1) KENNETH ROY SAVAGE v. JUDGE APRONIANO B. TAYPIN, sought to be reconsidered.[8] The denial of their last motion[9] prompted...
GR No. 134217, 2000-05-11 petitioners to come to this Court.
Facts:
Petitioners KENNETH ROY SAVAGE and K ANGELIN EXPORT TRADING, owned
and managed by GEMMA DEMORAL-SAVAGE, seek to nullify the search
warrant issued by respondent Judge Aproniano B. Taypin of the Regional
Trial Court, Br. 12 Cebu City, which resulted in the... seizure of certain pieces
of wrought iron furniture from the factory of petitioners located in Biasong,
Talisay, Cebu. Their motion to quash the search warrant was denied by
respondent Judge as well as their motion to reconsider the denial. Hence,
this petition for... certiorari.
Acting on a complaint lodged by private respondent Eric Ng Mendoza,
president and general manager of Mendco Development Corporation
(MENDCO),[1] Supervising Agent Jose Ermie Monsanto of the National
Bureau of Investigation (NBI) filed... an application for search warrant with
the Regional Trial Court of Cebu City.[2] The application sought the
authorization to search the premises of K Angelin Export International
located in Biasong, Talisay, Cebu, and to seize the pieces of wrought iron...
furniture found therein which were allegedly the object of unfair
competition involving design patents, punishable under Art. 189 of the
Revised Penal Code as amended. The assailed Search Warrant No. 637-10-
1697-12 was issued by respondent Judge on 16 October
1997 and executed in the afternoon of the following day by NBI agents.[3]
Seized from the factory were several pieces of furniture, indicated in the
Inventory Sheet attached to the Return of Search Warrant, and all items
seized have remained in NBI... custody up to the present.
On 30 October 1997 petitioners moved to quash the search warrant alleging
that: (a) the crime they were accused of did not exist; (b) the issuance of the
warrant was not based on probable cause; (c) the judge failed to ask the
witnesses searching questions; and, (d) the warrant... did not particularly
describe the things to be seized.[5]
On 10 November 1997 petitioners filed a Supplemental Motion to Quash
where they additionally alleged that the assailed warrant was applied for
without a certification against forum shopping.[6] On 30 January 1998
respondent Judge denied the Motion... to Quash and the Supplemental
Motion to Quash.[7] On 2 March 1998 petitioners moved to reconsider the
denial of their motion to quash and alleged substantially the same grounds
found in their original Motion to Quash but adding thereto two
(2) new grounds, namely: (a) respondent court has no jurisdiction over the
subject-matter; and, (b) respondent court failed to "substantiate" the order
Issues:
principal issues
(a) questions involving jurisdiction over the offense; (b) the need for a
certification of non-forum shopping; and, (c) the existence of the crime.
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Ruling:
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Petitioners apparently misconstrued the import of the designation of Special
Courts for IPR. Administrative Order No. 113-95 merely specified which
court could "try and decide" cases involving violations of IPR. It did not, and
could not, vest exclusive jurisdiction with regard... to all matters (including
the issuance of search warrants and other judicial processes) in any one
court. Jurisdiction is conferred upon courts by substantive law; in this case,
BP Blg.129, and not by a procedural rule, much less by an administrative
order.[15] The power to issue search warrants for violations of IPR has not
been exclusively vested in the courts enumerated in Supreme Court
Administrative Order No.113-95.
Petitioners next allege that the application for a search warrant should have
been dismissed outright since it was not accompanied by a certification of
non-forum shopping, citing as authority therefor Washington Distillers, Inc.
v. Court of Appeals.[16] In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private
respondent sought a search warrant from the Manila Regional Trial Court
only after he was denied by the courts of Pampanga. The instant... case
differs significantly, for here there is no allegation of forum-shopping, only
failure to acquire a certification against forum-shopping. The Rules of Court
as amended requires such certification only from initiatory pleadings,
omitting any mention of
"applications."[17] In contrast, Supreme Court Circular 04-94, the old rule
on the matter, required such certification even from "applications." Our
ruling in Washington Distillers required no such certification from
applications for search... warrants. Hence, the absence of such certification
will not result in the dismissal of an application for search warrant.
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Petitioners apparently misconstrued the import of the designation of Special
Courts for IPR. Administrative Order No. 113-95 merely specified which
court could "try and decide" cases involving violations of IPR. It did not, and
could not, vest exclusive jurisdiction with regard... to all matters (including
the issuance of search warrants and other judicial processes) in any one
court. Jurisdiction is conferred upon courts by substantive law; in this case,
BP Blg.129, and not by a procedural rule, much less by an administrative
order.[15] The power to issue search warrants for violations of IPR has not
been exclusively vested in the courts enumerated in Supreme Court
Administrative Order No.113-95.
Petitioners next allege that the application for a search warrant should have
been dismissed outright since it was not accompanied by a certification of
non-forum shopping, citing as authority therefor Washington Distillers, Inc.
v. Court of Appeals.[16] In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private
respondent sought a search warrant from the Manila Regional Trial Court
only after he was denied by the courts of Pampanga. The instant... case
differs significantly, for here there is no allegation of forum-shopping, only
failure to acquire a certification against forum-shopping. The Rules of Court
as amended requires such certification only from initiatory pleadings,
omitting any mention of
"applications."[17] In contrast, Supreme Court Circular 04-94, the old rule
on the matter, required such certification even from "applications." Our
ruling in Washington Distillers required no such certification from
applications for search... warrants. Hence, the absence of such certification
will not result in the dismissal of an application for search warrant.
The last question to be resolved is whether unfair competition involving
design patents punishable under Art. 189 of the Revised Penal Code exists in
this case. Prosecutor Ivan Herrero seems to agree as he filed the
corresponding Information against petitioners on 17
March 1998.[18] However, since the IPR Code took effect on 1 January 1998
any discussion contrary to the view herein expressed would be pointless.
The search warrant cannot even be issued by virtue of a possible violation of
the IPR Code. The assailed acts specifically alleged were the manufacture
and fabrication of wrought iron furniture similar to that patented by
MENDCO, without securing any license or patent... for the same, for the
purpose of deceiving or defrauding Mendco and the buying public
In the issuance of search warrants, the Rules of Court requires a finding of
probable cause in connection with one specific offense to be determined
personally by the judge after examination of the complainant and the
witnesses he may produce, and particularly... describing the place to be
searched and the things to be seized.[27] Hence, since there is no crime to
speak of, the search warrant does not even begin to fulfill these stringent
requirements and is therefore defective on its face. The nullity of the...
warrant renders moot and academic the other issues raised in petitioners'
Motion to Quash and Motion for Reconsideration. Since the assailed search
warrant is null and void, all property seized by virtue thereof should be
returned to petitioners in accordance... with established jurisprudence.[28]
In petitioners' Reply with Additional Information they allege that the trial
court denied their motion to transfer their case to a Special Court for IPR.
We have gone through the records and we fail to find any trace of such
motion or even a copy of the order denying... it. All that appears in the
records is a copy of an order granting a similar motion filed by a certain
Minnie Dayon with regard to Search Warrant No. 639-10-1697-12.[29] This
attachment being immaterial we shall give it no further attention.
WHEREFORE, the Order of the Regional Trial Court, Br. 12, Cebu City, dated
30 January 1998, denying the Motion to Quash Search Warrant No. 637-10-
1697-12 dated 30 October 1997 and the Supplemental Motion to Quash
dated 10 November 1997 filed by petitioners, as... well as the Order dated 8
April 1998 denying petitioners' Motion for Reconsideration dated 2 March
1998, is SET ASIDE. Search Warrant No. 637-10-1697-12 issued on 16
October 1997 is ANNULLED and SET ASIDE, and... respondents are ordered
to return to petitioners the property seized by virtue of the illegal search
warrant.
Principles:
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR
2) Price vs. United Laboratories, Inc., 166 SCRA 133 (1988)
(Licensing)
BARRY JOHN PRICE, JOHN WATSON CLITHERON and JOHN BRADSHAW,
Assignors to ALLEN & HANBURYS, LTD., PETITIONERS, vs UNITED
LABORATORIES, RESPONDENT. G.R. No.82542,
FIRST DIVISION,
September 29, 1988, GRIÑO-AQUINO, J.
The petitioners are the owners-assignees of Philippine Patent No. 13540
which was granted to them on June 26, 1980 for a pharmaceutical
compound known as "aminoalkyl furan derivatives." On October 1, 1982,
respondent United Laboratories, Inc. (or UNILAB) filed in the Philippine
Patent Office a petition Inter Partes Case for the issuance of a compulsory
license to use the patented compound in its own brands of medicines and
pharmaceuticals and to sell, distribute, or otherwise dispose of such
medicines or pharmaceutical preparations in the country. The patentees
elevated the case before the SC to question the jurisdiction of the Director
of Patents to determine unilaterally the terms and conditions of the
compulsory license, without affording the parties an opportunity to
negotiate the terms and conditions freely and by themselves.
The Supreme Court held that the Director of Patents may order the grant of
an appropriate license and in default of agreement among the parties as to
the terms and conditions of the license he shall fix the terms and conditions
of the license in the order under Section 36 of P.D. 1263. The order of the
Director granting a license under this Chapter, when final, shall operate as a
deed granting a- license executed by the patentee and the other patties in
interest and under Section 35 of P.D. 1263, amending portions of Republic
Act No.165 which reads
FACTS
The petitioners are the owners-assignees of Philippine Patent No. 13540
which was granted to them on June 26, 1980 for a pharmaceutical
compound known as "aminoalkyl furan derivatives." On October 1, 1982,
respondent United Laboratories, Inc. (or UNILAB) filed in the Philippine
Patent Office a petition Inter Partes Case for the issuance of a compulsory
license to use the patented compound in its own brands of medicines and
pharmaceuticals and to sell, distribute, or otherwise dispose of such
medicines or pharmaceutical preparations in the country. The petition
further alleged that the patent relates to medicine and that petitioner,
which has had long experience in the business of manufacturing and selling
pharmaceutical products, possesses the capability to use the subject
compound in the manufacture of a useful product or of making dosage
formulations containing the said compound. Philippine Patent Office
granted UNILAB a compulsory. The patentees appealed the decision to the
Court of Appeals which dismissed the appeal on December 4, 1987. Hence,
this petition.
ISSUE
Whether or not the Director of Patents’ unilateral determination of the
terms and conditions of the compulsory license, without affording the
parties an opportunity to negotiate the terms and conditions freely and by
themselves is proper? (YES)
RULING
The terms and conditions of the compulsory license were fixed by the
Director of Patents after a hearing and careful consideration of the evidence
of the parties and in default of an agreement between them as to the terms
of the license. This he is authorized to do under Section 36 of Republic Act
No. 165 which provides:
Sec. 36. GRANT OF LICENSE.—If the Director finds that a case for the grant
of license under Section 34, hereof made out, he may order the grant of an
appropriate license and in default of agreement among the parties as to the
terms and conditions of the license he shall fix the terms and conditions of
the license in the order.
The order of the Director granting a license under this Chapter, when final,
shall operate as a deed granting a- license executed by the patentee and the
other patties in interest and under Section 35 of P.D. 1263, amending
portions of Republic Act No.165 which reads:
Sec. 35. GRANT OF LICENSE.—(1)If the Director finds that a case for the
grant of a license under Sec. 34 hereof has been made out, he shall within
one hundred eighty (180) days from the date the petition was filed, order
the grant of an appropriate license. The order shall state the terms and
conditions of the license which he himself must fix in default of an
agreement on the matter manifested or submitted by the parties during the
hearing.
The Court of Appeals found that the 2.5% royalty fixed by the Director of
Patents 'is just and reasonable.' We quote its observations hereunder:
“Respondent-appellant contends further that the 2.5% royalty rate is unfair
to respondent-appellant as to amount to an undue deprivation of its
property right. We do not hold this view. The royalty rate of 2.5% provided
for by the Director of Patents is reasonable. Paragraph 3, Section 35-B,
Republic Act No. 165, as amended by Presidential Decree No. 1263,
provides:
(3) A compulsory license shall only be granted subject to the payment of
adequate royalties commensurate with the extent to which the invention is
worked. However, royalty payments shall not exceed five per cent (5%) of
the net wholesale price (as defined in Section 33-A) of the products
manufactured under the license. If the product, substance, or process
subject of the compulsory license is involved in an industrial project
approved by the Board of Investments, the royalty payable to the patentee
or patentees shall not exceed three per cent (3%) of the net wholesale price
(as defined in Section 34-A) of the patented commodity and/or commodity
manufactured under the patented process; the same rule of royalty shall be
paid whenever two or more patents are involved, which royalty shall be
distributed to the patentees in rates proportional to the extent of
commercial use by the licensee giving preferential values to the holder of
the oldest subsisting product patent.
Thus, said provision grants to the Director of Patents the use of his sound
discretion in fixing the percentage for the royalty rate and We find that the
Director of Patents committed no abuse of this discretion. Also, there is
always a presumption of regularity in the performance of one's official
duties.
Moreover, what UNILAB has with the compulsory license is the bare right to
use the patented chemical compound in the manufacture of a special
product, without any technical assistance from herein respondent-
appellant. Besides, the special product to be manufactured by UNILAB will
only be used, distributed, and disposed locally. Therefore, the royalty rate of
2.5% is just and reasonable. (pp. 10-11, CA Decision, pp. 44-45, Rollo)
Furthermore, as pointed out in the respondent's comment on the petition,
Identical terms and conditions had been prescribed for the grant of
compulsory license in a good number of patent cases. The Director's finding
that UNILAB has the capability to use the patented compound in the
manufacture of an anti-ulcer pharmaceutical preparation is a factual finding
which is supported by substantial evidence; hence, the Court of Appeals did
not commit a reversible error in affirming it. Of indubitable relevance to this
point is the evidence that UNILAB has been engaged in the business of
manufacturing drugs and pharmaceutical products for the past thirty (30)
years, that it is the leading drug manufacturer in the country, that it has the
necessary equipment and technological expertise for the development of
solid dosage forms or for tablet, capsule, and liquid preparations, and that it
maintains standards and procedures to ensure the quality of its products.
Even if it were true, as alleged by the patentee (although it is denied by
UNILAB), that its capability to use the patented compound was only
acquired after the petition for compulsory licensing had been filed, the
important thing is that such capability was proven to exist during the
hearing of the petition. The patented invention in this case relates to
medicine and is necessary for public health as it can be used as component
in the manufacture of anti-ulcer medicine. The Director of Patents did not
err in granting a compulsory license over the entire patented invention for
there is no law requiring that the license be limited to a specific
embodiment of the invention, or, to a particular claim. The invention in this
case relates to new aminoalkyl derivatives which have histamine H2
blocking activity, having the general formula (I) and physiologically
acceptable salts, Noxides and dehydrates thereof. The compound ranitidine
hydrochloride named in Claim 45 is also covered by General Claim I and
several other sub-generic claims. Therefore, a license for Claim 45 alone
would not be fully comprehensive. In any event, since the petitioner will be
paid royalties on the sales of any products the licensee may manufacture
using any or all of the patented compounds, the petitioner cannot complain
of a deprivation of property rights without just compensation.
3) Smith Kline & French Laboratories ltd. Vs Court of Appeals
G.R. No. 121267, October 23, 2001
Vertine Paul Beler
Facts:
Smith Kline (Petitioner) is the assignee of Letters Patent No. 12207 covering
the pharmaceutical product Cimetidine, which relates to derivatives of
heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or
guanadines. Said patent was issued by the BPTTT to Graham John Durant,
John Collin Emmett and Robin Genellin on November 29, 1978. On August
1989, Danlex Research Laboratories (Private Respondents) petitioned
before Bureau of Patents, Trademarks and Technology Transfer (BPTTT) that
it may be granted a compulsory license for the use and manufacture of the
pharmaceutical product Cimetidine. Cimetidine is useful as an antihistamine
and in the treatment of ulcers. Cimetidine is originally patented to Smith
Kline and French Laboratories in 1978, and the said patent is still in force at
the time of application by Danlex Research. Petitioner opposed the petition
for compulsory license, arguing that the private respondent had no cause of
action and failed to allege how it intended to work the patented product.
Petitioner further stated that its manufacture, use and sales of Cimetidine
satisfied the needs of the Philippine market, hence, there was no need to
grant a compulsory license to private respondent to manufacture, use and
sell the same. Finally, petitioner also claimed that the grant of a compulsory
license to private respondent would not promote public safety and that the
latter was only motivated by pecuniary gain
The BPTTT granted the application of Danlex Research together with a
provision that Danlex Research should be paying 2.5% of the net wholesale
price as royalty payment to Smith Kline. This was affirmed by the Court of
Appeals. Smith Kline assailed the grant as it argued, among others, that the
same is an invalid exercise of police power because there is no
overwhelming public necessity for such grant considering that Smith Kline is
able to provide an adequate supply of it to satisfy the needs of the
Philippine market; that a provision in the Philippine Patent Laws is violative
of the Paris Convention to which the Philippines is a signatory. To explain
the second contention, Smith Kline states that the Paris Convention only
allows compulsory licensing if the original licensee (patent holder) has failed
to work on the patent; that therefore, the provision in the Philippine Patent
Laws which adds other grounds for the granting of compulsory license i.e.
monopoly, is invalid and contrary to the Paris Convention.
ISSUES: Whether or not the decision of public respondent BPTTT which is
an arbitrary exercise of police power and is violative of international law.
HELD: No.  The granting is a valid exercise of police power. Cimetidine is
medicinal in nature, and therefore necessary for the promotion of public
health and safety.
The grant of the compulsory license satisfies the requirements of the
foregoing provision. More than ten years have passed since the patent for
Cimetidine was issued to petitioner and its predecessors-in-interest, and the
compulsory license applied for by private respondent is for the use,
manufacture and sale of a medicinal product. Furthermore, both the
appellate court and the BPTTT found that private respondent had the
capability to work Cimetidine or to make use thereof in the manufacture of
a useful product. Also, Section A(2) of Article 5 [of the Paris Convention]
unequivocally and explicitly respects the right of member countries to adopt
legislative measures to provide for the grant of compulsory licenses to
prevent abuses which might result from the exercise of the exclusive rights
conferred by the patent. An example provided of possible abuses is “failure
to work;” however, as such, is merely supplied by way of an example, it is
plain that the treaty does not preclude the inclusion of other forms of
categories of abuses. The legislative intent in the grant of a compulsory
license was not only to afford others an opportunity to provide the public
with the quantity of the patented product, but also to prevent the growth of
monopolies. Certainly, the growth of monopolies was among the abuses
which Section A, Article 5 of the Convention foresaw, and which our
Congress likewise wished to prevent in enacting.
4) ALBAÑA, petitioner-appellant, vs. THE DIRECTOR OF
PATENTS, respondent-appellee. Meliton D. Albaña in his
own behalf. Solicitor General Pompeyo Diaz and Solicitor
Pacifico P. de Castro for respondent and appellee. G.R.
No. L-4572. May 22, 1953
SYLLABUS
1. PATENTS; ASSIGNMENT OF PATENTS; REGISTRATION OF ASSIGNMENT IN
PATENT OFFICE; JURISDICTION THEREON OF DIRECTOR OF PATENTS. —
Assignments of patents and inventions covered thereby may be recorded in
books and records kept for the purpose in the Patent Office if presented in
due form (Republic Act 165, sections 51-53). But where a person other than
the inventor files a motion with the Director of Patents praying that the
applicant-inventor be compelled to sign the contract executed by a co-
applicant-inventor and both applicant-inventors to acknowledge it before a
notary public as well as another document which refers to the minutes of a
meeting of the organizers of a manufacturing corporation, and then to have
both documents recorded in the Patent Office and in the office of the
registrar of deeds, the Director of Patents has no power and authority to
compel the applicant-inventors to do what the movant is asking them to
perform. What the movant asks the Director of Patents to do for him is
essentially a judicial function which would require the determination of
finding by a court of competent jurisdiction as to whether there was a
meeting of the minds of the contracting parties before it could compel any
of them to perform what the movant prays the court to order him to do.
DECISION
PADILLA, J p:
An application for patent was filed with the Patent Office. Pending
examination of the application, Meliton D. Albaña filed a motion to
intervene claiming that the applicant-inventors had "sold and/or bartered
and assigned to him their right to contract or deal the sale of their invention
called Fel-Tap Meter Guard and Detector to or through the Corporation that
they were then organizing under his direction and to fix and decide on the
purchase price of it to at least P200,000 in installments cash and P300,000
in shares of stock of said Corporation . . . " and praying that applicant
inventor Maximo D. Tapinio be compelled to sign a contract (Appendix I)
and, together with the other applicant-inventor Dolorito M. Feliciano who
had already signed it, to acknowledge it and another contract (Appendix II)
before a notary public, to have both contracts recorded in the Patent Office
and in the office of the Register of Deeds, and that the patent for the
invention be issued in his name and in the name of the inventors. The
motion was denied on the ground that under the provisions of the Patent
Law (Republic Act No. 165) the Director of Patents has no jurisdiction or
power to decide the question submitted to him. The movant filed an
amended motion to intervene claiming "that he is the assignee of inventors
Dolorito M. Feliciano and Maximo Tapinio of the undivided part interests in
the invention for whose letter— patent the named petitioners Dolorito M.
Feliciano and Maximo Tapinio are herein applying."
The amended motion was denied on the ground that the assignment made
to the movant is not one of exclusive right to make, use and sell 1 the
electrical contrivance for which patent is applied for; that it is just an
authority to act as the selling agent for the inventors of the patent, if
granted, and the invention covered thereby and to receive compensation
therefor; and that not being entitled to have his name included as one of
the patentees, if patent for the invention be granted, the movant has no
right to intervene in the proceedings for the grant of the patent. An
exception to and a motion for reconsideration of the preceding order were
noted and denied. From the orders denying his motion to intervene the
movant has appealed What the appellant attempted to secure by his motion
to intervene is clearly beyond the jurisdiction and authority of the Director
of Patents to grant. Despite the amendment to the first motion to intervene
by which he claims assignment of the invention, still it remains that the
alleged assignment is not of the invention but it is an agreement whereby
he is to act as selling agent for the inventors of the patent (if granted) and of
the invention covered thereby and to receive compensation therefor. this
finding of the Director of Patents is supported by the following clauses
found in the contract (Appendix I): "We (the inventors) . . . hereby declare
and ratify that both of us are the co-inventors and joint fifty-fifty owners of
the 'Fel-Tap Electric Meter Guard & Detector' . . . " "We are now organizing
a Corporation under the direction of Mr. Albaña (Meliton D. Albaña) to
exploit and industrialize the invention . . . which we promise hereby to sell
to said Corporation with its letter-patent . . . except the Royalty Right of the
same, . . . " "For and in consideration of the monetary and other helps (help)
that said Mr. Meliton D. Albaña . . . has rendered and is rendering us . . . of
approaching, interesting and looking for subscribers and payers to the
capital stocks (stock) of said Corporation to be . . . we hereby promise and
actually pay to said Mr. Albaña in instalments fifty thousand pesos (P50,000)
of said P200,000 instalments cash purchase price . . . " The above quoted
terms and stipulations of the executory contract clearly show that it was not
an assignment of the invention and the patent applied for.
Assignments of patents and inventions covered thereby may be recorded in
books and records kept for the purpose in the Patent Office if presented in
due form; 3 but the appellant does not ask for the registration of the alleged
agreement between him and the inventors, because as it is not in due form
it cannot be recorded, but prays that the Director of Patents compel
applicant-inventor Maximo B. Tapinio to sign the contract executed and
signed by the other applicant-inventor Dolorito M. Feliciano on 14 March
1050 (Appendix I) and both applicant-inventors to acknowledge it and
another document which by all indications refers to the minutes of a
meeting of the organizers of the Manufacturing Corporation held on 30
March 1950, before a notary public, and then to have both documents
recorded in the Patent Office and in the office of the Registrar of Deeds.
Under the provisions of the Patent Law (Republic Act NO. 165), the Director
of Patents has no power and authority to compel the applicant-inventors to
do what the appellant is asking them to perform. What the appellant asked
the Director of Patents to do for him is essentially a judicial function which
would require the determination or finding by a court of competent
jurisdiction as to whether there was a meeting of the minds of the
contracting parties before it could compel the applicant-inventors to
perform what the appellant prays the court to order them to do. Aside from
want of authority and power, the Director of Patents lacks the means to
make such determination and finding which would be necessary before he
could act on the appellant's motion.
The orders appealed from are affirmed, with costs against the appellant.
Paras, C.J., Feria, Pablo, Bengzon, Tuason, Montemayor, Reyes, Jugo and
Bautista Angelo, JJ., concur.
Footnotes
1. Section 37, Republic Act No. 165.
2. Section 61, Republic Act No. 165.
3. Sections 51, 52 and 53, Republic Act No. 165.
5) CHING vs. SALINAS, SR. G.R. No. 161295. June 29, 2005.
DOCTRINES:
The focus of copyright is the usefulness of the artistic design and not its
marketability while works of applied art, original intellectual, literary and
artistic works are copyrightable, useful articles and works of industrial
design are not. That the works of the petitioner may be the proper subject
of a patent does not entitle him to the issuance of a search warrant for
violation of copyright laws.
FACTS:
Jessie Ching is the owner and GM of Jeshicris Mfg.Co., the maker and
manufacturer of a Utility Model, described as “Leaf Spring Eye Bushing for
Automobile” made up of plastic.Ching and Joseph Yu were issued by the
National Library Certificates of Copyright Registration. In 2001, Ching
requested the NBI for police/investigative assistance for the apprehension
and prosecution of illegal manufacturers, producers and/or distributors of
the works. After due investigation, the NBI filed for search warrants in the
RTC Manila against William Salinas, Sr. and the officers and members of the
Board of Directors of Wilaware Product Corporation for reproducing and
distributing the said models. The applications sought the seizure of Leaf
spring eye busing for automobile and Vehicle bearing cushion. The RTC
granted the application and issued 2 Search Warrants for the seizure of
articles. The respondents filed a motion to quash the search warrants. The
respondents averred that the works covered by the certificates issued by
the National Library are not artistic in nature; they are considered
automotive spare parts and pertain to technology. Furthermore, they aver
that the models are not original, and as such are the proper subject of a
patent, not copyright. Petitioner opposed the said motion and averred that
until his copyright was nullified in a proper proceeding, he enjoys rights of a
registered owner/holder thereof. The trial court quashed the search
warrant. It ruled that the work covered by the certificates issued to the
petitioner pertained to solutions to technical problems, not literary and
artistic as provided in Article 172 of the IP Code. Petitioner filed a petition
for certiorari in the CA contending that the RTC had no jurisdiction to delve
into and resolve the validity of the copyright certificates issued to him by
the National Library. He insisted that his works are covered by Sections
172.1 and 172.2 of the IP Code. The CA dismissed the petition.
LIP DIGEST 5/DESCALLAR, FRISIAN
ISSUE:
1. Whether or not the RTC has jurisdiction to resolve the issue
whether the utility models are copyrightable 2.Whether or not
petitioner’s models are copyrightable
HELD:
1. YES The RTC had jurisdiction to delve into and resolve the issue
whether the petitioner’s utility models are copyrightable and, if so,
whether he is the owner of a copyright over the said models. It
bears stressing that upon the filing of the application for search
warrant, the RTC was duty-bound to determine whether probable
cause existed, in accordance with Section 4, Rule 126 of the Rules of
Criminal Procedure.
6) KENNETH ROY SAVAGE v. JUDGE APRONIANO B. TAYPIN,
GR No. 134217, 2000-05-11
Facts:
Petitioners KENNETH ROY SAVAGE and K ANGELIN EXPORT TRADING, owned
and managed by GEMMA DEMORAL-SAVAGE, seek to nullify the search
warrant issued by respondent Judge Aproniano B. Taypin of the Regional
Trial Court, Br. 12 Cebu City, which resulted in the... seizure of certain pieces
of wrought iron furniture from the factory of petitioners located in Biasong,
Talisay, Cebu. Their motion to quash the search warrant was denied by
respondent Judge as well as their motion to reconsider the denial. Hence,
this petition for... certiorari.
Acting on a complaint lodged by private respondent Eric Ng Mendoza,
president and general manager of Mendco Development Corporation
(MENDCO),[1] Supervising Agent Jose Ermie Monsanto of the National
Bureau of Investigation (NBI) filed... an application for search warrant with
the Regional Trial Court of Cebu City.[2] The application sought the
authorization to search the premises of K Angelin Export International
located in Biasong, Talisay, Cebu, and to seize the pieces of wrought iron...
furniture found therein which were allegedly the object of unfair
competition involving design patents, punishable under Art. 189 of the
Revised Penal Code as amended. The assailed Search Warrant No. 637-10-
1697-12 was issued by respondent Judge on 16 October
1997 and executed in the afternoon of the following day by NBI agents.[3]
Seized from the factory were several pieces of furniture, indicated in the
Inventory Sheet attached to the Return of Search Warrant, and all items
seized have remained in NBI... custody up to the present.
On 30 October 1997 petitioners moved to quash the search warrant alleging
that: (a) the crime they were accused of did not exist; (b) the issuance of the
warrant was not based on probable cause; (c) the judge failed to ask the
witnesses searching questions; and, (d) the warrant... did not particularly
describe the things to be seized.[5]
On 10 November 1997 petitioners filed a Supplemental Motion to Quash
where they additionally alleged that the assailed warrant was applied for
without a certification against forum shopping.[6] On 30 January 1998
respondent Judge denied the Motion... to Quash and the Supplemental
Motion to Quash.[7] On 2 March 1998 petitioners moved to reconsider the
denial of their motion to quash and alleged substantially the same grounds
found in their original Motion to Quash but adding thereto two
(2) new grounds, namely: (a) respondent court has no jurisdiction over the
subject-matter; and, (b) respondent court failed to "substantiate" the order
sought to be reconsidered.[8] The denial of their last motion[9] prompted...
petitioners to come to this Court.
Issues:
principal issues
(a) questions involving jurisdiction over the offense; (b) the need for a
certification of non-forum shopping; and, (c) the existence of the crime.
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Ruling:
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Petitioners apparently misconstrued the import of the designation of Special
Courts for IPR. Administrative Order No. 113-95 merely specified which
court could "try and decide" cases involving violations of IPR. It did not, and
could not, vest exclusive jurisdiction with regard... to all matters (including
the issuance of search warrants and other judicial processes) in any one
court. Jurisdiction is conferred upon courts by substantive law; in this case,
BP Blg.129, and not by a procedural rule, much less by an administrative
order.[15] The power to issue search warrants for violations of IPR has not
been exclusively vested in the courts enumerated in Supreme Court
Administrative Order No.113-95.
Petitioners next allege that the application for a search warrant should have
been dismissed outright since it was not accompanied by a certification of
non-forum shopping, citing as authority therefor Washington Distillers, Inc.
v. Court of Appeals.[16] In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private
respondent sought a search warrant from the Manila Regional Trial Court
only after he was denied by the courts of Pampanga. The instant... case
differs significantly, for here there is no allegation of forum-shopping, only
failure to acquire a certification against forum-shopping. The Rules of Court
as amended requires such certification only from initiatory pleadings,
omitting any mention of
"applications."[17] In contrast, Supreme Court Circular 04-94, the old rule
on the matter, required such certification even from "applications." Our
ruling in Washington Distillers required no such certification from
applications for search... warrants. Hence, the absence of such certification
will not result in the dismissal of an application for search warrant.
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction over all violations of IPR was thereafter
confined to the Regional Trial Courts.[11]
The authority to issue search warrants was not among those mentioned in
the administrative orders. But the Court has consistently ruled that a search
warrant is merely a process issued by the court in the exercise of its ancillary
jurisdiction and not a criminal action which it... may entertain pursuant to
its original jurisdiction.[12] The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial
jurisdiction.[13] In the instant case, the premises searched... located in
Biasong, Talisay, Cebu, are well within the territorial jurisdiction of the
respondent court.[14]
Petitioners apparently misconstrued the import of the designation of Special
Courts for IPR. Administrative Order No. 113-95 merely specified which
court could "try and decide" cases involving violations of IPR. It did not, and
could not, vest exclusive jurisdiction with regard... to all matters (including
the issuance of search warrants and other judicial processes) in any one
court. Jurisdiction is conferred upon courts by substantive law; in this case,
BP Blg.129, and not by a procedural rule, much less by an administrative
order.[15] The power to issue search warrants for violations of IPR has not
been exclusively vested in the courts enumerated in Supreme Court
Administrative Order No.113-95.
Petitioners next allege that the application for a search warrant should have
been dismissed outright since it was not accompanied by a certification of
non-forum shopping, citing as authority therefor Washington Distillers, Inc.
v. Court of Appeals.[16] In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private
respondent sought a search warrant from the Manila Regional Trial Court
only after he was denied by the courts of Pampanga. The instant... case
differs significantly, for here there is no allegation of forum-shopping, only
failure to acquire a certification against forum-shopping. The Rules of Court
as amended requires such certification only from initiatory pleadings,
omitting any mention of
"applications."[17] In contrast, Supreme Court Circular 04-94, the old rule
on the matter, required such certification even from "applications." Our
ruling in Washington Distillers required no such certification from
applications for search... warrants. Hence, the absence of such certification
will not result in the dismissal of an application for search warrant.
The last question to be resolved is whether unfair competition involving
design patents punishable under Art. 189 of the Revised Penal Code exists in
this case. Prosecutor Ivan Herrero seems to agree as he filed the
corresponding Information against petitioners on 17
March 1998.[18] However, since the IPR Code took effect on 1 January 1998
any discussion contrary to the view herein expressed would be pointless.
The search warrant cannot even be issued by virtue of a possible violation of
the IPR Code. The assailed acts specifically alleged were the manufacture
and fabrication of wrought iron furniture similar to that patented by
MENDCO, without securing any license or patent... for the same, for the
purpose of deceiving or defrauding Mendco and the buying public
In the issuance of search warrants, the Rules of Court requires a finding of
probable cause in connection with one specific offense to be determined
personally by the judge after examination of the complainant and the
witnesses he may produce, and particularly... describing the place to be
searched and the things to be seized.[27] Hence, since there is no crime to
speak of, the search warrant does not even begin to fulfill these stringent
requirements and is therefore defective on its face. The nullity of the...
warrant renders moot and academic the other issues raised in petitioners'
Motion to Quash and Motion for Reconsideration. Since the assailed search
warrant is null and void, all property seized by virtue thereof should be
returned to petitioners in accordance... with established jurisprudence.[28]
In petitioners' Reply with Additional Information they allege that the trial
court denied their motion to transfer their case to a Special Court for IPR.
We have gone through the records and we fail to find any trace of such
motion or even a copy of the order denying... it. All that appears in the
records is a copy of an order granting a similar motion filed by a certain
Minnie Dayon with regard to Search Warrant No. 639-10-1697-12.[29] This
attachment being immaterial we shall give it no further attention.
WHEREFORE, the Order of the Regional Trial Court, Br. 12, Cebu City, dated
30 January 1998, denying the Motion to Quash Search Warrant No. 637-10-
1697-12 dated 30 October 1997 and the Supplemental Motion to Quash
dated 10 November 1997 filed by petitioners, as... well as the Order dated 8
April 1998 denying petitioners' Motion for Reconsideration dated 2 March
1998, is SET ASIDE. Search Warrant No. 637-10-1697-12 issued on 16
October 1997 is ANNULLED and SET ASIDE, and... respondents are ordered
to return to petitioners the property seized by virtue of the illegal search
warrant.
Principles:
Petitioners claim that respondent trial court had no jurisdiction over the
offense since it was not designated as a special court for Intellectual
Property Rights (IPR), citing in support thereof Supreme Court
Administrative Order No. 113-95 designating certain branches... of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in
Cities as Special Courts for IPR. The courts enumerated therein are
mandated to try and decide violations of IPR including Art. 189 of the
Revised Penal Code committed within their... respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu
City, was designated Special Court for IPR for the 7th Judicial Region.[10]
Subsequently Supreme Court Administrative Order No.104-96 was issued
providing that... jurisdiction
7) AIR PHILIPPINES CORP V PENNSWELL INC GR 172835 |13
December 2007
Trade Secrets
FACTS:
Petitioner Air Philippines Corporation is a domestic corporation engaged in
the business of air transportation services. On the other hand, respondent
Pennswell, Inc. was organized to engage in the business of manufacturing
and selling industrial chemicals, solvents, and special lubricants.
Respondent delivered and sold to petitioner sundry goods in trade. Under
the contracts, petitioner’s total outstanding obligation amounted to P449,
864.98 with interest at 14% per annum until the amount would be fully
paid. For failure of the petitioner to comply with its obligation under said
contracts, respondent filed a Complaint for a Sum of Money on 28 April
2000 with the RTC.
In its Answer, petitioner alleged that it was defrauded in the amount of
P592,000.00 by respondent for its previous sale of four items. Petitioner
asserted that it was deceived by respondent which merely altered the
names and labels of such goods. Petitioner asseverated that had respondent
been forthright about the identical character of the products, it would not
have purchased the items complained of.
Moreover, petitioner alleged that when the purported fraud was
discovered, a conference was held between petitioner and respondent on
13 January 2000, whereby the parties agreed that respondent would return
to petitioner the amount it previously paid. However, petitioner was
surprised when it received a letter from the respondent, demanding
payment of the amount of P449,864.94, which later became the subject of
respondent’s Complaint for Collection of a Sum of Money against petitioner.
During the pendency of the trial, petitioner filed a Motion to Compel
respondent to give a detailed list of the ingredients and chemical
components of the following products. The RTC rendered an Order granting
the petitioner’s motion.
Respondent sought reconsideration of the foregoing Order, contending that
it cannot be compelled to disclose the chemical components sought
because the matter is confidential. It argued that what petitioner
endeavored to inquire upon constituted a trade secret which respondent
cannot be forced to divulge.
The RTC gave credence to respondent’s reasoning, and reversed itself.
Alleging grave abuse of discretion on the part of the RTC, petitioner filed a
Petition for Certiorari under Rule 65 of the Rules of Court with the Court of
Appeals, which denied the Petition and affirmed the Order dated 30 June
2004 of the RTC. Petitioner’s Motion for Reconsideration was denied.
Unyielding, petitioner brought the instant Petition before SC.
ISSUE:
Whether the chemical components of the respondent’s products are subject
to compulsory disclosure.
HELD:
Yes. The products are covered by the exception of trade secrets being
divulged in compulsory disclosure. The Court affirms the ruling of the Court
of Appeals which upheld the finding of the RTC that there is substantial
basis for respondent to seek protection of the law for its proprietary rights
over the detailed chemical composition of its products.
The Supreme Court has declared that trade secrets and banking transactions
are among the recognized restrictions to the right of the people to
information as embodied in the Constitution. SC said that the drafters of the
Constitution also unequivocally affirmed that, aside from national security
matters and intelligence information, trade or industrial secrets (pursuant to
the Intellectual Property Code and other related laws) as well as banking
transactions (pursuant to the Secrecy of Bank Deposits Act), are also
exempted from compulsory disclosure.
A trade secret is defined as a plan or process, tool, mechanism or compound
known only to its owner and those of his employees to whom it is necessary
to confide it. The definition also extends to a secret formula or process not
patented, but known only to certain individuals using it in compounding
some article of trade having a commercial value. American jurisprudence
has utilized the following factors to determine if an information is a trade
secret, to wit:
(1) the extent to which the information is known outside of the employer’s
business;
(2) the extent to which the information is known by employees and others
involved in the business;
(3) the extent of measures taken by the employer to guard the secrecy of
the information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in developing
the information; and
(6) the extent to which the information could be easily or readily obtained
through an independent source.
Rule 27 sets an unequivocal proviso that the documents, papers, books,
accounts, letters, photographs, objects or tangible things that may be
produced and inspected should not be privileged. The documents must not
be privileged against disclosure. On the ground of public policy, the rules
providing for production and inspection of books and papers do not
authorize the production or inspection of privileged matter; that is, books
and papers which, because of their confidential and privileged character,
could not be received in evidence. Such a condition is in addition to the
requisite that the items be specifically described, and must constitute or
contain evidence material to any matter involved in the action and which
are in the party’s possession, custody or control.
In the case at bar, petitioner cannot rely on Section 77of Republic Act 7394,
or the Consumer Act of the Philippines, in order to compel respondent to
reveal the chemical components of its products. While it is true that all
consumer products domestically sold, whether manufactured locally or
imported, shall indicate their general make or active ingredients in their
respective labels of packaging, the law does not apply to respondent.
Respondent’s specialized lubricants — namely, Contact Grease, Connector
Grease, Thixohtropic Grease, Di-Electric Strength Protective Coating, Dry
Lubricant and Anti-Seize Compound — are not consumer products.
What is clear from the factual findings of the RTC and the Court of Appeals
is that the chemical formulation of respondent’s products is not known to
the general public and is unique only to it. Both courts uniformly ruled that
these ingredients are not within the knowledge of the public. Since such
factual findings are generally not reviewable by this Court, it is not duty-
bound to analyze and weigh all over again the evidence already considered
in the proceedings below.
The revelation of respondent’s trade secrets serves no better purpose to the
disposition of the main case pending with the RTC, which is on the collection
of a sum of money. As can be gleaned from the facts, petitioner received
respondent’s goods in trade in the normal course of business. To be sure,
there are defenses under the laws of contracts and sales available to
petitioner. On the other hand, the greater interest of justice ought to favor
respondent as the holder of trade secrets. Weighing the conflicting interests
between the parties, SC rules in favor of the greater interest of respondent.
Trade secrets should receive greater protection from discovery, because
they derive economic value from being generally unknown and not readily
ascertainable by the public.
8) MANOLO P. SAMSON v. REYNALDO B. DAWAY, GR Nos.
160054-55, 2004-07-21
Facts:
two informations for unfair competition... under
Section 170, of the Intellectual Property Code... ere filed... against petitioner
Manolo P. Samson... challenging the jurisdiction of the trial court over the
offense charged.  He contended that since under Section 170... of R.A. No.
8293, the penalty... of imprisonment for unfair competition does not exceed
six years... he offense is cognizable by the Municipal Trial Courts and not by
the Regional Trial Court... trial court denied petitioner... r's... motions
A motion for reconsideration thereof was likewise
Hence, the instant petition alleging that respondent Judge gravely abused
its discretion in issuing the assailed orders.
Issues:
Which court has jurisdiction over criminal and civil cases for violation of
intellectual property rights?
Ruling:
WHEREFORE, in view of all the foregoing, the petition is dismissed. Under
R.A. No. 8293 Section 163 of the same Code states that actions (including
criminal and civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall
be brought before the proper courts with appropriate jurisdiction under
existing laws, thus The existing law referred to in the foregoing provision is
Section 27 of R.A. No. 166 (The Trademark Law) which provides that
jurisdiction over cases for infringement of registered marks, unfair
competition, false designation of origin and false description or
representation, is... lodged with the Regional Trial Court... e find no merit in
the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No.
8293 Jurisdiction conferred by a special law to Regional Trial Courts must
prevail over that granted by a general law to Municipal Trial Courts. In the
case at bar, R.A. No. 8293 and R.A. No. 166 are special laws[... conferring
jurisdiction over violations of intellectual property rights to the Regional
Trial Court.  They should therefore prevail over R.A. No. 7691, which is a
general... law. Hence, jurisdiction over the instant criminal case for unfair
competition is properly lodged with the Regional Trial Court even if the
penalty therefor is imprisonment of less than 6 years In fact, to implement
and ensure the speedy disposition of cases involving violations of
intellectual property rights under R.A. No. 8293, the Court issued A.M. No.
02-1-11-SC... designating certain Regional Trial Courts as Intellectual
Property Courts.
The Court further issued a Resolution consolidating jurisdiction to hear and
decide Intellectual Property Code and Securities and Exchange Commission
cases in specific Regional Trial Courts designated as Special Commercial
Courts.
9) Mirpuri vs CA, GR No. 114508, 19 November 1999, 318
SCRA 516
FACTS         
Lolita Escobar applied with the Bureau of Patents for the registration of the
trademark “Barbizon”, alleging that she had been manufacturing
and selling these products since 1970. private respondent Barbizon Corp
opposed the application in IPC No. 686. The Bureau granted the application
and a certificate of registration was issued for the trademark “Barbizon”.
Escobar later assigned all her rights and interest over the trademark to
petitioner Mirpuri. In 1979, Escobar failed to file with the Bureau the
Affidavit of Use of the trademark. Due to his failure, the Bureau cancelled
the certificate of registration. Escobar reapplied and Mirpuri also applied
and this application was also opposed by private respondent in IPC No.
2049, claiming that it adopted said trademark in 1933 and has been using it.
It obtained a certificate from the US Patent Office in 1934. Then in 1991, DTI
cancelled petitioner’s registration and declared private respondent the
owner and prior user of the business name “Barbizon International”.
ISSUE
          Whether or not the treaty (Paris Convention) affords protection to
a foreign corporation against a Philippine applicant for the registration of a
similar trademark.
 HELD
The Court held in the affirmative. RA 8293 defines trademark as any
visible sign capable of distinguishing goods. The Paris Convention is a
multilateral treaty that seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks, service marks, trade
names and indications of source or appellations of origin, and at the same
time aims to repress unfair competition. In short, foreign nationals are to be
given the same treatment in each of the member countries as that country
makes available to its own citizens. Nationals of the various member nations
are thus assured of a certain minimum of international protection of their
industrial property.
10) DISTILLERIA WASHINGTON, INC. or WASHINGTON
DISTILLERY, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LA TONDEÑA
DISTILLERS, INC., respondents. G.R. No. 120961 October
17, 1996
FACTS :
La Tondeña Distillers , Inc. (LTDI) filed a case against Distilleria Washington
for the seizure of 18,157 empty bottles bearing the blown-in marks of La
Tondeña Inc. and Ginebra San Miguel. Said bottles were being used by
Washington for its own products without the consent of LTDI.
LTDI asserted that as the owner of the bottles they were entitled for the
protection extended by RA no. 623 (An Act to regulate the use of duly
stamped or marked bottles, boxes, kegs, barrels and other similar
containers). Washington countered that RA no. 623 should not apply to
alcoholic beverages and the ownership of the bottles were lawfully
transferred to the buyer upon the sale of the gin and the containers at a
single price.
The trial court rendered a decision favoring Washington and ordered LTDI
for the return of the seized bottles. LTDI appealed the decision to the Court
of Appeals. The appellate court reversed the court a quo and ruled against
Washington.
ISSUE :
Whether or not ownership of the empty bottles was transferred to
Washington?
HELD :
The fact of the matter is that R.A. 623, as amended, in affording trademark
protection to the registrant, has additionally expressed a prima facie
presumption of illegal use by a possessor whenever such use or possession
is without the written permission of the registered manufacturer, a
provision that is neither arbitrary nor without appropriate rationale.
The above-quoted provisions grant protection to a qualified manufacturer
who successfully registered with the Philippine Patent Office its duly
stamped or marked bottles, boxes, casks and other similar containers. The
mere use of registered bottles or containers without the written consent of
the manufacturer is prohibited, the only exceptions being when they are
used as containers for "sisi," "bagoong," "patis" and similar native products.
It is to be pointed out that a trademark refers to a word, name, symbol,
emblem, sign or device or any combination thereof adopted and used by a
merchant to identify, and distinguish from others, his goods of commerce. It
is basically an intellectual creation that is susceptible to ownership 7 and,
consistently therewith, gives rise to its own elements of jus posidendi, jus
utendi, jus fruendi, jus disponendi, and jus abutendi, along with the
applicable jus lex, comprising that ownership. The incorporeal right,
however, is distinct from the property in the material object subject to it.
Ownership in one does not necessarily vest ownership in the other. Thus,
the transfer or assignment of the intellectual property will not necessarily
constitute a conveyance of the thing it covers, nor would a conveyance of
the latter imply the transfer or assignment of the intellectual right. 8
11) Ang vs. Teodoro G.R. No. L-48226 December 14, 1942
Facts:
Respondent Toribio Teodoro has continuously used "Ang Tibay," both as a
trade-mark and as a trade-name, in the manufacture and sale of slippers,
shoes, and indoor baseballs since 1910. On September 29, 1915, he formally
registered it as trade-mark and as trade-name on January 3, 1933.
Petitioner Ana Ang registered the same trade-mark "Ang Tibay" for pants
and shirts on April 11, 1932, and established a factory for the manufacture
of said articles in the year 1937.
The Court of First Instance of Manila absolved the defendant (Ms. Ang) on
the grounds that the two trademarks are dissimilar and are used on
different and non-competing goods; that there had been no exclusive use of
the trade-mark by the plaintiff; and that there had been no fraud in the use
of the said trade-mark by the defendant because the goods on which it is
used are essentially different from those of the plaintiff.
The Court of Appeals reversed said judgment, directing the Director of
Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor
of petitioner, and perpetually enjoining the latter from using said trade-
mark on goods manufactured and sold by her.
Thus, this case, a petition for certiorari.
Issue:
Are the goods or articles or which the two trademarks are used similar or
belong to the same class of merchandise? 

Ruling:
Yes, pants and shirts are goods closely similar to shoes and slippers. They
belong to the same class of merchandise as shoes and slippers. They are
closely related goods.
The Supreme Court affirmed the judgment of the Court of Appeals and
added that “although two non-competing articles may be classified under to
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 of
identical or closely similar trademarks would be likely to cause confusion as
to the origin, or personal source, of the second user’s goods. They would be
considered as not falling under the same class only if they are so dissimilar
or so foreign to each other as to make it unlikely that the purchaser would
think that the first user made the second user’s goods”.  the whole of the two trademarks pictured in their manner of display.
12) ETEPHA, A.G., petitioner, vs. DIRECTOR OF PATENTS and
WESTMONT PHARMACEUTICALS, INC., respondents .
(G.R. No. L-20635, March 31, 1966)
FACTS:
Respondent Westmont Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark "Atussin" placed on its "medicinal
preparation of expectorant antihistaminic, bronchodilator sedative, ascorbic
acid (Vitamin C) used in the treatment of cough". The trademark is used
exclusively in the Philippines since January 21, 1959.
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected
claiming that it will be damaged because Atussin is so confusedly similar to
its Pertussin used on a preparation for the treatment of coughs, that the
buying public will be misled into believing that Westmont's product is that
of petitioner's which allegedly enjoys goodwill.
The Director of Patents ruled that the trademark ATUSSIN may be registered
even though PERTUSSIN had been previously registered from the same
office, hence, this appeal.
ISSUE:
Whether or not ATUSSIN may be registered?
HELD:
We are to be guided by the rule that the validity of a cause for infringement
is predicated upon colorable imitation. The phrase "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, and
to cause him to purchase the one supposing it to be the other.
A practical approach to the problem of similarity or dissimilarity is to go into
Inspection should be undertaken from the viewpoint of a prospective buyer.
Confusion is likely between trademarks, however, only if their over-all
presentations in any of the particulars of sound, appearance, or meaning
are such as would lead the purchasing public into believing that the
products to which the marks are applied emanated from the same source.
We concede the possibility that buyers might be able to obtain Pertussin or
Attusin without prescription. When this happens, then the buyer must be
one thoroughly familiar with what he intends to get, else he would not have
the temerity to ask for a medicine — specifically needed to cure a given
ailment. In which case, the more improbable it will be to palm off one for
the other. For a person who purchases with open eyes is hardly the man to
be deceived.
For the reasons given, the appealed decision of the respondent Director of
Patents — giving due course to the application for the registration of
trademark ATTUSIN is hereby affirmed. Cost against petitioner. So ordered.
 13) UNNO COMMERCIAL ENTERPRISES, INCORPORATED,
petitioner,
vs.
GENERAL MILLING CORPORATION and TIBURCIO S.
EVALLE, in his capacity as Director of Patents,
respondents. G.R. No. L-28554 February 28, 1983
FACTS :
The Court affirms respondent Director of Patent's decision declaring
respondent General Milling Corporation as the prior user of the trademark
"All Montana" on wheat flour in the Philippines and ordering the
cancellation of the certificate of registration for the same trademark
previously issued in favor of petitioner Unno Commercial Enterprises,
Incorporated, it appearing that Unno Commercial Enterprises, Inc. merely
acted as exclusive distributor of All Montana wheat flour in the Philippines.
Only the owner of a trademark, trade name or service mark may apply for
its registration and an importer, broker, indentor or distributor acquires no
rights to the trademark of the goods he is dealing with in the absence of a
valid transfer or assignment of the trade mark.
On December 11, 1962, respondent General Milling Corporation filed an
application for the registration of the trademark "All Montana" to be used in
the sale of wheat flour. In view of the fact that the same trademark was
previously, registered in favor of petitioner Unno Commercial Enterprises,
Inc. Respondent General Milling Corporation, in its application for
registration, alleged that it started using the trademark "All Montana" on
August 31, 1955 and subsequently was licensed to use the same by
Centennial Mills, Inc. by virtue of a deed of assignment executed on
September 20, 1962. On the other hand petitioner Unno Commercial
Enterprises, Inc. argued that the same trademark had been registered in its
favor on March 8, 1962 asserting that it started using the trademark on June
30, 1956, as indentor or broker for S.H. Huang Bros. & Co., a local firm.
The Director of Patents, after hearing, ruled in favor of respondent General
Milling Corporation and rendered its decision as follows:
ISSUE :
Whether or not director of patents can issue cancellation of the certification
of registration?
HELD :
The Court finds without merit petitioner's argument that the Director of
Patents could not order the cancellation of' its certificate of registration in
an interference proceeding and that the question of whether or not a
certificate of registration is to be cancelled should have been brought in
cancellation proceedings. Under Rule 178 of the Rules of the Patent Office in
Trademark Cases, 14 the Director of Patents is expressly authorized to order
the cancellation of a registered mark or trade name or name or other mark
of ownership in an inter partes case, such as the interference proceeding at
bar.
The right to register trademark is based on ownership. 4 When the applicant
is not the owner of the trademark being applied for, he has no right to apply
for the registration of the same. 5 Under the Trademark Law only the owner
of the trademark, trade name or service mark used to distinguish his goods,
business or service from the goods, business or service of others is entitled
to register the same. 6
The term owner does not include the importer of the goods bearing the
trademark, trade name, service mark, or other mark of ownership, unless
such importer is actually the owner thereof in the country from which the
goods are imported. A local importer, however, may make application for
the registration of a foreign trademark, trade name or service mark if he is
duly authorized by the actual owner of the name or other mark of
ownership. 7
Thus, petitioner's contention that it is the owner of the mark "All Montana"
because of its certificate of registration issued by the Director of Patents,
must fail, since ownership of a trademark is not acquired by the mere fact of
registration alone. 9 Registration merely creates a prima facie presumption
of the validity of the registration, of the registrant's ownership of the
trademark and of the exclusive right to the use thereof. 10 Registration does
not perfect a trademark right. 11 As conceded itself by petitioner, evidence
may be presented to overcome the presumption. Prior use by one will
controvert a claim of legal appropriation, by subsequent users. In the case
at bar, the Director of Patents found that "ample evidence was presented in
the record that Centennial Mills, Inc. was the owner and prior user in the
Philippines of the trademark 'All Montana' through a local importer and
broker. Use of a trademark by a mere importer, indentor or exporter (the
Senior Party herein) inures to the benefit of the foreign manufacturer
whose goods are Identified by the trademark. The Junior Party has hereby
established a continuous chain of title and, consequently, prior adoption
and use" and ruled that "based on the facts established, it is safe to
conclude that the Junior Party has satisfactorily discharged the burden of
proving priority of adoption and use and is entitled to registration." It is
well-settled that we are precluded from making further inquiry, since the
findings of fact of the Director of Patents in the absence of any showing that
there was grave abuse of discretion is binding on us 12 and the findings of
facts by the Director of Patents are deemed conclusive in the Supreme
Court provided that they are supported by substantial evidence. 13
Petitioner has failed to show that the findings of fact of the Director of
Patents are not substantially supported by evidence nor that any grave
abuse of discretion was committed.
14) ANDRES ROMERO vs. MAIDEN FORM BRASSIERE CO.,
INC., and THE DIRECTOR OF PATENTS
FACTS
Respondent company, a foreign corporation, filed with Director of Patents
an application for registration of the trademark "Adagio" for the brassieres
manufactured by it. In its application, respondent company alleged that said
trademark was first used by it in US in 1937, and in the Philippines on 1946;
that it had been continuously used by it in Philippines for over 10 years.
Director issued certificate of registration.
Petitioner filed a petition for cancellation of said trademark. Director
dismissed petition. Hence, this appeal.
DECISION
Appellant claims that the trademark "Adagio" has become a common
descriptive name of a particular style of brassiere and is, therefore,
unregistrable. It is urged that said trademark had been used by local
brassiere manufacturers since 1948, without objection on the part of
respondent company.
This claim is without basis in fact. The evidence shows that the trademark
"Adagio" is a musical term, which means slowly or in an easy manner, and
was used as a trademark by the owners thereof (the Rosenthals of Maiden
Form Co., New York) because they are musically inclined. Being a musical
term, it is used in an arbitrary (fanciful) sense as a trademark for brassieres
manufactured by respondent company. It also appears that respondent
company has, likewise, adopted other musical terms to identify, as a
trademark, the different styles or types of its brassieres.
It is not true that respondent company did not object to the use of said
trademark by petitioner and other local brassiere manufacturers. The
records show that respondent company's agent, Mr. Schwartz, warned the
Valleson Department Store to desist from the sale of the "Adagio" Royal
Form brassieres manufactured by petitioner, and even placed an
advertisement in the local newspapers warning the public against unlawful
use of said trademark. The advertisement prompted petitioner to file this
present petition for cancellation.
On the other hand, respondent company's long and continuous use of the
trademark "Adagio" has not rendered it merely descriptive of the product. If
this argument were sound, then every time a plaintiff obtained the result of
having the public purchase its article, that fact of itself would destroy a
trademark. Arbitrary trademarks cannot become generic in this way.
Appellant next contends that the trademark "Adagio at the time it was
registered (in the Philippines) on 1957, had long been used by respondent
company, only to designate a particular style or quality of brassiere and,
therefore, is unregistrable as a trademark.
This contention is untenable.
Brassieres are usually of different types or styles, and appellee has used
different trademarks for every type. The mere fact that appellee uses
"Adagio" for one type or style, does not affect the validity of such word as a
trademark.
Appellant also claims that respondent Director erred in registering the
trademark in question, despite appellee's non-compliance with Section 37,
paragraphs 1 and 4 (a) of the Trademark Law.
This contention flows from a misconception of the application for
registration of trademark of respondent. As we see it, respondent's
application was filed under the provisions of Section 2 of the Trademark Law
as amended by Section 1 of Republic Act 865.
Section 37 can be availed of only where the Philippines is a party to an
international convention or treaty relating to trademarks, in which the
trade-mark sought to be registered need not be use in the Philippines.
Appellant, likewise, contends that the registration the trademark in
question was fraudulent or contrary Section 4 of the Trademark Law. There
is no evidence to show that the registration of the trademark "Adagio" was
obtained fraudulently by appellee. The evidence record shows, on the other
hand, that the trademark "Adagio" was first exclusively in the Philippines by
appellee in the year 1932. There being no evidence of use of the mark by
others before 1932, or that appellee abandoned use thereof, the
registration of the mark was made in accordance with the Trademark Law.
Granting that appellant used the mark when appellee stopped using it
during the period of time that the Government imposed restrictions on
importation of respondent's brassiere bearing the trademark, such
temporary non-use did not affect the rights of appellee because it was
occasioned by government restrictions and was not permanent, intentional,
and voluntary.
Appellant next argues that respondent Director erred in declaring illegal the
appropriation in the Philippines of the trademark in question by appellant
and, therefore, said appropriation did not affect appellee's right thereto and
the subsequent registration thereof. Appellant urges that its appropriation
of the trademark in question cannot be considered illegal under Philippine
laws, because of non-compliance by appellee of Section 37. But we have
already shown that Section 37 is not the provision invoked by respondent
because the Philippines is not as yet a party to any international convention
or treaty relating to trademarks.
The decision appealed from is therefore hereby AFFIRMED.
15) MCDONALDS VS L.C. BIG MAK BURGER
Mcdonald’s Corporation et.al. vs. L.C. Big Mak Burger, Inc., et. al., G.R. No.
143993, August 18, 2004, 8:03 AM
FACTS:
The court ruled that the use of the respondents of the “Big Mak” mark
infringed the trademark of that of petitioner McDonald’s “Big Mac”. Using
the dominancy test, the court reasoned that both marks are closely similar
(visually and orally). The law prohibits usage of marks which might cause
confusion and mistake or might deceive/mislead consumers as to the origin,
general appearance, nature, and kind, among others, of their products
and/or services (Sec 155.1, ICP).
RULING:
The court not only ruled on the confusion of similar goods but also on the
issue of confusion of business. The Court found that petitioners have duly
established McDonald's exclusive ownership of the "Big Mac" mark and that
usage of respondents of the “Big Mak” mark has unjustly created the
impression that its business is approved and sponsored by, or affiliated with
petitioners.
The court also found respondents guilty of unfair competition, reasoning
that respondents passed off their products as though they were of
petitioner’s. Had respondents gave due notice as to who clearly sells the
products, they would have only been guilty of infringement.
16) SOCIETE DES PRODUITS NESTLE, S.A. v CA and CFC CORP
G.R. NO. 112012 April 4, 2001
Ynares-Santiago, J.
FACTS:
CFC corporation filed with Bureau of Patents a registration of the Trademark
“FLAVOR MASTER” for instant coffee. Petitioner Societe Des Produits Nestle
filed an unverified Notice of Opposition, claiming that the trademark of
respondent’s product is confusingly similar to its Trademarks for coffee:
“MASTER ROAST AND MASTER BLEND”. Nestle Philippines also filed notice
of opposition against the registration Petitioners argued that it would cause
confusion in trade, or deceive purchasers and would falsely suggest to the
public a connection between the two marks.
ISSUE:
Is the TM, FLAVOR MASTER, a colorable imitation of the TMs MASTER
ROAST and MASTER BLEND?
RULING:
YES. The TM sought to be registered is likely to cause confusion.
A trademark has been generally defined as any word, name, symbol, or
device adopted and used by a merchant to identify his goods and distinguish
them from those sold by others. Such is entitled to protection Under the
Philippine Trademark Law, the owner of a TM cannot register if it resembles
a mark or trade-name registered in the Philippines or a mark previously
used and not abandoned WHICH IS LIKELY TO CAUSE CONFUSION OR
MISTAKE OR TO DECEIVE PURCHASERS. The law prescribes a stringent
standard proscribes registration if it causes confusing similarity, and if it is
likely to cause confusion or mistake or deceive purchasers. Colorable
imitation denotes a close imitation as to be calculated to deceive ordinary
persons as to cause him to purchase the one supposing it to be the other.
In determining colorable imitation there are two tests: Dominancy Test and
Holistic Test. The test of dominancy focuses on the similarity of the
prevalent features of the competing trademarks; the holistic test mandates
the entirety of the marks in question must be considered in determining
confusing similarity
The Dominancy test should be applied as it relies not only on the visual but
also on the aural and connotative comparisons and overall impressions
between the two TMs.
• The word MASTER is the dominant feature which is neither a generic
nor a descriptive term. As such said term cannot be invalidated as a
trademark and therefore, may be protected.
• Generic terms are those which constitute the common descriptive
name of an article or substance and are not legally protectable.
• The term MASTER is a suggestive which require imagination, thought,
and perception to reach a conclusion as to the nature of the goods.
The term MASTER has acquired a certain connotation to mean the coffee
products MASTER ROAST and Master Blend produced by NESTLE. AS SUCH
the use of CFC of the term “MASTER” is likely to cause confusion or mistake.
17) GUILLERMO BAXTER AND G. GAXTER & CO., plaintiffs-
appellees, vs. ZOSIMO ZUAZUA, ET AL., defendants-
appellants. Jose Ma. Rosado for appellants. Pillsbury and
Sutro for appellees. G.R. No. L-1750 October 26, 1905
MAPA, J.:
Guillermo Baxter, the plaintiff in this case, after complying with the
necessary formalities, secured from the Government of the Philippine
Islands, on the 30th day of August, 1894, the right to use the trade-mark
described as "Agua de Kananga", as well as the labels annexed thereto, a
facsimile of which was attached to the complaint filed in this case.
On the 23rd day of July, 1901, the said Guillermo Baxter associated himself
with certain merchants of the city of Manila for the purpose of organizing a
limited partnership for a period of five years, under the firm name and style
of "Baxter & Company," the object of which said partnership was the
manufacture of toilet water and perfumery. Guillermo Baxter contributed to
the partnership, of which he was elected manager and administrator, the
business which is now the basis of that carried on by the said partnership;
also his title to certain trade-marks, among them the one described as
"Agua de Kananga."
For this reason the proprietor of the said trade-mark was joined as a party
plaintiff with the partnership of Baxter & Co., the firm directly interested in
the use and exploitation of the said trade-mark. This trade-mark is actually
used by the plaintiffs to designate the ownership and origin of a certain
toilet water manufactured and sold by them under the said name of "Agua
de Kananga." The plaintiffs brought this action for unfair competition under
section 7 of Act No. 666 of the Philippine Commission. It is alleged that the
defendant Zosimo Zuazua, for the purpose of imitating and fraudulently
simulating the "Agua de Kananga" manufactured by plaintiffs, placed on the
market for sale a certain toilet water under the name and denomination of
"Kananga Superior" and "Kanangue", and disposed of the same in bottles
with labels similar to those used by the plaintiffs for their own goods. It was
further alleged that the other defendants were engaged in retailing to the
public the product manufactured by the defendant Zuazua. Certain
facsimiles of the labels used by the said Zuazua were also attached to the
complaint.
Zuazua admitted that he had manufactured certain toilet water under the
denomination of "Kananga Superior"and "Kanangue", and that he had also
sold the same in bottles labeled as alleged in the complaint. As to the
bottles, it was stipulated, page 19 of the bill of exceptions, that "those used
by the defendant Zuazua, as well as those used by the plaintiffs, were
universally used by all persons engaged in the manufacture of toilet water,
and that the fact that they were used by the defendant did not, of itself,
constitute a violation of the rights of the plaintiffs, nor a fraud or deceit
upon the public."
The trial court entered judgment enjoining the defendants from the further
manufacture of toilet water under the trade-mark of "Kananga Superior"
and "Kananga", and the selling of the same in bottles of the size and form of
those introduced in evidence at the trial, labeled as aforesaid, and for costs.
The said judgment was based upon the ground that the labels, words, and
bottles in question, taken together, were an imitation of those used by the
plaintiffs, and tended to deceive the public by making it appear that the
toilet water manufactured and sold by the defendants was the same toilet
water manufactured by the plaintiffs, and that the use of the said labels,
words, and bottles was therefore illegal, and constituted a violation of
plaintiff's rights.
The trial court found also, as a conclusion of law, that the grant by the
Government of the Philippine Islands did not give the plaintiffs an exclusive
right to the use of the word "Kananga," but to the phrase "Agua de
Kananga;"that "Kananga" was the name of a well-known tree of the
Philippine Islands, and held that, although the plaintiffs had a right to the
exclusive use of the phrase "Agua de Kananga," it did not follow that they
had an exclusive right to the use of any of the words contained in the said
phrase.
The plaintiffs, as well as the defendant Zosimo Zuazua, excepted to the
judgment of the trial court, upon different grounds. The defendant moved
for a new trial in the Court of First Instance, upon the ground that the
judgment was contrary to the weight of evidence. The main reliance of the
defendant is that the labels used on his goods differed from those used by
the plaintiffs as to the drawing, color, and general appearance of the design,
and he denies emphatically that he had any intention to deceive the public
thereby, alleging that the people clearly distinguished the goods of the
plaintiffs from those of the defendants, the former being known from the
picture on the bottle as the "Payo Brand" and the latter as the "Señorita
Brand."
The alleged similarity or resemblance between the labels is a question of
fact which can be decided by a mere inspection of the same. After a careful
comparison of the labels used by the defendant with those used by the
plaintiffs, we have unanimously arrived at the conclusion that there is no
identity nor even any similarity whatsoever between them, either in detail
or as a whole. The difference between the two is so apparent that it can be
readily noticed. We do not believe that the public could have been deceived
by the appearance of the labels to the extent of taking the goods of the
plaintiffs for those manufactured and sold by the defendant.
We make no finding as to the bottles because they were not forwarded to
this court for inspection, and, moreover, because it was stipulated by the
parties that the said bottles were universally used by all manufacturers of
toilet water, and that their particular use by defendant was not, therefore,
an act of fraud or deceit practiced by him upon the plaintiffs or the public
generally. Section 7 of Act No. 666 provides in part as follows: 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 plaintiffs have not proved, or attempted to prove, the fraudulent intent
attributed to the defendant Zuazua by any means other that the alleged
similarity between the labels used by him and those used by the defendant
to designate his own goods. There being no such similarity between the
labels, we find no reason for even inferring that the defendant had any such
intention, and therefore the action brought by the plaintiffs in this case can
not be maintained under the law. The judgment appealed from should be
reversed in so far as it holds that such an action lies in this case.
We agree, however, with the trial court, that the ownership of the trade-
mark "Agua de Kananga" did not give the plaintiffs a right to the exclusive
use of the word "Kananga." The defendant alleged in his answer that the
word "Kananga" could not be used as a trade-mark because it was the name
of a flower. It is stated in the judgment of the court below that the word
"Kananga" represents the name of a well-known tree in the Philippines. This
finding has not been disputed by the plaintiffs, who simply allege that the
spelling of the said word indicates that it is foreign to the Spanish language.
This, by the way, would not prove, even though it were true, that the said
word was not in fact the name of a flower of the Philippine Islands, as set
out in the judgment.
It is apparent, therefore, that the said word could not be used exclusively as
a trade-mark, any more than could the words "sugar," "tobacco," or
"coffee." The law is clear and conclusive upon the subject. "A designation or
part of a designation," says section 2 of Act No. 666, "which relates only to
the name, quality, or description of the merchandise ... can not be the
subject of a trade-mark." This provision is in conformity with the provisions
of paragraph 3 of article 5 of the royal decree of the 26th of October, 1888,
under which Guillermo Baxter secured the registration of his trade-mark.
The said royal decree provided that the denominations generally used in
commerce for the purpose of designating a class of goods could not be the
subject of labels or trade-marks.
The plaintiffs allege that the defendants did not prove, or even attempt to
prove, that the goods manufactured by them had anything to do with the
"Kananga" flower. If the goods in question had really nothing to do with the
said flower, then it was not lawful for the plaintiffs to sell them to the public
under the name of "Agua de Kananga,"because the people might be
deceived as to the nature of the goods, taking for "Kananga" an article
which, as a matter of fact, had nothing to do with the said flower. Both
plaintiffs and defendant would be exactly in the same position as one who
should sell goods as "coffee" or "tobacco" which were neither one nor the
other.
Such being the case the plaintiffs could not have maintained this action for
unfair competition, because under section 9 of said Act No. 666 such action
would not lie "when the trade-mark or designation of its origin, ownership,
or manufacture has been used by the claimant for the purpose of deceiving
the public as to the nature of the goods in which he deals, his business,
profession, or occupation." The law can not and does not permit that trade-
marks shall contain indications capable of deceiving the public as to the
nature of the goods. This would be exactly the case if under the trade-mark
of "Agua de Kananga" the plaintiffs should sell goods that had in fact
nothing to do, as they say, with the "Kananga" flower. However the
contention of the plaintiffs may be considered, the proof is nevertheless
insufficient to show that the word "Kananga," the name of a flower, can be
appropriated as the subject of a trade-mark, under the law.
The defendant prays that judgment be entered against the plaintiffs for
damages incurred by reason of the preliminary injunction, still in force,
issued by the trial court on the 18th day of June, 1903. In his answer the
defendant estimates these damages at 800 pesos per month. He did not,
however, introduce evidence in support of his allegation, and no order can
be made by the court upon this matter. The foregoing disposes of the other
questions raised by the parties in their brief in this court. The judgment
appealed from is hereby reversed, and another judgment entered in favor
of the defendant and appellant Zosimo Zuazua, dissolving the preliminary
injunction heretofore issued by the court below on the 18th of June, 1903.
The finding of the court that the plaintiffs have no right to the exclusive use
of the word "Kananga" is sustained. Each party shall pay its own costs. After
the expiration of ten days from the date hereof let judgment be entered
accordingly and the case remanded to the trial court. So ordered. Arellano,
C.J., Torres, Johnson, and Carson, JJ., concur. Willard, J., did not sit in this
case.
18) Ong Ai Gui vs Director of Patents
Facts:
Ong Ai Gui alias Tan Ai Gui filed an application with the director of Patents
for the registration of the trade-name"20th Century Nylon Shirts
Factory." Described as "General merchandise dealing principally in
textiles, haberdasheries; also operating as a manufacturer of shirts, pants
and other men's and woman's wears." The Director held that the
words"shirts factory" are not registrable; so the applicant made a disclaimer
of said words (shirts factory) inserting a statement to that effect in his
original application. Director ordered the publication of the trade-name in
the official Gazette.ch Publication was made but before the expiration of the
period for filing opposition, Atty. J. A. Wolfson, on behalf of E. I. DePont de
Nemours and Company, presented an opposition on the ground that the
word "nylon" was a name coined by E. I.Du Pont de Nemours and Company
as the generic name of a synthetic fabric material, invented,
patented, manufactured and sold by it and that this word is a generic term.
While he dismissed the opposition, the Director ruled that the application
must be disapproved unless the word "nylon" is also disclaimed.
Issue:
Is "Nylon" a generic term?
Ruling:
The Court ruled that used in connection with shirt-making, "Nylon" can
never become distinctive, can never acquire secondary meaning, because it
is a generic term, like cotton, silk, linen, or ramie. Just as no length of use
and no amount of advertising will make "cotton," "silk," "linen," or"ramie,"
distinctive of shirts or of the business of making them, so no length of use
and no amount of advertising will make "nylon" distinctive of shirts or of the
business of manufacturing them."
19) Fredco Manufacturing Corporation vs President and
Fellows of Harvard College (Harvard University)
Facts:
On August 10 2005, Petitioner Fredco Manufacturing Corporation (Fredco),
a corporation organized and existing under the laws of the Philippines, filed
a Petition for Cancellation of Registration No. 56561 before the Bureau of
Legal Affairs of the Intellectual Property Office (IPO) against respondents
President and Fellows of Harvard College (Harvard University).
Fredco alleged that Registration No. 56561 was issued to Harvard University
on 25 November 1993 for the mark “Harvard Veritas Shield Symbol” for
decals, tote bags, serving trays, sweatshirts, t-shirts, hats and flying discs
under Classes 16, 18, 21, 25 and 28 of the Nice International Classification of
Goods and Services. Fredco alleged that the mark “Harvard” for t-shirts,
polo shirts, sandos, briefs, jackets and slacks was first used in the Philippines
on 2 January 1982 by New York Garments Manufacturing & Export Co., Inc.
(New York Garments), a domestic corporation and Fredco’s predecessor-in-
interest. A Certificate of Registration was issued to New York Garments on
12 December 1988, with a 4 20-year term subject to renewal at the end of
the term.
Fredco alleged that at the time of issuance of Registration No. 56561 to
Harvard University, New York Garments had already registered the mark
“Harvard” for goods under Class 25. Despute New York Garments
inadvertently failing to file an affidavit of use/non-use on the fifth
anniversary of the registration, the right to the mark “Harvard” remained
with its predecessor New York Garments and now with Fredco.
Harvard University, on the other hand, alleged that it is the lawful owner of
the name and mark “Harvard” in numerous countries worldwide, including
the Philippines. It contends that the name and mark “Harvard” was adopted
in 1639 as the name of Harvard College of Cambridge, Massachusetts, U.S.A.
The name and mark “Harvard” was allegedly used in commerce as early as
1872. Harvard University is over 350 years old and is one of the most
famous brands in the world.
Harvard University alleged that in March 2002, it discovered, through its
international trademark watch program, Fredco’s website which advertises
and promotes the brand name “Harvard Jeans USA.” It then filed an
administrative complaint against Fredco before the IPO for trademark
infringement and/or unfair competition with damages.
Harvard University alleged that its valid and existing certificates of
trademark registration in the Philippines. The trademark for “Harvard
Veritas Shield Design” was issued on November 25, 1993 among others.
IPO cancelled Harvard University’s registration of the mark “Harvard” under
Class 25. The Office of the Director General, IPO reversed the decision of the
Bureau of Legal Affairs, IPO. The Court of Appeals affirmed the decision of
the Office of the Director General of the IPO hence, this petition.
Issue:
Whether or not Fredco’s date of actual use of the trademark in the
Philippines entitles it to a better right to register the marks.
Held:
No. Under Section 2 of Republic Act No. 166,14 as amended (R.A. No. 166),
before a trademark can be registered, it must have been actually used in
commerce for not less than two months in the Philippines prior to the filing
of an application for its registration. However, Harvard University’s
registration of the name “Harvard” is based on home registration which is
allowed under Section 37 of R.A. No. 166.
Where the trademark sought to be registered has already been registered in
a foreign country that is a member of the Paris Convention, the requirement
of proof of use in the commerce in the Philippines for the said period is not
necessary.
Under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293), 18 “[m]arks
registered under Republic Act No. 166 shall remain in force but shall be
deemed to have been granted under this Act. Since the mark “Harvard
Veritas Shield Symbol” is now deemed granted under R.A. No. 8293, any
alleged defect arising from the absence of actual prior use in the Philippines
has been cured by Section 239.2.19. In addition, Fredco’s registration was
already cancelled on 30 July 1998 when it failed to file the required affidavit
of use/non-use for the fifth anniversary of the mark’s registration. Hence, at
the time of Fredco’s filing of the Petition for Cancellation before the Bureau
of Legal Affairs of the IPO on 2005, Fredco was no longer the registrant or
presumptive owner of the mark “Harvard.”
Fredco’s registration of the mark “Harvard” and its identification of origin as
“Cambridge, Massachusetts” falsely suggest that Fredco or its goods are
connected with Harvard University. Section 4(a) of R.A. No. 166 prohibits
the registration of a mark “which may disparage or falsely suggest a
connection with persons, living or dead, institutions, beliefs.
Indisputably, Fredco does not have any affiliation or connection with
Harvard University, or even with Cambridge, Massachusetts.
Fredco claims that it used these words “to evoke a ‘lifestyle’ or suggest a
‘desirable aura’ of petitioner’s clothing lines.” Fredco’s belated justification
merely confirms that it sought to connect or associate its products with
Harvard University, riding on the prestige and popularity of Harvard
University, and thus appropriating part of Harvard University’s goodwill
without the latter’s consent.
The Philippines and the United States of America are both signatories to the
Paris Convention for the Protection of Industrial Property (Paris
Convention). Thus, under Philippine law, a trade name of a national of a
State that is a party to the Paris Convention, whether or not the trade name
forms part of a trademark, is protected “without the obligation of filing or
registration.”
No entity in the Philippines can claim, expressly or impliedly through the use
of the name and mark “Harvard,” that its products or services are
authorized, approved, or licensed by, or sourced from, Harvard University
without the latter’s consent.
Minister of Trade Secretary Luis Villafuerte issued a Memorandum directing
the Director of Patents to reject, pursuant to the Paris Convention, all
pending applications for Philippine registration of signature and other
world-famous trademarks by applicants other than their original owners.
Minister of Trade and Industry Roberto Ongpin directed the Director of
Patents to implement measures necessary to comply with the Philippines’
obligations under the Paris Convention.
To be protected under the two directives of the Ministry of Trade, an
internationally well-known mark need not be registered or used in the
Philippines. All that is required is that the mark is well-known internationally
and in the Philippines for identical or similar goods, whether or not the mark
is registered or used in the Philippines.
Section 123.1(e) of R.A. No. 8293 now categorically states that “a mark
which is considered by the competent authority of the Philippines to be
well-known internationally and in the Philippines, whether or not it is
registered here,” cannot be registered by another in the Philippines. Section
123.1(e) does not require that the well-known mark be used in commerce in
the Philippines but only that it be well-known in the Philippines.
Records also show that the first use of the name HARVARD was in 1638 for
educational services, policy courses of instructions and training at the
university level. It has a Charter. Its first commercial use of the name or
mark HARVARD for Class 25 was on 31 December 1953. The name HARVARD
was the name of a person, John Harvard, whose deeds were considered to
be a cornerstone of the university.
“Harvard” is a well-known name and mark not only in the United States but
also internationally, including the Philippines. The mark “Harvard” is rated
as one of the most famous marks in the world. It has been registered in at
least 50 countries. It has been used and promoted extensively in numerous
publications worldwide. It has established a considerable goodwill
worldwide since the founding of Harvard University more than 350 years
ago.
20) E. Spinner v. Neuss Hesslein G.R. No. 31380 | January 13,
1930
SUMMARY
E. Spinner exports khaki to the Philippines, including the brand "Wigan." the
different grades of khaki are under a common trademark registered in the
Bureau of Patents, Copyrights and Trademark. In 1924, E. Spinner
discovered that Neuss Hesslein (defendant) was selling khaki in the
Philippines with the word "Wigan." Neuss Hesslein is enjoined from using
Wigan as it constitutes unfair competition and trademark infringement.
Neuss' marking of the khaki with the word "Wigan" although not able to
deceive the dealers are ultimately able to deceive the consumers and
constitutes unfair competition. If the defendant were manufacturing the
product from the town of Wigan, the name would have been indicative of
the place of manufacture of the goods and would have been allowed.
FACTS
o 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.
o 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.
o E. Spinner & Co., has long been engaged in the manufacture and
sale of textile fabrics, including khaki cloth.
o About 1900, plaintiff began exporting khaki to the Philippine Islands.
Among the brands of khaki was the grade indicated by the
manufacturer as "Wigan."
o All of the 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.
MANCHESTER & BOMBAY
Quality:................................Yds.
REGISTERED
No. 50,275.
o 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".
o As thus employed by the defendant, the word "Wigan" purports to
show the color of the defendant's khaki.
o 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.
ISSUE
o Whether defendant corporation has a right to use the word "Wigan"
on khaki sold by it in the Philippine Islands. – NO (constitutes unfair
competition and trademark infringement)
RULING
o 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.
o 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.
 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.
Unfair Competition
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.
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.
 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.
Trademark Infringement
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.
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.
 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.
 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.
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.
21) PETRONILO DEL ROSARIO, plaintiff-appellee, vs. VICENTE
QUIOGUE, defendant-appellant. G.R. No. L-5461 February
28, 1910
O'Brien & De Witt, for appellant.
Manuel Torres, for appellee.
ARELLANO, C.J.:
Petronilo del Rosario conducted an undertaker's establishment as "La
Funeraria Paz," on the Calzada de Bilibid, now Nos. 533 and 535 Calle
Paz, in the district of Santa Cruz, for nine years previous to the entry or
registration of the said name in the registry on the 14th of January,
1909.
His branch establishments at No. 100 Calle Alix, in the district of
Sampaloc, and Nos. 148 and 150 of Calle Ilaya, in the district of Tondo
also bear the same name.
At the present time the main establishment on the Calzada de Bilibid is
located upon other premises on the same street, now named Paz, and
on the same sidewalk, about 50 meters beyond the old location at Nos.
513 and 515 on the same street.
The old premises, Nos. 533 and 535, together with No. 537, were
occupied by Vicente Quiogue, operating a similar undertaker's
establishment, under the same "La Nueva Funeraria Paz," with a sign
bearing the said name placed in a most conspicuous spot, which name
he also used in his advertisements in the local papers.
The name is almost the same, and the establishment being situated in
the same place where "La Funeraria Paz" had been located and known
for nine years, these facts have actually deceived those who, intending
to send their orders to "La Funeraria Paz" of Petronilo del Rosario,
inadvertently employed "La Nueva Funeraria Paz" of Vicente Quiogue,
and the said establishment thus succeeded in obtaining benefits which
should have gone to the real establishment whose services were
sought.
In view of the foregoing, Petronilo del Rosario prayed the Court of
First Instance of Manila to issue a preliminary injunction and another
final one, prohibiting Vicente Quiogue from using the name
"Funeraria Paz" in his above-mentioned establishment, and in
addition asked that the latter be adjudged to pay P500 as losses and
damages, and the costs.
The court below granted the two injunctions with the costs against
the defendant, but dismissed the claim for an indemnity for losses and
damages, for the reason that they were not proven; from the said
judgement the defendant has appealed and submitted his bill of
exceptions to his court.
Upon appeal it now appears that the following error has been
assigned:
The court below erred in maintaining that the plaintiff had acquired
the exclusive right to the use of the word "Paz" in his trade name as
against any other person on the same street by reason of the long
time he had used said word, and by virtue of the recording of the
same in the registry of trade-marks and trade-names, it appearing
that "Paz" is the name of the street where the undertaker's
establishment is located.
In support of the above assignment of error, section 2 of Act No. 666
of the Philippine Commission is especially relied upon, in connection
with its proviso, which is of the following tenor:
Provided, That a designation or part of a designation which relates
only to the name, quality, description of the merchandise or
geographical place of its production or origin can not be the subject of
a trade-mark.
o In accordance with the above provision, the defendant can not be
prevented from using the word "Funeraria," a generic name of the
trade, and it was so admitted at the trial; but as the name "Paz," it
does not appear that it is a "geographical name of the place of
production or origin of an article," as in the examples of names
rejected in the decisions cited by the appellant, such as
"Pennsylvania wheat," "Kentucky hemp," "Virginia tobacco," "Sea-
island cotton," etc.
o "Paz" is a name which has been used by the plaintiff to designate
his establishment, not necessarily taken from the name of the
street on which it is situated at the present time, since the name
of "Paz" was in use when the establishment was located on the
Calzada de Bilibid; and while located at the latter place he
registered the name and the place became so known in his
business papers (Exhibits B and C); the word "Paz" is also applied
to his establishments situated on Calle Ilaya in Tondo, and on
Calle Alix in Sampaloc, and is still so used.
The following findings of fact are contained in the judgment appealed
from: (1) That the words "La Nueva" appear on the sign of the
establishment of the defendant, with letters one span in width, and the
words "Funeraria Paz" in letters of more than double the size, and
identical with those on the sign of the plaintiff's establishment; (2) that
the defendant opened his establishment in the place that was formerly
occupied by the plaintiff; and (3) that the defendant, according to his
own declaration, had fixed lower rates than those charged by the
plaintiff for the services of his establishment.
From all of the foregoing conclusions, the trial court concluded that the
use of the words "Funeraria Paz" answered no other purpose than that
of making it easy to mistake the defendant's establishment for that of
the plaintiff formerly located in the same place, or so that it might be
considered as its successor; that the addition of "La Nueva" was nothing
more than a tick employed by the defendant in order to covertly
appropriate the trade name of the plaintiff; that the very fact of adding
"La Nueva" to the prominent words "Funeraria Paz" on the sign shows
how fully convinced he was that, without such an addition, he could not
use the said sign which he now considers as a "generic name of the
 place of production or origin" referred to in said Act No. 666; that the
lowering of rates, together with all the circumstances set forth, tended
to establish a competition in bad faith; and that the results are as shown
by the defendant in his claim for damages by reason of the preliminary
injunction, which prevented him for obtaining such beneficial results.
In this instance the defendant insists that the plaintiff should be
adjudged to pay him P2,000, by reason of the said preliminary
injunction, without any express assignment of error against the
judgment which naturally did not grant him an indemnity for the
damages claimed by him.
His claim is stated as follows:
It has been shown at the trial by the books of the defendant that, from
the 8th to the 24th of January, a period of sixteen days, the collections
amounted to P380 Philippine currency; and from January 24, to the day
when he testified, February 1, the collections only amounted to P39.
Said difference is due to the fact that the defendant had extensively
advertised his business under the former name, and because of the
injunction he was obliged to commence the business under another
name, thus losing the benefit of his advertisements. (Brief, 10.)
Hence, the word "Paz" — as concluded in the judgment appealed from
— added to the word "Funeraria" on the sign of the defendant's
establishment, although preceded by the words "La Nueva," is what
attracted clients to the establishment, and not the lower rates charged
for services. (B. of E., 14.)
In view of the fact that the only assigned by the appellant has not been
proven, the judgment appealed from is hereby affirmed with the costs
of this instance against the appellant. So ordered.
Johnson, Carson and Moreland, JJ., concur.
22) E.Y. INDUSTRIAL SALES, INC. and ENGRACIO YAP,
Petitioners, vs. SHEN DAR ELECTRICITY AND MACHINERY
CO., LTD., Respondent. G.R. No. 184850 October 20, 2010
The Facts
EYIS is a domestic corporation engaged in the production, distribution and
sale of air compressors and other industrial tools and equipment. Petitioner
Engracio Yap is the Chairman of the Board of Directors of EYIS.
Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the
manufacture of air compressors.
Both companies claimed to have the right to register the trademark
"VESPA" for air compressors.
From 1997 to 2004, EYIS imported air compressors from Shen Dar through
sales contracts. In the Sales Contract dated April 20, 2002, 8 for example,
Shen Dar would supply EYIS in one (1) year with 24 to 30 units of 40-ft.
containers worth of air compressors identified in the Packing/Weight Lists
simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In the
corresponding Bill of Ladings, the items were described merely as air
compressors.9 There is no documentary evidence to show that such air
compressors were marked "VESPA."
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-
121492 with the IPO for the mark "VESPA, Chinese Characters and Device"
for use on air compressors and welding machines. 10
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-
005393, also for the mark "VESPA," for use on air compressors. 11 On January
18, 2004, the IPO issued COR No. 4-1999-005393 in favor of
EYIS.12Thereafter, on February 8, 2007, Shen Dar was also issued COR No. 4-
1997-121492.13
In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation
of EYIS’ COR with the BLA.14 In the Petition, Shen Dar primarily argued that
the issuance of the COR in favor of EYIS violated Section 123.1 paragraphs
(d), (e) and (f) of Republic Act No. (RA) 8293, otherwise known as the
Intellectual Property Code (IP Code), having first filed an application for the
mark. Shen Dar further alleged that EYIS was a mere distributor of air
compressors bearing the mark "VESPA" which it imported from Shen Dar.
Shen Dar also argued that it had prior and exclusive right to the use and
registration of the mark "VESPA" in the Philippines under the provisions of
the Paris Convention.15

In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true
owners of the mark "VESPA" being the sole assembler and fabricator of air
compressors since the early 1990s. They further alleged that the air
compressors that Shen Dar allegedly supplied them bore the mark "SD" for
Shen Dar and not "VESPA." Moreover, EYIS argued that Shen Dar, not being
the owner of the mark, could not seek protection from the provisions of the
Paris Convention or the IP Code.16
Thereafter, the Director of the BLA issued its Decision dated May 29, 2006 in
favor of EYIS and against Shen Dar, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition for Cancellation is, as it is
hereby, DENIED. Consequently, Certificate of Registration No. 4-1999-
[005393] for the mark "VESPA" granted in the name of E.Y. Industrial Sales,
Inc. on 9 January 2007 is hereby upheld.
Let the filewrapper of VESPA subject matter of this case be forwarded to the
Administrative, Financial and Human Resource Development Services
Bureau for issuance and appropriate action in accordance with this
DECISION and a copy thereof furnished to the Bureau of Trademarks for
information and update of its records.
SO ORDERED.
The Ruling of the Court The appeal is meritorious.
Fifth Issue:
Whether EYIS is the true owner of the mark "VESPA"
In any event, given the length of time already invested by the parties in the
instant case, this Court must write finis to the instant controversy by
determining, once and for all, the true owner of the mark "VESPA" based on
the evidence presented.
RA 8293 espouses the "first-to-file" rule as stated under Sec. 123.1(d) which
states:
Section 123. Registrability. - 123.1. A mark cannot be registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different proprietor or
a mark with an earlier filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or
cause confusion. (Emphasis supplied.)
Under this provision, the registration of a mark is prevented with the filing
of an earlier application for registration. This must not, however, be
interpreted to mean that ownership should be based upon an earlier filing
date. While RA 8293 removed the previous requirement of proof of actual
use prior to the filing of an application for registration of a mark, proof of
prior and continuous use is necessary to establish ownership of a mark.
Such ownership constitutes sufficient evidence to oppose the registration of
a mark.
Sec. 134 of the IP Code provides that "any person who believes that he
would be damaged by the registration of a mark x x x" may file an
opposition to the application. The term "any person" encompasses the true
owner of the mark¾the prior and continuous user.
Notably, the Court has ruled that the prior and continuous use of a mark
may even overcome the presumptive ownership of the registrant and be
held as the owner of the mark. As aptly stated by the Court in Shangri-la
International Hotel Management, Ltd. v. Developers Group of Companies,
Inc.:37
Registration, without more, does not confer upon the registrant an absolute
right to the registered mark. The certificate of registration is merely a prima
facie proof that the registrant is the owner of the registered mark or trade
name. Evidence of prior and continuous use of the mark or trade name by
another can overcome the presumptive ownership of the registrant and
may very well entitle the former to be declared owner in an appropriate
case.
xxxx
Ownership of a mark or trade name may be acquired not necessarily by
registration but by adoption and use in trade or commerce. As between
actual use of a mark without registration, and registration of the mark
without actual use thereof, the former prevails over the latter. For a rule
widely accepted and firmly entrenched, because it has come down through
the years, is that actual use in commerce or business is a pre-requisite to
the acquisition of the right of ownership.
xxxx
By itself, registration is not a mode of acquiring ownership. When the
applicant is not the owner of the trademark being applied for, he has no
right to apply for registration of the same. Registration merely creates a
prima facie presumption of the validity of the registration, of the registrant’s
ownership of the trademark and of the exclusive right to the use thereof.
Such presumption, just like the presumptive regularity in the performance
of official functions, is rebuttable and must give way to evidence to the
contrary.
Here, the incontrovertible truth, as established by the evidence submitted
by the parties, is that EYIS is the prior user of the mark. The exhaustive
discussion on the matter made by the BLA sufficiently addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a legitimate
corporation engaged in buying, importing, selling, industrial machineries
and tools, manufacturing, among others since its incorporation in 1988.
(Exhibit "1"). Indeed private respondents have submitted photographs
(Exhibit "376", "377", "378", "379") showing an assembly line of its
manufacturing or assembly process.
More importantly, the private respondent’s prior adoption and continuous
use of the mark "VESPA" on air compressors is bolstered by numerous
documentary evidence consisting of sales invoices issued in the name of
respondent EY Industrial and Bills of Lading. (Exhibits "4" to "375"). Sales
Invoice No. 12075 dated March 27, 1995 antedates petitioner’s date of first
use in January 1, 1997 indicated in its trademark application filed in June 9,
1997 as well as the date of first use in June of 1996 as indicated in the
Declaration of Actual Use submitted on December 3, 2001 (Exhibit "385").
The use by respondent-registrant in the concept of owner is shown by
commercial documents, sales invoices unambiguously describing the goods
as "VESPA" air compressors. Private respondents have sold the air
compressors bearing the "VESPA" to various locations in the Philippines, as
far as Mindanao and the Visayas since the early 1990’s. We carefully
inspected the evidence consisting of three hundred seventy one (371)
invoices and shipment documents which show that "VESPA" air
compressors were sold not only in Manila, but to locations such as Iloilo
City, Cebu City, Dumaguete City, Zamboanga City, Cagayan de Oro City,
Davao City to name a few. There is no doubt that it is through private
respondents’ efforts that the mark "VESPA" used on air compressors has
gained business goodwill and reputation in the Philippines for which it has
validly acquired trademark rights. Respondent EY Industrial’s right has been
preserved until the passage of RA 8293 which entitles it to register the
same. x x x
On the other hand, Shen Dar failed to refute the evidence cited by the BLA
in its decision. More importantly, Shen Dar failed to present sufficient
evidence to prove its own prior use of the mark "VESPA." We cite with
approval the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the trademark
"VESPA" used on air compressors. The thrust of [Shen Dar’s] argument is
that respondent E.Y. Industrial Sales, Inc. is a mere distributor of the
"VESPA" air compressors. We disagree.
This conclusion is belied by the evidence. We have gone over each and
every document attached as Annexes "A", "A" 1-48 which consist of Bill of
Lading and Packing Weight List. Not one of these documents referred to a
"VESPA" air compressor. Instead, it simply describes the goods plainly as air
compressors which is type "SD" and not "VESPA". More importantly, the
earliest date reflected on the Bill of Lading was on May 5, 1997. (Annex –
"A"-1). [Shen Dar] also attached as Annex "B" a purported Sales Contract
with respondent EY Industrial Sales dated April 20, 2002. Surprisingly,
nowhere in the document does it state that respondent EY Industrial agreed
to sell "VESPA" air compressors. The document only mentions air
compressors which if genuine merely bolsters respondent Engracio Yap’s
contention that [Shen Dar] approached them if it could sell the "Shen Dar"
or "SD" air compressor. (Exhibit "386") In its position paper, [Shen Dar]
merely mentions of Bill of Lading constituting respondent as consignee in
1993 but never submitted the same for consideration of this Bureau. The
document is also not signed by [Shen Dar]. The agreement was not even
drafted in the letterhead of either [Shen Dar] nor [sic] respondent –
registrant. Our only conclusion is that [Shen Dar] was not able to prove to
be the owner of the VESPA mark by appropriation. Neither was it able to
prove actual commercial use in the Philippines of the mark VESPA prior to
its filing of a trademark application in 9 June 1997. 39
As such, EYIS must be considered as the prior and continuous user of the
mark "VESPA" and its true owner. Hence, EYIS is entitled to the registration
of the mark in its name.
WHEREFORE, the petition is hereby GRANTED. The CA’s February 21, 2008
Decision and October 6, 2008 Resolution in CA-G.R. SP No. 99356 are hereby
REVERSED and SET ASIDE. The Decision dated May 25, 2007 issued by the
IPO Director General in Inter Partes Case No. 14-2004-00084 and the
Decision dated May 29, 2006 of the BLA Director of the IPO are hereby
REINSTATED.
No costs.
SO ORDERED.
23) COMPAÑIA GENERAL DE TABACOS DE FILIPINAS,
PLAINTIFF AND APPELLEE, VS. ALHAMBRA CIGAR &
CIGARETTE MANUFACTURING CO., DEFENDANT AND
APPELLANT [G.R. No. 10251, February 10, 1916 ]
DECISION
MORELAND, J.:
The plaintiff claims to have appropriated and to own the exclusive right to
use the word "Isabela" on cigarettes.  ,
Sometime before the commencement of this action defendant began the
manufacture of cigarettes, offering them to the public in packages on the
front side of each of which appeared the words "Alhambra Isabelas." This
action was brought to enjoin the defendant from so using the word
"Isabelas." Judgment was for plaintiff and defendant appealed.
The complaint contains two counts, one for the violation or infringement of
the trade-name "Isabela," and the other, claims the plaintiff, for unfair
competition arising out of the use by the defendant of the word "Isabelas"
on its cigarettes in the manner already stated. The trial court dismissed the
count based on unfair competition, saying, "we doubt that the facts
established, under the circumstances of the case, Justify the inference of
actual intention on defendant's part to deceive the public and defraud a
competitor, and can, therefore, not find the defendant guilty of unfair
competition."  Although neither count in the complaint was based on the
infringement or violation of a trade-mark, and plaintiff, during the trial,
offered no evidence on that subject, and, accordingly, no issue was framed
thereon either by the pleadings or on the trial (Lizarraga Hermanos vs. Yap
Tico, 24 Phil. Rep., 504), nevertheless the court, in its decision for plaintiff,
treated the action as one for the infringement of a trade-mark, saying, "the
case is rather one of the violation of a trade-mark under the first four
sections of Act No. 666." The court then cited those sections of the Act
relative to trade-marks, discussed them at some length, and finally founded
its judgment thereon.
Plaintiff did not appeal from that portion of the judgment finding the
defendant not guilty of unfair competition; while the defendant appealed
from that part founded on the violation of a trade-mark and decreeing a
perpetual injunction. Therefore the question involving unfair competition is
not really before us, that count of the complaint founded thereon having
been in effect dismissed by the trial court, and no appeal having been taken
from that dismissal. While the court founded its judgment solely on the
theory of a violation of a trade-mark and, although the defendant insisted
from the very beginning that the action as set out in the complaint in no
possible way involved the question of a trade-mark, nevertheless, the court,
as we have already seen, proceeded to try and resolve the case on that
theory and based its judgment exclusively thereon. Defendant now
contends that, if it appears that the action was not for a violation of a trade-
mark, the judgment should be reversed, as it was wholly misled in its
defense and would be seriously prejudiced by the change necessarily
resulting. We regard the action, however, as we necessarily must under the
statute, as one for the violation of a trade-name and not one for the
violation of a trade-mark or for unfair competition. But, inasmuch as we find
for the defendant on the whole case and reverse the judgment against it,
we do not stop to dispose of the question as to whether the theory of the
action was changed during or after trial or on appeal, so long as the parties
have agreed on certain questions which they have submitted and discussed,
which questions include all those which can arise whether the action be for
the violation of a trade-name or for unfair competition. We prefer to decide
the case so as to end the litigation once for all.
Inasmuch as the plaintiff did not appeal from the judgment dismissing the
complaint as to unfair competition, we would be justified in holding that
that question is not before us, and, accordingly, in deciding the case from
the single viewpoint of a violation of a trade-name. But for the reasons just
expressed we take up both alleged causes of action and decide all the
questions presented by both.
Plaintiffs claim is this: It has trade-name rights in the word "Isabela." The
defendant has violated those rights. Plaintiff is entitled to damages on the
theory of violation of a trade name, or unfair competition, or both. Can it
recover? We hold that none of these claims have been sustained and that
plaintiff is not entitled to recover on any theory mentioned.  We proceed to
show why.
Rights of action for the violation of a trade-mark or trade-name or to
restrain unfair competition are conferred by statute. Without such a statute
right of action would not exist in those cases. In deciding this appeal,
therefore, we must be governed by the provisions of the statute.
The Act is No. 666 of the Philippine Commission and confers a right of action
in three cases (1) for the violation of a trade-mark, (2) a trade-name, and (3)
to restrain unfair competition. The statute founds the cause of action in the
first two cases exclusively on the invasion of the right of property which the
statute gives in the trade-mark or trade-name. These actions are not based
on fraud nor is the right given on the theory of unfair competition. It is
founded solely in the property which the statute creates in the trade-mark
or trade-name. These two cases are dealt with somewhat on the theory of
patents, giving the owner of the trade-mark or trade-name a right in
the thing similar to the right created by a patent. As a necessary
consequence, an action for a violation or infringement of a trade-mark or
trade-name does not proceed primarily on the theory that either the
plaintiff or the public has been or will be defrauded, although that may be,
in effect, the result; but on the hypothesis that plaintiff's right in the mark or
the name has been invaded and that he is entitled to the damages resulting
from the invasion. In either case an action may be maintained without proof
of anything more than the right to the exclusive use of the mark or name
and that the defendant has violated it. No allegation or proof of fraud or
intent to defraud is necessary. On the other hand, the action to prevent
unfair competition is based exclusively on fraud; and it would seem from the
wording of the statute that it refers to the fraud committed on
the public rather than to the fraud committed on the plaintiff the fraud
against the plaintiff being only an incident the means by which the fraud is
perpetrated on the public. No right of property in the appearance which
plaintiff gives to his goods is required, if the word "property" may be used in
such a connection, and none needs to be alleged or proved. In such an
action plaintiff, to recover, must prove that the defendant, in selling his
goods, gave them the same general appearance of the goods of the plaintiff
either in the wrapping of the package in which they were contained or in
the devices of words thereon or in some other feature of their appearance
which would be likely to influence purchasers to believe that the goods
offered for sale by defendant were those of the plaintiff; and that the
defendant clothed his goods with such appearance for the purpose of
deceiving the public and of defrauding the plaintiff of his legitimate trade.
The statute expressly requires that the plaintiff prove the intent to
deceive the public and defraud a competitor before he can recover; and,
while such intent may be inferred from the similarity in the appearance of
the goods as packed or offered for sale, such an inference is not a necessary
one, it being legally possible that such similarity exist and there still be no
intent to deceive. Fraud, then, is the essence of an action of unfair
competition; right in property the essence of the other two.
From these observations it is a necessary deduction that an action for the
violation of a trade-name cannot be carried on in conjunction with an action
of unfair competition based on a similarity to the plaintiff's trade-name. If
an action on the trade-name will lie, then an action of unfair competition
based on similarity to the trade-name is impossible; whereas, on the other
hand, if an action of unfair competition is the proper action, then one for
the violation of a trade-name based on the same facts will not lie. The facts
which will support an action for the violation of a trade-name will not
support an action of unfair competition. The same is true of an action for
the violation of a trade-mark except where such an action fails for the
reason that the trade-mark is invalid because it consists of a word or words
which, in law, are not capable of appropriation as a trade-mark. In such
case, by express provision of the statute (section 7), an action of unfair
competition will lie. No such exception is made in favor of a trade-name;
and if the plaintiff fails to establish his right of property therein, his failure is
irremediable. He cannot fall back on the action of unfair competition.  We
apprehend that the reason why this privilege was not extended to a plaintiff
in an action for the violation of a trade-name was that an action of unfair
competition is based exclusively on the appearance of the goods as they are
exposed for sale; while, under the statute, the trade-name, unlike the trade-
mark, applies exclusively to the business, profession, trade or occupation of
the plaintiff and, as a consequence, it is not essential that the trade-name
appear on plaintiff's goods or go into the market with them.  (Section 5.) It is
clear that, if the action of unfair competition is based on the appearance of
the goods as they are exposed for sale, the facts necessary to support an
action for the violation of a trade-name will not sustain is as neither the
trade-name of the plaintiff nor of the defendant need go into the market at
all and, as a consequence, the similarity of appearance between the goods
of plaintiff and defendant, a fact necessary to sustain an action of unfair
competition, may not exist.
Another principle of the law of trade-marks, trade-names and unfair
competition of importance in this case, and one which naturally follows
from what has already been said, is that there can be no secondary
meaning, as that term is understood in the American law of trade- marks
and trade-names, with  respect to a trade-name. It must be borne in mind,
as we stated at the outset, that the only rights existing in this jurisdiction
with respect to trade-marks and trade-names, as well as unfair competition,
are conferred by Act No. 666; and, accordingly, they are limited by the
provisions of the Act.  The statute prohibits the registration of a trade-name
when that trade-name represents the geographical place of production or
origin of the products or goods to which the trade-name refers, or when it is
merely the name, quality, or description of the merchandise with respect to
which the trade-name is to be used. In such cases, therefore, no trade-name
can exist.  The statute prescribes what a trade-name may be and then gives
a right of action to protect the owner of that trade-name. If it is not a trade-
name defined by statute, it does not carry with it the right of action granted
by the statute. No trade-name can legally exist except that prescribed by
the Act. If it can exist, it can be enforced as, and only as, the rights in trade-
names are enforced under the statute. If it cannot exist as a trade-name, it
cannot be enforced at all, either as a trade-name, i. e., as a property right,
or on the theory of unfair competition based on the doctrine of secondary
meaning.  Of course, if the trade-name is not recognized in law, it can have
no secondary meaning. Moreover, the doctrine of secondary meaning as it
is known in the United States, is carried into effect on the theory of unfair
competition and not on the theory of property in the trade-name. Indeed,
the necessity of basing the action on the theory of unfair competition
negatives the existence at that time of the trade-name in its primary
meaning.  In this jurisdiction that necessity is emphasized by the fact that, as
we have seen, the statute makes a sharp distinction between actions for the
violation of a trade-mark or trade-name and those based on unfair
competition, the former being founded in a property right and the latter on
the fact that fraud has been or will be committed on the public. 
Furthermore, if the action of unfair competition based on the similarity of
plaintiff's and defendant's trade-names cannot be maintained in this
jurisdiction, as we have seen that it cannot, then the fundamental basis of
the doctrine of secondary meaning disappears.  We might add that the
statute does not seem to have dealt with trade-names as it has with trade-
marks; for, with respect to the latter, it expressly confers, as we have seen
(sec. 7), a right of action for unfair competition even though the trade-mark,
as such, is illegal and unregisterable by reason of being the name of the
geographical place of production or origin of the goods to which it is affixed,
or the name, quality or description of the merchandise on which it is placed.
In other words, the statute seems to create with regard to a trade-mark a
right which is, in many aspects, the equivalent of that springing from the
doctrine of secondary meaning, and where the trade-mark, though illegal
and unregisterable under the Act, has been used by the plaintiff for such a
length of time that it has ceased to be used and understood in its primary
meaning, the owner will be protected on the theory of unfair competition. 
The statute does not confer a right on the owner of a trade-name under
similar circumstances.
The trial court was, therefore, correct in dismissing that count of the
complaint based on unfair competition.  The statute, as we have already
observed, does not permit these two actions to be maintained on the same
facts. We might say, however, that the ownership of a trade-name does not
necessarily prevent the owner from bringing an action of unfair competition
founded on the appearance of the goods of defendant as exposed for
sale, which appearance is not based on similarity to the owner's trade-
name.  Such an action would have to be based on the general appearance of
the package, its form, color, style, adornment, and matters of that
character; and would not lie on appearance arising from the similarity of
plaintiff's and defendant's trade-names.
The effect of these observations and conclusions would necessarily be to
end the case at this point if we were disposed to leave the other questions
presented for resolution unsettled; for, if there can attach to a trade-name
no secondary meaning, plaintiff's action must fail. It is based exclusively on
the secondary signification of the word "Isabela" which it has acquired by
long association with plaintiff's cigarettes, by virtue of which it no longer
means to the trade and the public generally when used in connection with
tobacco products, a province of Luzon or the tobacco grown in that
province, but simply and solely the products of plaintiff's factory.  In other
words, the claim is that it has completely lost its primary signification and
come to have a secondary meaning exclusively when used in connection
with manufactured tobacco. The action being based entirely on the theory
of secondary meaning, and the statute giving no right of action in cases of
that character, it is evident that the action cannot be maintained.
In spite of the fact, however, that we might here reverse the judgment on
the grounds already stated, we prefer, in the interests of the parties, the bar
and the public generally, to decide the other questions presented, some of
them being extremely important and of public interest and they having
been fully argued on the appeal.  (Lichauco vs. Limjuco and Gonzalo, 19 Phil.
Rep., 12.)
It is admitted all through this case, in fact it is alleged in plaintiff's complaint
and is set out in all parts of its brief filed on this appeal, that plaintiff's trade-
name, as evidenced by the certificate issued under the Spanish regime,
consists solely of the words "La Flor de la Isabela." Plaintiff does not claim
that the word "Isabela" has been registered by it as a trade-name or that it
has a title from any source conferring on it the exclusive right to use that
word. The certificate offered in evidence by plaintiff to show its right to the
exclusive use of the phrase "La Flor de la Isabela" grants two rights: One in a
trade-mark consisting of a rectangular shield, surmounted by a crown and
divided into four equal parts, in the right hand upper corner of' which is a
full rigged sailing ship at sea, in the left hand upper corner a growing
tobacco plant, in the lower right hand corner a field of sugar cane with a
pool of water in the foreground, and in the lower left hand corner a factory
in operation; the other, a right in the trade-name "La Flor de la Isabela." As
we have already seen, there is no claim here based on the infringement or
violation of the trade-mark just described, nor is there contention or claim
of any kind that the use of the word "Isabela" is a violation or an
infringement of the trade-name "La Flor de la Isabela." The action is not for
the violation of the trade-name "La Flor de la Isabela," but for the violation
of an entirely different trade-name, namely, "Isabela." The exclusive right to
use this name, plaintiff claims arises from two causes: First, the contraction
of the phrase "La Flor de la Isabela" into the word "Isabela" by popular
expression and use; and, second, the use for more than twenty years of the
word "Isabela." In view of the fact that there is no claim of an infringement
of the trade name "La Flor de la Isabela," these two claims are identical; for,
there could have been no contraction brought about by popular expression
except after long lapse of time. The contraction of the phrase into the word
would create no rights, there being no registration, unless it resulted from
long use. Therefore, to establish a right in the word, the contraction must be
shown to have existed for a length of time equivalent to that which would
be necessary to give the word "Isabela" the dignity and legal status of a
trade-name. If, therefore, it results from the evidence in this action that the
word "Isabela" has not been used by the plaintiff for a period of time
sufficient to give it the special value necessary to bring it within the law
relating to trade-names (if it be admitted for the moment that that could be
done), then the plaintiff must fail, whether it base its action on contraction,
or use, or both.
There is another ground on which plaintiff would fail in his action. If it
should appear in the case that the word "Isabela" was a word which, at the
time of its adoption by plaintiff and at all times since, was the name of the
geographical place of production or origin or was ordinarily and generally
used as the name, quality or description of the merchandise to which it
related, plaintiff would fail, as such name would not be capable of being
registered as a trade-name (sees. 2 and 13) and could not. for that reason,
be appropriated by plaintiff as such. That being so, no action for a violation
thereof could be maintained, as none is granted by the statute in such case.
(Secs. 3, 5, and 7.)
Before entering on the discussion of the facts of the case, it may be well to
set down certain things that appear to be uncontroverted
1. There is a province in the Island of Luzon known as Isabela
Province.  In that province grows tobacco of a class and quality not
grown in any other province or place in the Philippine Islands.
2. That tobacco is known commercially and to the trade as Isabela
tobacco and the expression "Isabela tobacco" has in the Philippine
Islands a meaning as definite, certain and clear as the expression
 "Havana tobacco" or "Virginia tobacco" in the United States.
3. The defendant has used on its cigarettes the words "Alhambra
Isabelas" with a statement that the cigarettes inclosed in the
package are composed exclusively of Isabela tobacco. Aside from
"Isabela" no other word or phrase or character is used on
defendant's packages which it is claimed is in violation of plaintiff's
rights.
4. There is absolutely no resemblance between the packages of
cigarettes manufactured and sold by the plaintiff and those
manufactured and sold by the defendant, except in the word
"Isabela."
5. The phrase "La Flor de la Isabela" means in English, giving it a free
translation, "The best tobacco grown in Isabela Province," or "The
finest tobacco grown in Isabela Province," or "The finest quality of
tobacco grown in Isabela Province." The phrase, in its primary
sense, conveys the idea that the products on which it is placed are
composed of the best tobacco grown in the Province of Isabela.
6. Plaintiff's cigarettes marked with the design "La Flor de la Isabela,"
and referred to in this case, are not manufactured or composed,
either wholly or in part, of tobacco grown in Isabela Province.
7. The cigarettes manufactured and sold by defendant as "Alhambra
Isabelas" are composed exclusively of tobacco grown in Isabela
Province.
8. The word "Isabela," when used in connection witty tobacco, cigars
or cigarettes, signifies in its primary sense that the tobacco itself, or
that composing the cigars or cigarettes, is Isabela tobacco.
We are of the opinion that the plaintiff must fail in this action for the reason
that, in the first place, it has not proved that the word "Isabela" has been
used in the manner and form alleged in the complaint; and, in the second
place, for the reason that it is the name of the geographical place of
production or origin of the material composing the article to which it is
affixed and that it is the name, quality and description thereof. The burden
is on plaintiff to prove the use of the word "Isabela" for such a length of
time and under such circumstances as to give it the right to its exclusive use.
Reviewing the evidence of record, we are of the opinion that the
overwhelming weight thereof is contrary to plaintiffs contention. It shows
that in not a single instance in the history of the plaintiff corporation, so far
as is disclosed by the record, has a package of its cigarettes gone into the
market, either at wholesale or retail, with the word "Isabela" alone on the
package as a separate or distinct word or name. In every instance, so far as
the documentary evidence goes, the packages have been marked by the
phrase "La Flor de la Isabela." There is not an exhibit of any probative value
on the issues involved which does not tend affirmatively to establish that
the word was never used as a separate and distinct word and to negative
any intention on the part of the plaintiff to use it as such.  As far back as the
time when the plaintiff obtained the right to use the trade-name "La Flor de
la Isabela" the exhibits filed in its application for registration of that trade-
name demonstrate, as they naturally must, that the trade-name which
plaintiff desired to secure was "La Flor de la Isabela" and not "Isabela." 
These exhibits are the wrappers which inclose plaintiff's cigarettes as they
are found exposed for sale and have on them the words, designs and
devices to the exclusive use of which plaintiff claims to be entitled. Every
one of them contains the phrase "La Flor de la Isabela" and not one of them
the word "Isabela." In all of them the word "Flor" is almost equally
conspicuous with the word "Isabela" and from them we can see no intent to
emphasize the word "Isabela" more than the word "Flor."  So far as the
record shows, plaintiff nowhere advertised or advertises its cigarettes as
"Isabela" cigarettes and we find nothing in the exhibits which shows that the
plaintiff has or ever had the slightest intention to use the word "Isabela" as
a trade-name.
Much stress is laid by plaintiff on the fact that the wholesale packages of
cigarettes, that is, the packages containing a number of the small retail
packages, have printed on the two edges in large letters "Isabela Cortos,"
"Isabela Largos," and "Isabela Entrelargos," as the case may be. But it is to
be noted that it appears from the exhibits themselves that plaintiff's trade-
name "La Flor de la Isabela," in conspicuous letters, is also attached to both
ends of each of such packages; and each of the small packages inclosed in
the larger carries the phrase "La Flor de la Isabela" and not the word
"Isabela." It remains true, therefore, as we said at the outset, that not a
single package of plaintiff's cigarettes has ever gone into the market in the
Philippine Islands with the word "Isabela" alone thereon as a trade-name.
Much importance is attached by plaintiff to a letter dated April 8, 1914,
received from one of its employees in America. While this letter is of
doubtful competency as evidence for plaintiff, it is in the record, and
inasmuch as so much stress is laid on a portion of it, and it appears to be
competent evidence as against plaintiff, we refer to it. The sentence in the
letter to which reference is particularly made is this: "Furthermore, the
trade here knows the cigars as 'Isabela' pure and simple."  As is seen, this
letter refers to cigars and not cigarettes; but, be that as it may, we believe
that the plaintiff has quite overlooked the real nature of the letter as
evidence. In its attempt to demonstrate that its tobacco products are known
in America as "Isabela" products, it overlooked the first part of the letter
which, to us, is the most significant part of it. The writer says:
"Ehrman Bros. & Co. have asked us to have the paster 'La Flor de la Isabela,'
which goes on the end of the boxes, as per sample we inclose herewith,
changed as follows: Make the strip about half as wide again as the inclosed
sample, and instead of the words 'La Flor de la Isabela,' put on just the one
word 'Isabela' in large letters. Ehrman Bros, say their customers claim that
the lettering on this strip is too small for the customers to notice it readily
behind the counter, whereas a large lettering of the word 'Isabela' will be
much more attractive and more noticeable."
This portion of the letter demonstrates conclusively that the plaintiff has
never advertised its cigars in America as "Isabela" cigars. It has persisted
always in advertising them as "La Flor de la Isabela;" and the precise
objection made by the dealers handling plaintiff's cigars in the United States
is that plaintiff insists on advertising its goods as "La Flor de la Isabela"
instead of "Isabela;" and it is clear from the letter that if, as the writer says,
its cigars are known to the trade in America as "Isabela" cigars, it is not by
reason of plaintiff's efforts but in spite of them. Plaintiff itself has put forth
no effort, as far as we can see from the record, to create a right in the word
"Isabela." All of its money has been spent and all its energy used in the
advertisement of the phrase "La Flor de la Isabela."
A price list of the products of the plaintiff company has been introduced in
evidence, on the tenth and eleventh pages of which appear the words
"Isabela Cortos," "Isabela Largos" and "Isabela Entrelargos," together with
the price. We do not regard this price list as indicating anything more than
the fact that the limited space (the price list is printed in very small letters)
forbade the use of the phrase "La Flor de la Isabela." But we note then, in
extremely large letters, comparatively speaking, on the front page of the
price list, are found the words "La Flor de la Isabel a," while on each package
of cigarettes which, in the price list, are called "Isabela Cortos," "Isabela
Largos" and "Isabela Entrelargos," is found, in more than one place, the
phrase "La Flor de la Isabela." Moreover, under the word "remarks" found
at the close of the price list, are these words: "When the Spanish
Government abolished the tobacco monopoly in the Philippine Islands this
company acquired the exclusive right to use the marks Cavite, Malabon,
Princesa, and Meisic which were formerly the property of the Government."
Nothing is said about the word "Isabela." No rights are claimed by that
advertisement in that name.
The documentary evidence introduce by plaintiff is fully corroborated by the
evidence of defendant.  The testimony of Mr. Olsen, one of the leading
tobacco manufacturers of the Philippine Islands, is to the effect that the
products of plaintiff's factory are generally known in the Philippine Islands
as Tabacalera products, sometimes as "La Flor de la Isabela" products, but
not as "Isabela" products. He states that the cigarettes which plaintiff calls
"Isabela Cortos" and "Isabela Largos" are generally known to the trade as
"Tabacalera Cortos" and "Tabacalera Largos." The clerk of the Court of First
Instance in which the action was tried, being called as a witness for the
defendant, testified that he smoked cigarettes of the Tabacalera and Insular
factories and that he had never heard of "Isabela" cigarettes before the
defendant began the manufacture of its cigarettes; but that he had
frequently heard of the factory "La Flor de la Isabela."  Mr. Blanco, the
interpreter of the court, testified that he had smoked cigarettes for forty or
fifty years and that he had not heard of "Isabela" cigarettes.
While some of the witnesses for the plaintiff testified that the public knew
the products of plaintiff's factory as "Isabela". products, that testimony was
in part contradicted by other witnesses for the plaintiff and is entirely at
variance with its documentary evidence.
It appearing from the record in the case that the plaintiff has always insisted
on the ownership of the trade-name "La Flor de la Isabela" and has
invariably sent it into the market with its products both in the Philippine
Islands and in the United States, and that whatever effort and money
plaintiff has expended in securing a trade-name have been spent with
respect to "La Flor de la Isabela" and not "Isabela," we are driven to the
conclusion that, as a matter of fact, the word "Isabela" has never been used
by the plaintiff as a trade-name in such a way as to give it any exclusive right
therein. Moreover, the persistent use of the trade-name "La Flor de la
Isabela" denies the possibility of any single word in that phrase being a
trade-name. It being kept in mind that there is no contention on the part of
the plaintiff that the use of the word "Isabela" by the defendant is an
infringement of the trade-name "La Flor de la Isabela," it is clear that the
use of "La Flor de la Isabela" has given the plaintiff no right to the use of the
word "Isabela." Furthermore, plaintiff denies that it has abandoned the
trade-name "La Flor de la Isabela," but maintains that its rights therein are
now in full force and effect.  Admitting, even for the sake of argument, that
there can exist a trade-name without registration under the statute, it is
well known that the plaintiff is not entitled to the exclusive right to use such
a trade-name unless it has used it for a sufficient length of time to give it a
special value.  But plaintiff's effort has been directed exclusively to the
trade-name "La Flor de la Isabela," and this fact necessarily negatives any
claim that the word "Isabela," has, by plaintiff's effort, received any special
value in connection with plaintiff's products.
We might say, in concluding this branch of the subject, that, even admitting
that the word "Isabela" may have been appropriable by plaintiff as a trade-
name at the time it began to use it, the evidence showing that it had been
exclusively appropriated by the plaintiff would have to be very strong to
establish the fact of appropriation and the right to exclusive use. The law as
it now stands and has stood since the Royal Decree of 1888 prohibits the
use of a geographical name as a trade-name. Act No. 666 prohibits the use
not only of a geographical name but also of a word which is either the
name, quality, or the description of the article to which the trade-name
refers. Even if appropriation were possible, it would require the clearest of
proof to permit the appropriation of a word as a trade-name the use of
which in that connection the law expressly declines to sanction.
Furthermore, we are of the opinion that, even if plaintiff had proved a right
to the exclusive use of the word "Isabela," we would be forced to conclude
that its use by the defendant in connection with the word "Alhambra,"
which is made equally conspicuous with the word "Isabela," would be a
sufficient effort on the part of defendant to distinguish its cigarettes from
those of plaintiff; particularly in view of the fact that the word "Isabela" is
the name of a province and also the commercial name of the tobacco grown
in that province.
We do not believe, however, that the word "Isabela" can be appropriated or
could be appropriated at the time plaintiff claimed that it began to use that
word as descriptive of its products. The Royal Decree of 1888 prohibited the
use of a geographical name as a trade-name or trade-mark and that decree
was in force before the use of the word "Isabela" began, even under
plaintiff's claim. At least it had not been used for a sufficient length of time
to give it a property right therein, it never having been registered as a trade-
name either under that decree or Act No. 666. From the date of that decree
to the present time it has been unlawful to select the word "Isabela" as a
trade-name, and it would have been impossible during that time for plaintiff
to have obtained a right therein, no matter how much the word might have
been used or to what extent it had been advertised. While Act No. 666, as
we have seen, expressly permits the appropriation of a trade-mark,
although it may be a geographical or descriptive name, it does not permit
the appropriation of a trade-name under the same circumstances. We
accordingly repeat, from the Royal Decree of 1888 to the present time, the
word "Isabela" has not been appropriable by anybody as a trade-name.
For these reasons and for the further reason that we regard the case of
Baxter vs. Zuazua (5 Phil. Rep., 160), as decisive of the main questions
involved in this case, we are of the opinion that the judgment must be
reversed.
The judgment appealed from is reversed and the perpetual injunction
issued thereon is dissolved.  Without costs in this instance. So ordered.
Arellano C. J., and Torres, J., concur.
Carson, and Trent, JJ., concur in the result.
Johnson, J., dissents.
 24) KABUSHI KAISHA ISETAN ISETAN CO., LTD., vs. IAC,
ISETANN DEPARTMENT STORE, INC.
A fundamental principle of Philippine Trademarks Law is that actual use in
commerce in the Philippines is a prerequisite to the acquisition of
ownership over a trademark or a trade name.
A prior registrant cannot claim exclusive use of the trademark unless it uses
it in commerce.
The records show that the petitioner has never conducted any business in
the Philippines. I t has never promoted its tradename or trademark in the
Philippines. It has absolutely no business goodwill in the Philippines. I t is
unknown to Filipinos except the very few who may have noticed it while
traveling abroad. I t has never paid a single centavo of tax to the Philippine
government. Under the law, it has no right to the remedy it seeks. There can
be no question from the records that the petitioner has never used its
tradename or trademark in the Philippines. The mere origination or
adoption of a particular tradename without actual use thereof in the market
is insufficient to give any exclusive right to its use, even though such
adoption is publicly declared, such as by use of the name in advertisements,
circulars, price lists, and on signs and stationery.
 The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world that have signed it from
using a trade name that happens to be used in one country.
 Conditions which must exist before any trademark owner can claim and
be afforded rights:
1. the mark must be internationally known or well known;
2. the subject of the right must be a trademark, not a patent or copyright
or anything else;
3. the mark must be for use in the same or similar kinds of goods, and
4. The person claiming must be the owner of the mark.
25) ASIA BREWERY, INC. vs. THE HON. COURT OF APPEALS
and SAN MIGUEL CORPORATION G.R. No. 103543 July 5,
1993
GRIÑO-AQUINO, J.
FACTS:
San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition on account of
the latter's BEER PALE PILSEN or BEER NA BEER product which has been
competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local
beer market.
The trial court dismissed SMC's complaint because ABI "has not committed
trademark infringement or unfair competition against" SMC
On appeal by SMC, the Court of Appeals reversed the decision rendered by
the trial court, finding the defendant Asia Brewery Incorporated GUILTY of
infringement of trademark and unfair competition. ABI then filed a petition
for certiorari.
ISSUE: Whether or not Asia Brewery Inc. committed infringement of
trademark and unfair competition against San Miguel Corporation.
RULING:
No infringement. Infringement is determined by the "test of dominancy"
rather than by differences or variations in the details of one trademark and
of another. If the competing trademark 1) contains the main or essential or
dominant features of another, and 2) confusion and deception is likely to
result, infringement takes place.
In the instant case, the dominant feature of SMC is the words “SAN MIGUEL
PALE PILSEN” with elaborate serifs at the beginning and end of the letters
"S" and "M." While the dominant feature of ABI's trademark is the name:
“BEER PALE PILSEN” with the word "Beer" written in large amber letters.
Besides the dissimilarity in their dominant feature, the following other
dissimilarities in the appearance of the competing products abound:
· San Miguel’s bottle has a slender tapered neck, while Beer na Beer’s
bottle has a fat, bulging neck.
· San Miguel’s bottle cap is stamped with a coat of arms and the words
"San Miguel Brewery Philippines" encircling the same, while Beer na Beer’s
bottle cap is stamped with the name "BEER" in the center, surrounded by
the words "Asia Brewery Incorporated Philippines.”
· San Miguel is "Bottled by the San Miguel Brewery, Philippines," while
Beer na Beer is "Especially brewed and bottled by Asia Brewery
Incorporated, Philippines."
· San Miguel is with SMC logo, while Beer na Beer has no logo
· San Miguel’s price is P7.00 per bottle, while Beer na Beer’s price is
P4.25 per bottle
Based on the dissimilarity in their dominant features as well as in sound,
spelling & appearance, Beer na Beer cannot be said to be similarly confusing
with San Miguel Pale Pilsen.
The fact that the words ‘pale pilsen’ are part of ABI’s trademark does not
constitute an infringement of SMC’s trademark: SAN MIGUEL PALE PILSEN,
for “pale pilsen” are generic words descriptive of the color (“pale”), of a
type of beer (“pilsen”), which is a light bohemian beer with a strong hops
flavor that originated in the City of Pilsen in Czechoslovakia and became
famous in the Middle Ages. “Pilsen” is a “primarily geographically
descriptive word,” hence, non-registrable and not appropriable by any beer
manufacturer. The words “pale pilsen” may not be appropriated by SMC for
its exclusive use even if they are part of its registered trademark: SAN
MIGUEL PALE PILSEN. No one may appropriate generic or descriptive words.
They belong to the public domain.
No unfair competition. Sec 29, Republic Act No. 166 as amended describes
unfair competition as the employment of deception or any other means
contrary to good faith by which a person shall pass off the goods
manufactured by him or in which he deals, or his business, or services, for
those of another who has already established goodwill for his similar goods,
business or services, or any acts calculated to produce the same result.
Therefore, the universal test question is whether the public is likely to be
deceived.
In this case, the use of similar but unidentical bottle size, shape & color is
not unlawful as aptly explained. The 320 ml capacity is the standard
prescribed by the Dept of Trade. The amber color is a functional feature for
it prevents transmission of light and provides the maximum protection to
beer. Being of functional or common use, SMC’s being the first to use does
not give SMC exclusive right to such use. The bottle shape is usually
standardized just as a ketchup or vinegar bottle with its familiar elongated
neck, thereby dismissing the attendance of bad faith or the intention to
deceive the public by ABI.
Moreover, buyers generally order their beer by brand in the supermarket,
sari-sari stores, restaurants; thus dismissing the idea that Beer na Beer can
be passed off as San Miguel Beer. There can be no confusion or the
likelihood of deception among the consumers.
26) EMERALD GARMENT MANUFACTURING
CORPORATION vs. HON. COURT OF APPEALS, BUREAU OF
PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER
and H.D. LEE COMPANY, INC. G.R. No. 100098, December
29, 1995
FACTS:
            On 18 September 1981, private respondent H.D. Lee Co., Inc. filed
with the Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a
Petition for Cancellation of Registration No. SR 5054 for the trademark
"STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs, jackets,
jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27
October 1980 in the name of petitioner Emerald Garment Manufacturing
Corporation.
Private respondent averred that petitioner's trademark "so closely
resembled its own trademark, 'LEE' as previously registered and used in
the Philippines cause confusion, mistake and deception on the part of the
purchasing public as to the origin of the goods.
On 19 July 1988, the Director of Patents rendered a decision granting
private respondent's petition for cancellation and opposition to registration.
The Director of Patents, using the test of dominancy, declared that
petitioner's trademark was confusingly similar to private respondent's mark
because "it is the word 'Lee' which draws the attention of the buyer and
leads him to conclude that the goods originated from the same
manufacturer. It is undeniably the dominant feature of the mark.
ISSUE:
            Whether or not a trademark causes confusion and is likely to deceive
the public is a question of fact which is to be resolved by applying the "test
of dominancy", meaning, if the competing trademark contains the main or
essential or dominant features of another by reason of which confusion and
deception are likely to result.
HELD:
          The word "LEE" is the most prominent and distinctive feature of the
appellant's trademark and all of the appellee's "LEE" trademarks. It is the
mark which draws the attention of the buyer and leads him to conclude that
the goods originated from the same manufacturer. The alleged difference is
too insubstantial to be noticeable. The likelihood of confusion is further
made more probable by the fact that both parties are engaged in the same
line of business.
Although the Court decided in favor of the respondent, the appellee
has sufficiently established its right to prior use and registration of the
trademark "LEE" in the Philippines and is thus entitled to protection from
any infringement upon the same. The dissenting opinion of Justice Padilla is
more acceptable.
27) LYCEUM OF THE PHILIPPINES, INC., petitioner, vs. COURT
OF APPEALS, LYCEUM OF APARRI, LYCEUM OF CABAGAN,
LYCEUM OF CAMALANIUGAN, INC., LYCEUM OF LALLO,
INC., LYCEUM OF TUAO, INC., BUHI LYCEUM, CENTRAL
LYCEUM OF CATANDUANES, LYCEUM OF SOUTHERN
PHILIPPINES, LYCEUM OF EASTERN MINDANAO, INC. and
WESTERN PANGASINAN LYCEUM, INC., respondents.
Quisumbing, Torres & Evangelista Law Offices and Ambrosio Padilla for
petitioner.
Antonio M. Nuyles and Purungan, Chato, Chato, Tarriela & Tan Law Offices
for respondents.
Froilan Siobal for Western Pangasinan Lyceum.
SYLLABUS
1. CORPORATION LAW; CORPORATE NAMES; REGISTRATION OF PROPOSED
NAME WHICH IS IDENTICAL OR CONFUSINGLY SIMILAR TO THAT OF ANY
EXISTING CORPORATION, PROHIBITED; CONFUSION AND DECEPTION
EFFECTIVELY PRECLUDED BY THE APPENDING OF GEOGRAPHIC NAMES TO
THE WORD "LYCEUM". — The Articles of Incorporation of a corporation
must, among other things, set out the name of the corporation. Section 18
of the Corporation Code establishes a restrictive rule insofar as corporate
names are concerned: "Section 18. Corporate name. — No corporate name
may be allowed by the Securities an Exchange Commission if the proposed
name is identical or deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or is patently
deceptive, confusing or contrary to existing laws. When a change in the
corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name." The policy
underlying the prohibition in Section 18 against the registration of a
corporate name which is "identical or deceptively or confusingly similar" to
that of any existing corporation or which is "patently deceptive" or "patently
confusing" or "contrary to existing laws," is the avoidance of fraud upon the
public which would have occasion to deal with the entity concerned, the
evasion of legal obligations and duties, and the reduction of difficulties of
administration and supervision over corporations. We do not consider that
the corporate names of private respondent institutions are "identical with,
or deceptively or confusingly similar" to that of the petitioner institution.
True enough, the corporate names of private respondent entities all carry
the word "Lyceum" but confusion and deception are effectively precluded
by the appending of geographic names to the word "Lyceum." Thus, we do
not believe that the "Lyceum of Aparri" can be mistaken by the general
public for the Lyceum of the Philippines, or that the "Lyceum of
Camalaniugan" would be confused with the Lyceum of the Philippines.
2. ID.; ID.; DOCTRINE OF SECONDARY MEANING; USE OF WORD "LYCEUM,"
NOT ATTENDED WITH EXCLUSIVITY. — It is claimed, however, by petitioner
that the word "Lyceum" has acquired a secondary meaning in relation to
petitioner with the result that word, although originally a generic, has
become appropriable by petitioner to the exclusion of other institutions like
private respondents herein. The doctrine of secondary meaning originated
in the field of trademark law. Its application has, however, been extended to
corporate names sine the right to use a corporate name to the exclusion of
others is based upon the same principle which underlies the right to use a
particular trademark or tradename. In Philippine Nut Industry, Inc. v.
Standard Brands, Inc., the doctrine of secondary meaning was elaborated in
the following terms: " . . . a word or phrase originally incapable of exclusive
appropriation with reference to an article on the market, because
geographically or otherwise descriptive, might nevertheless have been used
so long and so exclusively by one producer with reference to his article that,
in that trade and to that branch of the purchasing public, the word or
phrase has come to mean that the article was his product." The question
which arises, therefore, is whether or not the use by petitioner of "Lyceum"
in its corporate name has been for such length of time and with such
exclusivity as to have become associated or identified with the petitioner
institution in the mind of the general public (or at least that portion of the
general public which has to do with schools). The Court of Appeals
recognized this issue and answered it in the negative: "Under the doctrine
of secondary meaning, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because
geographical or otherwise descriptive might nevertheless have been used so
long and so exclusively by one producer with reference to this article that, in
that trade and to that group of the purchasing public, the word or phrase
has come to mean that the article was his produce (Ana Ang vs. Toribio
Teodoro, 74 Phil. 56). This circumstance has been referred to as the
distinctiveness into which the name or phrase has evolved through the
substantial and exclusive use of the same for a considerable period of time. .
. . No evidence was ever presented in the hearing before the Commission
which sufficiently proved that the word 'Lyceum' has indeed acquired
secondary meaning in favor of the appellant. If there was any of this kind,
the same tend to prove only that the appellant had been using the disputed
word for a long period of time. . . . In other words, while the appellant may
have proved that it had been using the word 'Lyceum' for a long period of
time, this fact alone did not amount to mean that the said word had
acquired secondary meaning in its favor because the appellant failed to
prove that it had been using the same word all by itself to the exclusion of
others. More so, there was no evidence presented to prove that confusion
will surely arise if the same word were to be used by other educational
institutions. Consequently, the allegations of the appellant in its first two
assigned errors must necessarily fail." We agree with the Court of Appeals.
The number alone of the private respondents in the case at bar suggests
strongly that petitioner's use of the word "Lyceum" has not been attended
with the exclusivity essential for applicability of the doctrine of secondary
meaning. Petitioner's use of the word "Lyceum" was not exclusive but was
in truth shared with the Western Pangasinan Lyceum and a little later with
other private respondent institutions which registered with the SEC using
"Lyceum" as part of their corporation names. There may well be other
schools using Lyceum or Liceo in their names, but not registered with the
SEC because they have not adopted the corporate form of organization.
3. ID.; ID.; MUST BE EVALUATED IN THEIR ENTIRETY TO DETERMINE
WHETHER THEY ARE CONFUSINGLY OR DECEPTIVELY SIMILAR TO ANOTHER
CORPORATE ENTITY'S NAME. — petitioner institution is not entitled to a
legally enforceable exclusive right to use the word "Lyceum" in its corporate
name and that other institutions may use "Lyceum" as part of their
corporate names. To determine whether a given corporate name is
"identical" or "confusingly or deceptively similar" with another entity's
corporate name, it is not enough to ascertain the presence of "Lyceum" or
"Liceo" in both names. One must evaluate corporate names in their entirety
and when the name of petitioner is juxtaposed with the names of private
respondents, they are not reasonably regarded as "identical" or "confusingly
or deceptively similar" with each other.
DECISION
FELICIANO, J p:
Petitioner is an educational institution duly registered with the Securities
and Exchange Commission ("SEC"). When it first registered with the SEC on
21 September 1950, it used the corporate name Lyceum of the Philippines,
Inc. and has used that name ever since.
On 24 February 1984, petitioner instituted proceedings before the SEC to
compel the private respondents, which are also educational institutions, to
delete the word "Lyceum" from their corporate names and permanently to
enjoin them from using "Lyceum" as part of their respective names.
Some of the private respondents actively participated in the proceedings when that school motu proprio change its corporate name to "Pamantasan
before the SEC. These are the following, the dates of their original SEC ng Araullo."
registration being set out below opposite their respective names:
The background of the case at bar needs some recounting. Petitioner had
Western Pangasinan Lyceum — 27 October 1950 sometime before commenced in the SEC a proceeding (SEC-Case No. 1241)
against the Lyceum of Baguio, Inc. to require it to change its corporate name
Lyceum of Cabagan — 31 October 1962 and to adopt another name not "similar [to] or identical" with that of
petitioner. In an Order dated 20 April 1977, Associate Commissioner Julio
Lyceum of Lallo, Inc. — 26 March 1972 Sulit held that the corporate name of petitioner and that of the Lyceum of
Baguio, Inc. were substantially identical because of the presence of a
Lyceum of Aparri — 28 March 1972 "dominant" word, i.e., "Lyceum," the name of the geographical location of
the campus being the only word which distinguished one from the other
Lyceum of Tuao, Inc. — 28 March 1972 corporate name. The SEC also noted that petitioner had registered as a
corporation ahead of the Lyceum of Baguio, Inc. in point of time, 1 and
Lyceum of Camalaniugan — 28 March 1972 ordered the latter to change its name to another name "not similar or
identical [with]" the names of previously registered entities.
The following private respondents were declared in default for failure to file
an answer despite service of summons: The Lyceum of Baguio, Inc. assailed the Order of the SEC before the
Supreme Court in a case docketed as G.R. No. L-46595. In a Minute
Buhi Lyceum; Resolution dated 14 September 1977, the Court denied the Petition for
Review for lack of merit. Entry of judgment in that case was made on 21
Central Lyceum of Catanduanes; October 1977. 2

Lyceum of Eastern Mindanao, Inc.; and Armed with the Resolution of this Court in G.R. No. L-46595, petitioner then
wrote all the educational institutions it could find using the word "Lyceum"
Lyceum of Southern Philippines as part of their corporate name, and advised them to discontinue such use
of "Lyceum." When, with the passage of time, it became clear that this
Petitioner's original complaint before the SEC had included three (3) other recourse had failed, petitioner instituted before the SEC SEC-Case No. 2579
entities: to enforce what petitioner claims as its proprietary right to the word
"Lyceum." The SEC hearing officer rendered a decision sustaining
petitioner's claim to an exclusive right to use the word "Lyceum." The
1. The Lyceum of Malacanay;
hearing officer relied upon the SEC ruling in the Lyceum of Baguio, Inc. case
(SEC-Case No. 1241) and held that the word "Lyceum" was capable of
2. The Lyceum of Marbel; and
appropriation and that petitioner had acquired an enforceable exclusive
right to the use of that word.
3. The Lyceum of Araullo
On appeal, however, by private respondents to the SEC En Banc, the
The complaint was later withdrawn insofar as concerned the Lyceum of
decision of the hearing officer was reversed and set aside. The SEC En Banc
Malacanay and the Lyceum of Marbel, for failure to serve summons upon
did not consider the word "Lyceum" to have become so identified with
these two (2) entities. The case against the Liceum of Araullo was dismissed
petitioner as to render use thereof by other institutions as productive of
confusion about the identity of the schools concerned in the mind of the
general public. Unlike its hearing officer, the SEC En Banc held that the
attaching of geographical names to the word "Lyceum" served sufficiently to
distinguish the schools from one another, especially in view of the fact that
the campuses of petitioner and those of the private respondents were
physically quite remote from each other. 3
Petitioner then went on appeal to the Court of Appeals. In its Decision dated
28 June 1991, however, the Court of Appeals affirmed the questioned
Orders of the SEC En Banc. 4 Petitioner filed a motion for reconsideration,
without success.
Before this Court, petitioner asserts that the Court of Appeals committed
the following errors:
1. The Court of Appeals erred in holding that the Resolution of the Supreme
Court in G.R. No. L-46595 did not constitute stare decisis as to apply to this
case and in not holding that said Resolution bound subsequent
determinations on the right to exclusive use of the word Lyceum.
2. The Court of Appeals erred in holding that respondent Western
Pangasinan Lyceum, Inc. was incorporated earlier than petitioner.
3. The Court of Appeals erred in holding that the word Lyceum has not
acquired a secondary meaning in favor of petitioner.
4. The Court of Appeals erred in holding that Lyceum as a generic word
cannot be appropriated by the petitioner to the exclusion of others. 5
We will consider all the foregoing ascribed errors, though not necessarily
seriatim. We begin by noting that the Resolution of the Court in G.R. No. L-
46595 does not, of course, constitute res adjudicata in respect of the case at
bar, since there is no identity of parties. Neither is stare decisis pertinent, if
only because the SEC En Banc itself has re-examined Associate
Commissioner Sulit's ruling in the Lyceum of Baguio case. The Minute
Resolution of the Court in G.R. No. L-46595 was not a reasoned adoption of
the Sulit ruling.
The Articles of Incorporation of a corporation must, among other things, set
out the name of the corporation. 6 Section 18 of the Corporation Code
establishes a restrictive rule insofar as corporate names are concerned:
"SECTION 18. Corporate name. — No corporate name may be allowed by
the Securities an Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing corporation or to
any other name already protected by law or is patently deceptive, confusing
or contrary to existing laws. When a change in the corporate name is
approved, the Commission shall issue an amended certificate of
incorporation under the amended name." (Emphasis supplied)
The policy underlying the prohibition in Section 18 against the registration
of a corporate name which is "identical or deceptively or confusingly
similar" to that of any existing corporation or which is "patently deceptive"
or "patently confusing" or "contrary to existing laws," is the avoidance of
fraud upon the public which would have occasion to deal with the entity
concerned, the evasion of legal obligations and duties, and the reduction of
difficulties of administration and supervision over corporations. 7
We do not consider that the corporate names of private respondent
institutions are "identical with, or deceptively or confusingly similar" to that
of the petitioner institution. True enough, the corporate names of private
respondent entities all carry the word "Lyceum" but confusion and
deception are effectively precluded by the appending of geographic names
to the word "Lyceum." Thus, we do not believe that the "Lyceum of Aparri"
can be mistaken by the general public for the Lyceum of the Philippines, or
that the "Lyceum of Camalaniugan" would be confused with the Lyceum of
the Philippines.
Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion
which in turn referred to a locality on the river Ilissius in ancient Athens
"comprising an enclosure dedicated to Apollo and adorned with fountains
and buildings erected by Pisistratus, Pericles and Lycurgus frequented by
the youth for exercise and by the philosopher Aristotle and his followers for
teaching." 8 In time, the word "Lyceum" became associated with schools
and other institutions providing public lectures and concerts and public
discussions. Thus today, the word "Lyceum" generally refers to a school or
an institution of learning. While the Latin word "lyceum" has been
incorporated into the English language, the word is also found in Spanish
(liceo) and in French (lycee). As the Court of Appeals noted in its Decision,
Roman Catholic schools frequently use the term; e.g., "Liceo de Manila,"
"Liceo de Baleno" (in Baleno, Masbate), "Liceo de Masbate," "Liceo de
Albay." 9 "Lyceum" is in fact as generic in character as the word "university."
In the name of the petitioner, "Lyceum" appears to be a substitute for
"university;" in other places, however, "Lyceum," or "Liceo" or "Lycee"
frequently denotes a secondary school or a college. It may be (though this is
a question of fact which we need not resolve) that the use of the word
"Lyceum" may not yet be as widespread as the use of "university," but it is
clear that a not inconsiderable number of educational institutions have
adopted "Lyceum" or "Liceo" as part of their corporate names. Since
"Lyceum" or "Liceo" denotes a school or institution of learning, it is not
unnatural to use this word to designate an entity which is organized and
operating as an educational institution.
It is claimed, however, by petitioner that the word "Lyceum" has acquired a
secondary meaning in relation to petitioner with the result that that word,
although originally a generic, has become appropriable by petitioner to the
exclusion of other institutions like private respondents herein.
The doctrine of secondary meaning originated in the field of trademark law.
Its application has, however, been extended to corporate names sine the
right to use a corporate name to the exclusion of others is based upon the
same principle which underlies the right to use a particular trademark or
tradename. 10 In Philippine Nut Industry, Inc. v. Standard Brands, Inc., 11
the doctrine of secondary meaning was elaborated in the following terms:
" . . . a word or phrase originally incapable of exclusive appropriation with
reference to an article on the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase has come to mean that
the article was his product." 12
The question which arises, therefore, is whether or not the use by petitioner
of "Lyceum" in its corporate name has been for such length of time and with
such exclusivity as to have become associated or identified with the
petitioner institution in the mind of the general public (or at least that
portion of the general public which has to do with schools). The Court of
Appeals recognized this issue and answered it in the negative:
"Under the doctrine of secondary meaning, a word or phrase originally
incapable of exclusive appropriation with reference to an article in the
market, because geographical or otherwise descriptive might nevertheless
have been used so long and so exclusively by one producer with reference
to this article that, in that trade and to that group of the purchasing public,
the word or phrase has come to mean that the article was his produce (Ana
Ang vs. Toribio Teodoro, 74 Phil. 56). This circumstance has been referred to
as the distinctiveness into which the name or phrase has evolved through
the substantial and exclusive use of the same for a considerable period of
time. Consequently, the same doctrine or principle cannot be made to apply
where the evidence did not prove that the business (of the plaintiff) has
continued for so long a time that it has become of consequence and
acquired a good will of considerable value such that its articles and produce
have acquired a well-known reputation, and confusion will result by the use
of the disputed name (by the defendant) (Ang Si Heng vs. Wellington
Department Store, Inc., 92 Phil. 448).
With the foregoing as a yardstick, [we] believe the appellant failed to satisfy
the aforementioned requisites. No evidence was ever presented in the
hearing before the Commission which sufficiently proved that the word
'Lyceum' has indeed acquired secondary meaning in favor of the appellant.
If there was any of this kind, the same tend to prove only that the appellant
had been using the disputed word for a long period of time. Nevertheless,
its (appellant) exclusive use of the word (Lyceum) was never established or
proven as in fact the evidence tend to convey that the cross-claimant was
already using the word 'Lyceum' seventeen (17) years prior to the date the
appellant started using the same word in its corporate name. Furthermore,
educational institutions of the Roman Catholic Church had been using the
same or similar word like 'Liceo de Manila,' 'Liceo de Baleno' (in Baleno,
Masbate), 'Liceo de Masbate,' 'Liceo de Albay' long before appellant started
using the word 'Lyceum'. The appellant also failed to prove that the word
'Lyceum' has become so identified with its educational institution that
confusion will surely arise in the minds of the public if the same word were
to be used by other educational institutions.
In other words, while the appellant may have proved that it had been using
the word 'Lyceum' for a long period of time, this fact alone did not amount
to mean that the said word had acquired secondary meaning in its favor
because the appellant failed to prove that it had been using the same word
all by itself to the exclusion of others. More so, there was no evidence
presented to prove that confusion will surely arise if the same word were to
be used by other educational institutions. Consequently, the allegations of
the appellant in its first two assigned errors must necessarily fail." 13
(Underscoring partly in the original and partly supplied)
We agree with the Court of Appeals. The number alone of the private
respondents in the case at bar suggests strongly that petitioner's use of the
word "Lyceum" has not been attended with the exclusivity essential for
applicability of the doctrine of secondary meaning. It may be noted also that
at least one of the private respondents, i.e., the Western Pangasinan
Lyceum, Inc., used the term "Lyceum" seventeen (17) years before the
petitioner registered its own corporate name with the SEC and began using
the word "Lyceum." It follows that if any institution had acquired an
exclusive right to the word "Lyceum," that institution would have been the
Western Pangasinan Lyceum, Inc. rather than the petitioner institution.
In this connection, petitioner argues that because the Western Pangasinan
Lyceum, Inc. failed to reconstruct its records before the SEC in accordance
with the provisions of R.A. No. 62, which records had been destroyed during
World War II, Western Pangasinan Lyceum should be deemed to have lost
all rights it may have acquired by virtue of its past registration. It might be
noted that the Western Pangasinan Lyceum, Inc. registered with the SEC
soon after petitioner had filed its own registration on 21 September 1950.
Whether or not Western Pangasinan Lyceum, Inc. must be deemed to have
lost its rights under its original 1933 registration, appears to us to be quite
secondary in importance; we refer to this earlier registration simply to
underscore the fact that petitioner's use of the word "Lyceum" was neither
the first use of that term in the Philippines nor an exclusive use thereof.
Petitioner's use of the word "Lyceum" was not exclusive but was in truth
shared with the Western Pangasinan Lyceum and a little later with other
private respondent institutions which registered with the SEC using
"Lyceum" as part of their corporation names. There may well be other
schools using Lyceum or Liceo in their names, but not registered with the
SEC because they have not adopted the corporate form of organization.
We conclude and so hold that petitioner institution is not entitled to a
legally enforceable exclusive right to use the word "Lyceum" in its corporate
name and that other institutions may use "Lyceum" as part of their
corporate names. To determine whether a given corporate name is
"identical" or "confusingly or deceptively similar" with another entity's
corporate name, it is not enough to ascertain the presence of "Lyceum" or
"Liceo" in both names. One must evaluate corporate names in their entirety
and when the name of petitioner is juxtaposed with the names of private
respondents, they are not reasonably regarded as "identical" or "confusingly
or deceptively similar" with each other.
WHEREFORE, the petitioner having failed to show any reversible error on
the part of the public respondent Court of Appeals, the Petition for Review
is DENIED for lack of merit, and the Decision of the Court of Appeals dated
28 June 1991 is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
28) DERMALINE v. MYRA PHARMACEUTICALS, GR No.
190065, 2010-08-16
Facts:
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the
Intellectual Property Office (IPO) an application for registration of the
trademark "DERMALINE DERMALINE, INC."
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a
Verified Opposition[4] alleging that the trademark sought to be registered
by Dermaline so resembles its trademark "DERMALIN" and will likely cause
confusion, mistake and deception to the... purchasing public.
Issues:
The CA likewise denied Dermaline's motion for reconsideration; hence, this
petition raising the... issue of whether the CA erred in upholding the IPO's
rejection of Dermaline's application for registration of trademark.
Ruling:
In determining likelihood of confusion, case law has developed two (2) tests,
the Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the prevalent features of
the competing trademarks that might cause confusion or deception.
The important issue is... whether the use of the marks involved would likely
cause confusion or mistake in the mind of or deceive the ordinary
purchaser, or one who is accustomed to buy, and therefore to some extent
familiar with, the goods in question
public to associate the former with the latter,... especially considering that
both classifications pertain to treatments for the skin.
Thus, the public may mistakenly think that Dermaline is connected to or
associated with Myra, such that, considering the current proliferation of
health and beauty products in the market, the purchasers would likely be
misled that Myra has already expanded its business through
Dermaline from merely carrying pharmaceutical topical applications for the
skin to health and beauty services.
Principles:

The test of dominancy is now explicitly incorporated into law in
Section 155.1 of R.A. No. 8293 which provides--
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale, distribution,
advertising of any goods or... services including other preparatory steps
necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to
deceive; (emphasis supplied)
Verily, when one applies for the registration of a trademark or label which is
almost the same or that very closely resembles one already used and
registered by another, the application should be rejected and dismissed
outright, even without any opposition on the part of the... owner and user
of a previously registered label or trademark.  This is intended not only to
avoid confusion on the part of the public, but also to protect an already
used and registered trademark and an established goodwill.

On the other hand, the Holistic Test entails a consideration of the entirety of
the marks as applied to the products, including labels and packaging, in
determining confusing similarity.

Relative to the question on confusion of marks and trade names,

jurisprudence has noted two (2) types of confusion, viz: (1) confusion of
goods (product confusion), where the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was... purchasing
the other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of
which registration is applied for by one party, is such as might reasonably be
assumed to originate with the... registrant of an earlier product, and the
public would then be deceived either into that belief or into the belief that
there is some connection between the two parties, though inexistent.

Further, Dermaline's stance that its product belongs to a separate and

different classification from Myra's products with the registered trademark
does not eradicate the possibility of mistake on the part of the purchasing