LAW ON INTELLECTUAL PROPERTY MIDTERMS CASE COMPILATION

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1. MIGHTY CORPORATION VS. GALLO WINERY, G.R. NO. 154342, JULY 14, 2004.
FACTS: On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC (respondents) sued MIGHTY
CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. (petitioners) in the RTC-Makati for trademark and trade name
infringement and unfair competition, with a prayer for damages and preliminary injunction. They claimed that petitioners
adopted the Gallo trademark to ride on Gallo Winery’s and Gallo and Ernest & Julio Gallo trademark’s established
reputation and popularity, thus causing confusion, deception and mistake on the part of the purchasing public who had
always associated Gallo and Ernest and Julio & Gallo trademarks with Gallo Winery’s wines.

In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo cigarettes and Gallo Winery’s
wine were totally unrelated products. To wit:
a. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not cigarettes;
b. GALLO cigarettes and GALLO wines were sold through different channels of trade;
c. the target market of Gallo Winery’s wines was the middle or high-income bracket while Gallo cigarette buyers
were farmers, fishermen, laborers and other low-income workers;
d. that the dominant feature of the Gallo cigarette was the rooster device with the manufacturer’s name clearly
indicated as MIGHTY CORPORATION, while in the case of Gallo Winery’s wines, it was the full names of the
founders-owners ERNEST & JULIO GALLO or just their surname GALLO;
The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of preliminary injunction. CA
likewise dismissed respondent’s petition for review on certiorari.
After the trial on the merits, however, the Makati RTC held petitioners liable for committing trademark infringement and
unfair competition with respect to the GALLO trademark.
On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied petitioner’s motion for reconsideration.

ISSUE/S: Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for the reason alone that
they were purportedly forms of vice.

RULING: NO. Wines and cigarettes are not identical, similar, competing or related goods. In resolving whether goods are
related, several factors come into play:
a. the business (and its location) to which the goods belong
b. the class of product to which the good belong
c. the product’s quality, quantity, or size, including the nature of the package, wrapper or container
d. the nature and cost of the articles
e. the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition, texture or quality
f. the purpose of the goods
g. whether the article is bought for immediate consumption, that is, day-to-day household items
h. the field of manufacture
i. the conditions under which the article is usually purchased and
j. the articles of the trade through which the goods flow, how they are distributed, marketed, displayed and sold.
The test of fraudulent simulation is to the likelihood of the deception of some persons in some measure acquainted with
an established design and desirous of purchasing the commodity with which that design has been associated. The
simulation, in order to be objectionable, must be as appears likely to mislead the ordinary intelligent buyer who has a
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need to supply and is familiar with the article that he seeks to purchase. The petitioners are not liable for trademark
infringement, unfair competition or damages.

Doctrine:
The certificate of registration issued by the Director of Patents can only grant the exclusive right to use its own symbol
only to those goods specified in the certificate, that one who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for products which are of a different description and
not specified in the certificate.

2. SASOT & SASOT VS. PEOPLE, G.R. NO. 143193, JUNE 29, 2005
FACTS: The National Bureau of Investigation conducted an investigation pursuant to a complaint filed by the NBA
Properties, Inc. against petitioners for possible violation of Article 189 of the Revised Penal Code on unfair competition.
Based on the report from the NBI, they have conducted two investigations due to the petitioners’ alleged participation in
the manufacture, printing, sale and distribution of counterfeit “NBA” garment products, which led to the search and
seizure of several items from petitioner’s establishment.
Before arraignment, petitioners filed a Motion to Quash on the ground that, the facts charged do not constitute an offense
and that the court did not have jurisdiction over the offense charged or the person of the accused. Petitioners contend
that since the 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 complainants,
and they do not use complainants logo or design.

In the Comment/Opposition filed by the trial prosecutor of Manila RTC Branch 1, it stated 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,
as provided for in the Revised Penal Code.
The trial court sustained the prosecution’s arguments and denied petitioners’ motion to quash which lead to the filing of
a special civil action for Certiorari with the CA. According to the CA, the petition is not the proper remedy in assailing the
denial of the quashal motion, and that the grounds raised therein should be raised during the trial of the case on the
merits.
Petitioners sought for the reconsideration of the Decision, but was denied by the CA, hence this petition.

ISSUE: Whether or not a foreign corporation not doing business in the Philippines and not licensed to do business in the
Philippines have the right to sue for unfair competition.

HELD: The petition must be denied. 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,
their arguments focused on an alleged defect in the complaint filed before the fiscal, complainants capacity to sue and
petitioners exculpatory defenses against the crime of unfair competition.
More importantly, the crime of Unfair Competition punishable under Article 189 of the Revised Penal Code 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.
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Doctrine:
The crime of Unfair Competition punishable under Article 189 of the Revised Penal Code 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.

3. ELIDAD KHO VS. CA, G.R. NO. 115758, MARCH 19, 2002

Facts: Elidad Kho is the owner of KEC Cosmetics Laboratory and she was also the holder of copyrights over Chin Chun Su
and its Oval Facial Cream Container/Case. She also bought the patent rights over the Chin Chun Su & Device and Chin Chun
Su for medicated cream from one Quintin Cheng, who was the assignee of Shun Yi Factory – a Taiwanese factory actually
manufacturing Chin Chun Su products.

Kho filed a petition for injunction against Summerville General Merchandising and Company to enjoin the latter from
advertising and selling Chin Chun Su products, in similar containers as that of Kho, for this is misleading the public and
causing Kho to lose income; the petition is also to enjoin Summerville from infringing upon Kho’s copyrights.

Summerville in their defense alleged that they are the exclusive and authorized importer, re-packer and distributor of Chin
Chun Su products; that Shun Yi even authorized Summerville to register its trade name Chin Chun Su Medicated Cream
with the Philippine Patent Office; that Quintin Cheng, from whom Kho acquired her patent rights, had been terminated
(her services) by Shun Yi.

ISSUE: Whether or not Kho has the exclusive right to use the trade name and its container.

HELD: No. Kho has no right to support her claim for the exclusive use of the subject trade name and its container. The
name and container of a beauty cream product are proper subjects of a trademark (not copyright like what she registered
for) inasmuch as the same falls squarely within its definition. In order to be entitled to exclusively use the same in the sale
of the beauty cream product, the user must sufficiently prove that she registered or used it before anybody else did. Kho’s
copyright and patent registration of the name and container would not guarantee her the right to the exclusive use of the
same for the reason that they are not appropriate subjects of the said intellectual rights. Consequently, a preliminary
injunction order cannot be issued for the reason that the petitioner has not proven that she has a clear right over the said
name and container to the exclusion of others, not having proven that she has registered a trademark thereto or used the
same before anyone did.

Doctrine:
In order to be entitled to exclusively use the same in the sale of the beauty cream product, the user must sufficiently
prove that she registered or used it before anybody else did.

4. PEARL & DEAN VS. SHOEMART, G.R. NO. 148222, AUGUST 15, 2003
FACTS: Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display units called light boxes.
In January 1981, Pearl & Dean was able to acquire copyrights over the designs of the display units. In 1988, their trademark
application for “Poster Ads” was approved; they used the same trademark to advertise their light boxes.
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In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that the former may be contracted to install light boxes in
the ad spaces of SM. Eventually, SM rejected Pearl & Dean’s proposal.

Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs, were being used by SM in their
ad spaces. They demanded SM to stop using the light boxes and at the same time asked for damages amounting to P20
M. SM refused to pay damages though they removed the light boxes. Pearl & Dean eventually sued SM. SM argued that it
did not infringe on Pearl & Dean’s trademark because Pearl & Dean’s trademark is only applicable to envelopes and
stationeries and not to the type of ad spaces owned by SM. SM also averred that “Poster Ads” is a generic term hence it
is not subject to trademark registration. SM also averred that the actual light boxes are not copyrightable. The RTC ruled
in favor of Pearl & Dean. But the Court of Appeals ruled in favor of SM.

ISSUE: Whether or not the Court of Appeals is correct.

HELD: Yes. The light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial illustrations,
advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable; what was copyrighted were the
technical drawings only, and not the light boxes themselves. In other cases, it was held that there is no copyright
infringement when one who, without being authorized, uses a copyrighted architectural plan to construct a structure.
This is because the copyright does not extend to the structures themselves.
On the trademark infringement allegation, the words “Poster Ads” are a simple contraction of the generic term poster
advertising. In the absence of any convincing proof that “Poster Ads” has acquired a secondary meaning in this jurisdiction,
Pearl & Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in its certificate of registration,
namely, stationeries.
Doctrine:
Copyright extends only to the description or expression of the object and not to the object itself. It does not prevent
one from using the drawing to construct the object portrayed in the drawing. To be able to effectively and legally
preclude others from copying and profiting from the invention, a patent is a primordial requirement. No patent, no
protection.

5. LA CHEMISE LACOSTE VS. FERNANDEZ, 129 SCRA 373, 393.

Facts: La chemise Lacoste is a French corporation and the actual owner of the trademarks “Lacoste,” “Chemise Lacoste,”
“Crocodile Device” and a composite mark consisting of the word “Lacoste” and a representation of a crocodile/alligator,
used on clothings and other goods sold in many parts of the world and which has been marketed in the Philippines
(notably by Rustans) since 1964. In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the
trademark “Chemise Lacoste and Q Crocodile Device” both in the supplemental and Principal Registry. In 1980, La Chemise
Lacoste SA filed for the registration of the “Crocodile device” and “Lacoste”. Games and Garments (Gobindram
Hemandas, assignee of Hemandas Q.Co.) opposed the registration of “Lacoste.”
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In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of unfair competition committed by
Hemandas and requesting the agency’s assistance. A search warrant was issued by the trial court. Various goods and
articles were seized upon the execution of the warrants. Hemandas filed motion to quash the warrants, which the court
granted. The search warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste filed a petition
for certiorari.

Issue: Whether the proceedings before the patent office is a prejudicial question that need to be resolved before the
criminal action for unfair competition may be pursued.

Held: No. The proceedings pending before the Patent Office do not partake of the nature of a prejudicial question which
must first be definitely resolved. The case which suspends the criminal action must be a civil case, not a mere
administrative case, which is determinative of the innocence or guilt of the accused. The issue whether a trademark used
is different from another’s trademark is a matter of defense and will be better resolved in the criminal proceedings before
a court of justice instead of raising it as a preliminary matter in an administrative proceeding.

Inasmuch as the goodwill and reputation of La Chemise Lacoste products date back even before 1964, Hemandas cannot
be allowed to continue the trademark “Lacoste” for the reason that he was the first registrant in the Supplemental Register
of a trademark used in international commerce. Registration in the Supplemental Register cannot be given a posture as
if the registration is in the Principal Register. It must be noted that one may be declared an unfair competitor even if his
competing trademark is registered. La Chemise Lacoste is world renowned mark, and by virtue of the 20 November 1980
Memorandum of the Minister of Trade to the director of patents in compliance with the Paris Convention for the
protection of industrial property, effectively cancels the registration of contrary claimants to the enumerated marks,
which include “Lacoste"