be considered one and the same
trade-mark. And unless there is such a close resemblance as to result in this conclusion the
action does not properly fall within the provisions of section 3 of the Trade-Mark Law. The
reasoning of the opinion of the trial judge, however, does not in any way affect the merits of the
issues involved in the case submitted, nor the judgment actually entered by him. Section 7 of the
Trade-Mark Law provides as follows:
Any person who in selling his goods shall give them the general appearance of the
goods of another manufacturer or dealer, either in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, and who clothes the goods with such appearance for the
purpose of deceiving the public and defrauding another of his legitimate trade . . . shall
be guilty of unfair competition, and shall be liable to an action for the damages . . . and
in order that the action shall lie under this section, actual intent to deceive the public
and defraud a competitor shall affirmatively appear on the part of the person sought to
be made liable, but such intent may be inferred from similarity in the appearance of
the goods as packed or offered for sale to those of the complaining party.
It will be seen that the measure of damages is to be determined in the same way as that
provided in section 3, and the right of the complaining party to an injunction is the same as that
provided for in cases of the violation of a trade-mark. The facts alleged in the complaint and
proven at the trial sustain a judgment under either of these sections of Act No. 666. Section 3
relates to the actual use of the trade-mark of another, while section 7 relates to unfair
competition, where a manufacturer or dealer by the wrappings on a package, or by the words or
devices thereon, or by any other feature of their appearance gives his goods the appearance of
those of another manufacturer or dealer with the intent to deceive the public or defraud such
other dealer or manufacturer out of his legitimate trade. For reasons already stated we are of the
opinion that the present case comes within the provisions of section 7 of the Trade-Mark Law.
We come now to apply the facts of the case to the provisions of law as they are set forth in
section 7 of said Act No. 666. An examination of the labels used by the parties to this action
shows that they are strikingly similar in their general design and appearance. We have already
had occasion in the course of this opinion to give a rather minute description of both designs,
and as facsimile copies of the same appear in the record we have had the opportunity to
examine them. There are some details in which the two trade-marks vary, but in many and
indeed in most important and essential details they are identical. Both designs have the
demijohn as a central surrounded by two concentric circles. The horizontal planes which pass
over the face of both designs differ only in length; in plaintiffs' design this plane terminates in the
circumference of the outer circle, while in that of the defendants it terminates in the
circumference of the inner circle. We can not escape the conclusion that the two trade-mark are
so nearly alike in design and general appearance that only the most careful examination could
detect that they were not in fact the same. Such an examination discloses the points of
difference, but it is to be remembered that the purchasing public has, ordinary, no such
opportunity to make such an examination nor is there any reason to impose such an obligation
on the public. In the case of U. S. vs. Manuel (7 Phil. Rep., 221) this court said:
The true test of unfair competition is whether certain goods have been intentionally
clothed with an appearance which is likely to deceive the ordinary purchaser
exercising ordinary care, and not whether a certain limited class of purchasers with
special knowledge not possessed by the ordinary purchaser could avoid mistake by
the exercise of this special knowledge.
A person thoroughly familiar with the details of design in plaintiffs' trade-mark, and exercising
special care in examining the goods offered for sale and the wording used on the trade-mark,
would hardly be deceived by the trade-mark used by the defendants. It certainly could be only in
the exercise of such careful scrutiny as this, however, that an intending purchaser could assure
himself that the two labels were different. We are satisfy beyond a reasonable doubt that the
similarity of the two labels, and the further fact that the are affixed in the same way by both
parties to the corks used in the bottling of their products, would be the means of influencing the
purchaser to believe that the goods offered by the defendants were those of plaintiff's
manufacturer. We are of opinion that the charge of unfair competition is fully sustained by the
record. The similarity in the appearance of the goods as packed and offered for sale is so
striking that we are unable to attribute this fact to anything other than an intent on the part of
defendants to deceive the public and defraud plaintiffs out of their legitimate trade, and in this
case we infer such intent from the likeness of the goods so packed and offered for sale.
The lower court directed that the defendants render an account to the plaintiffs of the profits
which they had derived from the sale of their alcoholic liquors under the trade-mark in question,
in accordance with the provisions of the Trade-Mark Law. It appears, however, that the parties
hereto have agreed, for the purpose of this appeal, that the measures of profits shall be
reckoned at the sum of P1,000. The judgment of the lower court is therefore affirmed, except in
so far as it makes provisions for the taking of an account, and in so far as it thus provides for the
taking of an account, the judgment, in according with the agreement of the parties on appeal, is
modified by substituting therefor judgment in favor of the plaintiffs and against the defendants for
the sum of P1,000. The costs of the proceedings in both instances are allowed in favor of the
plaintiff company and against the defendants.
Torres, Mapa, Johnson, Moreland and Trent, JJ., concur.
Elements of trademark infringement
G.R. No. L-19906 April 30, 1969
STERLING PRODUCTS INTERNATIONAL, INCORPORATED, plaintiff-appellant,
vs.
FARBENFABRIKEN BAYER AKTIENGESELLSCHAFT, and ALLIED MANUFACTURING
AND TRADING CO., INC., defendant-appellants.
SANCHEZ, J.:
In this, a case for trademark infringement and unfair competition, each of the principal suitors,
namely, plaintiff Sterling Products International, Inc.,1 and defendant Farbenfabriken Bayer
Aktiengesellschaft,2 seeks to exclude the other from use in the Philippines of the trademarks
BAYER and BAYER CROSS IN CIRCLE. SPI asks this Court to strike down FBA's registration
of BAYER CROSS IN CIRCLE covering industrial and agricultural products — insecticides and
other chemicals, not medicines — from the supplemental register. FBA, for its part, prays for the
cancellation from the principal register of SPI's certificates of registration of the trademarks
aforesaid for medicines.
Contending parties are doing business in the Philippines. SPI markets Bayer Aspirin, Aspirin for
Children and Cafiaspirina. The BAYER and BAYER CROSS IN CIRCLE are being used by SPI
in the Philippines only for said products — Bayer Aspirin, Cafiaspirina and Bayer Aspirin for
Children. On the containers (bottles or printed celophane strips, which, in turn, are placed in
cardboard boxes) of Bayer Aspirin, Aspirin for Children and Cafiaspirina, SPI features the
trademarks BAYER and BAYER CROSS IN CIRCLE. FBA thru Allied Manufacturing & Trading
Co., Inc.3 distributes "Folidol" and other industrial and agricultural chemicals. FBA's "Folidol" (in
steel or fiber drums or aluminum containers) displays a replica of SPI's trademark BAYER
CROSS IN CIRCLE; on the tin cap and label of the container.
The conflict apparent, suit followed.
The trial court declared itself "in favor of the solution that favors division of the market rather than
monopoly." But to avoid confusion, it directed defendants "to add a distinctive word, or words in
their mark to indicate that their products come from Germany." The judgment below reads:
IN VIEW WHEREOF, both complaint and counterclaim are dismissed without costs; the Court
sustains plaintiff's right to use the Bayer trademark for its medicines, and defendants' right to use
it for chemicals, insecticides, and other products not medicines, but the Court orders defendants
to add a distinctive word or words in their mark to indicate that their products come from
Germany.4
Both parties appealed: Plaintiff, insofar as the judgment "dismisses plaintiff's complaint and
sustains defendants' right to use the BAYER trademark for their chemicals, insecticides, and
other products not medicines";5 and defendants, from the portions of the aforementioned
decision particularly those which dismiss the counterclaim of the defendants for the cancellation
of the registrations by the plaintiff of the trademarks Bayer and Bayer Cross and which allow the
plaintiff "to continue using the Bayer trademarks for medicines."6
And now to the facts.
The word BAYER was the surname of Friedrich Bayer, a German, who, on August 1, 1868,
organized a drug company bearing his name — Friedr Bayer et comp. — at Barmen, Germany.
The company was at first engaged in the manufacture and sale of chemicals. At about the year
1888 it started to manufacture pharmaceutical preparations also. A change of name from Friedr
Bayer to Farbenfabriken vorm. Friedr. Bayer & Co. (FFB, for short) effective July 1, 1881 was
followed in 1912 by a change of principal place of business from Elberfeld to Luverkusen,
Germany.7 Its products came to be known outside Germany. With the discovery in 1899 of the
Bayer Aspirin, the mark BAYER acquired prestige. The time was ripe to register the trademarks.
The record, however, does not clearly show when the word BAYER was registered as a
trademark in Germany. The BAYER CROSS IN CIRCLE trademark was registered in Germany
on January 6, 1904 — No. 65777.8 It was intended to be used on "medicines for human beings
and animals, disinfectants preservatives, tar dyestuffs and chemical preparations for dyes and
for photographic purposes."9 This registered trademark consists of the BAYER CROSS encircled
by the company's name Farbenfabriken vorm. Friedr. Bayer & Co. Elberfeld.
When the company was merged with other German companies in 1925 to form the I.G.
Farbenindustrie, the name of the former company was deleted from the trademark and what
remained was the present BAYER CROSS IN CIRCLE. A new registration was effected on June
17, 1929 in Germany and for which it was issued a certificate with serial no. 404341. The
trademark BAYER CROSS IN CIRCLE was registered by FFB and its subsidiaries in other parts
of the world, viz, in Norway, England, Denmark, and Argentina in 1904; in Japan and the United
States in 1908; in Spain in 1911; in Peru in 1913.
Sometime in 1895, FFB established a subsidiary in New York, United States. It was named
Farbenfabriken of Elberfeld Co. Its purpose was to sell FFB's products in the United States and
Canada. It was this subsidiary that registered the trademarks BAYER and BAYER CROSS IN
CIRCLE in the United States between the years 1907-1908.
Sometime in 1913, FFB organized another subsidiary — The Bayer Co., Inc. of New York. This
new subsidiary was authorized by FFB to negotiate for and acquire the trademarks, goodwill,
assets and property of Farbenfabriken of Elberfeld Co. By an agreement dated June 12, 1913
(Exh. 106) Bayer of New York purchased for the sum of US $750,000.00 Farbenfabriken of
Elberfeld Co.'s "right for the sale in the United States and Canada of the drugs, chemicals,
pharmaceuticals and any and all other products and articles manufactured and (or) controlled by
Leverkusen" (FFB) and its "trademarks, good will and other assets and property."
On April 6, 1917,10 the United States declared war on Germany. Pursuant to the provisions of
the Trading with the Enemy Act, the Alien Property Custodian classified The Bayer Co., Inc. of
New York as an enemy-controlled corporation. Hence, the Alien Property Custodian seized its
assets about the early part of 1918. Between December 1918 and January 1919, all the assets
of The Bayer Co., Inc. of New York were sold by the Alien Property Custodian to Sterling Drug,
Inc. for the sum of US $5,310,000.00. The Bayer Co., Inc. of New York then became a
subsidiary of Sterling Drug, Inc. Winthrop Chemical Co., Inc. was later organized as a new
subsidiary of Sterling Drug, Inc. to manufacture and sell the physicians' drugs which had been
acquired" by the purchase of the Bayer Co., Inc. Winthrop's operation was evidently hampered
because 'the Germans had kept manufacturing processes secret, so that the manufacture of
physicians' drugs on a commercial scale became an almost insoluble problem. 11
Sterling Drug, Inc. secured registrations of the BAYER trademarks in different countries of the
world.12
It would appear that the trademark BAYER for medicines was known in the Philippines about the
close of the 19th century. This appears on page 88 of the Revista Farmaceutica de Filipinos Año
I, Numero 7, 3 de Julio de 1893. Before World War I, BAYER products entering the Philippines
came from Germany.
In 1922, a worldwide conflict of interests occurred between Farbenfabriken vorm. Friedrich
Bayer & Co. and The Bayer Co., Inc. of New York, in reference to the trademarks BAYER and
BAYER CROSS IN CIRCLE as they were applied to various products.
Two agreements resolved this conflict, both executed on April 9, 1923 in London, England: one,
between FFB and Winthrop Chemical Co., Inc. (Exh. 66), and the other between FFB and Bayer
New York (Exh. WWW). Under the terms of the agreement with Winthrop Chemical Co., Inc.,
FFB stipulated, amongst others: (1) not to contest anymore Winthrop's right over the trademarks
BAYER and BAYER CROSS IN CIRCLE; (2) to discontinue the use of said trademarks in the
United States which was understood to include the Philippines under par. 16 of said agreement;
and (3) to disclose all secrets of other processes relating to the manufacture of pharmaceuticals.
Paragraph 26 of the FFB — Bayer New York agreement reads —
26. NEW YORK (The Bayer Company, Inc. of New York) agree that they will not sell or offer for
sale any goods other than hereunder or those they may market for Winthrop as hereinbefore
provided and other than Aspirin and compounds of Aspirin which New York shall continue to
market for their own account in the United States of America, Puerto Rico, the Philippines and
Hawaiian Islands and the Panama Zone.13
In 1925, Farbenfabriken vorm. Friedrich Bayer & Co. became I.G. Farbenindustrie, AG. This
necessitated a new agreement incorporating Exh. 66 with modifications. Said new agreement
was signed on November 15, 1926 between I.G. Farbenindustrie and Winthrop.
On September 5, 1941, in the anti-trust suits against Sterling Drug, Inc., Winthrop Chemicals Co.
and The Bayer Co., of New York, two consent decrees [Exh. 68 (No. 15-363) and Exh. 69: (No.
15-364)] were promulgated by the U.S. District Court for Southern New York. Said consent
decrees declared the April 9 1923, cartel agreements violative of the U.S. anti-trust laws. One
reason given is that the German company, FFB (later I.G. Farbenindustrie) — FBA's
predecessors — was excluded from the U.S. pharmaceutical market. The sentence, however,
contains a saving clause, thus —
The Bayer contract of 1923, the Bayer contract of 1926, and any and all amendments or
supplements thereto are declared and adjudged to be unlawful under the Anti-Trust Laws of the
United States, and the defendants Bayer and Sterling, and their respective successors an
subsidiaries, or any of them, be and they are hereby enjoined and restrained from carrying out or
enforcing any of the aforesaid contracts, or any supplements, amendments or modifications
thereof, or from paying to I.G. Farben, its subsidiaries, successors, or assigns, any royalties or
share of profits pursuant to said contracts with respect to sales following the effective date of this
decree.
Provided, however, that nothing herein contained in this Sec. III shall:lawphi1.nêt
xxx xxx xxx
Affect in any way the rights or title of the defendant Bayer, its successors, subsidiaries or
assigns, in or to the name "Bayer" and the "Bayer Cross" mark or registrations thereof, or
Affect or diminish any right, title or interest of said defendants, their successor subsidiaries or
assigns, in or to or under any heretofore acquired and presently existing patents, patent
applications, patent licenses, trade-marks, trade-names (such as the name "Bayer" and the
"Bayer Cross" mark and registrations thereof), processes or formulae relating to the
manufacturing, processing, use or sale of aspirin, aspirin compounds, pharmaceutical or other
drug or chemical products, or impair any rights or remedies of said defendants, their successors,
subsidiaries or assigns, provided by statute or convention, and by suits for damages, injunction
or other remedy with respect to any such patents, patent applications, patent licenses or
trademarks....14
Meanwhile, in 1935, plaintiff Sterling Products International, Inc. (SPI) a Delaware corporation, a
subsidiary of Sterling Drug, Inc. of New York, was issued a license to do business in the
Philippines.15 The trademarks BAYER and BAYER CROSS IN CIRCLE were then registered in
the Philippines under the old Trademark Law (Act 666) by The Bayer Co., Inc.; the BAYER
CROSS IN CIRCLE trademark on April 18, 1939 for which it was issued Certificate of
Registration No. 13081; the BAYER trademark on April 22, 1939 for which it was issued
Registration Certificate No. 13089. These trademark rights were assigned to SPI on December
30, 1942 and the assignment was recorded in the Philippines Patent Office on March 5, 1947.
With the passage of Republic Act 166 repealing the old Trademark Law (Act 666), SPI was
issued by the Philippines Patent Office on June 18, 1948 two new certificates of registration: No.
1260-S for BAYER CROSS IN CIRCLE; No. 1262-S for BAYER. The registration of these
trademarks was only for "Medicines".
Came World War II. I.G. Farbenindustrie AG. was seized by the allied powers. In 1945, after
World War II, I.G. Farbenindustrie AG. was decartelized by the Allied High Commission. The unit
known as Farbenfabriken Bayer was transferred in 1953 to Farbenfabriken Bayer
Aktiengesellschaft (FBA), one of the defendants in this case, which was organized in 1951.
Sometime in 1958, defendant Allied Manufacturing & Trading Co., Inc. (AMATCO) started selling
FBA's products especially "Folidol" a chemical insecticide which bears the BAYER CROSS IN
CIRCLE trademark.16
On November 18, 1959, FBA applied for the registration of the BAYER CROSS IN CIRCLE
trademark with the Philippines Patent Office for animal and plant destroying agents. The
examiner's report dated December 17, 1959 stated that the subject mark appears to be similar to
SPI's registered BAYER trademarks as covered by Certificates of Registration Nos. 1260-S and
1262-S. He concluded that "[r]egistration of applicant's mark is proscribed by Section 4-d of the
Statute because it would cause confusion or mistake or [to] deceive purchasers."17 This action of
the Philippines Patent Office drew a reply from FBA. In its letter dated February 1, 1960
applicant FBA, thru counsel, said that it "offers no question or objection to the assertion of the
Examiner that the registrant's mark and that of the applicant are similar to each other. It
emphasized the fact that it was seeking registration in the Supplemental Register. Its concluding
statement runs thus:.
Being aware of the duties and obligations of a trademark user in the Philippines and the
penalties provided for in the pertinent law on tradermarks and being aware also that
Supplemental Registration is not a prima facie evidence of ownership of mark but merely a
recordation of the use as in fact the mark is actually being used by the applicant in the
Philippines, it is respectfully urged that this [application] be given due course. 18
On February 25, 1960, FBA was issued a certificate of registration in the Supplemental Register,
SR-304.
We now grapple with the problems raised in the separate appeals.
1. A rule widely accepted and firmly entrenched because it has come down through the years is
that actual use in commerce or business is a prerequisite to the acquisition of the right of
ownership over a trademark. This rule is spelled out in our. Trademark Law thus:
SEC. 2-A. Ownership of trade-marks, trademark names and service-mark; how acquired. —
Anyone who lawfully produces or deals in merchandise of any kind or who engages in any lawful
business, or who renders any lawful service in commerce, by actual use thereof in manufacture
or trade, in business, and in the service rendered, may appropriate to his, exclusive use a
trademark, a trade-name, or a service-mark not so appropriated by another, to distinguish his
merchandise, business, or service from the merchandise, business or service of others. The
ownership or possession of a trademark, trade-name, service mark, heretofore or hereafter
appropriated, as in this section provided, shall be recognized and protected in the same manner
and to the same extent as are other property rights known to the law. (As inserted by Section 1
of Republic Act 638)
It would seem quite clear that adoption alone of a trademark would not give exclusive right
thereto. Such right grows out of their actual use."19 Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but these alone would not
give exclusive right of use. For trademark is a creation of use. The underlying reason for all
these is that Purchasers have come to understand the mark as indicating the origin of the
wares.20 Flowing from this is the trader's right to protection in the trade he has built up and the
goodwill he has accumulated from use of the trademark. Registration of a trademark, of course,
has value: it is an administrative act declaratory of a pre-existing right. Registration does not,
however, perfect a trademark right.
The BAYER trademarks registered in the Philippines to which plaintiff SPI may lay claim, as
correctly stated in the decision below, are those which cover medicines only. For, it was on said
goods that the BAYER trademarks were actually used by it in the Philippines. Therefore, the
certificates of registration for medicines issued by the Director of Patents upon which the
protection is enjoyed are only for medicines. Nothing in those certificates recited would include
chemical or insecticides.
But plaintiff insists that the statement of the applicant (The Bayer Co., Inc.) in its registrations of
the BAYER marks states that "the merchandise for which the trademark is appropriated is d. —
Chemicals, Medicines and Pharmaceutical Preparations." Plaintiff's position is that such
statement determines the goods for which said marks had been registered. Validity does not
attach to this proposition. First, the statement itself admits that "the particular description of the
articles comprised in said class (d) on which the trademark is used is Medicines." 21 It is not used
for chemicals.
Then, Section 11 of the Trademark Law requires that the certificate of registration state "the
particular goods . . . for which it is registered." This is controlling. Under Section 11 aforesaid,
likewise to be entered in the certificate of registration is "the date of the first use in commerce or
business. SPI may not claim "first use" of the trademarks prior to the registrations thereof on any
product other than medicines.
Besides, Section 7 of the same Trademark Act directs that upon the filing of the application and
the payment of the required fee, the "Director [of Patents] shall cause an examination of the
application" — for registration of the trademark — "to be made, and, if on such examination it
shall appear that the applicant is entitled to registration, the Director . . . shall cause the mark . . .
to be published in the Official Gazette." This examination, it would seem to us, is necessary in
order that the Director of Patents may be satisfied that the application conforms to the
requirement of actual use in commerce of the trademark in Section 2 and 2-A of the Trademark
Law; and that the statement in said application — as to the "first use" thereof and "the goods . . .
in connection with which the mark . . . is used" (Section 5) — is true.
Really, if the certificate of registration were to be deemed as including goods not specified
therein, then a situation may arise whereby an applicant may be tempted to register a trademark
on any and all goods which his mind may conceive even if he had never intended to use the
trademark for the said goods. We believe that such omnibus registration is not contemplated by
our Trademark Law.
Because of this and of the fact that the Bayer trademarks were never used in the Philippines by
plaintiff except for medicines — Aspirin, Aspirin for Children and Cafiaspirina — we find
ourselves unwilling to draw a hard and fast rule which would absolutely and under all
circumstances give unqualified protection to plaintiff against the use of said trademarks by all
others on goods other than medicines.
2. Neither will the 1927 registration in the United States of the BAYER trademark for insecticides
serve plaintiff any. The United States is not the Philippines. Registration in the United States is
not registration in the Philippines. At the time of the United States registration in 1927, we had
our own Trademark Law, Act No. 666 aforesaid of the Philippine Commission, which provided
for registration here of trademarks owned by persons domiciled in the United States.
What is to be secured from unfair competition in a given territory is the trade which one has in
that particular territory. There is where his business is carried on; where the goodwill symbolized
by the trademark has immediate value; where the infringer may profit by infringement.
There is nothing new in what we now say. Plaintiff itself concedes22 that the principle of
territoriality of the Trademark Law has been recognized in the Philippines, citing Ingenohl vs.
Walter E. Olsen, 71 L. ed. 762. As Callmann puts it, the law of trademarks "rests upon the
doctrine of nationality or territoriality."23
Accordingly, the 1927 registration in the United States of the BAYER trademark would not of
itself afford plaintiff protection for the use by defendants in the Philippines of the same trademark
for the same or different products.
3. A question basic in the field of trademarks and unfair competition is the extent to which a
registrant of a trademark covering one product may invoke the right to protection against the use
by other(s) of the same trademark to identify merchandise different from those for which the
trademark has been appropriated.
Plaintiff's trenchant claim is that it should not be turned away because its case comes within the
protection of the confusion of origin rule. Callmann notes two types of confusion. The first is
the confusion of goods "in which event the ordinarily prudent purchaser would be induced to The thoughts expressed in Ang Tibay command respect Conduct of business should conform to
purchase one product in the belief that he was purchasing the other." In which case, ethical business standards. Unfairness is proscribed. The invocation of equity is bottomed upon
"defendant's goods are then bought as the plaintiff's, and the poorer quality of the former reflects the injunction that no one should "reap where he has not sown."26
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
Nonetheless, "[i]t has been emphasized that each case presents a unique problem which must
assumed to originate with the plaintiff, and the public would then be deceived either into that
be answered by weighing the conflicting interests of the litigants."27 With this in mind, we are
belief or into the belief that there is some connection between the plaintiff and defendant which,
convinced that the case before us is not to be analogized with Ang Tibay. The factual setting is
in fact, does not exist."24
different. His Honor, Judge Magno S. Gatmaitan (now Associate Justice of the Court of
Appeals), the trial judge, so found. He reached a conclusion likewise different. And the reasons,
A judicial test giving the scope of the rule of confusion of origin is Ang vs. Teodoro (December so well stated by His Honor, are these:
14, 1942), 74 Phil. 50. Briefly, the facts of the just cited case are as follows: Toribio Teodoro, at
first in partnership with Juan Katindig and later as sole proprietor, had continuously used "Ang
1st). — It was not plaintiff's predecessor but defendant's namely Farbenfabriken or
Tibay" both as trademark and as tradename in the manufacture and sale of slippers, shoes and
Bayer Germany that first introduced the medical products into the Philippine market
indoor baseballs since 1910. He formally registered it as a trademark on September 29, 1915
and household with the Bayer mark half a century ago; this is what the Court gathers
and as a tradename on January 3, 1933. Ana L. Ang registered the same trademark "Ang Tibay"
from the testimony of Frederick Umbreit and this is the implication even of Exhs. 48,
for pants and shirts on April 11, 1932 and established a factory for the manufacture of said
49, 66 and as already shown a few pages back;28
articles in 1937. Suit was lodged by Teodoro against Ang to cancel the latter's registration of the
trademark "Ang Tibay" and to perpetually enjoin her from using the said trademark on goods
manufactured and sold by her. The judgment of the trial court absolved defendant (Ana L. Ang) 2nd). — There is thus reason plausible enough for defendant' plea that as Sterling
from the complaint with costs against the plaintiff. The Court of Appeals reversed. On appeal by was not the "originator" of the Bayer mark, the rule in Ang vs. Teodoro, supra, is not
certiorari, we affirmed the judgment of the Court of Appeals. We there said: applicable; and this is correct notwithstanding Exhs. 106 and 63 and even giving unto
these documents full force and virtue, because purchase of the assets of Elberfeld,
defendants' previous affiliate in New York, by Bayer of New York, even if that were to
"In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair
be held to include purchase of the Bayer mark, did not make the purchaser Bayer of
Trading, the test employed by the courts to determine whether noncompeting goods are or are
New York the originator of the mark; especially since Bayer of New York was only
not of the same class is confusion as to the origin of the goods of the second user. Although two
another subsidiary of Bayer Germany or Farbenfabriken which was the real originator;
noncompeting articles may be classified under two different classes by the Patent Office
because they are deemed not to possess the same descriptive properties, they would,
nevertheless, be held by the courts to belong to the same class if the simultaneous use on them 3rd). — The Court is also impelled to believe that the evidence establishes that among
of identical or closely similar trademarks would be likely to cause confusion as to the origin, or the common people of the Philippines the "Bayer" medicines come from Germany; this
personal source, of the second user's goods. They would be considered as not falling under the the Court deduces from the testimony of witness Florisa Pestano who only reproduced
same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the the belief of her grandmother; the Court might as well say that plaintiff itself has not
purchaser would think the first user made the second user's goods. discouraged that belief because the drug and its literature that came from the plaintiff
and its affiliate would show that it represented its medicines to have come from
defendant29 and were manufactured in Germany with that Bayer mark; thus Exh.
Such construction of the law is induced by cogent reasons of equity and fair dealing. The courts
7030 which is the price list of 1928 of Botica de Sta. Cruz on page 6 indicates that
have come to realize that there can be unfair competition or unfair trading even if the goods are
Winthrop Chemical Company of New York, — plaintiff's subsidiary — was a distributor
noncompeting, and that such unfair trading can cause injury or damage to the first user of a
of I.G. Farbenindustrie, A.G. Leverkusen Germany; Exh. 8031 which is a medical diary
given trademark, first, by prevention of the natural expansion of his business and, second, by
published by Winthrop for 1934 on page 148 manifested that the journal, "Practical
having his business reputation confused with and put at the mercy of the second user. When
Therapeutics" was published by I.G. Farbenindustrie Aktiengesellachaft for Winthrop
noncompetitive products are sold under the mark, the gradual whittling away or dispersion of the
Chemical Company, Inc.; "with particular reference to the pharmacological products,
identity and hold upon the public mind of the mark created by its first user, inevitably results. The
sera and vaccines originated and prepared in the laboratories of the I.G.
original owner is entitled to the preservation of the vauable link between him and the public that
Farbenindustrie A.G."; and Exh. 79 a, b, c, d and e which are prospectuses for the
has been created by his ingenuity and the merit of his wares or services. Experience has
medicines, Mitigal, Afridol, Aspirins, Novalgina and My-Salvarsan32 showed that these
demonstrated that when a well-known trademark is adopted by another even for a totally
products were manufactured for Winthrop by I.G. Farbenindustrie; and then Exh. 81
different class of goods, it is done to get the benefit of the reputation and advertisements of the
the Revista Boie of 1928 would show that Winthrop represented itself as the distributor
originator of said mark, to convey to the public a false impression of some supposed connection
of the products of Bayer of Germany otherwise known as I.G. Farbenindustrie, "segun
between the manufacturer of the article sold under the original mark and the new articles being
la alta calidad de la marca original";33 the Court being also impelled to add in this
tendered to the public under the same or similar mark. As trade has developed and commercial
connection that it has to take judicial notice of a belief of long standing common
changes have come about, the law of unfair competition has expanded to keep pace with the
among the people in the Philippines that German products are of very high quality and
times and the element of strict competition in itself has ceased to be the determining factor. The
it is only natural for a distributor or a retailer to take advantage of that, and as it is not
owner of a trademark or trade-name has a property right in which he is entitled to protection,
debated that "Bayer" is a German surname, (see plaintiff's rebuttal Exh. QQQQ, see
since there is damage to him from confusion of reputation or goodwill in the mind of the public as
also p. 7 plaintiff's reply memorandum wherein it is said that this surname is a "pretty
well as from confusion of goods. The modern trend is to give emphasis to the unfairness of the
common one among members of the Germany race") it is all so very easy to associate
acts and to classify and treat the issue as a fraud.25
the Bayer trademark with products that come from Germany and to believe that they
are of high quality;

4th). — The rationale of the doctrine in Ang vs. Teodoro, supra being that:
The Courts have come to realize that there can be unfair competition or unfair trading even if the
goods are non-competing, and that such unfair trading can cause injury or damage to the first
user of a given trade mark, first, by prevention of the natural expansion of his business, and
second, by having his business reputation confused with and put at the mercy of the second
user. 74 Phil. 55-56;
and the Court having found out that the 'first user' was Bayer Germany and it was this that had
built up the Bayer mark and plaintiff apparently having itself encouraged that belief even after it
had acquired the Bayer mark in America, thru forced sale, of defendant's subsidiary there in
1918, Exhs. 79, 80, 81, to apply the Ang Tibay rule in the manner advocated by Sterling would,
the Court fears, produce the reverse result and the consequence would be not equity but
injustice.34
It would seem to us that the fact that plaintiff rode on the German reputation in the Bayer
trademark has diluted the rationally of its exclusionary claim. Not that the free ride in the name of
defendant's German predecessor was sporadic. It is continuing. Proof of this is the label on the
box used by plaintiff (Exhibit U) in the distribution of Bayer Aspirin. This box bears prominently
on the front part the legend "Genuine" in red color and two arrows: the first pointing to BAYER
CROSS IN CIRCLE, and the second, to BAYER Aspirin. At the back thereof in big letters are the
words "BAYER ASPIRIN", followed in small letters "Used since 1900" and down below the small
words "Mfd. in the Phil. by Winthrop Stearns, Inc. for STERLING PRODUCTS
INTERNATIONAL, INCORPORATED." In plaintiff's prospectus (Exhibit 1) found in the box of
Bayer Aspirin tablets, children's size, there is the significant statement: "GENUINE BAYER —
Each Children's Size Bayer Aspirin tablet is stamped with the Bayer Cross, the trademark of the
genuine Bayer product. This means that your child is getting the same gentle-to-the-system
Bayer Aspirin that has been used for over 50 years by millions of normal people without ill
effect."
With the background of prior use in the Philippines of the word BAYER by FBA's German
predecessor and the prior representations that plaintiff's medicines sold in the Philippines were
manufactured in Germany, the facts just recited hammer on the mind of the public that the
Aspirin. Cafiaspirina and Aspirin for Children being marketed for plaintiff in the Philippines come
from the same source — the German source — and in use since 1900. That this view is far from
far-fetched, is illustrated by the testimony of plaintiff's own witness, Dr. Antonio Vasquez, viz:
Q. Have you ever heard of a pharmaceutical company of Bayer of Germany, or a
company in Germany named Bayer?
A. Yes, sir.
Q. Since when have you heard of this pharmaceutical company in Germany with the
name Bayer, since when have you heard of that?
A. I have always taken the name Bayer as associated with Winthrop & Stearns.
Q. But, you said a while ago....
Witness.
.... Yes .....
xxx xxx xxx
Q. ... that you have heard of a pharmaceutical company with the name of Bayer in
Germany?
A. Yes, sir.
Q. Do you know if this Winthrop & Stearns you mentioned has ever been connected
with Bayer Company of Germany?
A. I have always understood that they were distributing drugs of Bayer & Company. 35
4. The Ang Tibay doctrine, we believe, is not to be read as shunting aside the time-honored
teaching that he who comes into equity must do so with clean hands.36 Plaintiff cannot now say
that the present worth of its BAYER trademarks it owes solely to its own efforts; it is not
insulated from the charge that as it marketed its medicines it did so with an eye to the goodwill
as to quality that defendants' predecessor had established.
There is no whittling away of the identity of plaintiff's trademarks. Plaintiff is not the first user
thereof in the Philippines. The trademarks do not necessarily link plaintiff with the public. Plaintiff
must show injury; it has not. On the contrary, representations as to the place of manufacture of
plaintiff's medicines were untrue, misleading. Plaintiff could still be tagged with the same
deception "which (it) complains of in the defendant(s)."37 Appropriate it is to recall here our
observation in the Ang Tibay opinion, viz: "On our part may we add, without meaning to be
harsh, that a self-respecting person does not remain in the shelter of another but builds one of
his own."38
Plaintiff, the owner in this country of the trademarks BAYER for medicines, has thus forfeited its
right to protection from the use of the same trademarks by defendants for products different
therefrom — insecticides and other chemicals.
5. But defendants ask us to delist plaintiff's BAYER trademarks for medicines from the Principal
Register, claiming right thereto for said use. Said trademarks had been registered since 1939 by
plaintiff's predecessor. The Bayer Co., Inc.
Defendants' claim is stale; it suffers from the defect of non-use.39 While it is conceded that FBA's
predecessors first introduced medical products with the BAYER trademarks in the Philippine
market, it is equally true that, after World War I, no definite evidence there is that defendants or
their professors traded in the Philippines in medicines with the BAYER trademarks thereafter.
FBA did not seasonably voice its objection. Lack of protest thereto connoted acquiescence. And
this; notwithstanding the fact that the 1923 and 1926 agreements were set aside in the anti-trust
suits. Defendants did use the marks; but it was much later, i.e., in 1958 — and on chemicals and
insecticides — not on medicines. FBA only bestirred itself and challenged plaintiff's right to the
trademarks on medicines when this suit was filed. Vigilantibus non dormientibus equitas
subvenit.40
The net result is that, as the trial court aptly observed, plaintiff may hold on to its BAYER
trademarks for medicines. And defendants may continue using the same trademarks for
insecticides and other chemicals, not medicines.
6. Defendants balk at the ruling below which directs them "to add a distinctive word or words in
their mark to indicate that their products come from Germany." 41
We are left under no doubt as to the reasonableness of the formula thus fashioned. It avoids the
mischief of confusion of origin — defendant FBA's product would not be mistaken for those of
plaintiff. It reduces friction. We perceive of no prejudice to defendants. The order does not visit
defendant FBA with reprobation or condemnation. Rather, said defendant would be enhancing
the value of and would be sponsoring its own products. Anyway, a statement that its products
come from Germany is but a statement of fact.
FOR THE REASONS GIVEN, the judgment under review is hereby affirmed. No costs. So
ordered.
G.R. No. 112012 April 4, 2001
SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE PHILIPPINES, INC., petitioners,
vs.
COURT OF APPEALS and CFC CORPORATION., respondents.
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R. SP No.
24101,1 reversing and setting aside the decision of the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT),2 which denied private respondent’s application for registration of
the trade-mark, FLAVOR MASTER.
On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an application
for the registration of the trademark "FLAVOR MASTER" for instant coffee, under Serial No.
52994. The application, as a matter of due course, was published in the July 18, 1988 issue of
the BPTTT’s Official Gazette.
Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered under Swiss laws and
domiciled in Switzerland, filed an unverified Notice of Opposition, 3 claiming that the trademark of
private respondent’s product is "confusingly similar to its trademarks for coffee and coffee
extracts, to wit: MASTER ROAST and MASTER BLEND."
Likewise, a verified Notice of Opposition was filed by Nestle Philippines, Inc., a Philippine
corporation and a licensee of Societe Des Produits Nestle S.A., against CFC’s application for
registration of the trademark FLAVOR MASTER.4Nestle claimed that the use, if any, by CFC of
the trademark FLAVOR MASTER and its registration would likely cause confusion in the trade;
or deceive purchasers and would falsely suggest to the purchasing public a connection in the
business of Nestle, as the dominant word present in the three (3) trademarks is "MASTER"; or
that the goods of CFC might be mistaken as having originated from the latter.
In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is not
confusingly similar with the former’s trademarks, MASTER ROAST and MASTER BLEND,
alleging that, "except for the word MASTER (which cannot be exclusively appropriated by any
person for being a descriptive or generic name), the other words that are used respectively with
said word in the three trademarks are very different from each other – in meaning, spelling,
pronunciation, and sound". CFC further argued that its trademark, FLAVOR MASTER, "is clearly
very different from any of Nestle’s alleged trademarks MASTER ROAST and MASTER BLEND,
especially when the marks are viewed in their entirety, by considering their pictorial
representations, color schemes and the letters of their respective labels."
In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFC’s application for
registration.5 CFC elevated the matter to the Court of Appeals, where it was docketed as CA-
G.R. SP No. 24101.
The Court of Appeals defined the issue thus: "Does appellant CFC’s trade dress bear a striking
resemblance with appellee’s trademarks as to create in the purchasing public’s mind the
mistaken impression that both coffee products come from one and the same source?"
As stated above, the Court of Appeals, in the assailed decision dated September 23, 1993,
reversed Decision No. 90-47 of the BPTTT and ordered the Director of Patents to approve
CFC’s application. The Court of Appeals ruled:
Were We to take even a lackadaisical glance at the overall appearance of the
contending marks, the physical discrepancies between appellant CFC’s and
appellee’s respective logos are so ostensible that the casual purchaser cannot likely
mistake one for the other. Appellant CFC’s label (Exhibit "4") is predominantly a blend
of dark and lighter shade of orange where the words "FLAVOR MASTER", "FLAVOR"
appearing on top of "MASTER", shaded in mocha with thin white inner and outer
sidings per letter and identically lettered except for the slightly protruding bottom curve
of the letter "S" adjoining the bottom tip of the letter "A" in the word "MASTER", are
printed across the top of a simmering red coffee cup. Underneath "FLAVOR MASTER"
appears "Premium Instant Coffee" printed in white, slim and slanted letters. Appellees’
"MASTER ROAST" label (Exhibit "7"), however, is almost double the width of
appellant CFC’s. At the top is printed in brown color the word "NESCAFE" against a
white backdrop. Occupying the center is a square-shaped configuration shaded with
dark brown and picturing a heap of coffee beans, where the word "MASTER" is
inscribed in the middle. "MASTER" in appellees’ label is printed in taller capital letters,
with the letter "M" further capitalized. The letters are shaded with red and bounded
with thin gold-colored inner and outer sidings. Just above the word "MASTER" is a red
window like portrait of what appears to be a coffee shrub clad in gold. Below the
"MASTER" appears the word "ROAST" impressed in smaller, white print. And further
below are the inscriptions in white: "A selection of prime Arabica and Robusta coffee."
With regard to appellees’ "MASTER BLEND" label (Exhibit "6") of which only a
xeroxed copy is submitted, the letters are bolder and taller as compared to appellant
CFC’s and the word "MASTER" appears on top of the word "BLEND" and below it are
the words "100% pure instant coffee" printed in small letters.
From the foregoing description, while the contending marks depict the same product,
the glaring dissimilarities in their presentation far outweigh and dispel any aspect of
similitude. To borrow the words of the Supreme Court in American Cyanamid Co. v.
Director of Patents (76 SCRA 568), appellant CFC’s and appellees’ labels are entirely
different in size, background, colors, contents and pictorial arrangement; in short, the
general appearances of the labels bearing the respective trademarks are so distinct
from each other that appellees cannot assert that the dominant features, if any, of its
trademarks were used or appropriated in appellant CFC’s own. The distinctions are so
well-defined so as to foreclose any probability or likelihood of confusion or deception
on the part of the normally intelligent buyer when he or she encounters both coffee
products at the grocery shelf. The answer therefore to the query is a clear-cut NO.6
Petitioners are now before this Court on the following assignment of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING AND SETTING
ASIDE THE DECISION (NO. 90-47) OF THE DIRECTOR OF THE BUREAU OF
PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER (BPTTT) DATED
DECEMBER 27, 1990.
 2. RESPONDENT COURT ERRED IN FINDING THAT APPELLANT CFC’S TRADE
DRESS IS BEYOND THE SCOPE OF THE PROSCRIPTION LAID DOWN BY
JURISPRUDENCE AND THE TRADEMARK LAW.
3. RESPONDENT COURT ERRED IN HOLDING THAT THE TOTALITY RULE,
RATHER THAN THE TEST OF DOMINANCY, APPLIES TO THE CASE.
4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY RULE APPLIED IN
THE CASES OF BRISTOL MYERS V. DIRECTOR OF PATENTS, ET AL. (17 SCRA
128), MEAD JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND
AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76 SCRA 568).
The petition is impressed with merit.
A trademark has been generally defined as "any word, name, symbol or device adopted and
used by a manufacturer or merchant to identify his goods and distinguish them from those
manufactured and sold by others."7
A manufacturer’s trademark is entitled to protection. As Mr. Justice Frankfurter observed in the
case of Mishawaka Mfg. Co. v. Kresge Co.:8
The protection of trade-marks is the law’s recognition of the psychological function of
symbols. If it is true that we live by symbols, it is no less true that we purchase goods
by them. A trade-mark is a merchandising short-cut which induces a purchaser to
select what he wants, or what he has been led to believe he wants. The owner of a
mark exploits this human propensity by making every effort to impregnate the
atmosphere of the market with the drawing power of a congenial symbol. Whatever
the means employed, the aim is the same --- to convey through the mark, in the minds
of potential customers, the desirability of the commodity upon which it appears. Once
this is attained, the trade-mark owner has something of value. If another poaches
upon the commercial magnetism of the symbol he has created, the owner can obtain
legal redress.
Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended, which was in force at
the time, provides thus:
Registration of trade-marks, trade-names and service-marks on the principal register. -
There is hereby established a register of trade-marks, trade-names and service marks
which shall be known as the principal register. The owner of a trade-mark, trade-name
or service-mark used to distinguish his goods, business or services from the goods,
business or services of others shall have the right to register the same on the principal
register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name which so resembles a mark or
trade-name registered in the Philippines or a mark or trade-name previously used in
the Philippines by another and not abandoned, as to be likely, when applied to or used
in connection with the goods, business or services of the applicant, to cause confusion
or mistake or to deceive purchasers;
xxx xxx xxx
(Emphasis supplied)
The law prescribes a more stringent standard in that there should not only be confusing similarity
but that it should not likely cause confusion or mistake or deceive purchasers.
Hence, the question in this case is whether there is a likelihood that the trademark FLAVOR
MASTER may cause confusion or mistake or may deceive purchasers that said product is the
same or is manufactured by the same company. In other words, the issue is whether the
trademark FLAVOR MASTER is a colorable imitation of the trademarks MASTER ROAST and
MASTER BLEND.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive
ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser
giving such attention as a purchaser usually gives, as to cause him to purchase the one
supposing it to be the other.9 In determining if colorable imitation exists, jurisprudence has
developed two kinds of tests - the Dominancy Test and the Holistic Test.10 The test of dominancy
focuses on the similarity of the prevalent features of the competing trademarks which might
cause confusion or deception and thus constitute infringement. On the other side of the
spectrum, the holistic test mandates that the entirety of the marks in question must be
considered in determining confusing similarity.11
In the case at bar, the Court of Appeals held that:
The determination of whether two trademarks are indeed confusingly similar must be
taken from the viewpoint of the ordinary purchasers who are, in general,
undiscerningly rash in buying the more common and less expensive household
products like coffee, and are therefore less inclined to closely examine specific details
of similarities and dissimilarities between competing products. The Supreme Court
in Del Monte Corporation v. CA, 181 SCRA 410, held that:
"The question is not whether the two articles are distinguishable by their
labels when set side by side but whether the general confusion made by the
article upon the eye of the casual purchaser who is unsuspicious and off his
guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary
purchaser, buying under the normally prevalent conditions in trade and
giving the attention such purchasers usually give in buying that class of
goods, is the touchstone."
From this perspective, the test of similarity is to consider the two marks in their
entirety, as they appear in the respective labels, in relation to the goods to which they
are attached (Bristol Myers Company v. Director of Patents, et al., 17 SCRA
128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7 SCRA 768). The mark
must be considered as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it (Del Monte Corp. v.
CA, supra), as what appellees would want it to be when they essentially argue that
much of the confusion springs from appellant CFC’s use of the word "MASTER" which
appellees claim to be the dominant feature of their own trademarks that captivates the
prospective consumers. Be it further emphasized that the discerning eye of the
observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion whether one is
confusingly similar to the other (Mead Johnson & Co. v. NVJ Van Dorp, Ltd., supra).12
The Court of Appeals applied some judicial precedents which are not on all fours with this case.
It must be emphasized that in infringement or trademark cases in the Philippines, particularly in
ascertaining whether one trademark is confusingly similar to or is a colorable imitation of
another, no set rules can be deduced. Each case must be decided on its own merits.13 In Esso
Standard, Inc. v. Court of Appeals,14 we ruled that the likelihood of confusion is a relative
concept; to be determined only according to the particular, and sometimes peculiar,
circumstances of each case. In trademark cases, even more than in any other litigation,
precedent must be studied in light of the facts of the particular case. The wisdom of the
likelihood of confusion test lies in its recognition that each trademark infringement case presents
its own unique set of facts. Indeed, the complexities attendant to an accurate assessment of
likelihood of confusion require that the entire panoply of elements constituting the relevant
factual landscape be comprehensively examined.15
The Court of Appeals’ application of the case of Del Monte Corporation v. Court of Appeals16 is,
therefore, misplaced. In Del Monte, the issue was about the alleged similarity of Del Monte’s
logo with that of Sunshine Sauce Manufacturing Industries. Both corporations market the catsup
product which is an inexpensive and common household item.
Since Del Monte alleged that Sunshine’s logo was confusingly similar to or was a colorable
imitation of the former’s logo, there was a need to go into the details of the two logos as well as
the shapes of the labels or marks, the brands printed on the labels, the words or lettering on the
labels or marks and the shapes and colors of the labels or marks. The same criteria, however,
cannot be applied in the instant petition as the facts and circumstances herein are peculiarly
different from those in the Del Monte case.
from sulfa and "MET" from methyl, both of which are chemical compounds present in the article
manufactured by the contending parties. This Court held that the addition of the syllable "INE" in
respondent’s label is sufficient to distinguish respondent’s product or trademark from that of
petitioner. Also, both products are for medicinal veterinary use and the buyer will be more wary
of the nature of the product he is buying. In any case, both products are not identical as
SULMET’s label indicates that it is used in a drinking water solution while that of SULMETINE
indicates that they are tablets.
It cannot also be said that the products in the above cases can be bought off the shelf except,
perhaps, for ALASKA. The said products are not the usual "common and inexpensive"
household items which an "undiscerningly rash" buyer would unthinkingly buy.In the case at bar,
other than the fact that both Nestle’s and CFC’s products are inexpensive and common
household items, the similarity ends there. What is being questioned here is the use by CFC of
the trademark MASTER. In view of the difficulty of applying jurisprudential precedents to
trademark cases due to the peculiarity of each case, judicial fora should not readily apply a
certain test or standard just because of seeming similarities. As this Court has pointed above,
there could be more telling differences than similarities as to make a jurisprudential precedent
inapplicable.
Nestle points out that the dominancy test should have been applied to determine whether there
is a confusing similarity between CFC’s FLAVOR MASTER and Nestle’s MASTER ROAST and
MASTER BLEND.
We agree.

In the same manner, the Court of Appeals erred in applying the totality rule as defined in the
As the Court of Appeals itself has stated, "[t]he determination of whether two trademarks are
cases of Bristol Myers v. Director of Patents;17 Mead Johnson & Co. v. NVJ Van Dorf
indeed confusingly similar must be taken from the viewpoint of the ordinary purchasers who are,
Ltd.;18 and American Cyanamid Co. v. Director of Patents.19 The totality rule states that "the test
in general, undiscerningly rash in buying the more common and less expensive household
is not simply to take their words and compare the spelling and pronunciation of said words. In
products like coffee, and are therefore less inclined to closely examine specific details of
determining whether two trademarks are confusingly similar, the two marks in their entirety as
similarities and dissimilarities between competing products."21
they appear in the respective labels must be considered in relation to the goods to which they
are attached; the discerning eye of the observer must focus not only on the predominant words
but also on the other features appearing on both labels."20 The basis for the Court of Appeals’ application of the totality or holistic test is the "ordinary
purchaser" buying the product under "normally prevalent conditions in trade" and the attention
such products normally elicit from said ordinary purchaser. An ordinary purchaser or buyer does
As this Court has often declared, each case must be studied according to the peculiar
not usually make such scrutiny nor does he usually have the time to do so. The average shopper
circumstances of each case. That is the reason why in trademark cases, jurisprudential
is usually in a hurry and does not inspect every product on the shelf as if he were browsing in a
precedents should be applied only to a case if they are specifically in point.
library.22

In the above cases cited by the Court of Appeals to justify the application of the totality or holistic
The Court of Appeals held that the test to be applied should be the totality or holistic test
test to this instant case, the factual circumstances are substantially different. In the Bristol
reasoning, since what is of paramount consideration is the ordinary purchaser who is, in general,
Myers case, this Court held that although both BIOFERIN and BUFFERIN are primarily used for
undiscerningly rash in buying the more common and less expensive household products like
the relief of pains such as headaches and colds, and their names are practically the same in
coffee, and is therefore less inclined to closely examine specific details of similarities and
spelling and pronunciation, both labels have strikingly different backgrounds and surroundings.
dissimilarities between competing products.
In addition, one is dispensable only upon doctor’s prescription, while the other may be
purchased over-the-counter.
This Court cannot agree with the above reasoning. If the ordinary purchaser is "undiscerningly
rash" in buying such common and inexpensive household products as instant coffee, and would
In the Mead Johnson case, the differences between ALACTA and ALASKA are glaring and
therefore be "less inclined to closely examine specific details of similarities and dissimilarities"
striking to the eye. Also, ALACTA refers to "Pharmaceutical Preparations which Supply
between the two competing products, then it would be less likely for the ordinary purchaser to
Nutritional Needs," falling under Class 6 of the official classification of Medicines and
notice that CFC’s trademark FLAVOR MASTER carries the colors orange and mocha while that
Pharmaceutical Preparations to be used as prescribed by physicians. On the other hand,
of Nestle’s uses red and brown. The application of the totality or holistic test is improper since
ALASKA refers to "Foods and Ingredients of Foods" falling under Class 47, and does not require
the ordinary purchaser would not be inclined to notice the specific features, similarities or
medical prescription.
dissimilarities, considering that the product is an inexpensive and common household item.

In the American Cyanamid case, the word SULMET is distinguishable from the word
SULMETINE, as the former is derived from a combination of the syllables "SUL" which is derived
It must be emphasized that the products bearing the trademarks in question are "inexpensive
and common" household items bought off the shelf by "undiscerningly rash" purchasers. As
such, if the ordinary purchaser is "undiscerningly rash", then he would not have the time nor the
inclination to make a keen and perceptive examination of the physical discrepancies in the
trademarks of the products in order to exercise his choice.
While this Court agrees with the Court of Appeals’ detailed enumeration of differences between
the respective trademarks of the two coffee products, this Court cannot agree that totality test is
the one applicable in this case. Rather, this Court believes that the dominancy test is more
suitable to this case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to the elementary postulate of the law on
trademarks and unfair competition that confusing similarity is to be determined on the basis of
visual, aural, connotative comparisons and overall impressions engendered by the marks in
controversy as they are encountered in the realities of the marketplace. 23 The totality or holistic
test only relies on visual comparison between two trademarks whereas the dominancy test relies
not only on the visual but also on the aural and connotative comparisons and overall
impressions between the two trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and
held that:
From the evidence at hand, it is sufficiently established that the word MASTER is the
dominant feature of opposer’s mark. The word MASTER is printed across the middle
portion of the label in bold letters almost twice the size of the printed word ROAST.
Further, the word MASTER has always been given emphasis in the TV and radio
commercials and other advertisements made in promoting the product. This can be
gleaned from the fact that Robert Jaworski and Atty. Ric Puno Jr.., the personalities
engaged to promote the product, are given the titles Master of the Game and Master
of the Talk Show, respectively. In due time, because of these advertising schemes the
mind of the buying public had come to learn to associate the word MASTER with the
opposer’s goods.
x x x. It is the observation of this Office that much of the dominance which the word
MASTER has acquired through Opposer’s advertising schemes is carried over when
the same is incorporated into respondent-applicant’s trademark FLAVOR MASTER.
Thus, when one looks at the label bearing the trademark FLAVOR MASTER (Exh. 4)
one’s attention is easily attracted to the word MASTER, rather than to the
dissimilarities that exist. Therefore, the possibility of confusion as to the goods which
bear the competing marks or as to the origins thereof is not farfetched. x x x. 24
In addition, the word "MASTER" is neither a generic nor a descriptive term. As such, said term
can not be invalidated as a trademark and, therefore, may be legally protected. Generic
terms25 are those which constitute "the common descriptive name of an article or substance," or
comprise the "genus of which the particular product is a species," or are "commonly used as the
name or description of a kind of goods," or "imply reference to every member of a genus and the
exclusion of individuating characters," or "refer to the basic nature of the wares or services
provided rather than to the more idiosyncratic characteristics of a particular product," and are not
legally protectable. On the other hand, a term is descriptive26 and therefore invalid as a
trademark if, as understood in its normal and natural sense, it "forthwith conveys the
characteristics, functions, qualities or ingredients of a product to one who has never seen it and
does not know what it is," or "if it forthwith conveys an immediate idea of the ingredients,
qualities or characteristics of the goods," or if it clearly denotes what goods or services are
provided in such a way that the consumer does not have to exercise powers of perception or
imagination.
Rather, the term "MASTER" is a suggestive term brought about by the advertising scheme of
Nestle. Suggestive terms27 are those which, in the phraseology of one court, require
"imagination, thought and perception to reach a conclusion as to the nature of the goods." Such
terms, "which subtly connote something about the product," are eligible for protection in the
absence of secondary meaning. While suggestive marks are capable of shedding "some light"
upon certain characteristics of the goods or services in dispute, they nevertheless involve "an
element of incongruity," "figurativeness," or " imaginative effort on the part of the observer."
This is evident from the advertising scheme adopted by Nestle in promoting its coffee products.
In this case, Nestle has, over time, promoted its products as "coffee perfection worthy of masters
like Robert Jaworski and Ric Puno Jr."
In associating its coffee products with the term "MASTER" and thereby impressing them with the
attributes of said term, Nestle advertised its products thus:
Robert Jaworski. Living Legend. A true hard court hero. Fast on his feet. Sure in every
shot he makes. A master strategist. In one word, unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply satisfying. Made from a
unique combination of the best coffee beans - Arabica for superior taste and aroma,
Robusta for strength and body. A masterpiece only NESCAFE, the world’s coffee
masters, can create.
MASTER ROAST. Coffee perfection worthy of masters like Robert Jaworski.28
In the art of conversation, Ric Puno Jr. is master. Witty. Well-informed. Confident.
In the art of coffee-making, nothing equals Master Roast, the coffee masterpiece from
Nescafe, the world’s coffee masters. A unique combination of the best coffee beans -
Arabica for superior taste and aroma, Robusta for strength and body. Truly distinctive
and rich in flavor.
Master Roast. Coffee perfection worthy of masters like Ric Puno Jr.29
The term "MASTER", therefore, has acquired a certain connotation to mean the coffee products
MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by CFC of the
term "MASTER" in the trademark for its coffee product FLAVOR MASTER is likely to cause
confusion or mistake or even to deceive the ordinary purchasers.
In closing, it may not be amiss to quote the case of American Chicle Co. v. Topps Chewing
Gum, Inc.,30 to wit:
Why it should have chosen a mark that had long been employed by [plaintiff] and had
become known to the trade instead of adopting some other means of identifying its
goods is hard to see unless there was a deliberate purpose to obtain some advantage
from the trade that [plaintiff] had built up. Indeed, it is generally true that, as soon as
we see that a second comer in a market has, for no reason that he can assign,
plagiarized the "make-up" of an earlier comer, we need no more; . . . [W]e feel bound
to compel him to exercise his ingenuity in quarters further afield.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. SP No.
24101 is REVERSED and SET ASIDE and the decision of the Bureau of Patents, Trademarks
and Technology Transfer in Inter Partes Cases Nos. 3200 and 3202 is REINSTATED.
SO ORDERED.
G.R. No. 132604 March 6, 2002
VENANCIO SAMBAR, doing business under the name and style of CVS Garment
Enterprises, petitioner,
vs.
LEVI STRAUSS & CO., and LEVI STRAUSS (PHIL.), INC., respondents.
DECISION
QUISUMBING, J.:
This petition for review on certiorari prays for the reversal of the decision dated January 30,
1998, of the Court of Appeals in CA-G.R. CV No. 51553. That decision affirmed the decision in
Civil Case No. 88-2220 of the Regional Trial Court, Branch 66, Makati City, making permanent
the writ of preliminary injunction, ordering CVS Garment and Industrial Company (CVSGIC) and
petitioner Venancio Sambar to pay private respondents jointly and solidarily the sum of ₱50,000
as temperate and nominal damages, ₱10,000 as exemplary damages, and ₱25,000 as
attorney’s fees and litigation costs, and ordering the Director of the National Library to cancel
Copyright Registration No. 1-1998 in the name of Venancio Sambar.
The facts are as follows:
On September 28, 1987, private respondents, through a letter from their legal officer, demanded
that CVS Garment Enterprises (CVSGE) desist from using their stitched arcuate design on the
Europress jeans which CVSGE advertised in the Manila Bulletin.
Atty. Benjamin Gruba, counsel of CVSGE, replied that the arcuate design on the back pockets of
Europress jeans was different from the design on the back pockets of Levi’s jeans. He further
asserted that his client had a copyright on the design it was using.
Thereafter, private respondents filed a complaint against Sambar, doing business under the
name and style of CVSGE. Private respondents also impleaded the Director of the National
Library. Summons was sent to Sambar in his business address at 161-B Iriga corner Retiro, La
Loma, Quezon City.
Atty. Gruba claimed that he erroneously received the original summons as he mistook it as
addressed to his client, CVSGIC. He returned the summons and the pleadings and manifested
in court that CVSGE, which was formerly doing business in the premises, already stopped
operation and CVSGIC took over CVSGE’s occupation of the premises. He also claimed he did
not know the whereabouts of Sambar, the alleged owner of CVSGE.
Thereafter, private respondents amended their complaint to include CVSGIC. When private
respondents learned the whereabouts of Sambar and CVSGE, the case was revived.
Private respondents alleged in their complaint that Levi Strauss and Co. (LS&Co.), an
internationally known clothing manufacturer, owns the arcuate design trademark which was
registered under U.S. Trademark Registration No. 404, 248 on November 16, 1943, and in the
Principal Register of trademarks with the Philippine Patent Office under Certificate of
Registration No. 20240 issued on October 8, 1973; that through a Trademark Technical Data
and Technical Assistance Agreement with Levi Strauss (Phil.) Inc. (LSPI) in 1972, LS&Co.
granted LSPI a non-exclusive license to use the arcuate trademark in its manufacture and sale
of Levi’s pants, jackets and shirts in the Philippines; that in 1983, LS&Co. also appointed LSPI
as its agent and attorney-in-fact to protect its trademark in the Philippines; and that sometime in
1987, CVSGIC and Venancio Sambar, without the consent and authority of private respondents
and in infringement and unfair competition, sold and advertised, and despite demands to cease
and desist, continued to manufacture, sell and advertise denim pants under the brand name
"Europress" with back pockets bearing a design similar to the arcuate trademark of private
respondents, thereby causing confusion on the buying public, prejudicial to private respondents’
goodwill and property right.
In its answer, CVSGIC admitted it manufactured, sold and advertised and was still
manufacturing and selling denim pants under the brand name of "Europress", bearing a back
pocket design of two double arcs meeting in the middle. However, it denied that there was
infringement or unfair competition because the display rooms of department stores where Levi’s
and Europress jeans were sold, were distinctively segregated by billboards and other modes of
advertisement. CVSGIC avers that the public would not be confused on the ownership of such
known trademark as Levi’s, Jag, Europress, etc.. Also, CVSGIC claimed that it had its own
original arcuate design, as evidenced by Copyright Registration No. 1-1998, which was very
different and distinct from Levi’s design. CVSGIC prayed for actual, moral and exemplary
damages by way of counterclaim.
Petitioner Venancio Sambar filed a separate answer. He denied he was connected with
CVSGIC. He admitted that Copyright Registration No. 1-1998 was issued to him, but he denied
using it. He also said he did not authorize anyone to use the copyrighted design. He
counterclaimed for moral and exemplary damages and payment of attorney’s fees.
After hearing, the trial court issued a writ of preliminary injunction enjoining CVSGIC and
petitioner from manufacturing, advertising and selling pants with the arcuate design on their back
pockets. CVSGIC and petitioner did not appear during the October 13 and 27, 1993 hearings,
when they were to present evidence. Consequently, the trial court ruled that they waived their
right to present evidence.
On May 3, 1995, the trial court rendered its decision. The dispositive portion reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
a) making the writ of preliminary injunction permanent;
b) ordering the defendants CVS Garment and Industrial Company and Venancio
Sambar to pay the plaintiffs jointly and solidarily the sum of P50,000.00 as temperate
and nominal damages, the sum of P10,000.00 as exemplary damages, and the sum of
P25,000.00 as attorney’s fees and litigation expenses and to pay the costs.
SO ORDERED.1
Private respondents moved for a reconsideration praying for the cancellation of petitioner’s
copyright registration. The trial court granted reconsideration in its July 14, 1995 order, thus:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
a) making the writ of preliminary injunction permanent;
b) ordering the defendants CVS Garment and Industrial Company and Venancio
Sambar to pay the plaintiffs jointly and solidarily the sum of P50,000.00 as temperate
and nominal damages, the sum of P10,000.00 as exemplary damages, and the sum of
P25,000.00 as attorney’s fees and litigation expenses and to pay the costs;
c) ordering the Director of the National Library to cancel the Copyright Registration No.
1-1998 issued in the name of Venancio Sambar.2
Petitioner appealed to the Court of Appeals which on January 30, 1998 decided in favor of
private respondents as follows:
WHEREFORE, the judgment appealed from is AFFIRMED in toto.
SO ORDERED.3
In this instant petition, petitioner avers that the Court of Appeals erred in:
I. ...RULING THAT THERE WAS AN INFRINGEMENT OF RESPONDENT’S
ARCUATE MARK.
II. ...RULING THAT PETITIONER IS JOINTLY AND SOLIDARILY LIABLE WITH CVS
GARMENTS INDUSTRIAL CORPORATION FOR INFRINGEMENT OF
RESPONDENT’S ARCUATE MARK.
III. ...IN ORDERING, THERE BEING NO INFRINGEMENT OR UNFAIR
COMPETITION, THE AWARD OF DAMAGES AND CANCELLATION OF
COPYRIGHT REGISTRATION NO. 1-1998 ISSUED IN THE NAME OF
PETITIONER.4
Briefly, we are asked to resolve the following issues:
1. Did petitioner infringe on private respondents’ arcuate design?
2. Must we hold petitioner solidarily liable with CVS Garments Industrial Corporation?
3. Are private respondents entitled to nominal, temperate and exemplary damages
and cancellation of petitioner’s copyright?
On the first issue, petitioner claims that he did not infringe on private respondents’ arcuate
design because there was no colorable imitation which deceived or confused the public. He
cites Emerald Garment Manufacturing Corporation vs. Court of Appeals, G.R. No. 100098, 251
SCRA 600 (1995), as authority. He disagreed with the Court of Appeals that there were
confusing similarities between Levi’s and Europress’ arcuate designs, despite the trial court’s
observation of differences in them. Petitioner maintains that although the backpocket designs
had similarities, the public was not confused because Levi’s jeans had other marks not found in
Europress jeans. Further, he says Levi’s long history and popularity made its trademark easily
identifiable by the public.
In its comment, private respondents aver that the Court of Appeals did not err in ruling that there
was infringement in this case. The backpocket design of Europress jeans, a double arc
intersecting in the middle was the same as Levi’s’ mark, also a double arc intersecting at the
center. Although the trial court found differences in the two designs, these differences were not
noticeable. Further, private respondents said, infringement of trademark did not require exact
similarity. Colorable imitation enough to cause confusion among the public, was sufficient for a
trademark to be infringed. Private respondents explained that in a market research they
conducted with 600 respondents, the result showed that the public was confused by Europress
trademark vis the Levi’s trademark.
We find that the first issue raised by petitioner is factual. The basic rule is that factual questions
are beyond the province of this Court in a petition for review. Although there are exceptions to
this rule, this case is not one of them.5 Hence, we find no reason to disturb the findings of the
Court of Appeals that Europress’ use of the arcuate design was an infringement of the Levi’s
design.
On the second issue, petitioner claims that private respondents did not show that he was
connected with CVSGIC, nor did they prove his specific acts of infringement to make him liable
for damages. Again, this is a factual matter and factual findings of the trial court, concurred in by
the Court of Appeals, are final and binding on this Court.6 Both the courts below found that
petitioner had a copyright over Europress’ arcuate design and that he consented to the use of
said design by CVSGIC. We are bound by this finding, especially in the absence of a showing
that it was tainted with arbitrariness or palpable error.7 It must be stressed that it was immaterial
whether or not petitioner was connected with CVSGIC. What is relevant is that petitioner had a
copyright over the design and that he allowed the use of the same by CVSGIC.
Petitioner also contends that the Court of Appeals erred when it said that he had the burden to
prove that he was not connected with CVSGIC and that he did not authorize anyone to use his
copyrighted design. According to petitioner, these are important elements of private
respondents’ cause of action against him, hence, private respondents had the ultimate burden of
proof.
Pertinent is Section 1, Rule 131 of the Rules of Court8 which provides that the burden of proof is
the duty of a party to prove the truth of his claim or defense, or any fact in issue by the amount of
evidence required by law. In civil cases, the burden of proof may be on either the plaintiff or the
defendant. It is on the latter, if in his answer he alleges an affirmative defense, which is not a
denial of an essential ingredient in the plaintiff’s cause of action, but is one which, if established,
will be a good defense – i.e., an "avoidance" of the claim, which prima facie, the plaintiff already
has because of the defendant’s own admissions in the pleadings. 9
Petitioner’s defense in this case was an affirmative defense.1âwphi1 He did not deny that private
respondents owned the arcuate trademark nor that CVSGIC used on its products a similar
arcuate design. What he averred was that although he owned the copyright on the Europress
arcuate design, he did not allow CVSGIC to use it. He also said he was not connected with
CVSGIC. These were not alleged by private respondents in their pleadings, and petitioner
therefore had the burden to prove these.
Lastly, are private respondents entitled to nominal, temperate and exemplary damages and
cancellation of petitioner’s copyright?
Petitioner insists that he had not infringed on the arcuate trademark, hence, there was no basis
for nominal and temperate damages. Also, an award of nominal damages precludes an award of
temperate damages. He cites Ventanilla vs. Centeno, G.R. No. L-14333, 1 SCRA 215 (1961) on
this. Thus, he contends, assuming arguendo that there was infringement, the Court of Appeals
still erred in awarding both nominal and temperate damages.
Petitioner likewise said that the grant of exemplary damages was inconsistent with the trial
court’s finding that the design of Europress jeans was not similar to Levi’s design and that no
pecuniary loss was suffered by respondents to entitle them to such damages.
Lastly, petitioner maintains that as Europress’ arcuate design is not a copy of that of Levi’s,
citing the trial court’s findings that although there are similarities, there are also differences in the
two designs, cancellation of his copyright was not justified.
On this matter, private respondents assert that the lower courts found that there was
infringement and Levi’s was entitled to damages based on Sections 22 and 23 of RA No. 166
otherwise known as the Trade Mark Law,10 as amended, which was the law then governing. Said
sections define infringement and prescribe the remedies therefor. Further, private respondents
aver it was misleading for petitioner to claim that the trial court ruled that private respondents did
not suffer pecuniary loss, suggesting that the award of damages was improper. According to the
private respondents, the trial court did not make any such ruling. It simply stated that there was
no evidence that Levi’s had suffered decline in its sales because of the use of the arcuate design
by Europress jeans. They offer that while there may be no direct proof that they suffered a
decline in sales, damages may still be measured based on a reasonable percentage of the gross
sales of the respondents, pursuant to Section 23 of the Trademark law. 11
Finally, regarding the cancellation of petitioner’s copyright, private respondents deny that the trial
court ruled that the arcuate design of Europress jeans was not the same as Levi’s arcuate
design jeans. On the contrary, the trial court expressly ruled that there was similarity. The
cancellation of petitioner’s copyright was justified because petitioner’s copyright can not prevail
over respondents’ registration in the Principal Register of Bureau of Patents, Trademarks, and
Technology Transfer. According to private respondents, the essence of copyright registration is
originality and a copied design is inherently non-copyrightable. They insist that registration does
not confer originality upon a copycat version of a prior design.
From the foregoing discussion, it is clear that the matters raised by petitioner in relation to the
last issue are purely factual, except the matter of nominal and temperate damages. Petitioner
claims that damages are not due private respondents and his copyright should not be cancelled
because he had not infringed on Levi’s trademark. Both the trial court and the Court of Appeals
found there was infringement. Thus, the award of damages and cancellation of petitioner’s
copyright are appropriate.12 Award of damages is clearly provided in Section 23,13 while
cancellation of petitioner’s copyright finds basis on the fact that the design was a mere copy of
that of private respondents’ trademark.1âwphi1 To be entitled to copyright, the thing being
copyrighted must be original, created by the author through his own skill, labor and judgment,
without directly copying or evasively imitating the work of another.14
However, we agree with petitioner that it was error for the Court of Appeals to affirm the award of
nominal damages combined with temperate damages15 by the Regional Trial Court of Makati.
What respondents are entitled to is an award for temperate damages, not nominal damages. For
although the exact amount of damage or loss can not be determined with reasonable certainty,
the fact that there was infringement means they suffered losses for which they are entitled to
moderate damages.16 We find that the award of ₱50,000.00 as temperate damages fair and
reasonable, considering the circumstances herein as well as the global coverage and reputation
of private respondents Levi Strauss & Company and Levi Strauss (Phil.), Inc.
WHEREFORE, the decision dated January 30, 1998, of the Court of Appeals, in CA-G.R. CV
No. 51553 AFFIRMING the judgment of the Regional Trial Court of Makati, Branch 66, dated
July 14, 1995, is hereby MODIFIED so that nominal damages are deleted but the amount of
P50,000 is hereby awarded only as TEMPERATE DAMAGES. In all other respects, said
judgment is hereby AFFIRMED, to wit:
a) the writ of preliminary injunction is made permanent;
b) the defendants CVS Garment and Industrial Company and Venancio Sambar are
ordered also to pay the plaintiffs jointly and solidarily the sum of ₱10,000.00 as
exemplary damages, and the sum of ₱25,000.00 as attorney’s fees and litigation
expenses, and to pay the costs; and
c) the Director of the National Library is ordered to cancel the Copyright Registration
No. 1-1998 issued in the name of Venancio Sambar.
SO ORDERED.
FILTRATION APPROACH
Tests of confusion
TOTALITY APPROACH
TEST OF DOMINANCY
G.R. No. L-5378 May 24, 1954
In Re Petition for Registration of Trademark "Freedom" under section 4 of Republic Act
No. 166 filed in the Philippine Patent Office bearing Serial No. 38. CO TIONG SA, applicant-
petitioner,
vs.
DIRECTOR OF PATENTS, respondent,
SAW WOO CHIONG AND CO., oppositor.
Antonio Fa., Quesada, Floro Crisologo, Manuel A. Panis and Rizalino L. Favilla for petitioner.
Eufemio E. de Mesa and E. L. Gonzales for oppositor.
First Assistant Solicitor General Ruperto Kapunan Jr. and Solicitor Pacifico P. de Castro for
respondent.
LABRADOR, J.:
This is an appeal filed by Co Tiong Sa, applicant for registration of the trademark "Freedom" and
its corresponding design, against a decision of the Director of Patents sustaining the opposition
thereto of Saw Woo Chiong and Co., and denying the application. The application in said
registration proceeding, now petitioner in this Court, has used the trademark on undershirts and
T-shirts since March, 1947. The trademark sought to be registered is "Freedom". The word
"Freedom" is in hand print, with a slight to the right. In the facsimiles attached to the original
application, there are no letters, lines, or figures around the word, but in the label, Exhibit D-1,
the said word is preceded by a triangle, with the letter "F" inside and small letters "H.L." under. A
capital letter "L" is on the lower right-hand corner; and all of these are enclosed in a rectangle of
double lines. In Exhibit D-2, the label is the same word "Freedom" with a capital letter "M" above
it, a flourish under the word "Freedom", and the words "HIGH QUALITY" thereunder. The label
used for boxes is similar to label Exhibit D-1, except that the rectangle is in a heavy line and is
longer.
The label presented by Saw Woo Chiong and Co., oppositor-respondent herein (Exhibit D-3),
consist of the word "Freeman" in hand print, with a right slant, above the middle of which is a
vignette of a man wearing a to what, which vignette is preceded by the small word "The" in print
and followed by two parallel lines close to each other, and the words "PERFECT WEAR" in
smaller letters under the word "FREEMAN". This trademark was registered in 1947 in the
Bureau of Commerce and re-registered in the Patent Office on September 22, 1948. This
trademark is used not only on shirts, but also on polo shirts, undershirts, pajamas, skippers, and
T-shirts, although in the year 1947 Saw Woo Chiong and Co. discontinued manufacturing
skippers and T-shirts on the ground of scarcity of materials. This trademark has been used since
1938, and it had been advertised extensively in newspapers, magazines, etc.
The applicant-petitioner claims that in sustaining the objection of the oppositor-respondent, the
Director of Patents erred: (1) in holding that in determining an opposition in the registration of
trademarks, attention should be centered upon the central idea of each trademark, disregarding
their differences in details; (2) in holding that if the central idea of each trademark gives the
same general impression, the two trademarks should be adjudged as confusingly similar; (3) in
holding that the word "FREEDOM" and "FREEMAN" convey the same general impression,
hence must be adjudged to be confusingly similar; (4) in holding that if the word "FREEDOM" is
allowed to be registered as trademark, although no confusion and deception will actually take
place, the oppositor will nevertheless be damaged; and (5) in holding that the oppositor is not
required to introduce testimony on substantiate the claim made in its opposition.
The first four assignments of error are related to each other and may be considered together.
There is no question that if the details of the two trademarks are to be considered, many
differences would be noted that would enable a careful and scrutinizing eye to distinguish one
trademark from the other. Thus, we have the vignette of a man wearing a to what, which would
distinguish the oppositor's label from the triangle with the letter "F" on the right hand corner of
applicant's label. Then we also have the rectangle enclosing the applicant's mark, which
rectangle is absent in that of the oppositor's. But differences of variations in the details of one
trademark and of another are not the legally accepted tests of similarity in trademarks. It has
been consistently held that the question of infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and
confusion and deception is likely to result, infrigement takes place. Duplication or limitation is not
necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G.
Heilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead
Co. vs. Pflugh (CC) 180 Fed. 579.) The question at issue in cases of infringement of trademarks
is whether the use of the marks involved would be likely to cause confusion or mistake in the
mind of the public or to deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber
Co., 107 F. 2d, 588, citing Procter and Gamble Co. vs. J. L. Prescott Co., 49 F. 2d, 959, 18
CCPA, Patent, 1433; Pepsodent Co. vs. Comfort Manufacturing Co., 83 F. 2d 906, 23 CCPA,
Patents, 1224.)
When would a trademark cause confusion in the mind of the public or in those unwary
customers or purchasers? It must be remembered that infringement of a trademark is a form of
unfair competition (Clarke vs. Manila Candy Co., 36 Phil., 100), and unfair competition is always
a question of fact. The universal test has been said to be whether the public is likely to be
deceived. (Alhambra Cigar and Cigarette Co. vs. Mojica, 27 Phil., 266.)
When a person sees an object, a central or dominant idea or picture thereof is formed in his
mind. This dominant picture or idea is retained in the mind, and the decorations or details are
forgotten. When one sees the city hall of Baguio, the dominant characteristics which are likely to
be retained in the mind are the portico in the middle of the building, the tower thereon, the four
columns supporting it, and the wings on both sides. The features that are retained are the
peculiar, dominant features. When on sees the Legislative Building in Manila, the picture that is
retained is that of a majestic low building with concrete columns all around. In this mind-picture
the slight or minor decorations are lost sight of, and the central figure only is retained. So is it
with a customer or purchaser who sees a label. He retains in his mind the dominant
characteristics or features or central idea in the label, and does not retain or forgets the
attendant decorations, flourishes, or variations. The ordinary customer does not scrutinize the
details of the label; he forgets or overlooks these, but retains a general impression, or a central
figure, or a dominant characteristic. The reason for the above has been explained in the
following manner:
. . . This rule has a basis in experience. The average person usually will not, and often
can not, take in at a casual glance all, or even a large part of the details of what he
looks at. What part or parts of two trademarks which are alleged to be similar does the
average ordinary buyer see when he looks at them? What features of them are
remembered by the average buyer? We do not really hear all that is spoken in our
hearing. Far from all we see or hear casually is retained sufficiently clearly or
insufficient detail for us to get a lasting impression of it which we can remember when
we encounter the mark again. The importance of this rule is emphasized by the
increase of radio advertising in which we are deprived of the help of our eyes and
must depend entirely on the ear.
The average buyer usually seeks a sign, some special, easily remembered earmarks
of the brand he has in mind. It may be the color, sound, design, or a peculiar shape or
name. Once his eyes see that or his ear hears it, he is satisfied. An unfair competitor
need not copy the entire mark to accomplish his fraudulent purpose. It is enough if he
takes the one feature which the average buyer is likely to remember. (Nims, The Law
of Unfair Competition and Trademarks, 4th ed., Vol. 2, pp. 678-679).
The question of infringement is to be determined by the test of dominancy. The
dissimilarity in size, form and color of the label and the place where applied are not
conclusive. If the competing label contains the trademark of another, and confusion or
deception is likely to result, infringement takes place, regardless of the fact that the
accessories are dissimilar. Duplication or exact imitation is not necessary; nor is it
necessary that the infringing label should suggest an effort to imitate. (G. Heilman
Brewing Co. vs. Independent Brewing Co., 191 F., 489, citing Eagle Co. vs. Pflugh
(C.C.) 180 F., 579.)
In order to constitute infringement, it is not necessary that the trademark be literally
copied. ... . Neither is it necessary that every word be appropriated. There may be
infringement where the substantial and distinctive part of the trademark is copied or
imitated .... Dissimilarity in size, form and color of the label and place where it is
applied are not conclusive against infringement. ... . The resemblances may so far
dominate the differences as to be likely to deceive ordinary purchasers. (Queen Mfg.
Co. vs. Isaac Ginsberg Bros. Co., 25 F 2d 284, 287. See also Finchley, Inc. vs.
George Hess Co., Inc., et al., 24 F., Supp. 94.)
Upon examination of the trademark of the oppositor-respondent, one will readily see that the
dominant feature is the word "FREEMAN" written in a peculiar print, slightly slanting to the right,
with a peculiarly written capital letters "FF". These dominant features or characteristics of
oppositor's trademarks are reproduced or imitated in applicant's trademark. In the first place, the
word "FREEDOM" conveys a similar idea as the word "FREEMAN". In the second place, the
style in which both capital "F" are written are similar. The print and slant of the letters are also FRUIT OF THE LOOM, INC., petitioner,
similar. An ordinary purchaser or an unsuspecting customer who has seen the oppositor's label vs.
sometime before will not recognize the difference between that label and applicant's label. He COURT OF APPEALS and GENERAL GARMENTS CORPORATION, respondents.
may notice some variations, but he will ignore these, believing that they are variations of the
same trademark to distinguish one kind or quality of goods from another.
Lichauco, Picazo & Agcaoli Law Office for petitioner.

For purposes of illustration, the following words have been held to have the same significance or
to have the same appearance and meaning.

MAKASIAR, J.:
"CELDURA" and "CORDURA". — That both marks considered as a whole are similar
in meaning and appearance can not be doubted. When spoken as written they sound
very much alike. Similarity of sound alone, under such circumstances, is sufficient to This is a petition for review on certiorari of the decision dated October 8, 1970 of the former
cause the marks to be regarded as confusingly similar when applied to merchandise Court of Appeals reversing the decision of the defunct Court of First Instance of Manila, Branch
of the same descriptive properties. (Celanes Corporation of America vs. E. I. Du Pont XIV, ordering the cancellation of private respondent's registration of the trademark FRUIT FOR
de Nemours and Co. (1946),154 F. 2d 146, 148.) EVE, enjoining it permanently from using trademark and ordering it to pay herein petitioner
P10,000.00 as attorney's fees.
"SKOAL" and "SKOL", and "SKOAL" was held identical in sound and meaning to
"SKOL". (SKOL Co., Inc., vs. Olson, 151 F. 2d, 200.) Petitioner, a corporation duly organized and existing under the laws of the State of Rhode Island,
United States of America, is the registrant of a trademark, FRUIT OF THE LOOM, in the
Philippines Patent Office and was issued two Certificates of Registration Nos. 6227 and 6680,
In this jurisdiction we have held that that name "Lusolin" is an infringement of the trademark
on November 29, 1957 and July 26, 1958, respectively. The classes of merchandise covered by
"Sapolin," as the sound of the two names is almost the same, and the labels of containers being
Registration Certificate No. 6227 are, among others, men's, women's and children's underwear,
almost the same in respect to color, size, and other characteristics. (Sapolin Co. vs. Balmeceda
which includes women's panties and which fall under class 40 in the Philippine Patent Office's
and Germann and Co., 67 Phil., 705.)
classification of goods. Registration Certificate No. 6680 covers knitted, netted and textile
fabrics.
In the case of La Insular vs. Jao Oge, 47 Phil., 75, plaintiff's label represented an European
female, while defendant's was a Filipino, but both labels exhibited a matron seated on a platform
Private respondent, a domestic corporation, is the registrant of a trademark FRUIT FOR EVE in
with a view of Manila Bay looking towards Mariveles at sunset. In spite of the fact that the
the Philippine Patent Office and was issued a Certificate of Registration No. 10160, on January
posture and coloring were slightly different, defendant's labels were declared to constitute an
10, 1963 covering garments similar to petitioner's products like women's panties and pajamas.
infringement of plaintiff's labels.

On March 31, 1965 petitioner filed before the lower court, a complaint for infringement of
After a careful study, we find that the dominant characteristic of oppositor's trademark
trademark and unfair competition against the herein private respondent. Petitioner principally
"FREEMAN" has been imitated in applicant's trademark "FREEDOM," such as to confuse the
alleged in the complaint that private respondent's trademark FRUIT FOR EVE is confusingly
public and unwary customers and puchasers, and to deceive them into believing that the articles
similar to its trademark FRUIT OF THE LOOM used also on women's panties and other textile
bearing one label are similar or produced by the same manufacturer as those carrying the other
products. Furthermore, it was also alleged therein that the color get-up and general appearance
label. The decision of the Director of Patents sustaining the opposition and denying the
of private respondent's hang tag consisting of a big red apple is a colorable imitation to the hang
application must, therefore, be affirmed.
tag of petitioner.

With respect to the fifth assignment of error (first in petitioner's brief), it must be remembered
On April 19, 1965, private respondent filed an answer invoking the special defense that its
that the question of similarity or dissimilarity while it is a question of opinion, is to be determined
registered trademark is not confusingly similar to that of petitioner as the latter alleged. Likewise,
by the court mainly on the basis of the facsimiles or labels or pictures submitted to the Director
private respondent stated that the trademark FRUIT FOR EVE is being used on ladies' panties
of Patents. In the case at bar, innumerable exhibits were presented to show the similarity.
and pajamas only whereas petitioner's trademark is used even on men's underwear and
Similarity or dissimilarity can be determined by the Director of Patents, or by this Court on
pajamas.
appeal, by a mere examination and comparison of the competing trademarks. Failure on the part
of the oppositor to submit the testimony of witnesses, who are to give opinions on the alleged
similarity or dissimilarity, can not, therefore, be a ground for a dismissal of an opposition. We At the pre-trial on May 5, 1965, the following admissions were made: (1) That the trademark
hold that the Director of Patents did not err in denying the motion for dismissal presented by the FRUIT OF THE LOOM has been registered with the Bureau of Patents and it does not bear the
applicant upon the failure of the oppositor to submit witnesses to sustain his opposition. notice 'Reg. Phil. Patent Off.', and (2) That the trademark FRUIT FOR EVE has been registered
with the Bureau of Patents and it bears the notice "Reg. Phil. Patent Off." and (3) That at the
time of its registration, plaintiff filed no opposition thereto.
Finding no error in the decision appealed from, the same is hereby affirmed, with costs against
the applicant-petitioner Co Tiong Sa.
After trial, judgment was rendered by the lower court in favor of herein petitioner, the dispositive
portion of which reads as follows:
G.R. No. L-32747 November 29, 1984
 Judgment is, therefore, rendered ordering the Bureau of Patents to cancel
the registration of the Trademark "Fruit for Eve", permanently enjoining
Defendant from using the trademark "Fruit for Eve", ordering Defendant to
pay plaintiff the sum of P10,000.00 as attorney's fees and to pay the costs.
Both parties appealed to the former Court of Appeals, herein petitioner's appeal being centered
on the failure of the trial court to award damages in its favor. Private respondent, on the other
hand, sought the reversal of the lower court's decision.
On October 8, 1970, the former Court of Appeals, as already stated, rendered its questioned
decision reversing the judgment of the lower court and dismissing herein petitioner's complaint.
Petitioner's motion for reconsideration having been denied, the present petition was filed before
this Court.
The first and second arguments advanced by petitioner are that the respondent court committed
an error in holding that the word FRUIT, being a generic word, is not capable of exclusive
appropriation by petitioner and that the registrant of a trademark is not entitled to the exclusive
use of every word of his mark. Otherwise stated, petitioner argues that the respondent court
committed an error in ruling that petitioner cannot appropriate exclusively the word FRUIT in its
trademark FRUIT OF THE LOOM.
The third and fourth arguments submitted by petitioner which We believe is the core of the
present controversy, are that the respondent court erred in holding that there is no confusing
similarity in sound and appearance between the two trademarks in question. According to
petitioner, the prominent and dominant features in both of petitioner's and private respondent's
trademark are the word FRUIT and the big red apple design; that ordinary or average
purchasers upon seeing the word FRUIT and the big red apple in private respondent's label or
hang tag would be led to believe that the latter's products are those of the petitioner, The
resolution of these two assigned errors in the negative will lay to rest the matter in litigation and
there is no need to touch on the other issues raised by petitioner. Should the said questions be
resolved in favor of petitioner, then the other matters may be considered.
Petitioner, on its fifth assigned error, blames the former Court of Appeals for not touching the
question of the fraudulent registration of private respondent's trademark FRUIT FOR EVE. As
may be gleaned from the questioned decision, respondent court did not pass upon the argument
of petitioner that private respondent obtained the registration of its trademark thru fraud or
misrepresentation because of the said court's findings that there is no confusing similarity
between the two trademarks in question. Hence, said court has allegedly nothing to determine
as to who has the right to registration because both parties have the right to have their
respective trademarks registered.
Lastly, petitioner asserts that respondent court should have awarded damages in its favor
because private respondent had clearly profited from the infringement of the former's trademark.
The main issue involved in this case is whether or not private respondent's trademark FRUIT
FOR EVE and its hang tag are confusingly similar to petitioner's trademark FRUIT OF THE
LOOM and its hang tag so as to constitute an infringement of the latter's trademark rights and
justify the cancellation of the former.
In cases involving infringement of trademark brought before this Court it has been consistently
held that there is infringement of trademark when the use of the mark involved would be likely to
cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or
source of the commodity (Co Tiong Sa vs. Director of Patents, 95 Phil. 1; Alhambra Cigar &
Cigarette Co. vs. Mojica, 27 Phil. 266; Sapolin Co. vs. Balmaceda, 67 Phil. 705; La Insular vs.
Jao Oge, 47 Phil. 75).
In cases of this nature, there can be no better evidence as to whether there is a confusing
similarity in the contesting trademarks than the labels or hang tags themselves. A visual
presentation of the labels or hang tags is the best argument for one or the other, hence, We are
reproducing hereunder pictures of the hang tags of the products of the parties to the case. The
pictures below are part of the documentary evidence appearing on page 124 of the original
records.
Petitioner asseverates in the third and fourth assignment of errors, which, as We have said,
constitute the main argument, that the dominant features of both trademarks is the word FRUIT.
In determining whether the trademarks are confusingly similar, a comparison of the words is not
the only determinant factor. The trademarks in their entirety as they appear in their respective
labels or hang tags must also be considered in relation to the goods to which they are attached.
The discerning eye of the observer must focus not only on the predominant words but also on
the other features appearing in both labels in order that he may draw his conclusion whether one
is confusingly similar to the other (Bristol Myers Co. vs. Director of Patents, 17 SCRA 131).
In the trademarks FRUIT OF THE LOOM and FRUIT FOR EVE, the lone similar word is FRUIT.
WE agree with the respondent court that by mere pronouncing the two marks, it could hardly be
said that it will provoke a confusion, as to mistake one for the other. Standing by itself, FRUIT
OF THE LOOM is wholly different from FRUIT FOR EVE. WE do not agree with petitioner that
the dominant feature of both trademarks is the word FRUIT for even in the printing of the
trademark in both hang tags, the word FRUIT is not at all made dominant over the other words.
As to the design and coloring scheme of the hang tags, We believe that while there are
similarities in the two marks like the red apple at the center of each mark, We also find
differences or dissimilarities which are glaring and striking to the eye such as:
1. The shape of petitioner's hang tag is round with a base that looks like a
paper rolled a few inches in both ends; while that of private respondent is
plain rectangle without any base.
2. The designs differ. Petitioner's trademark is written in almost semi-circle
while that of private respondent is written in straight line in bigger letters
than petitioner's. Private respondent's tag has only an apple in its center but
that of petitioner has also clusters of grapes that surround the apple in the
center.
3. The colors of the hang tag are also very distinct from each other.
Petitioner's hang tag is fight brown while that of respondent is pink with a
white colored center piece. The apples which are the only similarities in the
hang tag are differently colored. Petitioner's apple is colored dark red, while
that of private respondent is light red.
The similarities of the competing trademarks in this case are completely lost in the substantial
differences in the design and general appearance of their respective hang tags. WE have
examined the two trademarks as they appear in the hang tags submitted by the parties and We
are impressed more by the dissimilarities than by the similarities appearing therein. WE hold that
the trademarks FRUIT OF THE LOOM and FRUIT FOR EVE do not resemble each other as to
confuse or deceive an ordinary purchaser. The ordinary purchaser must be thought of as having,
and credited with, at least a modicum of intelligence (Carnation Co. vs. California Growers
Wineries, 97 F. 2d 80; Hyram Walke and Sons vs. Penn-Maryland Corp., 79 F. 2d 836) to be
able to see the obvious differences between the two trademarks in question. Furthermore, We
believe that a person who buys petitioner's products and starts to have a liking for it, will not get
confused and reach out for private respondent's products when she goes to a garment store.
These findings in effect render immaterial the other errors assigned by petitioner which are
premised on the assumption that private respondent's trademark FRUIT FOR EVE had infringed
petitioner's trademark FRUIT OF THE LOOM.
WHEREFORE, THE DECISION APPEALED FROM IS AFFIRMED. COSTS AGAINST
PETITIONER.
SO ORDERED.
E. Trademark Assignment and Licensing (Sec. 149-150)
G.R. No. 143193 June 29, 2005
MELBAROSE R. SASOT and ALLANDALE R. SASOT, petitioners,
vs.
PEOPLE OF THE PHILIPPINES, The Honorable court of of appeals, and REBECCA G.
SALVADOR, Presiding Judge, RTC, Branch 1, Manila, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
The case subject of the present special civil action for certiorari is a criminal prosecution against
petitioners for unfair competition under Article 189 of the Revised Penal Code, filed before the
Regional Trial Court (RTC) of Manila (Branch 1), and docketed as Criminal Case No. 98-
166147.1
Some time in May 1997, the National Bureau of Investigation (NBI) conducted an investigation
pursuant to a complaint by the NBA Properties, Inc., against petitioners for possible violation of
Article 189 of the Revised Penal Code on unfair competition. In its Report dated June 4, 1997,
the NBI stated that NBA Properties, Inc., is a foreign corporation organized under the laws of the
United States of America, and is the registered owner of NBA trademarks and names of NBA
basketball teams such as "USA Basketball," "Chicago Bulls," "Orlando Magic," "Los Angeles
Lakers," "Rockets," "Phoenix Suns," "Bullets," "Pacers," "Charlotte Hornets," "Blazers," "Denver
Nuggets," "Sacramento Kings," "Miami Heat," Utah Jazz," "Detroit Pistons," "Milwaukee Bucks,"
"Seattle Sonics," "Toronto Raptors," "Atlanta Hawks," "Cavs," "Dallas Mavericks," "Minnesota
Timberwolves," and "Los Angeles Clippers." These names are used on hosiery, footwear, t-
shirts, sweatshirts, tank tops, pajamas, sport shirts, and other garment products, which are
allegedly registered with the Bureau of Patents, Trademarks and Technology Transfer. The
Report further stated that during the investigation, it was discovered that petitioners are engaged
in the manufacture, printing, sale, and distribution of counterfeit "NBA" garment products. Hence,
it recommended petitioners’ prosecution for unfair competition under Article 189 of the Revised
Penal Code.2
In a Special Power of Attorney dated October 7, 1997, Rick Welts, as President of NBA
Properties, Inc., constituted the law firm of Ortega, Del Castillo, Bacorro, Odulio, Calma &
Carbonell, as the company’s attorney-in-fact, and to act for and on behalf of the company, in the
filing of criminal, civil and administrative complaints, among others. 3 The Special Power of
Attorney was notarized by Nicole Brown of New York County and certified by Norman Goodman,
County Clerk and Clerk of the Supreme Court of the State of New York. Consul Cecilia B.
Rebong of the Consulate General of the Philippines, New York, authenticated the
certification.4 Welts also executed a Complaint-Affidavit on February 12, 1998, before Notary
Public Nicole J. Brown of the State of New York.5
Thereafter, in a Resolution dated July 15, 1998, Prosecution Attorney Aileen Marie S. Gutierrez
recommended the filing of an Information against petitioners for violation of Article 189 of the
Revised Penal Code.6 The accusatory portion of the Information reads:
That on or about May 9, 1997 and on dates prior thereto, in the City of Manila, Philippines, and
within the jurisdiction of this Honorable Court, above named accused ALLANDALE SASOT and
MELBAROSE SASOT of Allandale Sportslines, Inc., did then and there willfully, unlawfully and
feloniously manufacture and sell various garment products bearing the appearance of "NBA"
names, symbols and trademarks, inducing the public to believe that the goods offered by them
are those of "NBA" to the damage and prejudice of the NBA Properties, Inc., the trademark
owner of the "NBA".
CONTRARY TO LAW.7
Before arraignment, petitioners filed a Motion to Quash the Information on the following grounds:
I. THAT THE FACTS CHARGED DO NOT CONSTITUTE AN OFFENSE
II. AND THIS HONORABLE COURT HAD NO JURISDICTION OVER THE OFFENSE
CHARGED OR THE PERSON OF THE ACCUSED8
In support of the foregoing, petitioners argue that the fiscal should have dismissed Welts’s
complaint because under the rules, the complaint must be sworn to before the prosecutor and
the copy on record appears to be only a fax transmittal.9 They also contend that complainant is a
foreign corporation not doing business in the Philippines, and cannot be protected by Philippine
patent laws since it is not a registered patentee. Petitioners aver that they have been using the
business name "ALLANDALE SPORTSLINE, INC." since 1972, and their designs are original
and do not appear to be similar to complainant’s, and they do not use complainant’s logo or
design.10
The trial prosecutor of the RTC-Manila (Branch 1), Jaime M. Guray, filed his
Comment/Opposition to the motion to quash, stating that he has the original copy of the
complaint, and that complainant has an attorney-in-fact to represent it. Prosecutor Guray also
contended that the State is entitled to prosecute the offense even without the participation of the
private offended party, as the crime charged is a public crime.11
The trial court sustained the prosecution’s arguments and denied petitioners’ motion to quash in
its Order dated March 5, 1999.12
Petitioners filed a special civil action for certiorari with the Court of Appeals (CA) docketed as
CA-G.R. SP No. 52151 which was dismissed per its Decision dated January 26,
2000.13 According to the CA, the petition is not the proper remedy in assailing a denial of a
motion to quash, and that the grounds raised therein should be raised during the trial of the case
on the merits.14 The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered, the petition for certiorari is hereby DISMISSED. resort to a filing of a petition for certiorarishould be permitted. Clearly, the CA did not commit any
Respondent court is hereby ordered to conduct further proceedings with dispatch in Criminal grave abuse of discretion in dismissing the petition.
Case No. 98-166147.
Moreover, the Court does not find any justification for the quashal of the Information filed against
SO ORDERED.15 petitioners.

Petitioners sought reconsideration of the Decision but this was denied by the CA. 16
Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court, with
issues raised as follows:
For one, while petitioners raise in their motion to quash the grounds that the facts charged do
not constitute an offense and that the trial court has no jurisdiction over the offense charged or
the person of the accused,23 their arguments focused on an alleged defect in the complaint filed
before the fiscal, complainant’s capacity to sue and petitioners’ exculpatory defenses against the
crime of unfair competition.

1. WHETHER A FOREIGN CORPORATION NOT ENGAGED AND LICENSE (sic) TO DO

Section 3, Rule 117 of the 1985 Rules of Criminal Procedure, which was then in force at the time
BUSINESS IN THE PHILIPPINES MAY MAINTAIN A CAUSE OF ACTION FOR UNFAIR
the alleged criminal acts were committed, enumerates the grounds for quashing an information,
COMPETITION.
to wit:

2. WHETHER AN OFFICER OF A FOREIGN CORPORATION MAY ACT IN BEHALF OF A

a) That the facts charged do not constitute an offense;
CORPORATION WITHOUT AUTHORITY FROM ITS BOARD OF DIRECTORS.

b) That the court trying the case has no jurisdiction over the offense charged or the
3. WHETHER A FOREIGN CORPORATION NOT ENGAGED IN BUSINESS AND WHOSE
person of the accused;
EMBLEM IT SOUGHT TO PROTECT IS NOT IN ACTUAL USE IS ENTITLED TO THE
PROTECTION OF THE PHILIPPINE LAW.
c) That the officer who filed the information had no authority to do so;
4. WHETHER THE RESPONDENT REGIONAL TRIAL COURT CORRECTLY ASSUMED
JURISDICTION OVER THE CASE AND THE PERSONS OF THE ACCUSED. d) That it does not conform substantially to the prescribed form;

5. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION e) That more than one offense is charged except in those cases in which existing laws
AMOUNTING TO LACK OF JURISDICTION WHEN IT DISMISSED THE PETITION.17 prescribe a single punishment for various offenses;

Petitioners reiterate the argument that the complaint filed by Rick Welts of the NBA Properties, f) That the criminal action or liability has been extinguished;
Inc., is defective and should have been dismissed by the fiscal because it should have been
personally sworn to by the complainant before the investigating prosecutor. They also reiterate
g) That it contains averments which, if true, would constitute a legal excuse or
the claim that Welts failed to show any board resolution showing his authority to institute any
justification; and
action in behalf of the company, and that the NBA’s trademarks are not being actually used in
the Philippines, hence, they are of public dominion and cannot be protected by Philippine patent
laws. Petitioners further contend that they have not committed acts amounting to unfair h) That the accused has been previously convicted or in jeopardy of being convicted,
competition.18 or acquitted of the offense charged.

The Office of the Solicitor General appeared in behalf of the People, and filed its Amended Nowhere in the foregoing provision is there any mention of the defect in the complaint filed
Comment to the petition, praying for its dismissal, arguing that the CA did not commit any grave before the fiscal and the complainant’s capacity to sue as grounds for a motion to quash.
abuse of discretion in dismissing the petition for reasons stated in its Decision dated January 26,
2000.19
For another, under Section 3, Rule 112 of the 1985 Rules of Criminal Procedure, a complaint is
substantially sufficient if it states the known address of the respondent, it is accompanied by
The petition must be denied. complainant’s affidavit and his witnesses and supporting documents, and the affidavits are
sworn to before any fiscal, state prosecutor or government official authorized to administer oath,
or in their absence or unavailability, a notary public who must certify that he personally examined
The Court has consistently held that a special civil action for certiorari is not the proper remedy
the affiants and that he is satisfied that they voluntarily executed and understood their
to assail the denial of a motion to quash an information.20 The proper procedure in such a case
affidavits. All these have been duly satisfied in the complaint filed before Prosecution Attorney
is for the accused to enter a plea, go to trial without prejudice on his part to present the special
Aileen Marie S. Gutierrez. It must be noted that even the absence of an oath in the complaint
defenses he had invoked in his motion to quash and, if after trial on the merits, an adverse
does not necessarily render it invalid.24 Want of oath is a mere defect of form, which does not
decision is rendered, to appeal therefrom in the manner authorized by law.21 Thus, petitioners
affect the substantial rights of the defendant on the merits.25
should not have forthwith filed a special civil action for certiorari with the CA and instead, they
should have gone to trial and reiterate the special defenses contained in their motion to quash.
There are no special or exceptional circumstances 22 in the present case such that immediate
In this case, Welts’s Complaint-Affidavit contains an acknowledgement by Notary Public Nicole
Brown of the State of New York that the same has been subscribed and sworn to before her on
February 12, 1998,26 duly authenticated by the Philippine Consulate. While the copy on record of
the complaint-affidavit appears to be merely a photocopy thereof, Prosecution Attorney Gutierrez
stated that complainant’s representative will present the authenticated notarized original in
court,27 and Prosecutor Guray manifested that the original copy is already on hand. 28 It is apt to
state at this point that the prosecutor enjoys the legal presumption of regularity in the
performance of his duties and functions, which in turn gives his report the presumption of
accuracy.29
Moreover, records show that there are other supporting documents from which the prosecutor
based his recommendation, to wit:
(1) The NBI Report dated June 4, 1997, containing an account of the investigation
conducted from April 30, 1997 to May 9, 1997, and the subsequent search and
seizure of several items from petitioners’ establishment; 30
(2) The letter dated May 8, 1997 from the law firm of Ortega, Del Castillo, Bacorro,
Odulio, Calma & Carbonell to the NBI, seeking assistance in stopping the illegal
manufacture, distribution and sale of "fake products bearing the ‘NBA’ trademark, and
in prosecuting the proprietors of aforesaid factory;"31 and
(3) The Joint Affidavit executed by Rechie D. Malicse and Dalisay P. Bal-ot of the
Pinkerton Consulting Services (Phils.) Inc., which was certified to by Prosecution
Attorney Gutierrez, attesting to their findings that petitioners were found to be
manufacturing, printing, selling, and distributing counterfeit "NBA" garment products.32
Consequently, if the information is valid on its face, and there is no showing of manifest error,
grave abuse of discretion and prejudice on the part of public prosecutor, as in the present case,
the trial court should respect such determination.33
More importantly, the crime of Unfair Competition punishable under Article 189 of the Revised
Penal Code34 is a public crime. It is essentially an act against the State and it is the latter which
principally stands as the injured party. The complainant’s capacity to sue in such case becomes
immaterial.
In La Chemise Lacoste, S.A. vs. Fernandez,35 a case akin to the present dispute, as it involved
the crime of Unfair Competition under Article 189 of the Revised Penal Code, and the quashal of
search warrants issued against manufacturers of garments bearing the same trademark as that
of the petitioner, the Court succinctly ruled that:
More important is the nature of the case which led to this petition. What preceded this petition for
certiorari was a letter-complaint filed before the NBI charging Hemandas with a criminal offense,
i.e., violation of Article 189 of the Revised Penal Code. If prosecution follows after the
completion of the preliminary investigation being conducted by the Special Prosecutor
the information shall be in the name of the People of the Philippines and no longer the
petitioner which is only an aggrieved party since a criminal offense is essentially an act
against the State. It is the latter which is principally the injured party although there is a
private right violated. Petitioner's capacity to sue would become, therefore, of not much
significance in the main case. We cannot allow a possible violator of our criminal statutes to
escape prosecution upon a far-fetched contention that the aggrieved party or victim of a crime
has no standing to sue.
In upholding the right of the petitioner to maintain the present suit before our courts for unfair
competition or infringement of trademarks of a foreign corporation, we are moreover recognizing
our duties and the rights of foreign states under the Paris Convention for the Protection of
Industrial Property to which the Philippines and France are parties. We are simply interpreting
and enforcing a solemn international commitment of the Philippines embodied in a multilateral
treaty to which we are a party and which we entered into because it is in our national interest to
do so.36 (Emphasis supplied)
Lastly, with regard to petitioners’ arguments that the NBA Properties, Inc., is not entitled to
protection under Philippine patent laws since it is not a registered patentee, that they have not
committed acts amounting to unfair competition for the reason that their designs are original and
do not appear to be similar to complainant’s, and they do not use complainant’s logo or design,
the Court finds that these are matters of defense that are better ventilated and resolved during
trial on the merits of the case.
WHERFORE, the petition is DENIED for lack of merit. Let the records of this case be
REMANDED to the Regional Trial Court of Manila (Branch 24) where Criminal Case No. 98-
166147 is presently assigned, for further proceedings with reasonable dispatch.
G.R. No. 150877 May 4, 2006
ELIDAD KHO and VIOLETA KHO, Petitioners,
vs.
HON. ENRICO LANZANAS, Presiding Judge of the Regional Trial Court of Manila – Branch
7 and SUMMERVILLE GENERAL MERCHANDISING, Respondents.
DECISION
CHICO-NAZARIO, J.:
Culled from the records are the following antecedent facts:
Shun Yih Chemistry Factory (SYCF), a business existing and operating in Taiwan and engaged
in the manufacture and sale of Chin Chun Su Creams/Cosmetics, appointed Young Factor
Enterprises in the Philippines, owned and operated by Quintin Cheng also known as Kho Seng
Hiok, as its distributor of Chin Chun Su products in the Philippines for a term of two years
beginning 1978.1 Quintin Cheng registered with the Bureau of Food and Drugs (BFAD) as
distributor of Chin Chun Su products. Quintin Cheng subsequently secured a supplemental
registration for Chin Chun Su and device.2 This supplemental registration was ordered cancelled
by the Bureau of Patents, Trademarks and Technology Transfer3 on the ground of failure of the
registrant to file the required affidavit of non-use as required by Section 12 of Republic Act No.
166, as amended.4
Notwithstanding this cancellation, Quintin Cheng executed on 30 January 1990 an Assignment
of a Registered Trademark5 and a Supplementary Deed of Assignment6 dated 25 November
1991 wherein he sold all his right, title, interest and goodwill in the trademark Chin Chun Su and
device to petitioner Elidad Kho.
In the meantime, animosity arose between SYCF and Quintin Cheng resulting in the termination
of their distributorship agreement on 30 October 1990.7
Consequently, on 30 November 1990, SYCF appointed respondent Summerville General
Merchandising, represented by Ang Tiam Chay and Victor Chua, as its exclusive importer, re-
packer and distributor of Chin Chun Su products in the Philippines 8 for a period of five years or
until May 2005.
SYCF further executed a Special Power of Attorney dated 11 September 1991 in favor of
Summerville General Merchandising granting it the authority to file complaints against usurpers
of Chin Chun Su trademarks/tradename.9
From the foregoing incidents arose several judicial and quasi-judicial proceedings.
1) Civil Case No. Q-91-10926 before the Regional Trial Court (RTC) of Quezon City, Branch 90
On 20 December 1991, Elidad Kho/KEC Laboratory filed a Complaint for Injunction and
Damages against Ang Tiam Chay and Summerville General Merchandising before the RTC of
Quezon City, Branch 90, docketed as Civil Case No. Q-91-10926. Plaintiff therein Elidad
Kho/KEC Laboratory sought to enjoin defendants Ang Tiam Chay and Summerville General
Merchandising from using the name Chin Chun Su in their cream products.
On 22 January 1993, a decision in Civil Case No. Q-91-10926 was rendered, the dispositive
portion of which provides:
ACCORDINGLY, judgment is hereby rendered:
1. Declaring that plaintiff is not legally authorized to use the trademark "CHIN CHUN
SU" and upholding the right of defendant Summerville General Merchandising & Co.
to use said trademark as authorized by Shun Yih Chemistry Factory of Taiwan;
2. Declaring plaintiff to have the right to use the copyright claim on "OVAL FACIAL
CREAM CONTAINER/CASE" by virtue of Certificate of Copyright Registration No.
3687 issued by the National Library on May 23, 1991;
3. No award of damages;
4. Counsels for plaintiff and defendants are awarded P75,000.00 each as attorney’s
fees; and
5. Both parties to pay proportionate fees.10
Both parties appealed the RTC decision to the Court of Appeals, docketed as CA-G.R. CV NO.
48043 entitled, "Elidad C. Kho, doing business under the style of KEC Cosmetic Laboratory v.
Summerville General Merchandising and Co., et al." In a decision11 dated 22 November 1999,
the appellate court affirmed in toto the decision of the trial court. 12 Elidad Kho elevated the case
to this Court, docketed as G.R. No. 144100. In a resolution dated 28 August 2000, we denied
the petition. We held that:
The issue is who, between petitioner Elidad C. Kho and respondent Summerville General
Merchandising and Company has the better right to use the trademark "Chin Chun Su" on their
facial cream product?
We agree with both the Court of Appeals and the trial court that Summerville General
Merchandising and Company has the better right to use the trademark "Chin Chun Su" on its
facial cream product by virtue of the exclusive importation and distribution rights given to it by
Shun Yih Chemistry Factory of Taiwan on November 20, 1990 after the latter cancelled and
terminated on October 30, 1990 its Sole Distributorship Agreement with one Quintin Cheng, who
assigned and transferred his rights under said agreement to petitioner Elidad C. Kho on January
31, 1990.
As correctly held by the Court of Appeals, petitioner Kho is not the author of the trademark "Chin
Chun Su" and his only claim to the use of the trademark is based on the Deed of Agreement
executed in his favor by Quintin Cheng. By virtue thereof, he registered the trademark in his
name. The registration was a patent nullity because petitioner is not the creator of the trademark
"Chin Chun Su" and, therefore, has no right to register the same in his name. Furthermore, the
authority of Quintin Cheng to be the sole distributor of Chin Chun Su in the Philippines had
already been terminated by Shun Yih Chemistry of Taiwan. Withal, he had no right to assign or
to transfer the same to petitioner Kho.
WHEREFORE, the instant petition is hereby denied due course.13
2) BFAD Cosmetic Case No. CM-040-91
At the other end of the spectrum, due to the proliferation of fake Chin Chun Su products,
Summerville General Merchandising filed a Complaint14 before the BFAD against KEC Cosmetic
Laboratory owned by Elidad Kho.
In a resolution of the BFAD dated 4 February 1992, it ruled that:
WHEREFORE, the brand name clearance of CCS in favor of KEC is recalled and cosmetic
registration number DR-X6113-78 dtd 11/17/78 is TEMPORARILY CANCELLED until KEC
applies to change or amend the brand name CCS it is now using. For this purpose, KEC is
hereby ordered to retrieve all locally produced Chin Chun Su Pearl Cream for relabelling as soon
as the amendment of its brand name has been approved by this Bureau with the corresponding
amended Certificate of Registration.
Summerville’s application to register (renew or reinstate) CCS Medicated Cream under DR-
X6113-78 in the name of Shun Yih Chemistry Factory is herewith approved for processing at
BFAD-Product Services Division.15
3) Criminal Case No. 00-183261 before the RTC of Manila, Branch 1
This is the case filed before the RTC of Manila, Branch 1, entitled, "People of the Philippines v.
Elidad and Violeta Kho and Roger Kho," pursuant to the DOJ Resolution in I.S. No. 00A-02396
and I.S. No. 00B-10973, ordering the filing of a criminal complaint against Elidad, Roger and
Violeta Kho.16
Prior to the filing of Criminal Case No. 00-183261 before the RTC of Manila, Branch 1, on 18
January 2000, Victor Chua, representing Summerville General Merchandising, filed a Complaint
for Unfair Competition, docketed as I.S. No. 00A-02396 entitled, "Summerville General
Merchandising, represented by Victor Chua v. Elidad and Violeta Kho," before the Office of the
City Prosecutor of Manila.
Elidad and Violeta Kho filed their counter-affidavit in the Complaint for Unfair Competition which
served as their countercharge against Ang Tiam Chay and Victor Chua, likewise for Unfair
Competition, docketed as I.S. No. OOB-10973.
On 29 March 2000, the Office of the City Prosecutor granted the consolidation of both I.S. No.
00A-02396 and I.S. No. 00B-10973. On 25 April 2000, Assistant City Prosecutor Rector
Macapagal rendered a joint resolution dismissing both the Complaint and countercharge. This
resolution of dismissal was reversed by the review resolution17 dated 31 May 2000 issued by
Assistant City Prosecutor Elmer Calledo who directed the filing of an information against Elidad
Kho, Roger Kho and Violeta Kho for violation of Section 168.3(a) in relation to Sections 168 and
170, Republic Act No. 8293 (The Intellectual Property Code).18 On 17 August 2000, Department
of Justice (DOJ) Undersecretary Regis Puno issued a resolution19 dismissing the petition for
review filed by Elidad and Violeta Kho and upholding the ruling of Assistant City Prosecutor
Calledo, directing the filing of charges against the Khos. Elidad and Violeta Kho filed a motion for
reconsideration, and in a complete turnabout, on 28 September 2001, a resolution20 was issued
by then DOJ Secretary Hernando Perez again dismissing the Complaint and countercharge in
I.S. No. 00A-02396 and I.S. No. 00B-10973 for lack of merit. Summerville General
Merchandising accordingly filed a motion for reconsideration of this DOJ resolution dated 20
September 2001.
In view of the latest DOJ resolution ordering the dismissal of the complaint of Summerville
General Merchandising against the Khos, the RTC of Manila, Branch 1, issued an Order dated
24 October 2001 directing the dismissal of the Complaint in Criminal Case No. 00-
183261.21 Summerville General Merchandising filed with the RTC of Manila, Branch 1, a motion
for reconsideration of its Order of dismissal of Criminal Case No. 00-183261. For their part,
Elidad and Violeta Kho also filed with the same court a supplemental motion insisting that the
Order dismissing Criminal Case No. 00-183261 cannot be set aside because to do so would, in
effect, reinstate the said criminal case and would already constitute double jeopardy. Acting on
these motions, the RTC of Manila, Branch 1, issued an Order dated 21 August 2002 resolving
the motions in the following manner:
The foregoing duly established facts indubitably supports accused’s contention that a re-filing
[o]f the Information would put them in double jeopardy. As ruled by the Supreme Court in
Marcelo v. Court of Appeals, 235 SCRA 39, upon withdrawal of the Information, which is the
logical consequence of the grant of the Motion to Withdraw, there no longer remained any case
to dismiss.
Accordingly, finding merit in the Motion for Reconsideration, the same is hereby granted.
The information against accused is hereby dismissed.
The Clerk of Court is hereby directed to return to the accused the cash bonds posted by the
latter for their provisional liberty upon presentation of the requisite receipts.
The ruling renders the remaining incidents moot and academic. 22
Thereafter, on 17 September 2002, the DOJ Secretary, Hernando B. Perez, granted the pending
motion of Summerville General Merchandising for reconsideration of the DOJ resolution 23 dated
28 September 2001, which dismissed the Complaint of movant Summerville General
Merchandising in I.S. No. 00A-02396, and accordingly issued another resolution vacating the
questioned 28 September 2001 resolution and directing the City Prosecutor of Manila to
continue with the criminal prosecution of the Khos for Unfair Competition.
Elidad and Violeta Kho filed a motion for reconsideration of the resolution dated 17 September
2002 before the DOJ. The DOJ,24 thru the new Secretary Simeon A. Datumanong denied that
double jeopardy lies, in a resolution dated 17 July 2003, declared that:
After an evaluation of the record, we resolve to deny the motion for reconsideration. For double
jeopardy to attach, the following requirements must be present: (1) upon a valid indictment; (2)
before a competent court; (3) after arraignment; (4) when a valid plea has been entered; and (5)
when the defendant was convicted, acquitted, or the case was dismissed or otherwise
terminated without the express consent of the accused. (People v. Court of Appeals, 308 SCRA
687). In the instant case, it appears that the case was terminated with the express consent of the
respondent, as the criminal case was dismissed upon the express application of the accused.
Her action in having the case dismissed constitutes a waiver of her constitutional prerogative
against double jeopardy as she thereby prevented the court from proceeding to trial on the
merits and rendering a judgment of conviction against her.25
At odds with the final DOJ resolution, the RTC of Manila, Branch 1, handling Criminal Case No.
00-183261, held in its Order dated 2 April 2003 that:
Considering the tenors of the orders of dismissal, whatever maybe the merits of the Motion for
Reconsideration, revival of the case is now barred by the impregnable wall of double jeopardy.
ACCORDINGLY, the Motion for Reconsideration dated September 10, 2002 filed by the private
prosecutor and subject of the Motion to Resolve is hereby denied with finality.
The Clerk of Court is hereby directed to return to the accused the cash bond posted by them for
their provisional liberty upon presentation of the required receipts.26
Thus, Summerville General Merchandising raised its case to the Court of Appeals, docketed as
CA-G.R. SP No. 77180, assailing the Order dated 24 October 2001 of the RTC of Manila,
Branch 1, dismissing Criminal Case No. 00-183261, as well as the Orders dated 21 August 2002
and 2 April 2003 of the same court affirming its previous order of dismissal.
In a decision of the Court of Appeals dated 26 May 2004 in CA-G.R. SP No. 77180,27 the Court
denied due course to the petition of Summerville General Merchandising and affirmed the ruling
of the trial court that, indeed, double jeopardy has set in.
The decision of the Court of Appeals in CA-G.R. SP No. 77180 is now the subject of a Petition
for Review before this Court, docketed as G.R. No. 163741 entitled, Summerville General
Merchandising and Co., Inc. v. Elidad Kho."28
4) Search Warrant No. 99-1520 before the RTC of Manila, Branch 7
Shortly before instituting Criminal Case No. 00-183261 against the Khos, or on 7 January 2000,
Summerville General Merchandising applied for the issuance of a search warrant against the
Spouses Elidad and Violeta Kho and Roger Kho, since they persisted in manufacturing and
selling Chin Chun Su products despite the BFAD order directing them to refrain from doing so.
The application was docketed as Search Warrant No. 99-1520 before the RTC of Manila, Branch
7, which was presided over by respondent herein, Judge Enrico A. Lanzanas. A hearing on the
application was held on 10 January 200029 and the search warrant was issued against Elidad,
Violeta and Roger Kho on the same day.30 Its enforcement led to the seizure of several Chin
Chun Su products.311avvphil.net
On 17 January 2000, Elidad, Violeta and Roger Kho filed before the RTC of Manila, Branch 7, a WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT NO GRAVE
motion to quash the search warrant and for the return of the items unlawfully seized. The motion ABUSE OF DISCRETION WAS COMMITTED BY HONORABLE JUDGE ENRICO LANZANAS
was opposed by Summerville General Merchandising. IN FINDING THAT PROBABLE CAUSE EXISTED AGAINST THE PETITIONERS FOR THE
ISSUANCE OF SEARCH WARRANT NO. 99-1520.
In an Order32 dated 3 April 2000, the RTC of Manila, Branch 7, denied Elidad and Violeta Kho’s
motion to quash and to return the seized articles for lack of merit.33 Elidad and Violeta Kho filed a WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT BRANCH 7 OF
motion for reconsideration and motion to transfer the proceedings in RTC of Manila, Branch 7, to THE REGIONAL TRIAL COURT OF MANILA HAD JURISDICTION TO ISSUE SEARCH
RTC of Manila, Branch 1, citing Supreme Court Administrative Order 113-9534 designating the WARRANT NO. 99-1520.
RTC of Manila, Branch 1, as an Intellectual Property Court. The RTC of Manila, Branch 7,
denied these motions in an Order dated 5 June 2000,35 explaining that:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT NO GRAVE
ABUSE OF DISCRETION WAS COMMITTED BY HONORABLE JUDGE ENRICO LANZANAS
Anent the Motion to Compel this Branch to transfer the case to Branch 1 of this Court, suffice it IN RULING THAT SEARCH WARRANT NO. 99-1520 WAS LAWFULLY EXECUTED.
to say that the cases for violation of Arts. 188 and 189 of the Revised Penal Code (now under
the Intellectual Property Law) are those that are already filed in court after the proper preliminary
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT NO GRAVE
investigation and not cases for application for search warrant involving probable violation of said
ABUSE OF DISCRETION WAS COMMITTED BY HONORABLE JUDGE ENRICO LANZANAS
law. Supreme Court Administrative Circular No. 113-95 itself designates the alluded court or
IN NOT ORDERING THE RETURN OF THE ITEMS SEIZED UNDER SEARCH WARRANT NO.
branch thereof to try and decide which clearly excludes cases/applications for search warrant
99-1520.43
which obviously does not involve trying and deciding case for violation of the Intellectual
Property law.
The petition is devoid of merit.
On respondent’s Motion for Reconsideration, the Court finds their arguments therein a rehash of
the issues and arguments raised in their Motion to Quash. As to the first issue, it must be noted that the dismissal of Criminal Case No. 00-183261 by the
RTC of Manila, Branch 1, was initially by virtue of the resolution of the DOJ dated 28 September
200144 ordering the dismissal of the criminal case for unfair competition.
WHEREFORE, for lack of merit, respondents’ Motion for Reconsideration and Motion to
Transfer, are hereby DENIED.36
This order of dismissal, however, was again set aside by the DOJ in its resolution dated 17
September 200245directing that appropriate information for Unfair Competition be filed against
Elidad and Violeta Kho filed a Petition for Certiorari and Preliminary Mandatory
the Khos. The motion for reconsideration of Elidad and Violeta Kho was denied by the DOJ in its
Injunction,37 docketed as CA-G.R. SP No. 60084, before the Court of Appeals questioning the
resolution dated 17 July 2003.46 This is the latest existing resolution of the DOJ on the matter,
aforementioned Orders of the RTC of Manila, Branch 7. A decision dated 6 August 200138 was
dated 17 July 2003, which affirmed the resolution of the then DOJ Secretary Hernando B. Perez
rendered by the Court of Appeals denying the petition. It upheld Search Warrant No. 99-1520 as
directing the City Prosecutor of Manila to file the appropriate information against Elidad and
having been validly issued and properly executed and, thus, there is no basis for the return of
Violeta Kho for Unfair Competition as defined and penalized under Section 168.3(a), in relation
the goods seized. A motion for reconsideration filed by the Khos was denied by the Court of
to Sections 168 and 170 of Rep. Act No. 8293 or The Intellectual Property Code of the
Appeals in an Order dated 16 November 2001.39
Philippines. Therefore, at the time of the dismissal of Criminal Case No. 00-183261 by the RTC
of Manila, Branch 1, on 24 October 2001, the DOJ resolution on I.S. No. 00A-02396 on which
Elidad and Violeta Kho filed a supplement to their Motion for Reconsideration dated 20 Criminal Case No. 00-183261 is based has not been written finis as yet.
November 200140 before the Court of Appeals in CA-G.R. SP No. 60084, reiterating their prayer
for the quashal of Search Warrant No. 99-1520 and the return of the seized items. The Court of
Taking into consideration these circumstances, the Court of Appeals did not err in affirming the
Appeals, in a resolution dated 4 December 2001,41 merely noted the motion in view of its earlier
Order of the RTC of Manila, Branch 7, denying the motion to quash filed by the herein petitioners
resolution rendered on 16 November 2001 already denying Elidad and Violeta Kho’s Motion for
because, subsequently, the DOJ still ordered the filing of charges against Elidad and Violeta
Reconsideration.
Kho.

Pained by the decisions and orders of the trial court and appellate court, petitioners Elidad and
As to whether the RTC of Manila, Branch 1, properly dismissed the criminal case against the
Violeta Kho filed the present petition praying that the decision of the Court of Appeals in CA-G.R.
Khos despite the resolution of the DOJ ordering their criminal prosecution, we cannot dwell more
SP No. 60084 dated 6 August 2001 be reversed and set aside, and a new decision be issued
on the issue because it is already the subject of G.R. No. 163741 before another division of this
granting the quashal of Search Warrant No. 99-1520 and ordering the return of the items
Court.
unlawfully seized.42

In their Memorandum, petitioners raise the following issues for resolution:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISREGARDING THE
WITHDRAWAL OF THE INFORMATION FOR UNFAIR COMPETITION AGAINST THE
PETITIONERS IN BRANCH 1 OF RTC-MANILA AS A RESULT OF THE RESOLUTION OF THE
DEPARTMENT OF JUSTICE FINDING NO PROBABLE CAUSE.
Issues two, three and four, on the other hand, boil down to the central issue of whether or not
the Court of Appeals erred in upholding the RTC of Manila, Branch 7, in its findings of probable
cause to issue a search warrant. Also resting on how we shall resolve the foregoing issue is the
fifth and last issue in the Petition at bar which questions the refusal by both the Court of Appeals
and the RTC of Manila, Branch 7, to return the seized items.
The issuance of Search Warrants is governed by Rule 126 of the Revised Rules of Court
reproduced below:
SECTION 1. Search warrant defined. – A search warrant is an order in writing issued in the
name of the People of the Philippines, signed by a judge and directed to a peace officer,
commanding him to search for personal property described therein and bring it before the court.
SEC. 2. Court where application for search warrant shall be filed. - An application for search
warrant shall be filed with the following:
a) Any court within whose territorial jurisdiction a crime was committed.
b) For compelling reasons stated in the application, any court within the judicial region
where the crime was committed if the place of the commission of the crime is known,
or any court within the judicial region where the warrant shall be enforced.
However, if the criminal action has already been filed, the application shall only be made in the
court where the criminal action is pending.
SEC. 3. Personal property to be seized. – A search warrant may be issued for the search and
seizure of personal property:
(a) Subject of the offense;
(b) Stolen or embezzled and other proceeds or fruits of the offense; or
(c) Used or intended to be used as the means of committing an offense.
SEC. 4. Requisites for issuing search warrant. – A search warrant shall not issue except upon
probable cause in connection with one specific offense to be determined personally by the judge
after examination under oath or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched and the things to be seized which
may be anywhere in the Philippines.
SEC.5. Examination of complainant; record. – The judge must, before issuing the warrant,
personally examine in the form of searching questions and answers, in writing and under oath,
the complainant and the witnesses he may produce on facts personally known to them and
attach to the record their sworn statements together with the affidavits submitted.
SEC. 6. Issuance and form of search warrant. – If the judge is satisfied of the existence of facts
upon which the application is based or that there is probable cause to believe that they exist, he
shall issue the warrant, which must be substantially in the form prescribed by these Rules.
What constitutes "probable cause" is well settled. In Microsoft Corporation v. Maxicorp, Inc., 47 we
defined probable cause as follows:
Probable cause means "such reasons, supported by facts and circumstances as will warrant a
cautious man in the belief that his action and the means taken in prosecuting it are legally just
and proper." Thus, probable cause for a search warrant requires such facts and circumstances
that would lead a reasonably prudent man to believe that an offense has been committed and
the objects sought in connection with that offense are in the place to be searched.
xxxx
The determination of probable cause does not call for the application of rules and standards of
proof that a judgment of conviction requires after trial on the merits. As implied by the words
themselves, "probable cause" is concerned with probability, not absolute or even moral certainty.
The prosecution need not present at this stage proof beyond reasonable doubt. The standards
of judgment are those of a reasonably prudent man, not the exacting calibrations of a judge after
a full-blown trial.
No law or rule states that probable cause requires a specific kind of evidence. No formula or
fixed rule for its determination exists. Probable cause is determined in the light of conditions
obtaining in a given situation. xxx
In Columbia Pictures, Inc. v. Court of Appeals,48 we explained further that:
Although the term "probable cause" has been said to have a well-defined meaning in the law,
the term is exceedingly difficult to define, in this case, with any degree of precision; indeed, no
definition of it which would justify the issuance of a search warrant can be formulated which
would cover every state of facts which might arise, and no formula or standard, or hard and fast
rule, may be laid down which may be applied to the facts of every situation. As to what acts
constitute probable cause seem incapable of definition. There is, of necessity, no exact test.
At best, the term "probable cause" has been understood to mean a reasonable ground of
suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious
man in the belief that the person accused is guilty of the offense with which he is charged; or the
existence of such facts and circumstances as would excite an honest belief in a reasonable mind
acting on all the facts and circumstances within the knowledge of the magistrate that the charge
made by the applicant for the warrant is true.
Probable cause does not mean actual and positive cause, nor does it import absolute certainty.
The determination of the existence of probable cause is not concerned with the question of
whether the offense charged has been or is being committed in fact, or whether the accused is
guilty or innocent, but only whether the affiant has reasonable grounds for his belief. The
requirement is less than certainty or proof, but more than suspicion or possibility.
In Philippine jurisprudence, probable cause has been uniformly defined as such facts and
circumstances which would lead a reasonable, discreet and prudent man to believe that an
offense has been committed, and that the objects sought in connection with the offense are in
the place sought to be searched. It being the duty of the issuing officer to issue, or refuse to
issue, the warrant as soon as practicable after the application therefor is filed, the facts
warranting the conclusion of probable cause must be assessed at the time of such judicial
determination by necessarily using legal standards then set forth in law and jurisprudence, and
not those that have yet to be crafted thereafter.
We also declared in People v. Chiu,49 citing Malaloan v. Court of Appeals,50 that a search
warrant is merely a judicial process designed by the Rules to respond only to an incident in the
main case, if one has already been instituted, or in anticipation thereof.
It bears repeating that the proceedings before the RTC of Manila, Branch 7, was solely for the
issuance of Search Warrant No. 99-1520, while the main case against Elidad and Violeta Kho
for violation of The Intellectual Property Code was instituted only later on as Criminal Case No.
00-183261 before the RTC of Manila, Branch 1. What is before us in the Petition at bar is the
validity of the search warrant issued in the proceedings in Search Warrant No. 99-1520.
A perspicacious examination of the records reveal that the RTC of Manila, Branch 7, followed We cannot find any irregularity or abuse of discretion on the part of Judge Lanzanas for issuing
the prescribed procedure for the issuance of Search Warrant No. 99-1520, namely, (1) the the assailed search warrant. On the contrary, we find that he had complied with the procedural
examination under oath or affirmation of the Complainant and his witnesses and, in this case, and substantive requirements for issuing a search warrant. We are, therefore, bound to respect
Judge Enrico A. Lanzanas personally examined complainant-policewoman SPO4 Nedita Alvario his finding of probable cause for issuing Search Warrant No. 99-1520.
Balagbis, and Mr. Victor Chua, the representative/officer of Summerville General Merchandising,
at the hearing on the application for Search Warrant No. 99-1520 held on 10 January 2000; (2)
After declaring that Search Warrant No. 99-1520 was validly issued by the RTC of Manila,
an examination personally conducted by then Presiding Judge Lanzanas, in the form of
Branch 7, then there is no reason for us to order the return of the articles seized by virtue
searching questions and answers, in writing and under oath, of the complainant and witnesses
thereof.
on facts personally known to them; and (3) the taking of sworn statements, together with the
affidavits submitted, which were duly attached to the records. 51
WHEREFORE, the Decision of the Court of Appeals dated 6 August 2001 and Resolution dated
16 November 2001, denying the quashal of Search Warrant No. 99-1520 and the return of the
In determining probable cause in the issuance of a search warrant, the oath required must refer
seized items, are hereby AFFIRMED. Costs against petitioners.
to the truth of the facts within the personal knowledge of the applicant or his witnesses, because
the purpose thereof is to convince the committing magistrate, not the individual making the
affidavit and seeking the issuance of the warrant, of the existence of probable cause.52

From the affidavit dated 7 January 2000 of SPO4 Nedita Balagbis, in support of the application
for search warrant, she stated that Summerville General Merchandising represented by Mr.
Victor Chua sought the assistance of their police station in connection with the proliferation of
fake Chin Chun Su products. With Victor Chua, they made a surveillance of two places, namely
2407 Topacio Street and 2412 Raymundo Street both in San Andres, Manila. Through this, they
were able to verify that plastic containers were being labeled with Chin Chun Su stickers filled
with cream at 2407 Topacio Street. On the other hand, in the affidavit dated 7 January 2000 of
Victor Chua, he stated that Summerville General Merchandising, being the exclusive importer,
distributor and dealer of Chin Chun Su products received reliable information that persons going
by the name of Elidad, Violeta and Roger Kho were engaged in the illegal manufacture and sale
of these products. From the surveillance conducted with the help of SPO4 Balagbis, they saw a
tricycle full of containers taken to a house at 2412 Raymundo Street, San Andres, Manila. It was
at this address that Chin Chun Su stickers were being affixed. The containers were thereafter
taken to 2407 Topacio Street to be filled with the cream product.

Clearly, probable cause existed for the issuance of the warrant as shown by the affidavits of the
above affiants who had personal knowledge of facts indicating that an offense involving violation
of intellectual property rights was being committed and that the objects sought in connection with
the offense are in the place sought to be searched. The surveillance conducted by SPO4 Nedita
Balagbis on the basis of reliable information that Elidad, Violeta and Roger Kho were engaged in
the illegal manufacture and sale of fake Chin Chun Su products enabled her to gain personal
knowledge of the illegal activities of the Khos.53 This fact was sufficient justification for the
examining judge, in this case Judge Lanzanas, to conclude that there was probable cause for
the issuance of the search warrant.

At the hearing conducted by Judge Lanzanas, SPO4 Nedita Balagbis and Victor Chua testified
on the affidavits they separately executed, and essentially stated therein upon inquiry by Judge
Lanzanas that indeed several fake Chin Chun Su products were loaded to a tricycle and brought
to a warehouse in Topacio Street.

In People v. Tee,54 this Court held that:

It is presumed that a judicial function has been regularly performed, absent a showing to the
contrary. A magistrate’s determination of probable cause for the issuance of a search warrant is
paid great deference by a reviewing court, as long as there was substantial basis for that
determination. Substantial basis means that the questions of the examining judge brought out
such facts and circumstances as would lead a reasonably discreet and prudent man to believe
that an offense has been committed, and the objects in connection with the offense sought to be
seized are in the place sought to be searched.