EN BANC

[G.R. No. 204605. July 19, 2016.]

INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINES, petition

er, vs. HON. PAQUITO OCHOA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, HON. ALBERT DEL ROSARIO, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS, AND HON.
RICARDO BLANCAFLOR, IN HIS CAPACITY AS THEDIRECTOR
GENERAL OF THE INTELLECTUAL PROPERTY OFFICE OF THE PHILIPPI
NES, respondents.

DECISION

BERSAMIN, J : p

In this special civil action for certiorari and

prohibition, the Intellectual Property Association of the Philippines (IPAP) seeks to
declare the accession of the Philippines to theProtocol Relating to the Madrid Agreement
Concerning the International Registration of Marks (Madrid Protocol) unconstitutional
on the ground of the lack of concurrence by theSenate, and in the alternative, to
declare the implementation thereof as unconstitutional because it conflicts with Republic
Act No. 8293, otherwise known as the IntellectualProperty Code of the Philippines (IP
Code). 1
We find and declare that the President's ratification is valid and constitutional
because the Madrid Protocol, being an executive agreement as determined
by theDepartment of Foreign Affairs, does not require the concurrence of the Senate.
Antecedents
The Madrid System for the International Registration of Marks (Madrid
System), which is the centralized system providing a one-stop solution for registering and
managing marks worldwide, allows the trademark owner to file one application in one
language, and to pay one set of fees to protect his mark in the territories of up to 97
member-states. 2The Madrid System is governed by the Madrid Agreement, concluded in
1891, and the Madrid Protocol, concluded in 1989. 3
The Madrid Protocol, which was adopted in order to remove the challenges
deterring some countries from acceding to the Madrid Agreement, has two objectives,
namely: (1) to facilitate securing protection for marks; and (2) to
make the management of the registered marks easier in different countries. 4 SDAaTC

In 2004, the Intellectual Property Office of the Philippines (IPOPHL), the government
agency mandated to administer the intellectual property system of the country and to
implement the state policies on intellectual property, began considering the country's
accession to the Madrid Protocol. However, based on its assessment in
2005, the IPOPHL needed to first improve its own operations before
making the recommendation in favor of accession. The IPOPHL thus implemented
reforms to eliminate trademark backlogs and to reduce the turnaround time
for the registration of marks. 5
In the meanwhile, the IPOPHL mounted a campaign for information dissemination
to raise awareness of the Madrid Protocol. It launched a series of consultations with
stakeholders and various business groups regarding the Philippines' accession
to the Madrid Protocol. It ultimately arrived at the conclusion that accession would
benefit thecountry and help raise the level of competitiveness for Filipino brands. Hence,
it recommended in September 2011 to the Department of Foreign Affairs (DFA)
that the Philippinesshould accede to the Madrid Protocol. 6
After its own review, the DFA endorsed to the President the country's accession
to the Madrid Protocol. Conformably with its express authority under Section
9 of Executive Order No. 459 (Providing for the Guidelines
in the Negotiation of International Agreements and its Ratification) dated November 25,
1997, the DFA determined that the Madrid Protocol was an executive
agreement, The IPOPHL, the Department of Science and Technology,
and the Department of Trade and Industry concurred in the recommendation ofthe DFA. 7
On March 27, 2012, President Benigno C. Aquino III ratified the Madrid
Protocol through an instrument of accession. The instrument of accession was deposited
with theDirector General of the World Intellectual Property Organization (WIPO) on April
25, 2012. 8 The Madrid Protocol entered into force in the Philippines on July 25, 2012. 9
Petitioner IPAP, an association of more than 100 law firms and individual
practitioners in Intellectual Property Law whose main objective is to promote and
protect intellectual property rights in the Philippines through constant assistance and
involvement in the legislation of intellectual property law, 10 has commenced this special
civil action for certiorari and prohibition 11 to challenge the validity of the President's
accession to the Madrid Protocol without the concurrence of the Senate. Citing Pimentel,
Jr. v. Office ofthe Executive Secretary, the IPAP has averred:
Nonetheless, while the President has the sole authority to negotiate and
enter into treaties, the Constitution provides a limitation to his power by
requiring theconcurrence of 2/3 of all the members of the Senate
for the validity of the treaty entered into by him. Section 21, Article VII of the 1987
Constitution provides that "no treaty or international agreement shall be valid and
effective unless concurred in by at least two-
thirds of all the Members of the Senate." The 1935 and the 1973 Constitution also
required the concurrence by the legislature to the treaties entered into
by the executive. 12
According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement;
hence, respondent DFA Secretary Albert Del Rosario acted with grave abuse of discretion
in determining the Madrid Protocol as an executive agreement. 13
 The IPAP has argued that the implementation of the Madrid
Protocol in the Philippines, specifically the processing of foreign trademark applications,
conflicts with the IP Code, 14 whose Section 125 states:
Sec. 125. Representation; Address for Service. — If the applicant is not
domiciled or has no real and effective commercial establishment in the Philippines,
he shall designate by a written document filed in the office, the name and
address of a Philippine resident who may be served notices or process in
proceedings affecting the mark. Such notices or services may be served
upon the person so designated by leaving a copy thereof at the address specified
in the last designation filed. If the person so designated cannot be found
at the address given in the last designation, such notice or process may be served
upon the Director. (Sec. 3, R.A. No. 166 a)
It has posited that Article 2 of the Madrid Protocol provides in contrast:
Article 2
Securing Protection through International Registration
(1) Where an application for the registration of a mark has been filed
with the Office of a Contracting Party, or where a mark has been registered
in the register of theOffice of a Contracting Party, the person in whose name that
application (hereinafter referred to as "the basic application") or that registration
(hereinafter referred to as "thebasic registration") stands may, subject
to the provisions of this Protocol secure protection for his mark
in the territory of the Contracting Parties, by obtaining the registration ofthat mark
in the register of the International
Bureau of the World Intellectual Property Organization (hereinafter referred to as
"the international registration," "the International Register," "the International
Bureau" and "the Organization", respectively), provided that,
(i) where the basic application has been filed
with the Office of a Contracting State or where the basic registration
has been made by such an Office, theperson in whose name that
application or registration stands is a national of that Contracting
State, or is domiciled, or has a real and effective industrial or
commercial establishment, in the said Contracting State,
(ii) where the basic application has been filed
with the Office of a Contracting Organization or where the basic
registration has been made by such an Office, the person in whose
name that application or registration stands is a national of a State
member of that Contracting Organization, or is domiciled, or has a real
and effective industrial or commercial establishment,
in the territory of the said Contracting Organization.acEHCD

(2) The application for international registration (hereinafter referred to as

"the international application") shall be filed with the International Bureau
through theintermediary of the Office with which the basic application was filed or
by which the basic registration was made (hereinafter referred to as
"the Office of origin"), as the case may be.
(3) Any reference in this Protocol to an "Office" or an "Office of a Contracting
Party" shall be construed as a reference to the office that is in charge, on
 behalf of a Contracting Party, of the registration of marks, and any reference in this
Protocol to "marks" shall be construed as a reference to trademarks and service
marks.
(4) For the purposes of this Protocol, "territory of a Contracting Party"
means, where the Contracting Party is a State, the territory of that State and,
where theContracting Party is an intergovernmental organization, the territory in
which the constituting treaty of that intergovernmental organization applied.
The IPAP has insisted that Article 2 of the Madrid Protocol means that foreign
trademark applicants may file their applications through the International Bureau
or theWIPO, and their applications will be automatically granted trademark protection
without the need for designating their resident agents in the country. 15
Moreover, the IPAP has submitted that the procedure outlined in the Guide
to the International Registration of Marks relating to representation before the International
Bureau is the following, to wit:
Rule 3(1)(a) 09.02 References in the Regulations, Administrative Instructions or in
this Guide to representation relate only to representation before the International
Bureau. The questions of the need for a representative before the Office of origin
or the Office of a designated Contracting Party (for example, in the event of a
refusal of protection issued by such an Office), who may act as a representative in
such cases and the method of appointment, are
outside the scope of the Agreement, Protocol and Regulations and are governed
by the law and practice of the Contracting Party concerned.
which procedure is in conflict with that under Section 125 of the IP Code, and constitutes
in effect an amendment of the local law by the Executive Department. 16
The IPAP has prayed that the implementation of the Madrid
Protocol in the Philippines be restrained in order to prevent future wrongs considering
that the IPAP and its constituency have a clear and unmistakable right not to be
deprived of the rights granted them by the IP Code and existing local laws. 17
In its comment in behalf of the respondents, the Office of the Solicitor General
(OSG) has stated that the IPAP does not have the locus standi to challenge the accession
to the Madrid Protocol; that the IPAP cannot invoke the Court's original jurisdiction
absent a showing of any grave abuse of discretion on the part of the respondents;
that thePresident's ratification of the Madrid Protocol as an executive agreement is valid
because the Madrid Protocol is only procedural, does not create substantive rights, and
does not require the amendment of the IP Code; that the IPAP is not entitled
to the restraining order or injunction because it suffers no damage from the ratification
by the President, and there is also no urgency for such relief; and the IPAP has no clear
unmistakable right to the relief sought. 18
Issues
The following issues are to be resolved, namely:
I. Whether or not the IPAP has locus standi to challenge the President's
ratification of the Madrid Protocol;
 II. Whether or not the President's ratification of the Madrid Protocol is valid and
constitutional; and
III. Whether or not the Madrid Protocol is in conflict with the IP Code.
Ruling of the Court
The petition for certiorari and prohibition is without merit.
A.
The issue of legal standing to sue, or locus standi
The IPAP argues in its reply 19 that it has the locus standi to file the present case by
virtue of its being an association whose members stand to be injured as a
result of theenforcement of the Madrid Protocol in the Philippines; that the injury pertains
to the acceptance and approval of applications submitted through the Madrid
Protocol without local representation as required by Section 125 of the IP Code; 20 and
that such will diminish the rights granted by the IP
Code to Intellectual Property Law practitioners like themembers of the IPAP. 21
The argument of the IPAP is untenable.
Legal standing refers to "a right of appearance in a court of justice on a given
question." 22 According to Agan, Jr. v. Philippine International Air Terminals Co.,
Inc., 23 standing is "a peculiar concept in constitutional law because in some cases, suits
are not brought by parties who have been personally injured by the operation of a law or
any other government act but by concerned citizens, taxpayers or voters who actually sue
in the public interest."SDHTEC

The Court has frequently felt the need to dwell on the issue of standing in public or
constitutional litigations to sift the worthy from the unworthy public law litigants seeking
redress or relief. The following elucidation in De Castro v. Judicial and Bar
Council 24 offers the general understanding of the context of legal standing, or locus
standi for that purpose, viz.:
In public or constitutional litigations, the Court is often burdened
with the determination of the locus standi of the petitioners due to the ever-present
need to regulate theinvocation of the intervention of the Court to correct any official
action or policy in order to avoid obstructing the efficient functioning of public
officials and offices involved in public service. It is required, therefore,
that the petitioner must have a personal stake in the outcome of the controversy,
for, as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties
have "alleged such a personal stake
in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult
constitutional questions." Accordingly, it has been held
that the interest of a person assailing the constitutionality of a
statute must be direct and personal. He must be able to show, not
only that the law or any government act is invalid, but also that he
sustained or is in imminent danger of sustaining some direct
 injury as a result of its enforcement, and not merely that he
suffers thereby in some indefinite way. It must appear
that the person complaining has been or is about to be denied
some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by
reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court
adopted the direct injury test for determining whether a petitioner in a public action
had locus standi. There, the Court held that the person who would
assail the validity of a statute must have "a personal and substantial interest
in the case such that he has sustained, or will sustain direct injury as a
result." Vera was followed in Custodio v. President of the Senate, Manila Race
Horse Trainers' Association v. De la Fuente, Anti-Chinese
League of thePhilippines v. Felix, and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi, being a
mere procedural technicality, can be waived by the Court in the exercise of its
discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court
liberalized the approach when the cases had "transcendental importance." Some
notable controversies whose petitioners did not pass the direct injury test were
allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court
decided to resolve the issues raised by the petition due to their "far-reaching
implications," even if the petitioner had no personality to file the suit. The liberal
approach of Aquino v. Commission on Elections has been adopted in several
notable cases, permitting ordinary citizens, legislators, and civic organizations to
bring their suits involving the constitutionality or validity of laws, regulations, and
rulings.
However, the assertion of a public right as a predicate for challenging a
supposedly illegal or unconstitutional executive or legislative action rests
on the theory that thepetitioner represents the public in general. Although such
petitioner may not be as adversely affected by the action complained against as are
others, it is enough that he sufficiently demonstrates in his petition that he is
entitled to protection or relief from the Court in the vindication of a public right. 25
The injury that the IPAP will allegedly suffer from the implementation of the Madrid
Protocol is imaginary, incidental and speculative as opposed to a direct and material
injury required by the foregoing tenets on locus standi. Additionally, as the OSG points
out in the comment, 26 the IPAP has misinterpreted Section 125 of the IP
Code on the issue of representation. The provision only states that a foreign trademark
applicant "shall designate by a written document filed in the office, the name and
address of a Philippine resident who may be served notices or process in proceedings
affecting the mark;" it does not grant anyone in particular the right to
represent the foreign trademark applicant. Hence, the IPAP cannot justly claim that it will
suffer irreparable injury or diminution of rights granted to it by Section 125 of the IP
Code from the implementation of the Madrid Protocol.
Nonetheless, the IPAP also emphasizes that the paramount public interest involved
has transcendental importance because its petition asserts that the Executive
Department has overstepped the bounds of its authority by thereby cutting into another
branch's functions and responsibilities. 27 The assertion of the IPAP may be valid on this
score. There is little question that the issues raised herein
against the implementation of the Madrid Protocol are of transcendental importance.
Accordingly, we recognize IPAP's locus standi to bring the present challenge.
Indeed, the Court has adopted a liberal attitude towards locus standi whenever the issue
presented for consideration has transcendental significance to the people, or
whenever the issues raised are of paramount importance to the public. 28
B.
Accession to the
Madrid Protocol was constitutional
The IPAP submits that respondents Executive Secretary and DFA Secretary Del
Rosario gravely abused their discretion in determining that there was no need
for thePhilippine Senate's concurrence with the Madrid Protocol; that the Madrid
Protocol involves changes of national policy, and its being of a permanent character
requires theSenate's concurrence, 29 pursuant to Section 21, Article
VII of the Constitution, which states that "no treaty or international agreement shall be
valid and effective unless concurred in by at least two-
thirds of all the Members of the Senate." AScHCD

Before going further, we have to distinguish between treaties and international

agreements, which require the Senate's concurrence, on one hand, and executive
agreements, which may be validly entered into without the Senate's
concurrence. Executive Order No. 459, Series of 1997, 30 notes the following definitions,
to wit:
Sec. 2. Definition of Terms. —
a. International agreement — shall refer to a contract or understanding,
regardless of nomenclature, entered into between the Philippines and another
government in written form and governed by international law, whether
embodied in a single instrument or in two or more related instruments.
b. Treaties — international agreements entered into by the Philippines which require
legislative concurrence after executive ratification. This term may include
compacts like conventions, declarations, covenants and acts.
c. Executive Agreements — similar to treaties except that they do not require
legislative concurrence.
The Court has highlighted the difference between treaties and executive
agreements in Commissioner of Customs v. Eastern Sea Trading, 31 thusly:
International agreements involving political issues or changes of national
policy and those involving international arrangements of a permanent character
usually take the form of treaties. But international agreements
embodying adjustments of detail carrying out well-established national policies and
traditions and those involving arrangements of a more or less temporary nature
usually take the form of executive agreements.
 In the Philippines, the DFA, by virtue of Section 9, Executive Order No. 459, 32 is
initially given the power to determine whether an agreement is to be treated as a treaty or
as an executive agreement. To determine the issue of whether DFA Secretary Del Rosario
gravely abused his discretion in making his determination relative to the Madrid Protocol,
we review the jurisprudence on the nature of executive agreements, as well as the subject
matters to be covered by executive agreements.
The pronouncement in Commissioner of Customs v. Eastern Sea Trading 33 is
instructive, to wit:
. . . The concurrence of said House of Congress is required by our fundamental law
in the making of "treaties" (Constitution of the Philippines, Article VII, Section 10[7]),
which are, however, distinct and different from "executive agreements," which may
be validly entered into without such concurrence.
"Treaties are formal documents which require ratification
with the approval of two thirds of the Senate. Executive agreements
become binding through executive action without the need of a vote
by the Senate or by Congress.
xxx xxx xxx
". . . the right of the Executive to enter into binding
agreements without the necessity of subsequent Congressional
approval has been confirmed by long usage. From the earliest
days of our history we have entered into executive agreements
covering such subjects as commercial and consular relations, most-
favored-nation rights, patent rights, trademark and copyright
protection, postal and navigation arrangements
and the settlement of claims. The validity of these has never been
seriously questioned by our courts.
xxx xxx xxx
Agreements with respect
to the registration of trademarks have been concluded
by the Executive with various countries
under the Act of Congress ofMarch 3, 1881 (21 Stat. 502). . . .
xxx xxx xxx
In this connection, Francis B. Sayre, former U.S. High Commissioner
to the Philippines, said in his work on "The Constitutionality of Trade Agreement
Acts":
Agreements concluded by the President which fall
short of treaties are commonly referred to as executive agreements
and are no less common in our scheme of government than
are the more formal instruments — treaties and conventions. They
sometimes take the form of exchanges of notes and at other times
that or more formal documents denominated 'agreements' or
'protocols'. The point where ordinary correspondence between this
and other governments ends and agreements — whether
denominated executive agreements or exchanges of notes or
otherwise — begin, may sometimes be difficult of ready
 ascertainment. It would be useless to undertake to discuss
here the large variety of executive agreements as such, concluded
from time to time. Hundreds of executive agreements, other than
those entered into under the trade-agreements act, have been
negotiated with foreign governments. . . . It would seem to be
sufficient, in order to show that the trade agreements
under the act of 1934 are not anomalous in character, that they are
not treaties, and that they have abundant precedent in our history, to
refer to certain classes of agreements heretofore entered into
by the Executive without the approval of the Senate. They cover such
subjects as the inspection of vessels, navigation dues, income tax
on shipping profits, the admission of civil aircraft, customs
matters, and commercial relations generally, international claims,
postal matters, the registration of trademarks and copyrights,
etcetera. Some of them were concluded not by specific
congressional authorization but in conformity with policies
declared in acts of Congress with respect to the general subject
matter, such as tariff acts;while still others, particularly those with
respect of the settlement of claims against foreign governments, were
concluded independently of any legislation. (Emphasis ours) AcICHD

As the foregoing pronouncement indicates, the registration of trademarks and

copyrights have been the subject of executive agreements entered into
without theconcurrence of the Senate. Some executive agreements have been concluded
in conformity with the policies declared in the acts of Congress with respect
to the general subject matter.
It then becomes relevant to examine our state policy on intellectual property in
general, as reflected in Section 2 of our IP Code, to wit:
Section 2. Declaration of State Policy. — The State recognizes that an
effective intellectual and industrial property system is vital
to the development ofdomestic and creative activity, facilitates
transfer of technology, attracts foreign investments, and ensures market
access for our products. It shall protect and secure the exclusive
rights of scientists, inventors, artists and other gifted citizens to
their intellectual property and creations, particularly when beneficial
to thepeople, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State
shall promote the diffusion of knowledge and information
for the promotion of national development and progress and the common good.
It is also the policy of the State to streamline administrative
procedures of registering patents, trademarks and copyright, to
liberalize the registration on thetransfer of technology, and to
enhance the enforcement of intellectual property rights in the Philippines.
In view of the expression of state policy having been made by the Congress
itself, the IPAP is plainly mistaken in asserting that "there was no Congressional act that
authorized the accession of the Philippines to the Madrid Protocol." 34
 Accordingly, DFA Secretary Del Rosario's determination and
treatment of the Madrid Protocol as an executive agreement, being in apparent
contemplation of the express state policies on intellectual property as well as within his
power under Executive Order No. 459, are upheld. We observe at this point that there are
no hard and fast rules on thepropriety of entering into a treaty or an executive agreement
on a given subject as an instrument of international relations. The primary consideration
in the choice of the form ofagreement is the parties' intent and desire to craft their
international agreement in the form they so wish to further their respective
interests. The matter of form takes a back seat when it comes to effectiveness and
binding effect of the enforcement of a treaty or an executive agreement, inasmuch as
all the parties, regardless of the form, become obliged to comply conformably
with the time-honored principle of pacta sunt servanda. 35 The principle binds the parties
to perform in good faith their parts in the agreements. 36
C.
There is no conflict between the
Madrid Protocol and the IP Code.
The IPAP also rests its challenge on the supposed conflict between the Madrid
Protocol and the IP Code, contending that the Madrid Protocol does away
with therequirement of a resident agent under Section 125 of the IP Code; and
that the Madrid Protocol is unconstitutional for being in conflict with the local law, which it
cannot modify.
The IPAP's contentions stand on a faulty premise. The method of registration
through the IPOPHL, as laid down by the IP Code, is distinct and separate
from the method ofregistration through the WIPO, as set in the Madrid
Protocol. Comparing the two methods of registration despite their being governed by two
separate systems of registration is thus misplaced.
In arguing that the Madrid Protocol conflicts with Section 125 of the IP
Code, the IPAP highlights the importance of the requirement for the designation of a
resident agent. It underscores that the requirement is intended to ensure that non-
resident entities seeking protection or privileges under
Philippine Intellectual Property Laws will be subjected to the country's jurisdiction. It
submits that without such resident agent, there will be a need to resort to costly, time
consuming and cumbersome extra-territorial service of writs and processes. 37
The IPAP misapprehends the procedure for examination under the Madrid
Protocol. The difficulty, which the IPAP illustrates, is minimal, if not altogether
inexistent. TheIPOPHL actually requires the designation of the resident agent when it
refuses the registration of a mark. Local representation is further required
in the submission of theDeclaration of Actual Use, as well as
in the submission of the license contract. 38 The Madrid Protocol accords with the intent
and spirit of the IP Code, particularly
on the subject of the registration of trademarks. The Madrid Protocol does not amend or
modify the IP Code on the acquisition of trademark rights considering
that the applications under theMadrid Protocol are still examined according
 to the relevant national law. In that regard, the IPOPHL will only grant protection to a mark
that meets the local registration requirements. TAIaHE

WHEREFORE, this Court DISMISSES the petition for certiorari and prohibition for
lack of merit; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.
Sereno, C.J., Carpio, Velasco, Jr., Leonardo-de Castro, Peralta, Del Castillo, Perez,
Reyes and Caguioa, JJ., concur.
Brion, J., see: concurring opinion.
Mendoza, * J., is on official leave.
Perlas-Bernabe, J., please see my concurring opinion.
Leonen, J., see separate concurring opinion.
Jardeleza, ** J., took no part.
(Intellectual Property Association of the Philippines v. Ochoa, G.R. No. 204605, [July 19,
|||

2016], 790 PHIL 276-347)

 BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly
BIRKENSTOCK ORTHOPAEDIE GMBH), petitioner, vs. PHILIPPINE SHOE
EXPO MARKETING CORPORATION, respondent.

DECISION

PERLAS-BERNABE, J : p

Assailed in this Petition for Review on Certiorari 1 are the Court of Appeals' (CA)
Decision 2 dated June 25, 2010 and Resolution 3 dated October 27, 2010 in CA-G.R. SP No.
112278 which reversed and set aside the Intellectual Property Office (IPO) Director General's
Decision 4 dated December 22, 2009 that allowed the registration of various trademarks in
favor of petitioner Birkenstock Orthopaedie GmbH & Co. KG.
The Facts
Petitioner, a corporation duly organized and existing under the laws of Germany,
applied for various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK"
under Trademark Application Serial No. (TASN) 4-1994-091508 for goods falling under Class
25 of the International Classification of Goods and Services (Nice Classification) with filing
date of March 11, 1994; (b)"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING
OF ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND
SUNBEAM" under TASN 4-1994-091509 for goods falling under Class 25 of the Nice
Classification with filing date of March 11, 1994; and (c) "BIRKENSTOCK BAD HONNEF-
RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF
A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043 for goods falling under
Class 10 of the Nice Classification with filing date of September 5, 1994 (subject
applications). 5AcDHCS

However, registration proceedings of the subject applications were suspended in view

of an existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No.
56334 dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town
International and Industrial Corporation, the predecessor-in-interest of respondent Philippine
Shoe Expo Marketing Corporation. 6 In this regard, on May 27, 1997 petitioner filed a petition
for cancellation of Registration No. 56334 on the ground that it is the lawful and rightful
owner of the Birkenstock marks (Cancellation Case). 7 During its pendency, however,
respondent and/or its predecessor-in-interest failed to file the required 10th Year Declaration
of Actual Use (10th Year DAU) for Registration No. 56334 on or before October 21,
2004, 8 thereby resulting in the cancellation of such mark. 9 Accordingly, the cancellation
case was dismissed for being moot and academic. 10
The aforesaid cancellation of Registration No. 56334 paved the way for the publication
of the subject applications in the IPO e-Gazette on February 2, 2007. 11 In response,
respondent filed three (3) separate verified notices of oppositions to the subject applications
docketed as Inter Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-
00116, 12 claiming, inter alia, that: (a) it, together with its predecessor-in-interest, has been
using Birkenstock marks in the Philippines for more than 16 years through the mark
"BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject applications are
identical to the one covered by Registration No. 56334 and thus, petitioner has no right to
the registration of such marks; (c) on November 15, 1991, respondent's predecessor-in-
interest likewise obtained a Certificate of Copyright Registration No. 0-11193 for the word
"BIRKENSTOCK"; (d) while respondent and its predecessor-in-interest failed to file the 10th
Year DAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful commerce;
and (e)to record its continued ownership and exclusive right to use the "BIRKENSTOCK"
marks, it has filed TASN 4-2006-010273 as a "re-application" of its old registration,
Registration No. 56334. 13 On November 13, 2007, the Bureau of Legal Affairs (BLA) of the
IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes cases
(Consolidated Opposition Cases). 14 CHEIcS

The Ruling of the BLA

In its Decision 15 dated May 28, 2008, the BLA of the IPO sustained respondent's
opposition, thus, ordering the rejection of the subject applications. It ruled that the
competing marks of the parties are confusingly similar since they contained the word
"BIRKENSTOCK" and are used on the same and related goods. It found respondent and its
predecessor-in-interest as the prior user and adopter of "BIRKENSTOCK" in the Philippines,
while on the other hand, petitioner failed to present evidence of actual use in the trade and
business in this country. It opined that while Registration No. 56334 was cancelled, it does
not follow that prior right over the mark was lost, as proof of continuous and uninterrupted
use in trade and business in the Philippines was presented. The BLA likewise opined that
petitioner's marks are not well-known in the Philippines and internationally and that the
various certificates of registration submitted by petitioners were all photocopies and,
therefore, not admissible as evidence. 16
Aggrieved, petitioner appealed to the IPO Director General.
The Ruling of the IPO Director General
In his Decision 17 dated December 22, 2009, the IPO Director General reversed and set
aside the ruling of the BLA, thus allowing the registration of the subject applications. He held
that with the cancellation of Registration No. 56334 for respondent's failure to file the 10th
Year DAU, there is no more reason to reject the subject applications on the ground of prior
registration by another proprietor. 18 More importantly, he found that the evidence presented
proved that petitioner is the true and lawful owner and prior user of "BIRKENSTOCK" marks
and thus, entitled to the registration of the marks covered by the subject applications. 19 The
IPO Director General further held that respondent's copyright for the word "BIRKENSTOCK"
is of no moment since copyright and trademark are different forms of intellectual property
that cannot be interchanged. 20 HETDAC

Finding the IPO Director General's reversal of the BLA unacceptable, respondent filed
a petition for review with the CA.
Ruling of the CA
In its Decision 21 dated June 25, 2010, the CA reversed and set aside the ruling of the
IPO Director General and reinstated that of the BLA. It disallowed the registration of the
subject applications on the ground that the marks covered by such applications "are
confusingly similar, if not outright identical" with respondent's mark. 22 It equally held that
respondent's failure to file the 10th Year DAU for Registration No. 56334 "did not deprive
petitioner of its ownership of the "BIRKENSTOCK' mark since it has submitted substantial
evidence showing its continued use, promotion and advertisement thereof up to the
present." 23 It opined that when respondent's predecessor-in-interest adopted and started
its actual use of "BIRKENSTOCK," there is neither an existing registration nor a pending
application for the same and thus, it cannot be said that it acted in bad faith in adopting and
starting the use of such mark. 24 Finally, the CA agreed with respondent that petitioner's
documentary evidence, being mere photocopies, were submitted in violation of Section 8.1
of Office Order No. 79, Series of 2005 (Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for Reconsideration 25 dated July 20, 2010, which
was, however, denied in a Resolution 26 dated October 27, 2010. Hence, this petition. 27
Issues Before the Court
The primordial issue raised for the Court's resolution is whether or not the subject
marks should be allowed registration in the name of petitioner.
The Court's Ruling
The petition is meritorious.
A. Admissibility of Petitioner's
Documentary Evidence.
In its Comment 28 dated April 29, 2011, respondent asserts that the documentary
evidence submitted by petitioner in the Consolidated Opposition Cases, which are mere
photocopies, are violative of Section 8.1 of the Rules on Inter Partes Proceedings, which
requires certified true copies of documents and evidence presented by parties in lieu of
originals. 29 As such, they should be deemed inadmissible.
The Court is not convinced.
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the
attainment of justice, rather than its frustration. A strict and rigid application of the rules must
always be eschewed when it would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. Technicalities should never be used to defeat the
substantive rights of the other party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities." 30 "Indeed, the primordial policy is a faithful observance of [procedural rules],
and their relaxation or suspension should only be for persuasive reasons and only in
meritorious cases, to relieve a litigant of an injustice not commensurate with the degree of
his thoughtlessness in not complying with the procedure prescribed." 31 This is especially
true with quasi-judicial and administrative bodies, such as the IPO, which are not bound by
technical rules of procedure. 32 On this score, Section 5 of the Rules on Inter
PartesProceedings provides: CSTcEI

Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter

Partes cases. — The rules of procedure herein contained primarily apply in the
conduct of hearing of Inter Partes cases. The Rules of Court may be applied
 suppletorily. The Bureau shall not be bound by strict technical rules of procedure
and evidence but may adopt, in the absence of any applicable rule herein, such
mode of proceedings which is consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive disposition of cases, and which
will give the Bureau the greatest possibility to focus on the contentious issues before
it. (Emphasis and underscoring supplied)
In the case at bar, while petitioner submitted mere photocopies as documentary
evidence in the Consolidated Opposition Cases, it should be noted that the IPO had already
obtained the originals of such documentary evidence in the related Cancellation Case earlier
filed before it. Under this circumstance and the merits of the instant case as will be
subsequently discussed, the Court holds that the IPO Director General's relaxation of
procedure was a valid exercise of his discretion in the interest of substantial justice. 33
Having settled the foregoing procedural matter, the Court now proceeds to resolve the
substantive issues.
B. Registration and ownership of
"BIRKENSTOCK."
Republic Act No. (RA) 166, 34 the governing law for Registration No. 56334, requires
the filing of a DAU on specified periods, 35 to wit:
Section 12. Duration. — Each certificate of registration shall remain in force for
twenty years: Provided, That registrations under the provisions of this Act shall
be cancelled by the Director, unless within one year following the fifth, tenth
and fifteenth anniversaries of the date of issue of the certificate of registration,
the registrant shall file in the Patent Office an affidavit showing that the mark or
trade-name is still in use or showing that its non-use is due to special circumstance
which excuse such non-use and is not due to any intention to abandon the same,
and pay the required fee. acCTSE

The Director shall notify the registrant who files the above-prescribed affidavits
of his acceptance or refusal thereof and, if a refusal, the reasons therefor. (Emphasis
and underscoring supplied)
The aforementioned provision clearly reveals that failure to file the DAU within the
requisite period results in the automatic cancellation of registration of a trademark. In turn,
such failure is tantamount to the abandonment or withdrawal of any right or interest the
registrant has over his trademark. 36
In this case, respondent admitted that it failed to file the 10th Year DAU for
Registration No. 56334 within the requisite period, or on or before October 21, 2004. As a
consequence, it was deemed to have abandoned or withdrawn any right or interest over the
mark "BIRKENSTOCK." Neither can it invoke Section 236 37 of the IP Code which pertains to
intellectual property rights obtained under previous intellectual property laws, e.g., RA 166,
precisely because it already lost any right or interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
 Under Section 2 38 of RA 166, which is also the law governing the subject applications,
in order to register a trademark, one must be the owner thereof and must have actually used
the mark in commerce in the Philippines for two (2) months prior to the application for
registration. Section 2-A 39 of the same law sets out to define how one goes about acquiring
ownership thereof. Under the same section, it is clear that actual use in commerce is also
the test of ownership but the provision went further by saying that the mark must not have
been so appropriated by another. Significantly, to be an owner, Section 2-A does not require
that the actual use of a trademark must be within the Philippines. Thus, under RA 166, one
may be an owner of a mark due to its actual use but may not yet have the right to register
such ownership here due to the owner's failure to use the same in the Philippines for two (2)
months prior to registration. 40 EaSCAH

It must be emphasized that registration of a trademark, by itself, is not a mode of

acquiring ownership. If the applicant is not the owner of the trademark, he has no right to
apply for its registration. Registration merely creates a prima facie presumption of the validity
of the registration, 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. 41
Clearly, it is not the application or registration of a trademark that vests ownership
thereof, but it is the ownership of a trademark that confers the right to register the same. A
trademark is an industrial property over which its owner is entitled to property rights which
cannot be appropriated by unscrupulous entities that, in one way or another, happen to
register such trademark ahead of its true and lawful owner. The presumption of ownership
accorded to a registrant must then necessarily yield to superior evidence of actual and real
ownership of a trademark. The Court's pronouncement in Berris Agricultural Co., Inc. v.
Abyadang 42 is instructive on this point:
The ownership of a trademark is acquired by its registration and its actual use
by the manufacturer or distributor of the goods made available to the purchasing
public. . . . A certificate of registration of a mark, once issued, constitutes prima
facie evidence of the validity of the registration, of the registrant's ownership of the
mark, and of the registrant's exclusive right to use the same in connection with the
goods or services and those that are related thereto specified in the certificate. . . . In
other words, the prima facie presumption brought about by the registration of a mark
may be challenged and overcome in an appropriate action, . . . by evidence of prior
use by another person, i.e., it will controvert a claim of legal appropriation or of
ownership based on registration by a subsequent user. This is because a
trademark is a creation of use and belongs to one who first used it in trade or
commerce. 43 (Emphasis and underscoring supplied)
In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of
"BIRKENSTOCK" and its use in commerce long before respondent was able to register the
same here in the Philippines. It has sufficiently proven that "BIRKENSTOCK" was first
adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker, on his line of
quality footwear and thereafter, numerous generations of his kin continuously engaged in the
manufacture and sale of shoes and sandals bearing the mark "BIRKENSTOCK" until it
became the entity now known as the petitioner. Petitioner also submitted various certificates
of registration of the mark "BIRKENSTOCK" in various countries and that it has used such
mark in different countries worldwide, including the Philippines. 44
On the other hand, aside from Registration No. 56334 which had been cancelled,
respondent only presented copies of sales invoices and advertisements, which are not
conclusive evidence of its claim of ownership of the mark "BIRKENSTOCK" as these merely
show the transactions made by respondent involving the same. 45 ETDHaC

In view of the foregoing circumstances, the Court finds the petitioner to be the true
and lawful owner of the mark "BIRKENSTOCK" and entitled to its registration, and that
respondent was in bad faith in having it registered in its name. In this regard, the Court
quotes with approval the words of the IPO Director General, viz.:
The facts and evidence fail to show that [respondent] was in good faith in
using and in registering the mark BIRKENSTOCK. BIRKENSTOCK, obviously of
German origin, is a highly distinct and arbitrary mark. It is very remote that two
persons did coin the same or identical marks. To come up with a highly distinct and
uncommon mark previously appropriated by another, for use in the same line of
business, and without any plausible explanation, is incredible. The field from which a
person may select a trademark is practically unlimited. As in all other cases of
colorable imitations, the unanswered riddle is why, of the millions of terms and
combinations of letters and designs available, [respondent] had to come up with a
mark identical or so closely similar to the [petitioner's] if there was no intent to take
advantage of the goodwill generated by the [petitioner's] mark. Being on the same
line of business, it is highly probable that the [respondent] knew of the existence of
BIRKENSTOCK and its use by the [petitioner], before [respondent] appropriated the
same mark and had it registered in its name. 46
WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and
Resolution dated October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278
are REVERSED and SET ASIDE. Accordingly, the Decision dated December 22, 2009 of the
IPO Director General is hereby REINSTATED.
SO ORDERED.
Brion, Del Castillo, Perez and Reyes, * JJ., concur.
(Birkenstock Orthopaedie GmbH and Co. KG v. Phil. Shoe Expo Marketing Corp., G.R. No.
|||

194307, [November 20, 2013], 721 PHIL 867-882)

 W LAND HOLDING, INC., petitioner, vs. STARWOOD HOTELS AND
RESORTS WORLDWIDE, INC., respondent.

DECISION

PERLAS-BERNABE, J : p

Assailed in this petition for review on certiorari 1 are the Decision 2 dated June 22,
2015 and the Resolution 3 dated January 7, 2016 of the Court of Appeals (CA) in CA-G.R.
SP No. 133825 affirming the Decision 4 dated January 10, 2014 of the Intellectual
Property Office (IPO)-Director General (IPO DG), which, in turn, reversed the
Decision 5 dated May 11, 2012 of the IPO Bureau of Legal Affairs (BLA) in Inter Partes
Case No. 14-2009-00143, and accordingly, dismissed petitioner W Land Holdings, Inc.'s
(W Land) petition for cancellation of the trademark "W" registered in the name of
respondent Starwood Hotels and Resorts, Worldwide, Inc. (Starwood).

The Facts

On December 2, 2005, Starwood filed before the IPO an application for registration
of the trademark "W" for Classes 43 6 and 44 7 of the International Classification of Goods
and Services for the Purposes of the Registration of Marks 8 (Nice Classification). 9 On
February 26, 2007, Starwood's application was granted and thus, the "W" mark was
registered in its name. 10 However, on April 20, 2006, W Land applied 11 for the
registration of its own "W" mark for Class 36, 12 which thereby prompted Starwood to
oppose the same. 13 In a Decision 14 dated April 23, 2008, the BLA found merit
in Starwood's opposition, and ruled that W Land's "W" mark is confusingly similar
with Starwood's mark, 15which had an earlier filing date. W Land filed a motion for
reconsideration 16 on June 11, 2008, which was denied by the BLA in a
Resolution 17 dated July 23, 2010.
On May 29, 2009, W Land filed a Petition for Cancellation 18 of Starwood's mark for
non-use under Section 151.1 19 of Republic Act No. 8293 or the "Intellectual Property
Code of the Philippines" (IP Code), 20 claiming that Starwood has failed to use its mark in
the Philippines because it has no hotel or establishment in the Philippines rendering the
services covered by its registration; and that Starwood's "W" mark application and
registration barred its own "W" mark application and registration for use on real estate. 21
In its defense, 22 Starwood denied having abandoned the subject mark on the
ground of non-use, asserting that it filed with the Director of Trademarks a notarized
Declaration of Actual Use 23 (DAU) 24 with evidence of use on December 2, 2008, 25 which
was not rejected. In this relation, Starwood argued that it conducts hotel and leisure
business both directly and indirectly through subsidiaries and franchisees, and operates
interactive websites for its W Hotels in order to accommodate its potential clients
worldwide. 26 According to Starwood, apart from viewing agents, discounts, promotions,
and other marketing fields being offered by it, these interactive websites allow Philippine
residents to make reservations and bookings, which presuppose clear and convincing
use of the "W" mark in the Philippines. 27

The BLA Ruling

In a Decision 28 dated May 11, 2012, the BLA ruled in W Land's favor, and
accordingly ordered the cancellation of Starwood's registration for the "W" mark. The
BLA found that the DAU and the attachments thereto submitted by Starwood did not
prove actual use of the "W" mark in the Philippines, considering that the "evidences of
use" attached to the DAU refer to hotel or establishments that are located abroad. 29 In
this regard, the BLA opined that "the use of a trademark as a business tool and as
contemplated under [Section 151.1 (c) of RA 8293] refers to the actual attachment thereof
to goods and services that are sold or availed of and located in the Philippines." 30
Dissatisfied, Starwood appealed 31 to the IPO DG.

The IPO DG Ruling

In a Decision 32 dated January 10, 2014, the IPO DG granted Starwood's

appeal, 33 thereby dismissing W Land's Petition for Cancellation. Contrary to the BLA's
findings, the IPO DG found that Starwood's submission of its DAU and attachments,
coupled by the acceptance thereof by the IPO Bureau of Trademarks, shows that the "W"
mark still bears a "registered" status. Therefore, there is a presumption
that Starwood sufficiently complied with the registration requirements for its mark. 34 The
IPO DG likewise held that the absence of any hotel or establishment owned
by Starwood in the Philippines bearing the "W" mark should not be equated to the
absence of its use in the country, opining that Starwood's pieces of evidence, particularly
its interactive website, indicate actual use in the Philippines, 35 citing Rule 205 36 of the
Trademark Regulations, as amended by IPO Office Order No. 056-13. 37 Finally, the IPO
DG stressed that since Starwood is the undisputed owner of the "W" mark for use in hotel
and hotel-related services, any perceived damage on the part of W Land in this case
should be subordinated to the essence of protecting Starwood's intellectual property
rights. To rule otherwise is to undermine the intellectual property system. 38
Aggrieved, W Land filed a petition for review 39 under Rule 43 of the Rules of
Court before the CA.

The CA Ruling

In a Decision 40 dated June 22, 2015, the CA affirmed the IPO DG ruling. At the
onset, the CA observed that the hotel business is peculiar in nature in that the offer, as
well as the acceptance of room reservations or bookings wherever in the world is an
indispensable element. As such, the actual existence or presence of a hotel in one place
is not necessary before it can be considered as doing business therein. 41 In this regard,
the CA recognized that the internet has become a powerful tool in allowing businesses to
reach out to consumers in a given market without being physically present thereat; thus,
the IPO DG correctly held that Starwood's interactive websites already indicate its actual
use in the Philippines of the "W" mark. 42 Finally, the CA echoed the IPO DG's finding that
since Starwood is the true owner of the "W" mark — as shown by the fact
that Starwood had already applied for the registration of this mark even before W Land
was incorporated — its registration over the same should remain valid, absent any
showing that it has abandoned the use thereof. 43
Unperturbed, W Land moved for reconsideration, 44 but was denied in a
Resolution 45 dated January 7, 2016; hence, this petition.

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA correctly
affirmed the IPO DG's dismissal of W Land's Petition for Cancellation of Starwood's "W"
mark.

The Court's Ruling

The petition is without merit.

The IP Code defines a "mark" as "any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise." 46 Case law explains that
"[t]rademarks deal with the psychological function of symbols and the effect of these
symbols on the public at large." 47 It is a merchandising short-cut, and, "[w]hatever the
means employed, the aim is the same — to convey through the mark, in the minds of
potential customers, the desirability of the commodity upon which it appears." 48 Thus,
the protection of trademarks as intellectual property is intended not only to preserve the
goodwill and reputation of the business established on the goods or services bearing the
mark through actual use over a period of time, but also to safeguard the public as
consumers against confusion on these goods or services. 49 As viewed by modern
authorities on trademark law, trademarks perform three (3) distinct functions: (1) they
indicate origin or ownership of the articles to which they are attached; (2) they guarantee
that those articles come up to a certain standard of quality; and (3) they advertise the
articles they symbolize. 50
In Berris Agricultural Co., Inc. v. Abyadang, 51 this Court explained that "[t]he
ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. x x x. A
certificate of registration of a mark, once issued, constitutes prima facie evidence of the
validity of the registration, of the registrant's ownership of the mark, and of the
registrant's exclusive right to use the same in connection with the goods or services and
those that are related thereto specified in the certificate." 52 However, "the prima
facie presumption brought about by the registration of a mark may be challenged and
overcome, in an appropriate action, by proof of[, among others,] non-use of the mark,
except when excused." 53
The actual use of the mark representing the goods or services introduced and
transacted in commerce over a period of time creates that goodwill which the law seeks
to protect. For this reason, the IP Code, under Section 124.2, 54 requires the registrant or
owner of a registered mark to declare "actual use of the mark" (DAU) and present
evidence of such use within the prescribed period. Failing in which, the IPO DG may
cause the motu proprio removal from the register of the mark's registration. 55 Also, any
person, believing that "he or she will be damaged by the registration of a mark," which
has not been used within the Philippines, may file a petition for cancellation. 56 Following
the basic rule that he who alleges must prove his case, 57 the burden lies on the petitioner
to show damage and non-use. CAIHTE

The IP Code and the Trademark Regulations have not specifically defined "use."
However, it is understood that the "use" which the law requires to maintain the
registration of a mark must be genuine, and not merely token. Based on foreign
authorities, 58 genuine use may be characterized as a bona fide use which results or
tends to result, in one way or another, into a commercial interaction or transaction
"in the ordinary course of trade." 59
What specific act or acts would constitute use of the mark sufficient to keep its
registration in force may be gleaned from the Trademark Regulations, Rule 205 of which
reads:
RULE 205. Contents of the Declaration and Evidence of Actual Use. — The
declaration shall be under oath, must refer to only one application or registration,
must contain the name and address of the applicant or registrant declaring that
the mark is in actual use in the Philippines, list of goods where the mark is
attached; list the name or names and the exact location or locations of the
outlet or outlets where the products are being sold or where the services are
being rendered, recite sufficient facts to show that the mark described in the
application or registration is being actually used in the Philippines and,
specifying the nature of such use. The declarant shall attach five labels as
actually used on the goods or the picture of the stamped or marked container
visibly and legibly showing the mark as well as proof of payment of the prescribed
fee. [As amended by Office Order No. 08 (2000)] (Emphases supplied)
The Trademark Regulations was amended by Office Order No. 056-13. Particularly,
Rule 205 now mentions certain items which "shall be accepted as proof of actual use of
the mark:"
RULE 205. Contents of the Declaration and Evidence of Actual Use. —
(a) The declaration shall be under oath and filed by the applicant or registrant
(or the authorized officer in case of a juridical entity) or the attorney or authorized
representative of the applicant or registrant. The declaration must refer to only one
application or registration, shall contain the name and address of the applicant or
registrant declaring that the mark is in actual use in the Philippines, the list of goods
or services where the mark is used, the name/s of the establishment and address
where the products are being sold or where the services are being rendered. If the
 goods or services are available only by online purchase, the website must be
indicated on the form in lieu of name or address of the establishment or outlet. The
applicant or registrant may include other facts to show that the mark described in
the application or registration is actually being used in the Philippines. The date of
first use shall not be required.
(b) Actual use for some of the goods and services in the same class shall
constitute use for the entire class of goods and services. Actual use for one class
shall be considered use for related classes. In the event that some classes are not
covered in the declaration, a subsequent declaration of actual use may be filed for
the other classes of goods or services not included in the first declaration, provided
that the subsequent declaration is filed within the three-year period or the extension
period, in case an extension of time to file the declaration was timely made. In the
event that no subsequent declaration of actual use for the other classes of goods
and services is filed within the prescribed period, the classes shall be automatically
dropped from the application or registration without need of notice to the applicant
or registrant.
(c) The following shall be accepted as proof of actual use of the
mark: (1) labels of the mark as these are used; (2) downloaded pages from the
website of the applicant or registrant clearly showing that the goods are being
sold or the services are being rendered in the Philippines; (3) photographs
(including digital photographs printed on ordinary paper) of goods bearing the
marks as these are actually used or of the stamped or marked container of goods
and of the establishment/s where the services are being rendered; (4) brochures or
advertising materials showing the actual use of the mark on the goods being sold or
services being rendered in the Philippines; (5) for online sale, receipts of sale of
the goods or services rendered or other similar evidence of use, showing that
the goods are placed on the market or the services are available in the
Philippines or that the transaction took place in the Philippines; (6) copies of
contracts for services showing the use of the mark. Computer printouts of the
drawing or reproduction of marks will not be accepted as evidence of use.
(d) The Director may, from time to time, issue a list of acceptable
evidence of use and those that will not be accepted by the Office. (Emphases
and underscoring supplied)
Office Order No. 056-13 was issued by the IPO DG on April 5, 2013, pursuant to his
delegated rule-making authority under Section 7 of the IP Code. 60 The rationale for this
issuance, per its whereas clauses, is to further "the policy of the [IPO] to streamline
administrative procedures in registering trademarks" and in so doing, address the need
"to clarify what will be accepted as proof of use." In this regard, the parameters and list of
evidence introduced under the amended Trademark Regulations are thus mere
administrative guidelines which are only meant to flesh out the types of acceptable
evidence necessary to prove what the law already provides, i.e., the requirement of actual
use. As such, contrary to W Land's postulation, 61 the same does not diminish or modify
any substantive right and hence, may be properly applied to "all pending and registered
marks," 62 as in Starwood's "W" mark for hotel/hotel reservation services being rendered
or, at the very least, made available in the Philippines.
 Based on the amended Trademark Regulations, it is apparent that the IPO has now
given due regard to the advent of commerce on the internet. Specifically, it now
recognizes, among others, "downloaded pages from the website of the applicant or
registrant clearly showing that the goods are being sold or the services are being
rendered in the Philippines," as well as "for online sale, receipts of sale of the goods or
services rendered or other similar evidence of use, showing that the goods are placed on
the market or the services are available in the Philippines or that the transaction took
place in the Philippines," 63 as acceptable proof of actual use. Truly, the Court discerns
that these amendments are but an inevitable reflection of the realities of the times.
In Mirpuri v. CA, 64 this Court noted that "[a]dvertising on the Net and cybershopping are
turning the Internet into a commercial marketplace:" 65
The Internet is a decentralized computer network linked together through
routers and communications protocols that enable anyone connected to it to
communicate with others likewise connected, regardless of physical location. Users
of the Internet have a wide variety of communication methods available to them and
a tremendous wealth of information that they may access. The growing popularity
of the Net has been driven in large part by the World Wide Web, i.e., a system that
facilitates use of the Net by sorting through the great mass of information available
on it. Advertising on the Net and cybershopping are turning the Internet into a
commercial marketplace. 66(Emphasis and underscoring supplied)
Thus, as modes of advertising and acquisition have now permeated into virtual
zones over cyberspace, the concept of commercial goodwill has indeed evolved:
In the last half century, the unparalleled growth of industry and the rapid
development of communications technology have enabled trademarks, tradenames
and other distinctive signs of a product to penetrate regions where the owner does
not actually manufacture or sell the product itself. Goodwill is no longer confined
to the territory of actual market penetration; it extends to zones where the
marked article has been fixed in the public mind through advertising. Whether
in the print, broadcast or electronic communications medium, particularly on
the Internet, advertising has paved the way for growth and expansion of the
product by creating and earning a reputation that crosses over borders,
virtually turning the whole world into one vast marketplace. 67 (Emphasis and
underscoring supplied)
Cognizant of this current state of affairs, the Court therefore agrees with the IPO
DG, as affirmed by the CA, that the use of a registered mark representing the owner's
goods or services by means of an interactive website may constitute proof of actual use
that is sufficient to maintain the registration of the same. Since the internet has turned the
world into one vast marketplace, the owner of a registered mark is clearly entitled to
generate and further strengthen his commercial goodwill by actively marketing and
commercially transacting his wares or services throughout multiple platforms on the
internet. The facilities and avenues present in the internet are, in fact, more prominent
nowadays as they conveniently cater to the modern-day consumer who desires to
procure goods or services at any place and at any time, through the simple click of a
mouse, or the tap of a screen. Multitudinous commercial transactions are accessed,
brokered, and consummated everyday over websites. These websites carry the mark
which represents the goods or services sought to be transacted. For the owner, he
intentionally exhibits his mark to attract the customers' interest in his goods or services.
The mark displayed over the website no less serves its functions of indicating the goods
or services' origin and symbolizing the owner's goodwill than a mark displayed in the
physical market. Therefore, there is no less premium to recognize actual use of marks
through websites than their actual use through traditional means. Indeed, as our world
evolves, so too should our appreciation of the law. Legal interpretation — as it largely
affects the lives of people in the here and now — never happens in a vacuum. As such, it
should not be stagnant but dynamic; it should not be ensnared in the obsolete but rather,
sensitive to surrounding social realities.DETACa

It must be emphasized, however, that the mere exhibition of goods or services over
the internet, without more, is not enough to constitute actual use. To reiterate, the "use"
contemplated by law is genuine use — that is, a bona fide kind of use tending towards a
commercial transaction in the ordinary course of trade. Since the internet creates a
borderless marketplace, it must be shown that the owner has actually transacted, or
at the very least, intentionally targeted customers of a particular jurisdiction in order
to be considered as having used the trade mark in the ordinary course of his trade
in that country. A showing of an actual commercial link to the country is therefore
imperative. Otherwise, an unscrupulous registrant would be able to maintain his mark by
the mere expedient of setting up a website, or by posting his goods or services on
another's site, although no commercial activity is intended to be pursued in the
Philippines. This type of token use renders inutile the commercial purpose of the mark,
and hence, negates the reason to keep its registration active. As the IP Code expressly
requires, the use of the mark must be "within the Philippines." This is embedded in
Section 151 of the IP Code on cancellation, which reads:
SECTION 151. Cancellation. — 151.1. A petition to cancel a registration of a
mark under this Act may be filed with the Bureau of Legal Affairs by any person
who believes that he is or will be damaged by the registration of a mark under this
Act as follows:
(a) Within five (5) years from the date of the registration of the mark under this
Act.
(b) At any time, if the registered mark becomes the generic name for the goods
or services, or a portion thereof, for which it is registered, or has been
abandoned, or its registration was obtained fraudulently or contrary to
the provisions of this Act, or if the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source
of the goods or services on or in connection with which the mark is
used. If the registered mark becomes the generic name for less than all
of the goods or services for which it is registered, a petition to cancel
the registration for only those goods or services may be filed. A
registered mark shall not be deemed to be the generic name of goods
or services solely because such mark is also used as a name of or to
identify a unique product or service. The primary significance of the
registered mark to the relevant public rather than purchaser motivation
shall be the test for determining whether the registered mark has
become the generic name of goods or services on or in connection with
which it has been used.
 (c) At any time, if the registered owner of the mark without legitimate
reason fails to use the mark within the Philippines, or to cause it to
be used in the Philippines by virtue of a license during an
uninterrupted period of three (3) years or longer. (Emphasis and
underscoring supplied)
The hotel industry is no stranger to the developments and advances in technology.
Like most businesses nowadays, hotels are utilizing the internet to drive almost every
aspect of their operations, most especially the offering and accepting of room
reservations or bookings, regardless of the client or customer base. The CA explained
this booking process in that the "business transactions commence with the placing of
room reservations, usually by or through a travel agent who acts for or in behalf of his
principal, the hotel establishment. [The] reservation is first communicated to the
reservations and booking assistant tasked to handle the transaction. After the reservation
is made, the specific room reserved for the guest will be blocked and will not be offered
to another guest. As such, on the specified date of arrival, the room reserved will be
available to the guest." 68
In this accord, a hotel's website has now become an integral element of a hotel
business. Especially with the uptrend of international travel and tourism, the hotel's
website is now recognized as an efficient and necessary tool in advertising and promoting
its brand in almost every part of the world. More so, interactive websites that allow
customers or clients to instantaneously book and pay for, in advance, accommodations
and other services of a hotel anywhere in the world, regardless of the hotel's actual
location, dispense with the need for travel agents or hotel employees to transact the
reservations for them. In effect, the hotel's website acts as a bridge or portal through
which the hotel reaches out and provides its services to the client/customer anywhere in
the world, with the booking transaction completed at the client/customer's own
convenience. It is in this sense that the CA noted that the "actual existence or presence
of a hotel in one place is not necessary before it can be considered as doing business
therein." 69
As earlier intimated, mere use of a mark on a website which can be accessed
anywhere in the world will not automatically mean that the mark has been used in the
ordinary course of trade of a particular country. Thus, the use of mark on the internet
must be shown to result into a within-State sale, or at the very least, discernibly intended
to target customers that reside in that country. This being so, the use of the mark on an
interactive website, for instance, may be said to target local customers when they
contain specific details regarding or pertaining to the target State, sufficiently
showing an intent towards realizing a within-State commercial activity or
interaction. These details may constitute a local contact phone number, specific
reference being available to local customers, a specific local webpage, whether domestic
language and currency is used on the website, and/or whether domestic payment
methods are accepted. 70 Notably, this paradigm of ascertaining local details to evince
within-state commercial intent is subscribed to by a number of jurisdictions, namely, the
European Union, Hong Kong, Singapore, Malaysia, Japan, Australia, Germany, France,
Russia, and the United Kingdom. 71 As for the U.S. — where most of our intellectual
property laws have been patterned 72 — there have been no decisions to date coming
from its Trademark Trial and Appeal Board involving cases challenging the validity of
mark registrations through a cancellation action based on the mark's internet use.
However, in International Bancorp LLC v. Societe des Bains de Mer et du Cercle des
Etrangers a Monaco, 73 it was ruled that mere advertising in the U.S. combined with
rendering of services to American customers in a foreign country constituted "use" for the
purpose of establishing trademark rights in the U.S.
In this case, Starwood has proven that it owns Philippine registered domain
names, 74 i.e., www.whotels.ph, www.wreservations.ph, www.whotel.ph, www.wreservati
on.ph, for its website that showcase its mark. The website is readily accessible to
Philippine citizens and residents, where they can avail and book amenities and other
services in any of Starwood's W Hotels worldwide. Its website also readily provides a
phone number 75 for Philippine consumers to call for information or other concerns. The
website further uses the English language 76 — considered as an official language in this
country 77 — which the relevant market in the Philippines understands and often uses in
the daily conduct of affairs. In addition, the prices for its hotel accommodations and/or
services can be converted into the local currency or the Philippine Peso. 78 Amidst all of
these features, Starwood's "W" mark is prominently displayed in the website through
which consumers in the Philippines can instantaneously book and pay for their
accommodations, with immediate confirmation, in any of its W Hotels. Furthermore, it has
presented data showing a considerably growing number of internet users in the
Philippines visiting its website since 2003, which is enough to conclude
that Starwood has established commercially-motivated relationships with Philippine
consumers. 79
Taken together, these facts and circumstances show that Starwood's use of its
"W" mark through its interactive website is intended to produce a discernable commercial
effect or activity within the Philippines, or at the very least, seeks to establish commercial
interaction with local consumers. Accordingly, Starwood's use of the "W" mark in its
reservation services through its website constitutes use of the mark sufficient to keep its
registration in force.
To be sure, Starwood's "W" mark is registered for Classes 43, i.e., for hotel, motel,
resort and motor inn services, hotel reservation services, restaurant, bar and catering
services, food and beverage preparation services, café and cafeteria services, provision
of conference, meeting and social function facilities, under the Nice
Classification. 80 Under Section 152.3 of the IP Code, "[t]he use of a mark in connection
with one or more of the goods or services belonging to the class in respect of which the
mark is registered shall prevent its cancellation or removal in respect of all other goods or
services of the same class." Thus, Starwood's use of the "W" mark for reservation
services through its website constitutes use of the mark which is already sufficient to
protect its registration under the entire subject classification from non-use cancellation.
This, notwithstanding the absence of a Starwood hotel or establishment in the
Philippines.
Finally, it deserves pointing out that Starwood submitted in 2008 its DAU with
evidence of use which the IPO, through its Director of Trademarks and later by the IPO
DG in the January 10, 2014 Decision, had accepted and recognized as valid. The Court
 finds no reason to disturb this recognition. According to jurisprudence, administrative
agencies, such as the IPO, by means of their special knowledge and expertise over
matters falling within their jurisdiction are in a better position to pass judgment on this
issue. 81 Thus, their findings are generally accorded respect and finality, as long as they
are supported by substantial evidence. In this case, there is no compelling basis to
reverse the IPO DG's findings — to keep Starwood's registration for the "W" mark in
force — as they are well supported by the facts and the law and thus, deserve respect
from this Court. aDSIHc

WHEREFORE, the petition is DENIED. The Decision dated June 22, 2015 and the
Resolution dated January 7, 2016 of the Court of Appeals in CA-G.R. SP No. 133825 are
hereby AFFIRMED.
SO ORDERED.
Peralta, Caguioa and Reyes, Jr., JJ., concur.
Jardeleza, * J., is on leave.
(W Land Holding, Inc. v. Starwood Hotels and Resorts Worldwide, Inc., G.R. No. 222366,
|||

[December 4, 2017])

 ASIA BREWERY, INC. petitioner, vs. THE HON. COURT OF APPEALS and
SAN MIGUEL CORPORATION, respondents.

Abad Santos & Associates and Sycip, Salazar, Hernandez and Gatmaitan for petitioner.
Roco, Bunag, Kapunan Law Office for private respondent.

SYLLABUS

1. REMEDIAL LAW; APPEAL; FACTUAL FINDINGS OF COURT OF APPEALS CONCLUSIVE

AND BINDING ON SUPREME COURT; EXCEPTIONS; CASE AT BAR. — As a general rule,
the findings of the Court of Appeals upon factual questions are conclusive and ought not to
be disturbed by us. However, there are exceptions to this general rule, and they are: (1)
When the conclusion is grounded entirely on speculation, surmises and conjectures; (2)
When the inference of the Court of Appeals from its findings of fact is manifestly mistaken,
absurd and impossible; (3) Where there is grave abuse of discretion; (4) When the judgment
is based on a misapprehension of facts; (5) When the appellate court, in making its findings,
went beyond the issues of the case, and the same are contrary to the admissions of both the
appellant and the appellee; (6) When the findings of said court are contrary to those of the
trial court; (7) When the findings are without citation of specific evidence on which they are
based; (8) When the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondents; and (9) When the findings of facts of the Court of
Appeals are premised on the absence of evidence and are contradicted on record. (Reynolds
Philippine Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court
of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238;
Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576;
Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex Investment and Financing
Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina
Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA
817; and Moran, Jr. vs. Ca, 133 SCRA 88].) Under any of these exceptions, the Court has to
review the evidence in order to arrive at the correct findings based on the record (Roman
Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of
Appeals and trial court are contrary to each other, the Supreme Court may scrutinize the
evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.) The present case is one of the
exceptions because there is no concurrence between the trial court and the Court of
Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER
PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted
rectangular label has committed trademark infringement and unfair competition against
SMC.
2. COMMERCIAL LAW; TRADEMARK LAW (REPUBLIC ACT NO. 166); INFRINGEMENT;
DEFINED; NATURE THEREOF. — Infringement of trademark is a form of unfair competition
(Clarke vs. Manila Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise
known as the Trademark Law, defines what constitutes infringement: Sec. 22. Infringement,
what constitutes. — Any person who shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in
connection with the sale, offering for sale, or advertising of any goods, business or services
on or in connection with which such use is likely to cause confusion or mistake or to deceive
purchasers or others as to the source or origin of such goods or services, or identity of such
business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name
and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided. This definition implies that
only registered trade marks, trade names and service marks are protected against
infringement or unauthorized use by another or others. The use of someone else's registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done
"without the consent of the registrant."
3. ID.; ID.; HOW QUESTION OF INFRINGEMENT OF TRADEMARK DETERMINED;
QUESTION AT ISSUE IN CASES OF INFRINGEMENT. — Infringement is determined by the
"test of dominancy" rather than by differences or variations in the details of one trademark
and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4
(1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus: "It
has been consistently held that the question of infringement of a trademark is to be
determined by the test of dominancy. Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential or dominantfeatures of
another, and confusion and deception is likely to result, infringement takes place. Duplication
or imitation is not necessary; not it is necessary that the infringing label should suggest an
effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495,
citing Eagle While Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of
infringement of trademarks is whether the use of the marks involved would be likely
to cause confusion or mistakes in the mind of the public or deceive purchasers.(Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . .)" In Forbes, Munn & Co.
(Ltd.) vs. Ang San To, 40 Phil. 272, 275), the test was similarity or "resemblance between the
two (trademarks) such as would be likely to cause the one mark to be mistaken for the other.
. . . [But] this is not such similitude as amounts to identity." In Phil. Nut Industry
Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test is
"similarity in the dominant features of the trademarks."
4. ID.; ID.; ID.; ID.; CASE AT BAR. — The dominant feature of SMC's trademark is the name
of the product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate
serifs at the beginning and end of the letters "S" and "M" on an amber background across
the upper portion of the rectangular design. On the other hand, the dominant feature of ABI's
trademark is the name: BEER PALE PILSEN, with the word "Beer" written in large amber
letters, larger than any of the letters found in the SMC label. The trial court perceptively
observed that the word "BEER" does not appear in SMC's trademark, just as the words
"SAM MIGUEL" do not appear in ABI's trademark. Hence, there is absolutely no similarity in
the dominant features of both trademarks. Neither in sound, spelling or appearance can
BEER PALE PILSEN be said to be confusingly similar to SAN MIGUEL PALE PILSEN. No one
who purchases BEER PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE
PILSEN. No evidence whatsoever was presented by SMC proving otherwise.
5. ID.; ID.; GENERIC OR DESCRIPTIVE AND PRIMARILY GEOGRAPHICALLY DESCRIPTIVE
WORDS NON-REGISTRABLE AND NOT APPROPRIABLE; REASON THEREFOR; CASE AT
BAR. — 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. (Webster's Third New International
Dictionary of the English Language, Unabridged. Edited by Philip Babcock Gove. Springfield,
Mass.: G & C Merriam Co.,) 1976, page 1716.) "Pilsen" is a "primarily geographically
descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A.
No. 638) hence, non-registerable and not appropriable by any beer manufacturer. The
Trademark Law provides: "Sec. 4 . . . The owner of trade-mark, trade-name or service-mark
used to distinguished his goods, business or services from the goods, business or services
of others shall have the right to register the same [on the principal register], unless it: . . . "(e)
Consists of a mark or trade-name which, when applied to or used in connection with the
goods, business or services of the applicant is merely descriptive or deceptively
misdescriptive of them, or when applied to or used in connection with the goods, business
or services of the applicant is primarily geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a surname." 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, any more than such descriptive words as
"evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may
be appropriated by any single manufacturer of these food products, for no other reason than
that he was the first to use them in his registered trademark. In Masso Hermanos,
S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a dealer in shoes
cannot register "Leather Shoes" as his trademark because that would be merely descriptive
and it would be unjust to deprive other dealers in leather shoes of the right to use the same
words with reference to their merchandise. No one may appropriate generic or descriptive
words. They belong to the public domain (Ong Ai Gui vs.Director of Patents, 96 Phil. 673,
676 [1955]).
6. ID.; ID.; UNFAIR COMPETITION; DEFINED. — Unfair competition is 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. (Sec. 29, Republic Act No. 166, as
amended.)

7. ID.; ID.; ID.; TEST TO DETERMINE EXISTENCE THEREOF. — The universal test question
is whether the public is likely to be deceived. Nothing less than conduct tending to pass off
one man's goods or business as that of another will constitute unfair competition. Actual or
probable deception and confusion on the part of the customers by reason of defendant's
practices must always appear." (Shell Co. of the Philippines, Ltd. vs. Insular Petroleum
Refining Co. Ltd. et al., 120 Phil. 434, 439.) . . . In Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190,
196-197, where two competing tea products were both labelled as Formosan tea, both sold
in 5-ounce packages made of ordinary wrapping paper of conventional color, both with
labels containing designs drawn in green ink and Chinese characters written in red ink, one
label showing a double-decked jar in the center, the other, a flower pot, this court found that
the resemblances between the designs were not sufficient to mislead the ordinary intelligent
buyer, hence, there was no unfair competition. The Court held: ". . . In order that there may
be deception of the buying public in the sense necessary to constitute unfair competition, it
is necessary to suppose a public accustomed to buy, and therefore to some extent familiar
with, the goods in question. The test of fraudulent simulation is to be found in the likelihood
of the deception of persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been associated. The test
is not found in the deception, or possibility of the deception, of the person who knows
nothing about the design which has been counterfeited, and who must be indifferent as
between that and the other. The simulation, in order to be objectionable, must be such as
appears likely to mislead the ordinarily intelligent buyer who has a need to supply and is
familiar with the article that he seeks to purchase."
8. ID.; ID.; PROTECTION AGAINST IMITATION PROPERLY LIMITED TO NONFUNCTIONAL
FEATURES; CASE AT BAR. — The petitioner's contention that bottle size, shape and color
may not be the exclusive property of any one beer manufacturer is well taken. SMC's being
the first to use the steinie bottle does not give SMC a vested right to use it to the exclusion
of everyone else. Being of functional or common use, and not the exclusive invention of any
one, it is available to all who might need to use it within the industry. Nobody can acquire
any exclusive right to market articles supplying simple human needs in containers or
wrappers of the general form, size and character commonly and immediately used in
marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.) . . . ABI does
not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which
has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a functional
feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines
is contained and sold in amber-colored bottles because amber is the most effective color in
preventing transmission of light and provides the maximum protection to beer. As was ruled
in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38 F2d 885, a merchant
cannot be enjoined from using a type or color of bottle where the same has the useful
purpose of protecting the contents from the deleterious effects of light rays. Moreover, no
one may have a monopoly of any color. Not only beer, but most medicines, whether in liquid
or tablet form, are sold in amber-colored bottles. That the ABI bottle has a 320 ml. capacity
is not due to a desire to imitate SMC's bottle but because that bottle capacity is the
standard prescribed under Metrication Circular No. 778, dated 4 December 1979, of the
Department of Trade, Metric System Board. With regard to the white label of both beer
bottles, ABI explained that it used the color white for its label because white presents the
strongest contrast to the amber color of ABI's bottle; it is also the most economical to use
on labels, and the easiest to "bake" in the furnace. No one can have a monopoly of the color
amber for bottles, nor of white for labels, nor of the rectangular shape which is the usual
configuration of labels. Needless to say, the shape of the bottle and of the label is
unimportant. What is all important is the name of the product written on the label of the
bottle for that is how one beer may be distinguished from the others.
9. ID.; ID.; TRADEMARK ALLEGEDLY INFRINGED CONSIDERED AS A WHOLE AND NOT
AS DISSECTED; DOCTRINE ENUNCIATED IN DEL MONTE CORPORATION vs. COURT OF
APPEALS AND SUNSHINE SAUCE MANUFACTURING INDUSTRIES, 181 SCRA 410, 419,
NOT APPLICABLE TO CASE AT BAR. — Our decision in this case will not diminish our ruling
in "Del Monte Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing
Industries," 181 SCRA 410, 419, that: ". . . to determine whether a trademark has been
infringed, we must consider the mark as a whole and not as dissected. If the buyer is
deceived, it is attributable to the marks as a totality, not usually to any part of it." That ruling
may not apply to all kinds of products. The Court itself cautioned that in resolving cases of
infringement and unfair competition, the courts should "take into consideration several
factors which would affect is conclusion, to wit: the age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is bought for immediate
consumption and also the conditions under which it is usually purchased." (181 SCRA 410,
418-419). The Del Monte case involved catsup, a common household item which is bought
off the store shelves by housewives and house help who, if they are illiterate and cannot
identify the product by name or brand, would very likely identify it by mere recollection of its
appearance. Since the competitor, Sunshine Sauce Mfg. Industries, not only used recycled
Del Monte bottles for its catsup (despite the warning embossed on the bottles: "Del Monte
Corporation. Not to be refilled.") but also used labels which were "a colorable imitation" of
Del Monte's label, we held that there was infringement of Del Monte's trademark and unfair
competition by Sunshine. Our ruling in Del Monte would not apply to beer which is not
usually picked up from a store shelf but ordered by brand by the beer drinker himself from
the storekeeper or waiter in a pub or restaurant.
CRUZ, J., dissenting:
1. COMMERCIAL LAW; TRADEMARK LAW (REPUBLIC ACT NO. 166); INFRINGEMENT;
TOUCHSTONE IN DETERMINATION OF EXISTENCE THEREOF; TO DETERMINE WHETHER
TRADEMARK HAS BEEN INFRINGED, THE MARK IS CONSIDERED AS A WHOLE AND NOT
AS DISSECTED. — The question is not whether the two articles are distinguishable by their
labels when set side by side but whether the general confusion made by the article upon the
eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result
in his confounding it with the original. As observed in several cases, the general impression
of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving
the attention such purchasers usually give in buying that class of goods, is the touchstone. It
has been held that in making purchases, the consumer must depend upon his recollection of
the appearance of the product which he intends to purchase. The buyer having in mind the
mark/label of the respondent must rely upon his memory of the petitioner's mark. Unlike the
judge who has ample time to minutely examine the labels in question in the comfort of his
sala, the ordinary shopper does not enjoy the same opportunity. A number of courts have
held that to determine whether a trademark has been infringed, we must consider the mark
as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a
totality, not usually to any part of it. The court therefore should be guided by its first
impression, for a buyer acts quickly and is governed by a casual glance, the value of which
may be dissipated as soon as the court assumes to analyze carefully the respective features
of the mark.
 DECISION

GRIÑO-AQUINO, J : p

On September 15, 1988, 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. (San Miguel
Corporation vs. Asia Brewery Inc., Civ. Case No. 56390, RTC Branch 166, Pasig, Metro
Manila.)
On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge
Jesus O. Bersamira, dismissing SMC's complaint because ABI "has not committed
trademark infringement or unfair competition against" SMC (p. 189, Rollo). prcd

SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991,
the Court of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman
andponente, and Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members)
reversed the trial court. The dispositive part of the decision reads as follows:
"In the light of the foregoing analysis and under the plain language of the applicable
rule and principle on the matter, We find the defendant Asia Brewery Incorporated
GUILTY of infringement of trademark and unfair competition. The decision of the trial
court is hereby REVERSED, and a new judgment entered in favor of the plaintiff and
against the defendant as follows:
"(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are
hereby permanently enjoined and restrained from manufacturing, putting up, selling,
advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any
similar preparation, manufacture or beer in bottles and under labels substantially
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
employed for that purpose, or substantially identical with or like the bottles and labels
now employed by the defendant for that purpose, or in bottles or under labels which
are calculated to deceive purchasers and consumers into the belief that the beer is
the product of the plaintiff or which will enable others to substitute, sell or palm off
the said beer of the defendant as and for the beer of the plaintiff-complainant.

"(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and
pay the San Miguel Corporation double any and all the payments derived by
defendant from operations of its business and sale of goods bearing the mark 'Beer
Pale Pilsen' estimated at approximately Five Million Pesos (P5,000,000.00); to recall
all its products bearing the mark 'Beer Pale Pilsen' from its retailers and deliver these
as well as all labels, signs, prints, packages, wrappers, receptacles and
advertisements bearing the infringing mark and all plates, molds, materials and other
means of making the same to the Court authorized to execute this judgment for
destruction.
 "(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
(P2,000,000.00) as moral damages and Half a Million Pesos (P5,000,000.00) by way
of exemplary damages.
"(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
of P250,000.00 plus costs of this suit." (p. 90, Rollo.)
Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision,
was modified by the separate opinions of the Special Sixth Division 1 so that it should read
thus:
In the light of the foregoing analysis and under the plain language of the applicable
rule and principle on the matter, We find the defendant Asia Brewery
Incorporated GUILTY of infringement of trademark and unfair competition. The
decision of the trial court is hereby REVERSED, and a new judgment entered in favor
of the plaintiff and against the defendant as follows:
(1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are
hereby permanently enjoined and restrained from manufacturing, putting up, selling,
advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any
similar preparation, manufacture or beer in bottles and under labels substantially
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
employed for that purpose, or substantially identical with or like the bottles and labels
now employed by the defendant for that purpose, or in bottles or under labels which
are calculated to deceive purchasers and consumers into the belief that the beer is
the product of the plaintiff or which will enable others to substitute, sell or palm off
the said beer of the defendant as and for the beer of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products
bearing the mark Beer Pale Pilsen from its retailers and deliver these as well as all
labels, signs, prints, packages, wrappers, receptacles and advertisements bearing
the infringing mark and all plates, molds, materials and other means of making the
same to the Court authorized to execute this judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
(P2,000,000.00) as moral damages and Half a Million Pesos (P500,000.00) by way of
exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
of P250,000.00 plus costs of this suit.
In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules
of Court. The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel
Pale Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition
against the latter. It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65
SCRA 575) and as a general rule, the findings of the Court of Appeals upon factual questions
are conclusive and ought not to be disturbed by us. However, there are exceptions to this
general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and
conjectures;
(2) When the inference of the Court of Appeals from its findings of fact is manifestly
mistaken, absurd and impossible;
 (3) Where there is grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the appellate court, in making its findings, went beyond the issues of the
case, and the same are contrary to the admissions of both the appellant and the
appellee;
(6) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they are
based;
(8) When the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the absence of
evidence and are contradicted on record. (Reynolds Philippine Corporation vs. Court
of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156 SCRA
597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay vs. Sandiganbayan, 142
SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs. Court of Appeals, 198
SCRA 333, 336; also Apex Investment and Financing Corp. vs. IAC, 166 SCRA 458
[citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock
Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs.
CA, 133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order to arrive at the
correct findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191
SCRA 411, 420.) Where findings of the Court of Appeals and trial court are contrary to each
other, the Supreme Court may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA
222, 227.)
The present case is one of the exceptions because there is no concurrence between the trial
court and the Court of Appeals on the lone factual issue of whether ABI, by manufacturing
and selling its BEER PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a
white painted rectangular label has committed trademark infringement and unfair
competition against SMC.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36
Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law,
defines what constitutes infringement:
Sec. 22. Infringement, what constitutes. — Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to
the source or origin of such goods or services, or identity of such business; or
reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and
apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services, shall be liable to a civil action
by the registrant for any or all of the remedies herein provided. (Emphasis supplied.)
This definition implies that only registered trade marks, trade names and service marks are
protected against infringement or unauthorized use by another or others. The use of
someone else's registered trademark, trade name or service mark is unauthorized, hence,
actionable, if it is done "without the consent of the registrant." (Ibid.)
The registered trademark of SMC for its pale pilsen beer is:
"San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau
of Patents, Trademarks and Technology Transfer Trademark Certificate of
Registration No. 36103, dated 23 Oct. 1986." (p. 174, Rollo.)
As described by the trial court in its decision (Page 177, Rollo):
". . . a rectangular design [is] bordered by what appears to be minute grains arranged
in rows of three in which there appear in each corner hop designs. At the top is a
phrase written in small print 'Reg. Phil. Pat. Off.' and at the bottom 'Net Contents:
320 Ml.' The dominant feature is the phrase 'San Miguel' written horizontally at the
upper portion. Below are the words 'Pale Pilsen' written diagonally across the middle
of the rectangular design. In between is a coat of arms and the phrase 'Expertly
Brewed.' The 'S' in 'San' and the 'M' of 'Miguel,' 'P' of 'Pale' and 'Pilsen' are written
in Gothic letters with fine strokes of serifs, the kind that first appeared in the 1780s in
England and used for printing German as distinguished from Roman and Italic. Below
'Pale Pilsen' is the statement 'And Bottled by' (first line, 'San Miguel Brewery'
(second line), and 'Philippines' (third line)." (p. 177, Rollo; Italics supplied.)
On the other hand, ABI's trademark, as described by the trial court, consists of:
". . . a rectangular design bordered by what appear to be buds of flowers with leaves.
The dominant feature is 'Beer' written across the upper portion of the rectangular
design. The phrase 'Pale Pilsen' appears immediately below in smaller block letters.
To the left is a hop design and to the right, written in small prints, is the phrase 'Net
Contents 320 ml.' immediately below 'Pale Pilsen' is the statement written in three
lines 'Especially brewed and bottled by' (first line), 'Asia Brewery Incorporated'
(second line), and 'Philippines' (third line)." (p. 177, Rollo; Italics supplied.)
Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE
PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is "No."
Infringement is determined by the "test of dominancy" rather than by differences or
variations in the details of one trademark and of another. The rule was formulated in Co
Tiong Sa vs. Director of Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of
Patents, 100 Phil. 214, 216-217 (1956), thus:
"It has been consistently held that the question of infringement of a trademark is to
be determined by the test of dominancy. Similarity in size, form and color, while
relevant, is not conclusive. If the competing trademark contains the main or essential
or dominant features of another, and confusion and deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor it is necessary
that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co.
vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs.
Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of
trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
 Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . .)" (Emphasis
supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275), the test was similarity or
"resemblance between the two (trademarks) such as would be likely to cause the one mark
to be mistaken for the other . . . [But] this is not such similitude as amounts to identity."
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more
specific: the test is "similarity in the dominant features of the trademarks."
What are the dominant features of the competing trademarks before us?
There is hardly any dispute that the dominant feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at
the beginning and end of the letters "S" and "M" on an amber background across the upper
portion of the rectangular design.
On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE
PILSEN, with the word "Beer" written in large amber letters, larger than any of the letters
found in the SMC label.
The trial court perceptively observed that the word "BEER" does not appear in SMC's
trademark, just as the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there
is absolutely no similarity in the dominant features of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly
similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can
possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was
presented by SMC proving otherwise.
Besides the dissimilarity in their names, the following other dissimilarities in the trade dress
or appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along
a diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and
printed in slender block letters on a straight horizontal band. (See Exhibit "8-a".)
(3) The names of the manufacturers are prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas
BEER PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated,
Philippines."
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and
leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the
BEER PALE PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words
"San Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center,
surrounded by the words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at
P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who
pays only P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the
storekeeper or bartender.
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. (Webster's Third New International Dictionary of the
English Language, Unabridged. Edited by Philip Babcock Gove. Springfield, Mass.: G & C
Merriam Co., c) 1976, page 1716.) "Pilsen" is a "primarily geographically descriptive word,"
(Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-
registerable and not appropriable by any beer manufacturer. The Trademark Law provides:
"Sec. 4. . . . The owner of trade-mark, trade-name or service-mark used to
distinguish his goods, business or services from the goods, business or services of
others shall have the right to register the same [on the principal register], unless it:
xxx xxx xxx
"(e) Consists of a mark or trade-name which, when applied to or used in connection
with the goods, business or services of the applicant is merely descriptive or
deceptively misdescriptive of them, or when applied to or used in connection with the
goods, business or services of the applicant is primarily geographically descriptive or
deceptively misdescriptive of them, or is primarily merely a surname." (Emphasis
supplied.)
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, any more than such
descriptive words as "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes"
and "cooking oil" may be appropriated by any single manufacturer of these food products,
for no other reason than that he was the first to use them in his registered trademark. In
Masso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a
dealer in shoes cannot register "Leather Shoes" as his trademark because that would be
merely descriptive and it would be unjust to deprive other dealers in leather shoes of the
right to use the same words with reference to their merchandise. No one may appropriate
generic or descriptive words. They belong to the public domain (Ong Ai Gui vs. Director of
Patents, 96 Phil. 673, 676 [1955]):
"A word or a combination of words which is merely descriptive of an article of trade,
or of its composition, characteristics, or qualities, cannot be appropriated and
protected as a trademark to the exclusion of its use by others . . . inasmuch as all
 persons have an equal right to produce and vend similar articles, they also have the
right to describe them properly and to use any appropriate language or words for that
purpose, and no person can appropriate to himself exclusively any word or
expression, properly descriptive of the article, its qualities, ingredients or
characteristics, and thus limit other persons in the use of language appropriate to the
description of their manufactures, the right to the use of such language being
common to all. This rule excluding descriptive terms has also been held to apply to
trade-names. As to whether words employed fall within this prohibition, it is said that
the true test is not whether they are exhaustively descriptive of the article designated,
but whether in themselves, and as they are commonly used by those who understand
their meaning, they are reasonably indicative and descriptive of the thing intended. If
they are thus descriptive, and not arbitrary, they cannot be appropriated from general
use and become the exclusive property of anyone. (52 Am. Jur. 542-543.)
". . . Others may use the same or similar descriptive word in connection with their
own wares, provided they take proper steps to prevent the public being deceived.
(Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d] 598.)
". . . A descriptive word may be admittedly distinctive, especially if the user is the first
creator of the article. It will, however, be denied protection, not because it lacks
distinctiveness, but rather because others are equally entitled to its use. (2 Callman,
Unfair Competition and Trademarks, pp. 869-870.)" (Emphasis supplied.)
The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated,
has printed its name all over the bottle of its beer product: on the label, on the back of the
bottle, as well as on the bottle cap, disproves SMC's charge that ABI dishonestly and
fraudulently intends to palm off its BEER PALE PILSEN as SMC's product. In view of the
visible differences between the two products, the Court believes it is quite unlikely that a
customer of average intelligence would mistake a bottle of BEER PALE PILSEN for SAN
MIGUEL PALE PILSEN.
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-
colored steinie bottles of 320 ml. capacity and is also advertised in print, broadcast, and
television media, does not necessarily constitute unfair competition.
Unfair competition is 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. (Sec.
29, Republic Act No. 166, as amended.) The law further enumerates the more common ways
of committing unfair competition, thus:
"Sec. 29. . . .
"In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
"(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would 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, or who otherwise clothes the
goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose.
"(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or
"(c) Any person who shall make any false statement in the course of trade or who
shall commit any other act contrary to good faith of a nature calculated to discredit
the goods, business or services of another."

In this case, the question to be determined is whether ABI is using a name or mark for its
beer that has previously come to designate SMC's beer, or whether ABI is passing off its
BEER PALE PILSEN as SMC's SAN MIGUEL PALE PILSEN.
". . . The universal test question is whether the public is likely to be deceived. Nothing
less than conduct tending to pass off one man's goods or business as that of another
will constitute unfair competition. Actual or probable deception and confusion on the
part of the customers by reason of defendant's practices must always appear." (Shell
Co. of the Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil.
434, 439.)
The use by ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE
PILSEN bottle, is not unlawful. As pointed out by ABI's counsel, SMC did not invent but
merely borrowed the steinie bottle from abroad and it claims neither patent nor trademark
protection for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial and
the Efes Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court found
no infringement of SMC's bottle —
"The court agrees with defendant that there is no infringement of plaintiff's bottle,
firstly, because according to plaintiff's witness Deogracias Villadolid, it is a standard
type of bottle called steinie, and to witness Jose Antonio Garcia, it is not a San
Miguel Corporation design but a design originally developed in the United States by
the Glass Container Manufacturer's Institute and therefore lacks exclusivity.
Secondly, the shape was never registered as a trademark. Exhibit 'C' is not a
registration of a beer bottle design required under Rep. Act 165 but the registration of
the name and other marks of ownership stamped on containers as required by Rep.
Act 623. Thirdly, the neck of defendant's bottle is much larger and has a distinct
bulge in its uppermost part." (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the exclusive
property of any one beer manufacturer is well taken. SMC's being the first to use the steinie
bottle does not give SMC a vested right to use it to the exclusion of everyone else. Being of
functional or common use, and not the exclusive invention of any one, it is available to all
who might need to use it within the industry. Nobody can acquire any exclusive right to
market articles supplying simple human needs in containers or wrappers of the general form,
size and character commonly and immediately used in marketing such articles (Dy Buncio
vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
 ". . . protection against imitation should be properly confined to nonfunctional
features. Even if purely functional elements are slavishly copied, the resemblance will
not support an action for unfair competition, and the first user cannot claim
secondary meaning protection. Nor can the first user predicate his claim to protection
on the argument that his business was established in reliance on any such
unpatented nonfunctional feature, even 'at large expenditure of money.' (Callman
Unfair Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].)" (Petition for
Review, p. 28.)
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie
bottle which has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a
functional feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the
Philippines is contained and sold in amber-colored bottles because amber is the most
effective color in preventing transmission of light and provides the maximum protection to
beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38
F2d 885, a merchant cannot be enjoined from using a type or color of bottle where the same
has the useful purpose of protecting the contents from the deleterious effects of light rays.
Moreover, no one may have a monopoly of any color. Not only beer, but most medicines,
whether in liquid or tablet form, are sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle but
because that bottle capacity is the standard prescribed under Metrication Circular No. 778,
dated 4 December 1979, of the Department of Trade, Metric System Board.
With regard to the white label of both beer bottles, ABI explained that it used the color white
for its label because white presents the strongest contrast to the amber color of ABI's bottle;
it is also the most economical to use on labels, and the easiest to "bake" in the furnace (p.
16, TSN of September 20, 1988). No one can have a monopoly of the color amber for
bottles, nor of white for labels, nor of the rectangular shape which is the usual configuration
of labels. Needless to say, the shape of the bottle and of the label is unimportant. What is all
important is the name of the product written on the label of the bottle for that is how one
beer may be distinguished from the others. prLL

In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products
were both labelled as Formosan tea, both sold in 5-ounce packages made of ordinary
wrapping paper of conventional color, both with labels containing designs drawn in green ink
and Chinese characters written in red ink, one label showing a double-decked jar in the
center, the other, a flower pot, this court found that the resemblances between the designs
were not sufficient to mislead the ordinary intelligent buyer, hence, there was no unfair
competition. The Court held:
". . . In order that there may be deception of the buying public in the sense necessary
to constitute unfair competition, it is necessary to suppose a public accustomed to
buy, and therefore to some extent familiar with, the goods in question. The test of
fraudulent simulation is to be found in the likelihood of the deception of persons in
some measure acquainted with an established design and desirous of purchasing the
commodity with which that design has been associated. The test is not found in the
deception, or possibility of the deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent as between that
and the other. The simulation, in order to be objectionable, must be such as appears
 likely to mislead the ordinarily intelligent buyer who has a need to supply and is
familiar with the article that he seeks to purchase."
The main thrust of SMC's complaint is not infringement of its trademark, but unfair
competition arising from the allegedly "confusing similarity" in the general appearance or
trade dress of ABI's BEER PALE PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209,
Rollo).
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN
MIGUEL PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored
bottles with white rectangular labels.
However, when as in this case, the names of the competing products are clearly different
and their respective sources are prominently printed on the label and on other parts of the
bottle, mere similarity in the shape and size of the container and label, does not constitute
unfair competition. The steinie bottle is a standard bottle for beer and is universally used.
SMC did not invent it nor patent it. The fact that SMC's bottle is registered under R.A. No.
623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped or Marked
Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers) simply prohibits
manufacturers of other foodstuffs from the unauthorized use of SMC's bottles by refilling
these with their products. It was not uncommon then for products such as patis (fish sauce)
and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration
of SMC's beer bottles did not give SMC a patent on the steinie or on bottles of similar size,
shape or color.
Most containers are standardized because they are usually made by the same manufacturer.
Milk, whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of
the standard ketchup or vinegar bottle with its familiar elongated neck. Many other grocery
items such as coffee, mayonnaise, pickles and peanut butter are sold in standard glass jars.
The manufacturers of these foodstuffs have equal right to use these standard tins, bottles
and jars for their products. Only their respective labels distinguish them from each other.
Just as no milk producer may sue the others for unfair competition because they sell their
milk in the same size and shape of milk can which he uses, neither may SMC claim unfair
competition arising from the fact that ABI's BEER PALE PILSEN is sold, like SMC's SAN
MIGUEL PALE PILSEN in amber steinie bottles. prcd

The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed
off as SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of
beer generally order their beer by brand. As pointed out by ABI's counsel, in supermarkets
and tiendas, beer is ordered by brand, and the customer surrenders his empty replacement
bottles or pays a deposit to guarantee the return of the empties. If his empties are SAN
MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement. In sari-sari
stores, beer is also ordered from the tindera by brand. The same is true in restaurants, pubs
and beer gardens — beer is ordered from the waiters by brand. (Op. cit. page 50.)
Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic
beer market for the past hundred years, those who have been drinking no other beer but
SAN MIGUEL PALE PILSEN these many years certainly know their beer too well to be
deceived by a newcomer in the market. If they gravitate to ABI's cheaper beer, it will not be
because they are confused or deceived, but because they find the competing product to
their taste.

Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of
Appeals and Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that:
". . . to determine whether a trademark has been infringed, we must consider the
mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it."
That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving
cases of infringement and unfair competition, the courts should "take into consideration
several factors which would affect its conclusion, to wit: the age, training and education of
the usual purchaser, the nature and cost of the article, whether the article is bought for
immediate consumption and also the conditions under which it is usually purchased" (181
SCRA 410, 418-419).
The Del Monte case involved catsup, a common household item which is bought off the
store shelves by housewives and house help who, if they are illiterate and cannot identify the
product by name or brand, would very likely identify it by mere recollection of its
appearance. Since the competitor, Sunshine Sauce Mfg. Industries, not only used recycled
Del Monte bottles for its catsup (despite the warning embossed on the bottles: "Del Monte
Corporation. Not to be refilled.") but also used labels which were "a colorable imitation" of
Del Monte's label, we held that there was infringement of Del Monte's trademark and unfair
competition by Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked up from a store
shelf but ordered by brand by the beer drinker himself from the storekeeper or waiter in a
pub or restaurant.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by
ABI's mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a
bulging neck to differentiate it from SMC's bottle, and prints ABI's name in three (3) places
on said bottle (front, back and bottle cap) to prove that it has no intention to pass off its
"BEER" as "SAN MIGUEL."
There is no confusing similarity between the competing beers for the name of one is "SAN
MIGUEL" while the competitor is plain "BEER" and the points of dissimilarity between the
two outnumber their points of similarity.
Petition ABI has neither infringed SMC's trademark nor committed unfair competition with
the latter's SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly
competes with the latter in the open market, the competition is neither unfair nor fraudulent.
Hence, we must deny SMC's prayer to suppress it.
WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The
decision and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set
aside and that of the trial court is REINSTATED and AFFIRMED. Costs against the private
respondent.
SO ORDERED.
Narvasa, C . J ., Bidin, Regalado, Romero, Nocon, Bellosillo and Melo, JJ., concur.
Feliciano, J., no part. One party represented by my former firm.
Padilla, J., no part, in view of substantial interest in SMC.
||| (Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543, [July 5, 1993])

 MCDONALD’S CORPORATION and MCGEORGE FOOD INDUSTRIES,
INC., petitioners, vs. L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA
A. DY, RENE B. DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI
AYCARDO, and GRACE HUERTO, respondents.

DECISION

CARPIO, J :p

The Case
This is a petition for review 1 of the Decision dated 26 November 1999 of the Court of
Appeals 2 finding respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement
and unfair competition and ordering petitioners to pay respondents P1,900,000 in damages,
and of its Resolution dated 11 July 2000 denying reconsideration. The Court of Appeals’
Decision reversed the 5 September 1994 Decision 3 of the Regional Trial Court of Makati,
Branch 137, finding respondent L.C. Big Mak Burger, Inc. liable for trademark infringement
and unfair competition.
The Facts
Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation organized under
the laws of Delaware, United States. McDonald’s operates, by itself or through its
franchisees, a global chain of fast-food restaurants. McDonald’s 4 owns a family of
marks 5 including the “Big Mac” mark for its “double-decker hamburger
sandwich.” 6 McDonald’s registered this trademark with the United States Trademark
Registry on 16 October 1979. 7 Based on this Home Registration, McDonald’s applied for the
registration of the same mark in the Principal Register of the then Philippine Bureau of
Patents, Trademarks and Technology (“PBPTT”), now the Intellectual Property Office (“IPO”).
Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger
sandwiches in the Philippine market in September 1981. On 18 July 1985, the PBPTT
allowed registration of the “Big Mac” mark in the Principal Register based on its Home
Registration in the United States.
Like its other marks, McDonald’s displays the “Big Mac” mark in items 8 and
paraphernalia 9 in its restaurants, and in its outdoor and indoor signages. From 1982 to 1990,
McDonald’s spent P10.5 million in advertisement for “Big Mac” hamburger sandwiches
alone. 10
Petitioner McGeorge Food Industries (“petitioner McGeorge”), a domestic corporation,
is McDonald’s Philippine franchisee. 11
Respondent L.C. Big Mak Burger, Inc. (“respondent corporation”) is a domestic
corporation which operates fast-food outlets and snack vans in Metro Manila and nearby
provinces. 12 Respondent corporation’s menu includes hamburger sandwiches and other
food items. 13 Respondents Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus
Aycardo, Araceli Aycardo, and Grace Huerto (“private respondents”) are the incorporators,
stockholders and directors of respondent corporation. 14
On 21 October 1988, respondent corporation applied with the PBPTT for the
registration of the “Big Mak” mark for its hamburger sandwiches. McDonald’s opposed
respondent corporation’s application on the ground that “Big Mak” was a colorable imitation
of its registered “Big Mac” mark for the same food products. McDonald’s also informed
respondent Francis Dy (“respondent Dy”), the chairman of the Board of Directors of
respondent corporation, of its exclusive right to the “Big Mac” mark and requested him to
desist from using the “Big Mac” mark or any similar mark. ADaSET

Having received no reply from respondent Dy, petitioners on 6 June 1990 sued
respondents in the Regional Trial Court of Makati, Branch 137 (“RTC”), for trademark
infringement and unfair competition. In its Order of 11 July 1990, the RTC issued a
temporary restraining order (“TRO”) against respondents enjoining them from using the “Big
Mak” mark in the operation of their business in the National Capital Region. 15 On 16 August
1990, the RTC issued a writ of preliminary injunction replacing the TRO. 16
In their Answer, respondents admitted that they have been using the name “Big Mak
Burger” for their fast-food business. Respondents claimed, however, that McDonald’s does
not have an exclusive right to the “Big Mac” mark or to any other similar mark. Respondents
point out that the Isaiyas Group of Corporations (“Isaiyas Group”) registered the same mark
for hamburger sandwiches with the PBPTT on 31 March 1979. One Rodolfo Topacio
(“Topacio”) similarly registered the same mark on 24 June 1983, prior to McDonald’s
registration on 18 July 1985. Alternatively, respondents claimed that they are not liable for
trademark infringement or for unfair competition, as the “Big Mak” mark they sought to
register does not constitute a colorable imitation of the “Big Mac” mark. Respondents
asserted that they did not fraudulently pass off their hamburger sandwiches as those of
petitioners’ Big Mac hamburgers. 17 Respondents sought damages in their counterclaim.
In their Reply, petitioners denied respondents’ claim that McDonald’s is not the
exclusive owner of the “Big Mac” mark. Petitioners asserted that while the Isaiyas Group and
Topacio did register the “Big Mac” mark ahead of McDonald’s, the Isaiyas Group did so only
in the Supplemental Register of the PBPTT and such registration does not provide any
protection. McDonald’s disclosed that it had acquired Topacio’s rights to his registration in a
Deed of Assignment dated 18 May 1981. 18
The Trial Court’s Ruling
On 5 September 1994, the RTC rendered judgment (“RTC Decision”) finding
respondent corporation liable for trademark infringement and unfair competition. However,
the RTC dismissed the complaint against private respondents and the counterclaim against
petitioners for lack of merit and insufficiency of evidence. The RTC held:
Undeniably, the mark “B[ig] M[ac]” is a registered trademark for plaintiff
McDonald’s, and as such, it is entitled [to] protection against infringement.
xxx xxx xxx
There exist some distinctions between the names “B[ig] M[ac]” and “B[ig]
M[ak]” as appearing in the respective signages, wrappers and containers of the food
products of the parties. But infringement goes beyond the physical features of the
questioned name and the original name. There are still other factors to be
considered.
xxx xxx xxx
Significantly, the contending parties are both in the business of fast-food
chains and restaurants. An average person who is hungry and wants to eat a
hamburger sandwich may not be discriminating enough to look for a McDonald’s
restaurant and buy a “B[ig] M[ac]” hamburger. Once he sees a stall selling hamburger
sandwich, in all likelihood, he will dip into his pocket and order a “B[ig] M[ak]”
hamburger sandwich. Plaintiff McDonald’s fast-food chain has attained wide
popularity and acceptance by the consuming public so much so that its air-
conditioned food outlets and restaurants will perhaps not be mistaken by many to be
the same as defendant corporation’s mobile snack vans located along busy streets
or highways. But the thing is that what is being sold by both contending parties is a
food item — a hamburger sandwich which is for immediate consumption, so that a
buyer may easily be confused or deceived into thinking that the “B[ig] M[ak]”
hamburger sandwich he bought is a food-product of plaintiff McDonald’s, or a
subsidiary or allied outlet thereof. Surely, defendant corporation has its own secret
ingredients to make its hamburger sandwiches as palatable and as tasty as the other
brands in the market, considering the keen competition among mushrooming
hamburger stands and multinational fast-food chains and restaurants. Hence, the
trademark “B[ig] M[ac]” has been infringed by defendant corporation when it used the
name “B[ig] M[ak]” in its signages, wrappers, and containers in connection with its
food business . . .
Did the same acts of defendants in using the name “B[ig] M[ak]” as a
trademark or tradename in their signages, or in causing the name “B[ig] M[ak]” to be
printed on the wrappers and containers of their food products also constitute an act
of unfair competition under Section 29 of the Trademark Law?
The answer is in the affirmative . . .
The . . . provision of the law concerning unfair competition is broader and more
inclusive than the law concerning the infringement of trademark, which is of more
limited range, but within its narrower range recognizes a more exclusive right derived
by the adoption and registration of the trademark by the person whose goods or
services are first associated therewith. . . . Notwithstanding the distinction between
an action for trademark infringement and an action for unfair competition, however,
the law extends substantially the same relief to the injured party for both cases. (See
Sections 23 and 29 of Republic Act No. 166)
Any conduct may be said to constitute unfair competition if the effect is to
pass off on the public the goods of one man as the goods of another. The choice of
“B[ig] M[ak]” as tradename by defendant corporation is not merely for sentimental
reasons but was clearly made to take advantage of the reputation, popularity and the
established goodwill of plaintiff McDonald’s. For, as stated in Section 29, 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 as to the goods
themselves or in the wrapping of the packages in which they are contained, or the
devices or words thereon, or in any other feature of their appearance, which would
likely influence purchasers to believe that the goods offered are those of a
 manufacturer or dealer other than the actual manufacturer or dealer. Thus, plaintiffs
have established their valid cause of action against the defendants for trademark
infringement and unfair competition and for damages. 19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs McDonald’s
Corporation and McGeorge Food Industries, Inc. and against defendant L.C. Big Mak
Burger, Inc., as follows:

1. The writ of preliminary injunction issued in this case on [16 August 1990] is
made permanent;
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual
damages in the amount of P400,000.00, exemplary damages in the amount of
P100,000.00, and attorney’s fees and expenses of litigation in the amount of
P100,000.00;
3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy,
William B. Dy, Jesus Aycardo, Araceli Aycardo and Grace Huerto, as well as all
counter-claims, are dismissed for lack of merit as well as for insufficiency of
evidence. 20
Respondents appealed to the Court of Appeals.
The Ruling of the Court of Appeals
On 26 November 1999, the Court of Appeals rendered judgment (“Court of Appeals’
Decision”) reversing the RTC Decision and ordering McDonald’s to pay respondents
P1,600,000 as actual and compensatory damages and P300,000 as moral damages. The
Court of Appeals held:
Plaintiffs-appellees in the instant case would like to impress on this Court that
the use of defendants-appellants of its corporate name – the whole “L.C. B[ig] M[ak]
B[urger], I[nc].” which appears on their food packages, signages and advertisements
is an infringement of their trademark “B[ig] M[ac]” which they use to identify [their]
double decker sandwich, sold in a Styrofoam box packaging material with the
McDonald’s logo of umbrella “M” stamped thereon, together with the printed mark in
red bl[o]ck capital letters, the words being separated by a single space. Specifically,
plaintiffs-appellees argue that defendants-appellants’ use of their corporate name is
a colorable imitation of their trademark “Big Mac”. DHACES

xxx xxx xxx

To Our mind, however, this Court is fully convinced that no colorable imitation
exists. As the definition dictates, it is not sufficient that a similarity exists in both
names, but that more importantly, the over-all presentation, or in their essential,
substantive and distinctive parts is such as would likely MISLEAD or CONFUSE
persons in the ordinary course of purchasing the genuine article. A careful
comparison of the way the trademark “B[ig] M[ac]” is being used by plaintiffs-
appellees and corporate name L.C. Big Mak Burger, Inc. by defendants-appellants,
would readily reveal that no confusion could take place, or that the ordinary
purchasers would be misled by it. As pointed out by defendants-appellants, the
plaintiffs-appellees’ trademark is used to designate only one product, a double
decker sandwich sold in a Styrofoam box with the “McDonalds” logo. On the other
hand, what the defendants-appellants corporation is using is not a trademark for its
food product but a business or corporate name. They use the business name “L.C.
Big Mak Burger, Inc.” in their restaurant business which serves diversified food items
such as siopao, noodles, pizza, and sandwiches such as hotdog, ham, fish burger
and hamburger. Secondly, defendants-appellants’ corporate or business name
appearing in the food packages and signages are written in silhouette red-orange
letters with the “b” and “m” in upper case letters. Above the words “Big Mak” are the
upper case letter “L.C.”. Below the words “Big Mak” are the words “Burger, Inc.”
spelled out in upper case letters. Furthermore, said corporate or business name
appearing in such food packages and signages is always accompanied by the
company mascot, a young chubby boy named Maky who wears a red T-shirt with the
upper case “m” appearing therein and a blue lower garment. Finally, the defendants-
appellants’ food packages are made of plastic material.
xxx xxx xxx
. . . [I]t is readily apparent to the naked eye that there appears a vast difference
in the appearance of the product and the manner that the tradename “Big Mak” is
being used and presented to the public. As earlier noted, there are glaring
dissimilarities between plaintiffs-appellees’ trademark and defendants-appellants’
corporate name. Plaintiffs-appellees’ product carrying the trademark “B[ig] M[ac]” is
a double decker sandwich (depicted in the tray mat containing photographs of the
various food products . . . sold in a Styrofoam box with the “McDonald’s” logo and
trademark in red, bl[o]ck capital letters printed thereon . . . at a price which is more
expensive than the defendants-appellants’ comparable food products. In order to
buy a “Big Mac”, a customer needs to visit an air-conditioned “McDonald’s”
restaurant usually located in a nearby commercial center, advertised and identified by
its logo — the umbrella “M”, and its mascot — “Ronald McDonald”. A typical
McDonald’s restaurant boasts of a playground for kids, a second floor to
accommodate additional customers, a drive-thru to allow customers with cars to
make orders without alighting from their vehicles, the interiors of the building are
well-lighted, distinctly decorated and painted with pastel colors . . . . In buying a
“B[ig] M[ac]”, it is necessary to specify it by its trademark. Thus, a customer needs to
look for a “McDonald’s” and enter it first before he can find a hamburger sandwich
which carry the mark “Big Mac”. On the other hand, defendants-appellants sell their
goods through snack vans . . .
Anent the allegation that defendants-appellants are guilty of unfair
competition, We likewise find the same untenable.
Unfair competition is defined 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 service, for those of
another who has already established good will for his similar good, business or
services, or any acts calculated to produce the same result” (Sec. 29, Rep. Act No.
166, as amended).
To constitute unfair competition therefore it must necessarily follow that there
was malice and that the entity concerned was in bad faith.
 In the case at bar, We find no sufficient evidence adduced by plaintiffs-
appellees that defendants-appellants deliberately tried to pass off the goods
manufactured by them for those of plaintiffs-appellees. The mere suspected similarity
in the sound of the defendants-appellants’ corporate name with the plaintiffs-
appellees’ trademark is not sufficient evidence to conclude unfair competition.
Defendants-appellants explained that the name “M[ak]” in their corporate name was
derived from both the first names of the mother and father of defendant Francis Dy,
whose names are Maxima and Kimsoy. With this explanation, it is up to the plaintiffs-
appellees to prove bad faith on the part of defendants-appellants. It is a settled rule
that the law always presumes good faith such that any person who seeks to be
awarded damages due to acts of another has the burden of proving that the latter
acted in bad faith or with ill motive. 21
Petitioners sought reconsideration of the Court of Appeals’ Decision but the appellate
court denied their motion in its Resolution of 11 July 2000.
Hence, this petition for review.
Petitioners raise the following grounds for their petition:
I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS’
CORPORATE NAME “L.C. BIG MAK BURGER, INC.” IS NOT A COLORABLE
IMITATION OF THE MCDONALD’S TRADEMARK “BIG MAC”, SUCH
COLORABLE IMITATION BEING AN ELEMENT OF TRADEMARK
INFRINGEMENT.
A. Respondents use the words “Big Mak” as trademark for their products and
not merely as their business or corporate name.
B. As a trademark, respondents’ “Big Mak” is undeniably and unquestionably
similar to petitioners’ “Big Mac” trademark based on the dominancy
test and the idem sonans test resulting inexorably in confusion on the
part of the consuming public.
II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE INHERENT
SIMILARITY BETWEEN THE MARK “BIG MAK” AND THE WORD MARK “BIG
MAC” AS AN INDICATION OF RESPONDENTS’ INTENT TO DECEIVE OR
DEFRAUD FOR PURPOSES OF ESTABLISHING UNFAIR COMPETITION. 22
Petitioners pray that we set aside the Court of Appeals’ Decision and reinstate the RTC
Decision.
In their Comment to the petition, respondents question the propriety of this petition as
it allegedly raises only questions of fact. On the merits, respondents contend that the Court
of Appeals committed no reversible error in finding them not liable for trademark
infringement and unfair competition and in ordering petitioners to pay damages.
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are proper for a petition
for review under Rule 45. ADEaHT
 2. On the merits, (a) whether respondents used the words “Big Mak” not only as part
of the corporate name “L.C. Big Mak Burger, Inc.” but also as a trademark for their
hamburger products, and (b) whether respondent corporation is liable for trademark
infringement and unfair competition. 23
The Court’s Ruling
The petition has merit.
On Whether the Questions Raised in the Petition are
Proper for a Petition for Review
A party intending to appeal from a judgment of the Court of Appeals may file with this
Court a petition for review under Section 1 of Rule 45 (“Section 1”) 24 raising only questions
of law. A question of law exists when the doubt or difference arises on what the law is on a
certain state of facts. There is a question of fact when the doubt or difference arises on the
truth or falsity of the alleged facts. 25
Here, petitioners raise questions of fact and law in assailing the Court of Appeals’
findings on respondent corporation’s non-liability for trademark infringement and unfair
competition. Ordinarily, the Court can deny due course to such a petition. In view, however,
of the contradictory findings of fact of the RTC and Court of Appeals, the Court opts to
accept the petition, this being one of the recognized exceptions to Section 1. 26 We took a
similar course of action in Asia Brewery, Inc. v. Court of Appeals 27 which also involved a suit
for trademark infringement and unfair competition in which the trial court and the Court of
Appeals arrived at conflicting findings.

On the Manner Respondents Used

“Big Mak” in their Business
Petitioners contend that the Court of Appeals erred in ruling that the corporate name
“L.C. Big Mak Burger, Inc.” appears in the packaging for respondents’ hamburger products
and not the words “Big Mak” only.
The contention has merit.
The evidence presented during the hearings on petitioners’ motion for the issuance of
a writ of preliminary injunction shows that the plastic wrappings and plastic bags used by
respondents for their hamburger sandwiches bore the words “Big Mak.” The other
descriptive words “burger” and “100% pure beef” were set in smaller type, along with the
locations of branches. 28 Respondents’ cash invoices simply refer to their hamburger
sandwiches as “Big Mak.” 29 It is respondents’ snack vans that carry the words “L.C. Big
Mak Burger, Inc.” 30
It was only during the trial that respondents presented in evidence the plastic
wrappers and bags for their hamburger sandwiches relied on by the Court of
Appeals. 31Respondents’ plastic wrappers and bags were identical with those petitioners
presented during the hearings for the injunctive writ except that the letters “L.C.” and the
words “Burger, Inc.” in respondents’ evidence were added above and below the words “Big
Mak,” respectively. Since petitioners’ complaint was based on facts existing before and
during the hearings on the injunctive writ, the facts established during those hearings are the
proper factual bases for the disposition of the issues raised in this petition.
On the Issue of Trademark Infringement
Section 22 (“Section 22) of Republic Act No. 166, as amended (“RA 166”), the law
applicable to this case, 32 defines trademark infringement as follows:
Infringement, what constitutes. — Any person who [1] shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to
the source or origin of such goods or services, or identity of such business; or [2]
reproduce, counterfeit, copy, or colorably imitate any such mark or trade-name and
apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services, shall be liable to a civil action
by the registrant for any or all of the remedies herein provided. 33
Petitioners base their cause of action under the first part of Section 22, i.e. respondents
allegedly used, without petitioners’ consent, a colorable imitation of the “Big Mac” mark
in advertising and selling respondents’ hamburger sandwiches. This likely caused
confusion in the mind of the purchasing public on the source of the hamburgers or the
identity of the business.
To establish trademark infringement, the following elements must be shown: (1) the
validity of plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use of the mark
or its colorable imitation by the alleged infringer results in “likelihood of confusion.” 34 Of
these, it is the element of likelihood of confusion that is the gravamen of trademark
infringement. 35
On the Validity of the “Big Mac ”Mark
and McDonald’s Ownership of such Mark
A mark is valid if it is “distinctive” and thus not barred from registration under Section
4 36 of RA 166 (“Section 4”). However, once registered, not only the mark’s validity but also
the registrant’s ownership of the mark is prima facie presumed. 37
Respondents contend that of the two words in the “Big Mac” mark, it is only the word
“Mac” that is valid because the word “Big” is generic and descriptive (proscribed under
Section 4[e]), and thus “incapable of exclusive appropriation.” 38
The contention has no merit. The “Big Mac” mark, which should be treated in its
entirety and not dissected word for word, 39 is neither generic nor descriptive. Generic marks
are commonly used as the name or description of a kind of goods, 40 such as “Lite” for
beer 41 or “Chocolate Fudge” for chocolate soda drink. 42 Descriptive marks, on the other
hand, convey the characteristics, functions, qualities or ingredients of a product to one who
has never seen it or does not know it exists, 43 such as “Arthriticare” for arthritis
medication. 44On the contrary, “Big Mac” falls under the class of fanciful or arbitrary marks
as it bears no logical relation to the actual characteristics of the product it represents. 45 As
such, it is highly distinctive and thus valid. Significantly, the trademark “Little Debbie” for
snack cakes was found arbitrary or fanciful. 46
The Court also finds that petitioners have duly established McDonald’s exclusive
ownership of the “Big Mac” mark. Although Topacio and the Isaiyas Group registered the
“Big Mac” mark ahead of McDonald’s, Topacio, as petitioners disclosed, Topacio had
already assigned his rights to McDonald’s. The Isaiyas Group, on the other hand, registered
its trademark only in the Supplemental Register. A mark which is not registered in the
Principal Register, and thus not distinctive, has no real protection. 47 Indeed, we have held
that registration in the Supplemental Register is not even a prima facie evidence of the
validity of the registrant’s exclusive right to use the mark on the goods specified in the
certificate. 48
On Types of Confusion
Section 22 covers two types of confusion arising from the use of similar or colorable
imitation marks, namely, confusion of goods (product confusion) and confusion of business
(source or origin confusion). In Sterling Products International, Incorporated v. Farbenfabriken
Bayer Aktiengesellschaft, et al., 49 the Court distinguished these two types of confusion, thus:
[Rudolf] Callman notes two types of confusion. The first is the confusion of
goods “in which event the ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was purchasing the other.” . . . The other is
the confusion of business: “Here though the goods of the parties are different, the
defendant’s product is such as might reasonably be assumed to originate with the
plaintiff, and the public would then be deceived either into that belief or into the belief
that there is some connection between the plaintiff and defendant which, in fact,
does not exist.”
Under Act No. 666, 50 the first trademark law, infringement was limited to confusion of
goods only, when the infringing mark is used on “goods of a similar kind.” 51 Thus, no
relief was afforded to the party whose registered mark or its colorable imitation is used on
different although related goods. To remedy this situation, Congress enacted RA 166 on
20 June 1947. In defining trademark infringement, Section 22 of RA 166 deleted the
requirement in question and expanded its scope to include such use of the mark or its
colorable imitation that is likely to result in confusion on “the source or origin of such
goods or services, or identity of such business.” 52 Thus, while there is confusion of
goods when the products are competing, confusion of business exists when the products
are non-competing but related enough to produce confusion of affiliation. 53
On Whether Confusion of Goods and
Confusion of Business are Applicable
Petitioners claim that respondents’ use of the “Big Mak” mark on respondents’
hamburgers results in confusion of goods, particularly with respect to petitioners’
hamburgers labeled “Big Mac.” Thus, petitioners alleged in their complaint: IDTcHa

1.15. Defendants have unduly prejudiced and clearly infringed upon the
property rights of plaintiffs in the McDonald’s Marks, particularly the mark “B[ig]
M[ac]”. Defendants’ unauthorized acts are likely, and calculated, to confuse, mislead
or deceive the public into believing that the products and services offered by
 defendant Big Mak Burger, and the business it is engaged in, are approved and
sponsored by, or affiliated with, plaintiffs. 54 (Emphasis supplied)
Since respondents used the “Big Mak” mark on the same goods, i.e. hamburger
sandwiches, that petitioners’ “Big Mac” mark is used, trademark infringement through
confusion of goods is a proper issue in this case.
Petitioners also claim that respondents’ use of the “Big Mak” mark in the sale of
hamburgers, the same business that petitioners are engaged in, results in confusion of
business. Petitioners alleged in their complaint:
1.10. For some period of time, and without the consent of plaintiff McDonald’s
nor its licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs’
exclusive right to use and/or appropriate the McDonald’s marks, defendant Big Mak
Burger acting through individual defendants, has been operating “Big Mak Burger”, a
fast food restaurant business dealing in the sale of hamburger and cheeseburger
sandwiches, french fries and other food products, and has caused to be printed on
the wrapper of defendant’s food products and incorporated in its signages the name
“Big Mak Burger”, which is confusingly similar to and/or is a colorable imitation of the
plaintiff McDonald’s mark “B[ig] M[ac]”, . . . Defendant Big Mak Burger has thus
unjustly created the impression that its business is approved and sponsored by, or
affiliated with, plaintiffs . . .
2.2 As a consequence of the acts committed by defendants, which unduly
prejudice and infringe upon the property rights of plaintiffs McDonald’s and
McGeorge as the real owner and rightful proprietor, and the licensee/franchisee,
respectively, of the McDonald’s marks, and which are likely to have caused confusion
or deceived the public as to the true source, sponsorship or affiliation of defendants’
food products and restaurant business, plaintiffs have suffered and continue to suffer
actual damages in the form of injury to their business reputation and goodwill, and of
the dilution of the distinctive quality of the McDonald’s marks, in particular, the mark
“B[ig] M[ac]”. 55 (Emphasis supplied)

Respondents admit that their business includes selling hamburger sandwiches, the same
food product that petitioners sell using the “Big Mac” mark. Thus, trademark infringement
through confusion of business is also a proper issue in this case.
Respondents assert that their “Big Mak” hamburgers cater mainly to the low-income
group while petitioners’ “Big Mac” hamburgers cater to the middle and upper income
groups. Even if this is true, the likelihood of confusion of business remains, since the low-
income group might be led to believe that the “Big Mak” hamburgers are the low-end
hamburgers marketed by petitioners. After all, petitioners have the exclusive right to use the
“Big Mac” mark. On the other hand, respondents would benefit by associating their low-end
hamburgers, through the use of the “Big Mak” mark, with petitioners’ high-end “Big Mac”
hamburgers, leading to likelihood of confusion in the identity of business.
Respondents further claim that petitioners use the “Big Mac” mark only on petitioners’
double-decker hamburgers, while respondents use the “Big Mak” mark on hamburgers and
other products like siopao, noodles and pizza. Respondents also point out that petitioners
sell their Big Mac double-deckers in a styrofoam box with the “McDonald’s” logo and
trademark in red, block letters at a price more expensive than the hamburgers of
respondents. In contrast, respondents sell their Big Mak hamburgers in plastic wrappers and
plastic bags. Respondents further point out that petitioners’ restaurants are air-conditioned
buildings with drive-thru service, compared to respondents’ mobile vans.
These and other factors respondents cite cannot negate the undisputed fact that
respondents use their “Big Mak” mark on hamburgers, the same food product that
petitioners’ sell with the use of their registered mark “Big Mac.” Whether a hamburger is
single, double or triple-decker, and whether wrapped in plastic or styrofoam, it remains the
same hamburger food product. Even respondents’ use of the “Big Mak” mark on non-
hamburger food products cannot excuse their infringement of petitioners’ registered mark,
otherwise registered marks will lose their protection under the law.
The registered trademark owner may use his mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The Court has recognized that the registered
trademark owner enjoys protection in product and market areas that are the normal potential
expansion of his business. Thus, the Court has declared:
Modern law recognizes that the protection to which the owner of a trademark
is entitled is not limited to guarding his goods or business from actual market
competition with identical or similar products of the parties, but extends to all cases
in which the use by a junior appropriator of a trade-mark or trade-name is likely to
lead to a confusion of source, as where prospective purchasers would be misled into
thinking that the complaining party has extended his business into the field (see 148
ALR 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the
infringer; or when it forestalls the normal potential expansion of his business (v. 148
ALR, 77, 84; 52 Am. Jur. 576, 577). 56(Emphasis supplied)
On Whether Respondents’ Use of the “Big Mak”
Mark Results in Likelihood of Confusion
In determining likelihood of confusion, jurisprudence has developed two tests, the
dominancy test and the holistic test. 57 The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might cause confusion. In contrast, the
holistic test requires the court to consider the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity.
The Court of Appeals, in finding that there is no likelihood of confusion that could arise
in the use of respondents’ “Big Mak” mark on hamburgers, relied on the holistic test. Thus,
the Court of Appeals ruled that “it is not sufficient that a similarity exists in both name(s), but
that more importantly, the overall presentation, or in their essential, substantive and
distinctive parts is such as would likely MISLEAD or CONFUSE persons in the ordinary
course of purchasing the genuine article.” The holistic test considers the two marks in their
entirety, as they appear on the goods with their labels and packaging. It is not enough to
consider their words and compare the spelling and pronunciation of the words. 58
Respondents now vigorously argue that the Court of Appeals’ application of the
holistic test to this case is correct and in accord with prevailing jurisprudence.
 This Court, however, has relied on the dominancy test rather than the holistic test. The
dominancy test considers the dominant features in the competing marks in determining
whether they are confusingly similar. Under the dominancy test, courts give greater weight to
the similarity of the appearance of the product arising from the adoption of the dominant
features of the registered mark, disregarding minor differences. 59 Courts will consider more
the aural and visual impressions created by the marks in the public mind, giving little weight
to factors like prices, quality, sales outlets and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, 60 the Court ruled:
. . . It has been consistently held that the question of infringement of a
trademark is to be determined by the test of dominancy. Similarity in size, form and
color, while relevant, is not conclusive. If the competing trademark contains the main
or essential or dominant features of another, and confusion and deception is likely to
result, infringement takes place. Duplication or imitation is not necessary; nor is it
necessary that the infringing label should suggest an effort to imitate. (G. Heilman
Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead
Co. vs. Pflugh (CC) 180 Fed. 579). The question at issue in cases of infringement of
trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . .) (Emphasis
supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director of Patents, 61 Phil. Nut
Industry, Inc. v. Standard Brands Inc., 62 Converse Rubber Corporation v. Universal Rubber
Products, Inc., 63 and Asia Brewery, Inc. v. Court of Appeals. 64 In the 2001 case of Societe
Des Produits Nestlé, S.A. v. Court of Appeals, 65 the Court explicitly rejected the holistic test
in this wise:
[T]he totality or holistic test is contrary to the elementary postulate of the law
on trademarks and unfair competition that confusing similarity is to be determined on
the basis of visual, aural, connotative comparisons and overall
impressions engendered by the marks in controversy as they are encountered in the
realities of the marketplace. (Emphasis supplied)
The test of dominancy is now explicitly incorporated into law in Section 155.1 of
the Intellectual Property Code which defines infringement as the “colorable imitation of a
registered mark . . . or a dominant feature thereof.”
Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak”
mark results in likelihood of confusion. First, “Big Mak” sounds exactly the same as “Big
Mac.” Second, the first word in “Big Mak” is exactly the same as the first word in “Big Mac.”
Third, the first two letters in “Mak” are the same as the first two letters in “Mac.” Fourth, the
last letter in “Mak” while a “k” sounds the same as “c” when the word “Mak” is pronounced.
Fifth, in Filipino, the letter “k” replaces “c” in spelling, thus “Caloocan” is spelled
“Kalookan.”
In short, aurally the two marks are the same, with the first word of both marks
phonetically the same, and the second word of both marks also phonetically the same.
Visually, the two marks have both two words and six letters, with the first word of both
marks having the same letters and the second word having the same first two letters. In
spelling, considering the Filipino language, even the last letters of both marks are the same.
Clearly, respondents have adopted in “Big Mak” not only the dominant but also almost
all the features of “Big Mac.” Applied to the same food product of hamburgers, the two
marks will likely result in confusion in the public mind.
The Court has taken into account the aural effects of the words and letters contained
in the marks in determining the issue of confusing similarity. Thus, in Marvex Commercial
Co., Inc. v. Petra Hawpia & Co., et al., 66 the Court held: aAHTDS

The following random list of confusingly similar sounds in the matter of

trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will
reinforce our view that “SALONPAS” and “LIONPAS” are confusingly similar in
sound: “Gold Dust” and “Gold Drop”; “Jantzen” and “Jass-Sea”; “Silver Flash” and
“Supper Flash”; “Cascarete” and “Celborite”; “Celluloid” and “Cellonite”;
“Chartreuse” and “Charseurs”; “Cutex” and “Cuticlean”; “Hebe” and “Meje”; “Kotex”
and “Femetex”; “Zuso” and “Hoo Hoo”. Leon Amdur, in his book “Trade-Mark Law
and Practice”, pp. 419–421, cities, as coming within the purview of the idem
sonans rule, “Yusea” and “U-C-A”, “Steinway Pianos” and “Steinberg Pianos”, and
“Seven-Up” and “Lemon-Up”. In Co Tiong vs. Director of Patents, this Court
unequivocally said that “Celdura” and “Cordura” are confusingly similar in sound; this
Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the name “Lusolin” is an
infringement of the trademark “Sapolin”, as the sound of the two names is almost the
same. (Emphasis supplied)
Certainly, “Big Mac” and “Big Mak” for hamburgers create even greater confusion, not
only aurally but also visually.

Indeed, a person cannot distinguish “Big Mac” from “Big Mak” by their sound. When
one hears a “Big Mac” or “Big Mak” hamburger advertisement over the radio, one would not
know whether the “Mac” or “Mak” ends with a “c” or a “k.”
Petitioners’ aggressive promotion of the “Big Mac” mark, as borne by their
advertisement expenses, has built goodwill and reputation for such mark making it one of
the easily recognizable marks in the market today. This increases the likelihood that
consumers will mistakenly associate petitioners’ hamburgers and business with those of
respondents’.
Respondents’ inability to explain sufficiently how and why they came to choose “Big
Mak” for their hamburger sandwiches indicates their intent to imitate petitioners’ “Big Mac”
mark. Contrary to the Court of Appeals’ finding, respondents’ claim that their “Big Mak”
mark was inspired by the first names of respondent Dy’s mother (Maxima) and father
(Kimsoy) is not credible. As petitioners well noted:
[R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at a
more creative choice for a corporate name by using the names of his parents,
especially since he was allegedly driven by sentimental reasons. For one, he could
have put his father’s name ahead of his mother’s, as is usually done in this patriarchal
society, and derived letters from said names in that order. Or, he could have taken an
 equal number of letters (i.e., two) from each name, as is the more usual thing done.
Surely, the more plausible reason behind Respondents’ choice of the word “M[ak]”,
especially when taken in conjunction with the word “B[ig]”, was their intent to take
advantage of Petitioners’ . . . “B[ig] M[ac]” trademark, with their alleged sentiment-
focused “explanation” merely thought of as a convenient, albeit unavailing, excuse or
defense for such an unfair choice of name. 67
Absent proof that respondents’ adoption of the “Big Mak” mark was due to honest
mistake or was fortuitous, 68 the inescapable conclusion is that respondents adopted the
“Big Mak” mark to “ride on the coattails” of the more established “Big Mac” mark. 69 This
saves respondents much of the expense in advertising to create market recognition of their
mark and hamburgers. 70
Thus, we hold that confusion is likely to result in the public mind. We sustain
petitioners’ claim of trademark infringement.
On the Lack of Proof of
Actual Confusion
Petitioners’ failure to present proof of actual confusion does not negate their claim of
trademark infringement. As noted in American Wire & Cable Co. v. Director of
Patents, 71Section 22 requires the less stringent standard of “likelihood of confusion” only.
While proof of actual confusion is the best evidence of infringement, its absence is
inconsequential. 72
On the Issue of Unfair Competition
Section 29 (“Section 29”) 73 of RA 166 defines unfair competition, thus:
xxx xxx xxx
Any person who will employ deception or any other means contrary to good
faith by which he shall pass off the goods manufactured by him or in which he deals,
or his business, or services for those of the one having established such goodwill, or
who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which they are contained, or the
devices or words thereon, or in any 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, or who otherwise clothes the
goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or
 (c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of another. (Emphasis supplied)
The essential elements of an action for unfair competition are (1) confusing similarity in
the general appearance of the goods, and (2) intent to deceive the public and defraud a
competitor. 74 The confusing similarity may or may not result from similarity in the marks, but
may result from other external factors in the packaging or presentation of the goods. The
intent to deceive and defraud may be inferred from the similarity of the appearance of the
goods as offered for sale to the public. 75 Actual fraudulent intent need not be shown. 76
Unfair competition is broader than trademark infringement and includes passing off
goods with or without trademark infringement. Trademark infringement is a form of unfair
competition. 77 Trademark infringement constitutes unfair competition when there is not
merely likelihood of confusion, but also actual or probable deception on the public because
of the general appearance of the goods. There can be trademark infringement without unfair
competition as when the infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from being deceived that the goods
originate from the trademark owner. 78
To support their claim of unfair competition, petitioners allege that respondents
fraudulently passed off their hamburgers as “Big Mac” hamburgers. Petitioners add that
respondents’ fraudulent intent can be inferred from the similarity of the marks in question. 79
Passing off (or palming off) takes place where the defendant, by imitative devices on
the general appearance of the goods, misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his competitors. 80 Thus, the
defendant gives his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor.
The RTC described the respective marks and the goods of petitioners and
respondents in this wise:
The mark “B[ig] M[ac]” is used by plaintiff McDonald’s to identify its double
decker hamburger sandwich. The packaging material is a styrofoam box with the
McDonald’s logo and trademark in red with block capital letters printed on it. All
letters of the “B[ig] M[ac]” mark are also in red and block capital letters. On the other
hand, defendants’ “B[ig] M[ak]” script print is in orange with only the letter “B” and
“M” being capitalized and the packaging material is plastic wrapper. . . Further,
plaintiffs’ logo and mascot are the umbrella “M” and “Ronald McDonald’s”,
respectively, compared to the mascot of defendant Corporation which is a chubby
boy called “Macky” displayed or printed between the words “Big” and
“Mak.” 81 (Emphasis supplied)
Respondents point to these dissimilarities as proof that they did not give their
hamburgers the general appearance of petitioners’ “Big Mac” hamburgers.
The dissimilarities in the packaging are minor compared to the stark similarities in the
words that give respondents’ “Big Mak” hamburgers the general appearance of petitioners’
“Big Mac” hamburgers. Section 29(a) expressly provides that the similarity in the general
appearance of the goods may be in the “devices or words” used on the wrappings.
Respondents have applied on their plastic wrappers and bags almost the same words that
petitioners use on their styrofoam box. What attracts the attention of the buying public are
the words “Big Mak” which are almost the same, aurally and visually, as the words “Big
Mac.” The dissimilarities in the material and other devices are insignificant compared to the
glaring similarity in the words used in the wrappings.
Section 29(a) also provides that the defendant gives “his goods the general
appearance of goods of another manufacturer.” Respondents’ goods are hamburgers which
are also the goods of petitioners. If respondents sold egg sandwiches only instead of
hamburger sandwiches, their use of the “Big Mak” mark would not give their goods the
general appearance of petitioners’ “Big Mac” hamburgers. In such case, there is only
trademark infringement but no unfair competition. However, since respondents chose to
apply the “Big Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on
hamburgers, respondents have obviously clothed their goods with the general appearance of
petitioners’ goods.ASTcEa

Moreover, there is no notice to the public that the “Big Mak” hamburgers are products
of “L.C. Big Mak Burger, Inc.” Respondents introduced during the trial plastic wrappers and
bags with the words “L.C. Big Mak Burger, Inc.” to inform the public of the name of the seller
of the hamburgers. However, petitioners introduced during the injunctive hearings plastic
wrappers and bags with the “Big Mak” mark without the name “L.C. Big Mak Burger, Inc.”
Respondents’ belated presentation of plastic wrappers and bags bearing the name of “L.C.
Big Mak Burger, Inc.” as the seller of the hamburgers is an after-thought designed to
exculpate them from their unfair business conduct. As earlier stated, we cannot consider
respondents’ evidence since petitioners’ complaint was based on facts existing before and
during the injunctive hearings.
Thus, there is actually no notice to the public that the “Big Mak” hamburgers are
products of “L.C. Big Mak Burger, Inc.” and not those of petitioners who have the exclusive
right to the “Big Mac” mark. This clearly shows respondents’ intent to deceive the public.
Had respondents’ placed a notice on their plastic wrappers and bags that the hamburgers
are sold by “L.C. Big Mak Burger, Inc.”, then they could validly claim that they did not intend
to deceive the public. In such case, there is only trademark infringement but no unfair
competition. 82 Respondents, however, did not give such notice. We hold that as found by
the RTC, respondent corporation is liable for unfair competition.
The Remedies Available to Petitioners
Under Section 23 83 (“Section 23”) in relation to Section 29 of RA 166, a plaintiff who
successfully maintains trademark infringement and unfair competition claims is entitled to
injunctive and monetary reliefs. Here, the RTC did not err in issuing the injunctive writ of 16
August 1990 (made permanent in its Decision of 5 September 1994) and in ordering the
payment of P400,000 actual damages in favor of petitioners. The injunctive writ is
indispensable to prevent further acts of infringement by respondent corporation. Also, the
amount of actual damages is a reasonable percentage (11.9%) of respondent corporation’s
gross sales for three (1988–1989 and 1991) of the six years (1984–1990) respondents have
used the “Big Mak” mark. 84
 The RTC also did not err in awarding exemplary damages by way of correction for the
public good 85 in view of the finding of unfair competition where intent to deceive the public
is essential. The award of attorney’s fees and expenses of litigation is also in order. 86
WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision dated 26
November 1999 of the Court of Appeals and its Resolution dated 11 July 2000 and
REINSTATE the Decision dated 5 September 1994 of the Regional Trial Court of Makati,
Branch 137, finding respondent L.C. Big Mak Burger, Inc. liable for trademark infringement
and unfair competition.
SO ORDERED.
Davide, Jr., C .J ., Quisumbing, Ynares-Santiago and Azcuna, JJ ., concur.
(McDonald's Corp. v. L.C. Big Mak Burger, Inc., G.R. No. 143993, [August 18, 2004], 480
|||

PHIL 402-443)

 SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE PHILIPPINES,
INC., petitioners, vs. COURT OF APPEALS and CFC
CORPORATION, respondents.

DECISION

YNARES-SANTIAGO, J : p

This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R.
SP No. 24101, 1 reversing and setting aside the decision of the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT), 2 which denied private respondent's
application for registration of the trademark, FLAVOR MASTER.
On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an
application for the registration of the trademark "FLAVOR MASTER" for instant coffee, under
Serial No. 52994. The application, as a matter of due course, was published in the July 18,
1988 issue of the BPTTT's Official Gazette.
Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered under Swiss
laws and domiciled in Switzerland, filed an unverified Notice of Opposition, 3 claiming that
the trademark of private respondent's product is "confusingly similar to its trademarks for
coffee and coffee extracts, to wit: MASTER ROAST and MASTER BLEND."
Likewise, a verified Notice of Opposition was filed by Nestle Philippines, Inc., a
Philippine corporation and a licensee of Societe Des Produits Nestle S.A., against CFC's
application for registration of the trademark FLAVOR MASTER. 4 Nestle claimed that the use,
if any, by CFC of the trademark FLAVOR MASTER and its registration would likely cause
confusion in the trade; or deceive purchasers and would falsely suggest to the purchasing
public a connection in the business of Nestle, as the dominant word present in the three (3)
trademarks is "MASTER"; or that the goods of CFC might be mistaken as having originated
from the latter.
In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is
not confusingly similar with the former's trademarks, MASTER ROAST and MASTER BLEND,
alleging that, "except for the word MASTER (which cannot be exclusively appropriated by
any person for being a descriptive or generic name), the other words that are used
respectively with said word in the three trademarks are very different from each other — in
meaning, spelling, pronunciation, and sound". CFC further argued that its trademark,
FLAVOR MASTER, "is clearly very different from any of Nestle's alleged trademarks MASTER
ROAST and MASTER-BLEND, especially when the marks are viewed in their entirety, by
considering their pictorial representations, color schemes and the letters of their respective
labels."
In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFC's
application for registration. 5 CFC elevated the matter to the Court of Appeals, where it was
docketed as CA-G.R. SP No. 24101.
 The Court of Appeals defined the issue thus: "Does appellant CFC's trade dress bear
a striking resemblance with appellee's trademarks as to create in the purchasing public's
mind the mistaken impression that both coffee products come from one and the same
source?" aEHADT

As stated above, the Court of Appeals, in the assailed decision dated September 23,
1993, reversed Decision No. 90-47 of the BPTTT and ordered the Director of Patents to
approve CFC's application. The Court of Appeals ruled:
Were We to take even a lackadaisical glance at the overall appearance of the
contending marks, the physical discrepancies between appellant CFC's and
appellee's respective logos are so ostensible that the casual purchaser cannot likely
mistake one for the other. Appellant CFC's label (Exhibit "4") is predominantly a blend
of dark and lighter shade of orange where the words "FLAVOR MASTER", "FLAVOR"
appearing on top of "MASTER", shaded in mocha with thin white inner and outer
sidings per letter and identically lettered except for the slightly protruding bottom
curve of the letter "S" adjoining the bottom tip of the letter "A" in the word
"MASTER", are printed across the top of a simmering red coffee cup. Underneath
"FLAVOR MASTER" appears "Premium Instant Coffee" printed in white, slim and
slanted letters. Appellees' "MASTER ROAST" label (Exhibit "7"), however, is almost
double the width of appellant CFC's. At the top is printed in brown color the word
"NESCAFE" against a white backdrop. Occupying the center is a square-shaped
configuration shaded with dark brown and picturing a heap of coffee beans, where
the word "MASTER" is inscribed in the middle. "MASTER" in appellees' label is
printed in taller capital letters, with the letter "M" further capitalized. The letters are
shaded with red and bounded with thin gold-colored inner and outer sidings. Just
above the word "MASTER" is a red window like portrait of what appears to be a
coffee shrub clad in gold. Below the "MASTER" appears the word "ROAST"
impressed in smaller, white print. And further below are the inscriptions in white: "A
selection of prime Arabica and Robusta coffee." With regard to appellees' "MASTER
BLEND" label (Exhibit "6") of which only a xeroxed copy is submitted, the letters are
bolder and taller as compared to appellant CFC's and the word "MASTER" appears
on top of the word "BLEND" and below it are the words "100% pure instant coffee"
printed in small letters.
From the foregoing description, while the contending marks depict the same
product, the glaring dissimilarities in their presentation far outweigh and dispel any
aspect of similitude. To borrow the words of the Supreme Court in American
Cyanamid Co. v. Director of Patents (76 SCRA 568), appellant CFC's and appellees'
labels are entirely different in size, background, colors, contents and pictorial
arrangement; in short, the general appearances of the labels bearing the respective
trademarks are so distinct from each other that appellees cannot assert that the
dominant features, if any, of its trademarks were used or appropriated in appellant
CFC's own. The distinctions are so well-defined so as to foreclose any probability or
likelihood of confusion or deception on the part of the normally intelligent buyer when
he or she encounters both coffee products at the grocery shelf. The answer therefore
to the query is a clear-cut No. 6
Petitioners are now before this Court on the following assignment of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING AND SETTING
ASIDE THE DECISION (NO. 90-47) OF THE DIRECTOR OF THE BUREAU OF
 PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER (BPTTT) DATED
DECEMBER 27, 1990.
2. RESPONDENT COURT ERRED IN FINDING THAT APPELLANT CFC'S
TRADE DRESS IS BEYOND THE SCOPE OF THE PROSCRIPTION LAID DOWN BY
JURISPRUDENCE AND THE TRADEMARK LAW.
3. RESPONDENT COURT ERRED IN HOLDING THAT THE TOTALITY RULE,
RATHER THAN THE TEST OF DOMINANCY, APPLIES TO THE CASE.
4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY RULE
APPLIED IN THE CASES OF BRISTOL MYERS V. DIRECTOR OF PATENTS, ET AL.
(17 SCRA 128), MEAD JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND
AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76 SCRA 568).
The petition is impressed with merit.
A trademark has been generally defined as "any word, name, symbol or device
adopted and used by a manufacturer or merchant to identify his goods and distinguish them
from those manufactured and sold by others." 7
A manufacturer's trademark is entitled to protection. As Mr. Justice Frankfurter
observed in the case of Mishawaka Mfg. Co. v. Kresge Co.: 8
The protection of trade-marks is the law's recognition of the psychological
function of symbols. If it is true that we live by symbols, it is no less true that we
purchase goods by them. A trade-mark is a merchandising short-cut which induces a
purchaser to select what he wants, or what he has been led to believe he wants. The
owner of a mark exploits this human propensity by making every effort to impregnate
the atmosphere of the market with the drawing power of a congenial symbol.
Whatever the means employed, due aim is the same — to convey through the mark,
in the minds of potential customers, the desirability of the commodity upon which it
appears. Once this is attained, the trade-mark owner has something of value. If
another poaches upon the commercial magnetism of the symbol he has created, the
owner can obtain legal redress.
Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended, which was
in force at the time, provides thus:
Registration of trade-marks, trade-names and service-marks on the principal
register. — There is hereby established a register of trade-marks, trade-names and
service marks which shall be known as the principal register. The owner of a trade-
mark, trade-name or service-mark used to distinguish his goods, business or
services from the goods, business or services of others shall have the right to register
the same on the principal register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name which so resembles a mark
or trade-name registered in the Philippines or a mark or trade-name previously used
in the Philippines by another and not abandoned, as to be likely, when applied to or
used in connection with the goods, business or services of the applicant, to cause
confusion or mistake or to deceive purchasers;
xxx xxx xxx
 (Emphasis supplied)
The law prescribes a more stringent standard in that there should not only be
confusing similarity but that it should not likely cause confusion or mistake or deceive
purchasers.
Hence, the question in this case is whether there is a likelihood that the trademark
FLAVOR MASTER may cause confusion or mistake or may deceive purchasers that said
product is the same or is manufactured by the same company. In other words, the issue is
whether the trademark FLAVOR MASTER is a colorable imitation of the trademarks MASTER
ROAST and MASTER BLEND.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to
deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary
purchaser giving such attention as a purchaser usually gives, as to cause him to purchase
the one supposing it to be the other. 9 In determining if colorable imitation exists,
jurisprudence has developed two kinds of tests — the Dominancy Test and the Holistic
Test. 10 The test of dominancy focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or deception and thus constitute
infringement. On the other side of the spectrum, the holistic test mandates that the entirety
of the marks in question must be considered in determining confusing similarity. 11
In the case at bar, the Court of Appeals held that:
The determination of whether two trademarks are indeed confusingly similar
must be taken from the viewpoint of the ordinary purchasers who are, in general,
undiscerningly rash in buying the more common and less expensive household
products like coffee, and are therefore less inclined to closely examine specific
details of similarities and dissimilarities between competing products. The Supreme
Court in Del Monte Corporation v. CA, 181 SCRA 410, held that:
"The question is not whether the two articles are distinguishable by their
labels when set side by side but whether the general confusion made by the
article upon the eye of the casual purchaser who is unsuspicious and off his
guard, is such as to likely result in his confounding it with the original. As
observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods, is the
touchstone."
From this perspective, the test of similarity is to consider the two marks in their
entirety, as they appear in the respective labels, in relation to the goods to which they
are attached (Bristol Myers Company v. Director of Patents, et al., 17 SCRA
128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7 SCRA 768). The mark
must be considered as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it (Del Monte Corp. v.
CA, supra), as what appellees would want it to be when they essentially argue that
much of the confusion springs from appellant CFC's use of the word "MASTER"
which appellees claim to be the dominant feature of their own trademarks that
captivates the prospective consumers. Be it further emphasized that the discerning
eye of the observer must focus not only on the predominant words but also on the
other features appearing in both labels in order that he may draw his conclusion
 whether one is confusingly similar to the other (Mead Johnson & Co. v. NVJ Van
Dorp, Ltd., supra). 12
The Court of Appeals applied some judicial precedents which are not on all fours with
this case. It must be emphasized that in infringement or trademark cases in the Philippines,
particularly in ascertaining whether one trademark is confusingly similar to or is a colorable
imitation of another, no set rules can be deduced. Each case must be decided on its own
merits. 13 In Esso Standard, Inc. v. Court of Appeals, 14 we ruled that the likelihood of
confusion is a relative concept; to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. In trademark cases, even more than in any
other litigation, precedent must be studied in light of the facts of the particular case. The
wisdom of the likelihood of confusion test lies in its recognition that each trademark
infringement case presents its own unique set of facts. Indeed, the complexities attendant to
an accurate assessment of likelihood of confusion require that the entire panoply of elements
constituting the relevant factual landscape be comprehensively examined. 15
The Court of Appeals' application of the case of Del Monte Corporation v. Court of
Appeals 16 is, therefore, misplaced. In Del Monte, the issue was about the alleged similarity
of Del Monte's logo with that of Sunshine Sauce Manufacturing Industries. Both corporations
market the catsup product which is an inexpensive and common household item. DTIaHE

Since Del Monte alleged that Sunshine's logo was confusingly similar to or was a
colorable imitation of the former's logo, there was a need to go into the details of the two
logos as well as the shapes of the labels or marks, the brands printed on the labels, the
words or lettering on the labels or marks and the shapes and colors of the labels or marks.
The same criteria, however, cannot be applied in the instant petition as the facts and
circumstances herein are peculiarly different from those in the Del Monte case.
In the same manner, the Court of Appeals erred in applying the totality rule as defined
in the cases of Bristol Myers v. Director of Patents; 17 Mead Johnson & Co. v. NVJ Van Dorf
Ltd.; 18 and American Cyanamid Co. v. Director of Patents. 19 The totality rule states that "the
test is not simply to take their words and compare the spelling and pronunciation of said
words. In determining whether two trademarks are confusingly similar, the two marks in their
entirety as they appear in the respective labels must be considered in relation to the goods
to which they are attached; the discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing on both labels." 20
As this Court has often declared, each case must be studied according to the peculiar
circumstances of each case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point.
In the above cases cited by the Court of Appeals to justify the application of the
totality or holistic test to this instant case, the factual circumstances are substantially
different. In the Bristol Myers case, this Court held that although both BIOFERIN and
BUFFERIN are primarily used for the relief of pains such as headaches and colds, and their
names are practically the same in spelling and pronunciation, both labels have strikingly
different backgrounds and surroundings. In addition, one is dispensable only upon doctor's
prescription, while the other may be purchased over-the-counter.
 In the Mead Johnson case, the differences between ALACTA and ALASKA are glaring
and striking to the eye. Also, ALACTA refers to "Pharmaceutical Preparations which Supply
Nutritional Needs," falling under Class 6 of the official classification of Medicines and
Pharmaceutical Preparations to be used as prescribed by physicians. On the other hand,
ALASKA refers to "Foods and Ingredients of Foods" falling under Class 47, and does not
require medical prescription.
In the American Cyanamid case, the word SULMET is distinguishable from the word
SULMETINE, as the former is derived from a combination of the syllables "SUL" which is
derived from sulfa and "MET" from methyl, both of which are chemical compounds present
in the article manufactured by the contending parties. This Court held that the addition of the
syllable "INE" in respondent's label is sufficient to distinguish respondent's product or
trademark from that of petitioner. Also, both products are for medicinal veterinary use and
the buyer will be more wary of the nature of the product he is buying. In any case, both
products are not identical as SULMET's label indicates that it is used in a drinking water
solution while that of SULMETINE indicates that they are tablets.
It cannot also be said that the products in the above cases can be bought off the shelf
except, perhaps, for ALASKA. The said products are not the usual "common and
inexpensive" household items which an "undiscerningly rash" buyer would unthinkingly buy.
In the case at bar, other than the fact that both Nestle's and CFC's products are
inexpensive and common household items, the similarity ends there. What is being
questioned here is the use by CFC of the trademark MASTER. In view of the difficulty of
applying jurisprudential precedents to trademark cases due to the peculiarity of each case,
judicial fora should not readily apply a certain test or standard just because of seeming
similarities. As this Court has pointed above, there could be more telling differences than
similarities as to make a jurisprudential precedent inapplicable.
Nestle points out that the dominancy test should have been applied to determine
whether there is a confusing similarity between CFC's FLAVOR MASTER and Nestle's
MASTER ROAST and MASTER BLEND.
We agree.
As the Court of Appeals itself has stated, "[t]he determination of whether two
trademarks are indeed confusingly similar must be taken from the viewpoint of the ordinary
purchasers who are, in general, undiscerningly rash in buying the more common and less
expensive household products like coffee, and are therefore less inclined to closely examine
specific details of similarities and dissimilarities between competing products." 21
The basis for the Court of Appeals' application of the totality or holistic test is the
"ordinary purchaser" buying the product under "normally prevalent conditions in trade" and
the attention such products normally elicit from said ordinary purchaser. An ordinary
purchaser or buyer does not usually make such scrutiny nor does he usually have the time to
do so. The average shopper is usually in a hurry and does not inspect every product on the
shelf as if he were browsing in a library. 22
The Court of Appeals held that the test to be applied should be the totality or holistic
test reasoning, since what is of paramount consideration is the ordinary purchaser who is, in
general, undiscerningly rash in buying the more common and less expensive household
products like coffee, and is therefore less inclined to closely examine specific details of
similarities and dissimilarities between competing products.
This Court cannot agree with the above reasoning. If the ordinary purchaser is
"undiscerningly rash" in buying such common and inexpensive household products as
instant coffee, and would therefore be "less inclined to closely examine specific details of
similarities and dissimilarities" between the two competing products, then it would be less
likely for the ordinary purchaser to notice that CFC's trademark FLAVOR MASTER carries
the colors orange and mocha while that of Nestle's uses red and brown. The application of
the totality or holistic test is improper since the ordinary purchaser would not be inclined to
notice the specific features, similarities or dissimilarities, considering that the product is an
inexpensive and common household item.
It must be emphasized that the products bearing the trademarks in question are
"inexpensive and common" household items bought off the shelf by "undiscerningly rash"
purchasers. As such, if the ordinary purchaser is "undiscerningly rash", then he would not
have the time nor the inclination to make a keen and perceptive examination of the physical
discrepancies in the trademarks of the products in order to exercise his choice.
While this Court agrees with the Court of Appeals' detailed enumeration of differences
between the respective trademarks of the two coffee products, this Court cannot agree that
totality test is the one applicable in this case. Rather, this Court believes that the dominancy
test is more suitable to this case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to the elementary postulate of the law
on trademarks and unfair competition that confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons and overall impressions engendered by the
marks in controversy as they are encountered in the realities of the marketplace. 23The
totality or holistic test only relies on visual comparison between two trademarks whereas the
dominancy test relies not only on the visual but also on the aural and connotative
comparisons and overall impressions between the two trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of
dominancy and held that:
From the evidence at hand, it is sufficiently established that the word MASTER
is the dominant feature of opposer's mark. The word MASTER is printed across the
middle portion of the label in bold letters almost twice the size of the printed word
ROAST. Further, the word MASTER has always been given emphasis in the TV and
radio commercials and other advertisements made in promoting the product. This
can be gleaned from the fact that Robert Jaworski and Atty. Ric Puno Jr., the
personalities engaged to promote the product, are given the titles Master of the
Game and Master of the Talk Show, respectively. In due time, because of these
advertising schemes the mind of the buying public had come to learn to associate
the word MASTER with the opposer's goods.
. . . It is the observation of this Office that much of the dominance which the
word MASTER has acquired through Opposer's advertising schemes is carried over
when the same is incorporated into respondent-applicant's trademark FLAVOR
MASTER. Thus, when one looks at the label bearing the trademark FLAVOR MASTER
 (Exh. 4) one's attention is easily attracted to the word MASTER, rather than to the
dissimilarities that exist. Therefore, the possibility of confusion as to the goods which
bear the competing marks or as to the origins thereof is not farfetched. . . . 24
In addition, the word "MASTER" is neither a generic nor a descriptive term. As such,
said term can not be invalidated as a trademark and, therefore, may be legally protected.
Generic terms 25 are those which constitute "the common descriptive name of an article or
substance," or comprise the "genus of which the particular product is a species," or are
"commonly used as the name or description of a kind of goods," or "imply reference to every
member of a genus and the exclusion of individuating characters," or "refer to the basic
nature of the wares or services provided rather than to the more idiosyncratic characteristics
of a particular product," and are not legally protectable. On the other hand, a term is
descriptive 26 and therefore invalid as a trademark if, as understood in its normal and natural
sense, it "forthwith conveys the characteristics, functions, qualities or ingredients of a
product to one who has never seen it and does not know what it is," or "if it forthwith
conveys an immediate idea of the ingredients, qualities or characteristics of the goods," or if
it clearly denotes what goods or services are provided in such a way that the consumer does
not have to exercise powers of perception or imagination.
Rather, the term "MASTER" is a suggestive term brought about by the advertising
scheme of Nestle. Suggestive terms 27 are those which, in the phraseology of one court,
require "imagination, thought and perception to reach a conclusion as to the nature of the
goods." Such terms, "which subtly connote something about the product," are eligible for
protection in the absence of secondary meaning. While suggestive marks are capable of
shedding "some light" upon certain characteristics of the goods or services in dispute, they
nevertheless involve "an element of incongruity," "figurativeness," or " imaginative effort on
the part of the observer." DHCcST

This is evident from the advertising scheme adopted by Nestle in promoting its coffee
products. In this case, Nestle has, over time, promoted its products as "coffee perfection
worthy of masters like Robert Jaworski and Ric Puno Jr."
In associating its coffee products with the term "MASTER" and thereby impressing
them with the attributes of said term, Nestle advertised its products thus:
Robert Jaworski. Living Legend. A true hard court hero. Fast on his feet. Sure
in every shot he makes. A master strategist. In one word, unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply satisfying. Made from
a unique combination of the best coffee beans — Arabica for superior taste and
aroma, Robusta for strength and body. A masterpiece only NESCAFE, the world's
coffee masters, can create.
MASTER ROAST. Coffee perfection worthy of masters like Robert Jaworski. 28
In the art of conversation, Ric Puno Jr. is master. Witty. Well-informed.
Confident.
In the art of coffee-making, nothing equals Master Roast, the coffee
masterpiece from Nescafe, the world's coffee masters. A unique combination of the
best coffee beans — Arabica for superior taste and aroma, Robusta for strength and
body. Truly distinctive and rich in flavor.
 Master Roast. Coffee perfection worthy of masters like Ric Puno Jr. 29
The term "MASTER", therefore, has acquired a certain connotation to mean the coffee
products MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by
CFC of the term "MASTER" in the trademark for its coffee product FLAVOR MASTER is likely
to cause confusion or mistake or even to deceive the ordinary purchasers.
In closing, it may not be amiss to quote the case of American Chicle Co. v. Topps
Chewing Gum, Inc., 30 to wit:
Why it should have chosen a mark that had long been employed by [plaintiff]
and had become known to the trade instead of adopting some other means of
identifying its goods is hard to see unless there was a deliberate purpose to obtain
some advantage from the trade that [plaintiff] had built up. Indeed, it is generally true
that, as soon as we see that a second comer in a market has, for no reason that he
can assign, plagiarized the "make-up" of an earlier comer, we need no more; [W]e
feel bound to compel him to exercise his ingenuity in quarters further afield.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-
G.R. SP NO. 24101 is REVERSED and SET ASIDE and the decision of the Bureau of Patents,
Trademarks and Technology Transfer in Inter Partes Cases Nos. 3200 and 3202 is
REINSTATED.
SO ORDERED.
Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.
Puno, J., is on official leave.
(Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, [April 4, 2001], 408
|||

PHIL 307-327)

 SERI SOMBOONSAKDIKUL, petitioner, vs. ORLANE S.A., respondent.

DECISION

JARDELEZA, J : p

Assailed in this petition is the Decision 1 of the Court of Appeals (CA) in CA-G.R. SP
No. 105229 dated July 14, 2009 which affirmed the decision of the Director General of the
Intellectual Property Office (IPO) denying the application for the mark "LOLANE." HTcADC

Facts
On September 23, 2003, petitioner Seri Somboonsakdikul (petitioner) filed an
application for registration 2 of the mark LOLANE with the IPO for goods 3 classified under
Class 3 (personal care products) of the International Classification of Goods and Services
for the Purposes of the Registration of Marks (International Classification of
Goods). 4Orlane S.A. (respondent) filed an opposition to petitioner's application, on the
ground that the mark LOLANE was similar to ORLANE in presentation, general
appearance and pronunciation, and thus would amount to an infringement of its
mark. 5 Respondent alleged that: (1) it was the rightful owner of the ORLANE mark which
was first used in 1948; (2) the mark was earlier registered in the Philippines on July 26,
1967 under Registration No. 129961 for the following goods: 6
x x x perfumes, toilet water, face powders, lotions, essential oils, cosmetics,
lotions for the hair, dentrifices, eyebrow pencils, make-up creams, cosmetics
& toilet preparations under Registration No. 12996. 7
and (3) on September 5, 2003, it filed another application for use of the trademark on its
additional products:
x x x toilet waters; revitalizing waters, perfumes, deodorants and body
deodorants, anti-perspiration toiletries; men and women perfume products
for face care and body care; face, eye, lips, nail, hand make-up products and
make-up removal products, towels impregnated with cosmetic lotions;
tanning and instant tanning sunproducts, sunprotection products, (not for
medical use), after-suncosmetic products; cosmetic products; slimming
cosmetic aids; toiletries; lotions, shampoos and hair care products; shave
and after shave products, shaving and hair removing products; essential oils;
toothpastes; toiletry, cosmetic and shaving kits for travel, filled or fitted
vanity-cases[.] 8
Respondent adds that by promotion, worldwide registration, widespread and high
standard use, the mark had acquired distinction, goodwill, superior quality image and
reputation and was now well-known. 9 Imputing bad faith on the petitioner, respondent
claimed that LOLANE's first usage was only on August 19, 2003. 10
In his answer, 11 petitioner denied that the LOLANE mark was confusingly similar to
the mark ORLANE. He averred that he was the lawful owner of the mark LOLANE which
he has used for various personal care products sold worldwide. He alleged that the first
worldwide use of the mark was in Vietnam on July 4, 1995. Petitioner also alleged that he
had continuously marketed and advertised Class 3 products bearing LOLANE mark in the
Philippines and in different parts of the world and that as a result, the public had come to
associate the mark with him as provider of quality personal care products. 12
Petitioner maintained that the marks were distinct and not confusingly similar either
under the dominancy test or the holistic test. The mark ORLANE was in plain block upper
case letters while the mark LOLANE was printed in stylized word with the second letter L
and the letter A co-joined. Furthermore, the similarity in one syllable would not
automatically result in confusion even if used in the same class of goods since his
products always appear with Thai characters while those of ORLANE always had the
name Paris on it. The two marks are also pronounced differently. Also, even if the two
marks contained the word LANE it would not make them confusingly similar since the IPO
had previously allowed the co-existence of trademarks containing the syllable "joy" or
"book" and that he also had existing registrations and pending applications for
registration in other countries. 13
The Bureau of Legal Affairs (BLA) rejected petitioner's application in a
Decision 14 dated February 27, 2007, finding that respondent's application was filed, and
its mark registered, much earlier. 15 The BLA ruled that there was likelihood of confusion
based on the following observations: (1) ORLANE and LOLANE both consisted of six
letters with the same last four letters — LANE; (2) both were used as label for similar
products; (3) both marks were in two syllables and that there was only a slight difference
in the first syllable; and (4) both marks had the same last syllable so that if these marks
were read aloud, a sound of strong similarity would be produced and such would likely
deceive or cause confusion to the public as to the two trademarks. 16
Petitioner filed a motion for reconsideration but this was denied by the Director of
the BLA on May 7, 2007. 17 The BLA ruled that the law did not require the marks to be so
identical as to produce actual error or mistake as the likelihood of confusion was enough.
The BLA also found that the dominant feature in both marks was the word LANE; and that
the marks had a strong visual and aural resemblance that could cause confusion to the
buying public. This resemblance was amplified by the relatedness of the goods. 18
On appeal, the Director General of the IPO affirmed the Decision of the BLA
Director. Despite the difference in the first syllable, there was a strong visual and aural
resemblance since the marks had the same last four letters, i.e., LANE, and such word is
pronounced in this jurisdiction as in "pedestrian lane." 19 Also, the mark ORLANE is a
fanciful mark invented by the owner for the sole purpose of functioning as a trademark
and is highly distinctive. Thus, the fact that two or more entities would accidentally adopt
an identical or similar fanciful mark was too good to be true especially when they dealt
with the same goods or services. 20 The Director General also noted that foreign
judgments invoked by petitioner for the grant of its application are not judicial
precedents. 21
Thus, petitioner filed a petition for review 22 before the CA arguing that there is no
confusing similarity between the two marks. Petitioner maintained that LANE is not the
dominant feature of the mark and that the dominancy test did not apply since the
trademarks are only plain word marks and the dominancy test presupposes that the
marks involved are composite marks. 23 Petitioner pointed out that the IPO had previously
allowed the mark GIN LANE under Registration No. 4-2004-006914 which also involved
products under Class 3. 24 While petitioner admitted that foreign judgments are not
judicial precedents, he argued that the IPO failed to recognize relevant foreign
judgments, i.e.,the Australian Registrar of Trademarks and the IPO of Singapore which
ruled that there was no confusing similarity between the marks LOLANE and
ORLANE. 25 Lastly, the Director General should have deferred to the findings of the
Trademark Examiner who made a substantive examination of the application for
trademark registration, and who is an expert in the field and is in the best position to
determine whether there already exists a registered mark or mark for registration. Since
petitioner's application for registration of the mark LOLANE proceeded to allowance and
publication without any adverse citation of a prior confusingly similar mark, this meant
that the Trademark Examiner was of the view that LOLANE was not confusingly similar to
ORLANE. 26 aScITE

The CA Ruling
The CA denied the petition and held that there exists colorable imitation of
respondent's mark by LOLANE. 27
The CA accorded due respect to the Decision of the Director General and ruled that
there was substantial evidence to support the IPO's findings of fact. Applying the
dominancy test, the CA ruled that LOLANE's mark is confusingly or deceptively similar to
ORLANE. There are predominantly striking similarities in the two marks including LANE,
with only a slight difference in the first letters, thus the two marks would likely cause
confusion to the eyes of the public. The similarity is highlighted when the two marks are
pronounced considering that both are one word consisting of two syllables. The CA ruled
that when pronounced, the two marks produce similar sounds. 28 The CA did not heed
petitioner's contention that since the mark ORLANE is of French origin, the same is
pronounced as "OR-LAN." Filipinos would invariably pronounce it as "OR-LEYN." 29 The
CA also noted that the trademark ORLANE is a fanciful name and petitioner was not able
to explain why he chose the word LOLANE as trademark for his personal care products.
Thus, the only logical conclusion is that he would want to benefit from the established
reputation and goodwill of the ORLANE mark. 30
The CA rejected petitioner's assertion that his products' cheaper price and low-
income market eliminates the likelihood of confusion. Low-income groups, and even
those who usually purchased ORLANE products despite the higher cost, may be led to
believe that LOLANE products are low-end personal care products also marketed by
respondent. 31
The CA upheld the applicability of the dominancy test in this case. According to the
CA, the dominancy test is already recognized and incorporated in Section 155.1
of Republic Act No. 8293 (RA 8293), otherwise known as the Intellectual Property Code of
the Philippines. 32 Citing McDonald's Corporation v. MacJoy Fastfood Corporation, 33 the
CA ruled that the dominancy test is also preferred over the holistic test. This is because
the latter relies only on the visual comparison between two trademarks, whereas the
dominancy test relies not only on the visual, but also on their aural and connotative
comparisons, and their overall impressions created. 34 Nonetheless, the CA stated that
there is nothing in this jurisdiction dictating that the dominancy test is applicable for
composite marks. 35
The CA was not swayed by the alleged favorable judgment by the IPO in the GIN
LANE application, ruling that in trademark cases, jurisprudential precedents should be
applied only to a case if they are specifically in point. 36 It also did not consider the ruling
of the IPOs in Australia, South Africa, Thailand and Singapore which found no confusing
similarity between the marks LOLANE and ORLANE, stating that foreign judgments do
not constitute judicial precedent in this jurisdiction. 37
Finally, the CA did not give merit to petitioner's contention that the Director General
should have deferred to the findings of the Trademark Examiner. According to the CA, the
proceedings before the Trademark Examiner are ex-parte, 38 and his findings are
merely prima facie. Whatever his decision may be is still subject to review and/or
appeal. 39
The Petition 40
Petitioner maintains that the CA erred in its interpretation of the dominancy test,
when it ruled that the dominant feature of the contending marks is the suffix
"LANE." 41The CA failed to consider that in determining the dominant portion of a mark,
significant weight must be given to whether the buyer would be more likely to remember
and use one part of a mark as indicating the origin of the goods. 42 Thus, that part which
will likely make the most impression on the ordinary viewer will be treated as the
dominant portion of conflicting marks and given greater weight in the comparison. 43
Petitioner argues that both LOLANE and ORLANE are plain word marks which are
devoid of features that will likely make the most impression on the ordinary viewer. If at
all, the very word marks themselves, LOLANE and ORLANE are each to be regarded as
dominant features. 44 Moreover, the suffix LANE is a weak mark, being "in common use
by many other sellers in the market." 45 Thus, LANE is also used in the marks SHELLANE
and GIN LANE, the latter covering goods under Class 3. Moreover, the two marks are
aurally different since respondent's products originate from France and is read as "OR-
LAN" and not "OR-LEYN." 46
Petitioner also claims that the CA completely disregarded the holistic test, thus
ignoring the dissimilarity of context between LOLANE and ORLANE. Assuming that the
two marks produce similar sounds when pronounced, the differences in marks in their
entirety as they appear in their respective product labels should still be the controlling
factor in determining confusing similarity. 47
Besides, there has been no explicit declaration abandoning the holistic
test. 48 Thus, petitioner urges us to go beyond the similarities in spelling and instead
consider how the marks appear in their respective labels, the dissimilarities in the size
and shape of the containers, their color, words appearing thereon and the general
appearance, 49 hence: (1) the commonality of the marks ORLANE and LOLANE starts
from and ends with the four-letter similarity — LANE and nothing else; 50 (2) ORLANE
uses "safe" or conventional colors while LOLANE uses loud or psychedelic colors and
designs with Thai characters; 51 and (3) ORLANE uses the term "Paris," indicating the
source of origin of its products. 52HEITAD
 Petitioner likewise claims that consumers will be more careful in their choice
because the goods in question are directly related to personal hygiene and have direct
effects on their well-being, health and safety. 53 Moreover, with the huge price difference
between ORLANE and LOLANE products, relevant purchasers are less likely to be
confused. 54
Finally, petitioner notes that respondent has neither validly proven nor presented
sufficient evidence that the mark ORLANE is in actual commercial use in the Philippines.
Respondent failed to allege in any of its pleadings submitted to the IPO's BLA and the
IPO Director General the names of local outlets that products bearing the mark ORLANE
are being marketed or sold to the general consuming public. 55
Respondent's Comment 56
Respondent reiterates the decisions of the CA and the IPO. 57 It maintains that
ORLANE is entitled to protection under RA 8293 since it is registered with the IPO with
proof of actual use. 58 Respondent posits that it has established in the world 59 and in the
Philippines an image and reputation for manufacturing and selling quality beauty
products. Its products have been sold in the market for 61 years and have been used in
the Philippines since 1972. 60 Thus, to allow petitioner's application would unduly
prejudice respondent's right over its registered trademark. 61 Lastly, respondent argue
that decisions of administrative agencies such as the IPO shall not be disturbed by the
courts, absent any showing that the former have acted without or in excess of their
jurisdiction, or with grave abuse of discretion. 62
Issue
We resolve the issue of whether there is confusing similarity between ORLANE and
LOLANE which would bar the registration of LOLANE before the IPO.
Our Ruling
We find that the CA erred when it affirmed the Decision of the IPO.
While it is an established rule in administrative law that the courts of justice should
respect the findings of fact of administrative agencies, the courts may not be bound by
such findings of fact when there is absolutely no evidence in support thereof or such
evidence is clearly, manifestly and patently insubstantial; and when there is a clear
showing that the administrative agency acted arbitrarily or with grave abuse of discretion
or in a capricious and whimsical manner, such that its action may amount to an excess or
lack of jurisdiction. 63 Moreover, when there is a showing that the findings or conclusions,
drawn from the same pieces of evidence, were arrived at arbitrarily or in disregard of the
evidence on record, they may be reviewed by the courts. 64 Such is the case here.
There is no colorable imitation between the marks LOLANE and ORLANE which
would lead to any likelihood of confusion to the ordinary purchasers.
A trademark is defined under Section 121.1 of RA 8293 as any visible sign capable
of distinguishing the goods. It is susceptible to registration if it is crafted fancifully or
arbitrarily and is capable of identifying and distinguishing the goods of one manufacturer
or seller from those of another. 65 Thus, the mark must be distinctive. 66 The registrability
of a trademark is governed by Section 123 of RA 8293. Section 123.1 provides:
 Section 123. Registrability. —
123.1. A mark cannot be registered if it:
xxx xxx xxx
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;
e. Is identical with, or confusingly similar to, or constitutes a translation of 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, as being already the mark of a person other than the
applicant for registration, and used for identical or similar goods or
services: Provided, That in determining whether a mark is well-known,
account shall be taken of the knowledge of the relevant sector of the
public, rather than of the public at large, including knowledge in the
Philippines which has been obtained as a result of the promotion of the
mark;ATICcS

xxx xxx xxx

In Mighty Corporation v. E. & J. Gallo Winery, 67 we laid down the requirements for
a finding of likelihood of confusion, thus:
There are two types of confusion in trademark. infringement.
The first is "confusion of goods" when an otherwise prudent
purchaser is induced to purchase one product in the belief that he is
purchasing another, in which case defendant's goods are then bought
as the plaintiff's and its poor quality reflects badly on the plaintiff's
reputation. The other is "confusion of business" wherein the goods of
the parties are different but the defendant's product can reasonably
(though mistakenly) be assumed to originate from the plaintiff, thus
deceiving the public into believing that there is some connection
between the plaintiff and defendant which, in fact, does not exist.
In determining the likelihood of confusion, the Court must
consider: [a] the resemblance between the trademarks; [b] the
similarity of the goods to which the trademarks are attached; [c]
the likely effect on the purchaser and [d] the registrant's express
or implied consent and other fair and equitable
considerations. (Citations omitted, emphasis supplied.) 68
While Mighty Corporation enumerates four requirements, the most essential
requirement, to our mind, for the determination of likelihood of confusion is the existence
of resemblance between the trademarks, i.e., colorable imitation. Absent any finding of its
existence, there can be no likelihood of confusion. Thus we held:
Whether a trademark causes confusion and is likely to deceive
the public hinges on "colorable imitation" which has been defined as
 "such similarity in form, content, words, sound, meaning, special
arrangement or general appearance of the trademark or trade name in
their overall presentation or in their essential and substantive and
distinctive parts as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article." (Citations
omitted.) 69
We had the same view in Emerald Garment Manufacturing Corporation v. Court of
Appeals, 70 where we stated:
Proceeding to the task at hand, the essential element of
infringement is colorable imitation. This term has been defined as
"such a close or ingenious imitation as to be calculated to deceive
ordinary purchasers, or such resemblance of the infringing mark 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." ETHIDa

Colorable imitation does not mean such similitude as amounts

to identity. Nor does it require that all the details be literally copied. x x
x (Citation omitted, emphasis supplied.) 71
In determining colorable imitation, we have used either the dominancy test or the
holistic or totality test. The dominancy test considers the similarity of the prevalent or
dominant features of the competing trademarks that might cause confusion, mistake, and
deception in the mind of the purchasing public. More consideration is given on the aural
and visual impressions created by the marks on the buyers of goods, giving little weight
to factors like process, quality, sales outlets, and market segments. 72 On the other hand,
the holistic test considers the entirety of the marks as applied to the products, including
the labels and packaging, in determining confusing similarity. The focus is not only on the
predominant words but also on the other features appearing on the labels. 73
The CA's use of the dominancy test is in accord with our more recent ruling in UFC
Philippines, Inc. (now merged with Nutria-Asia, Inc. as the surviving entity) v. Barrio Fiesta
Manufacturing Corporation. 74 In UFC Philippines, Inc., we relied on our declarations
in McDonald's Corporation v. L.C. Big Mak Burger, Inc., 75 Co Tiong Sa v. Director of
Patents, 76and Societe Des Produits Nestle, S.A. v. Court of Appeals 77 that the
dominancy test is more in line with the basic rule in trademarks that confusing similarity is
determined by the aural, visual and connotative and overall impressions created by the
marks. Thus, based on the dominancy test, we ruled that there is no confusing similarity
between "PAPA BOY & DEVICE" mark, and "PAPA KETSARAP" and "PAPA BANANA
CATSUP."
While there are no set rules as what constitutes a dominant feature with respect to
trademarks applied for registration, usually, what are taken into account are signs, color,
design, peculiar shape or name, or some special, easily remembered earmarks of the
brand that readily attracts and catches the attention of the ordinary consumer. 78 In UFC
Philippines, Inc., what we considered as the dominant feature of the mark is the first
word/figure that catches the eyes or that part which appears prominently to the eyes and
ears. 79
 However, while we agree with the CA's use of the dominancy test, we arrive at a
different conclusion. Based on the distinct visual and aural differences between LOLANE
and ORLANE, we find that there is no confusing similarity between the two marks.
The suffix LANE is not the dominant feature of petitioner's mark. Neither can it be
considered as the dominant feature of ORLANE which would make the two marks
confusingly similar.
First, an examination of the appearance of the marks would show that there are
noticeable differences in the way they are written or printed as shown below: 80
As correctly argued by petitioner in his answer before the BLA, there are visual
differences between LOLANE and ORLANE since the mark ORLANE is in plain block
upper case letters while the mark LOLANE was rendered in stylized word with the second
letter L and the letter A co-joined. 81
Second, as to the aural aspect of the marks, LOLANE and ORLANE do not sound
alike. Etepha v. Director of Patents, et al. 82 finds application in this case. In Etepha, we
ruled that there is no confusing similarity between PERTUSSIN and ATUSSIN. The Court
considered among other factors the aural differences between the two marks as follows:
5. As we take up Pertussin and Atussin once again, we cannot
escape notice of the fact that the two words do not sound alike —
when pronounced. There is not much phonetic similarity between the
two. The Solicitor General well-observed that in Pertussin the
pronunciation of the prefix "Per", whether correct or incorrect,
includes a combination of three letters P, e and r; whereas, in
Atussin the whole starts with the single letter A added to suffix
"tussin". Appeals to the ear are dissimilar. And this, because in a
word combination, the part that comes first is the most
pronounced. An expositor of the applicable rule here is the decision in
the Syrocol-Cheracol controversy. There, the ruling is that trademark
Syrocol (a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason: the
two words "do not look or sound enough alike to justify a holding of
trademark infringement", and the "only similarity is in the last syllable,
and that is not uncommon in names given drug compounds". (Citation
omitted, emphasis supplied.) 83
Similar to Etepha, appeals to the ear in pronouncing ORLANE and LOLANE are
dissimilar. The first syllables of each mark, i.e., OR and LO do not sound alike, while the
proper pronunciation of the last syllable LANE — "LEYN" for LOLANE and "LAN" for
ORLANE, being of French origin, also differ. We take exception to the generalizing
statement of the Director General, which was affirmed by the CA, that Filipinos would
invariably pronounce ORLANE as "ORLEYN." This is another finding of fact which has no
basis, and thus, justifies our reversal of the decisions of the IPO Director General and the
CA. While there is possible aural similarity when certain sectors of the market would
pronounce ORLANE as "ORLEYN," it is not also impossible that some would also be
aware of the proper pronunciation — especially since, as respondent claims, its
trademark ORLANE has been sold in the market for more than 60 years and in the
Philippines, for more than 40 years. 84 cSEDTC
 Respondent failed to show proof that the suffix LANE has registered in the mind of
consumers that such suffix is exclusively or even predominantly associated with ORLANE
products. Notably and as correctly argued by petitioner, the IPO previously allowed the
registration of the mark GIN LANE for goods also falling under Class 3, i.e., perfume,
cologne, skin care preparations, hair care preparations and toiletries. 85
We are mindful that in the earlier cases of Mighty Corporation and Emerald, despite
a finding that there is no colorable imitation, we still discussed the nature of the goods
using the trademark and whether the goods are identical, similar, competing or related.
We need not belabor a similar discussion here considering that the essential element in
determining likelihood of confusion, i.e., colorable imitation by LOLANE of the mark
ORLANE, is absent in this case. Resemblance between the marks is a separate
requirement from, and must not be confused with, the requirement of a similarity of the
goods to which the trademarks are attached. In Great White Shark Enterprises, Inc. v.
Caralde, Jr., 86after we ruled that there was no confusing similarity between Great White
Shark's "GREG NORMAN LOGO" and Caralde's "SHARK & LOGO" mark due to the
visual and aural dissimilarities between the two marks, we deemed it unnecessary to
resolve whether Great White Shark's mark has gained recognition as a well-known mark.
Finding that LOLANE is not a colorable imitation of ORLANE due to distinct visual
and aural differences using the dominancy test, we no longer find it necessary to discuss
the contentions of the petitioner as to the appearance of the marks together with the
packaging, nature of the goods represented by the marks and the price difference, as
well as the applicability of foreign judgments. We rule that the mark LOLANE is entitled to
registration.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
dated July 14, 2009 is REVERSED and SET ASIDE. Petitioner's application of the mark
LOLANE for goods classified under Class 3 of the International Classification of Goods
is GRANTED.
SO ORDERED.
Velasco, Jr., Bersamin, Reyes and Caguioa, * JJ., concur.
(Seri Somboonsakdikul v. Orlane S.A., G.R. No. 188996, [February 1, 2017], 805 PHIL 37-
|||

58)

 EMERALD GARMENT MANUFACTURING
CORPORATION, petitioner, vs. HON. COURT OF APPEALS, BUREAU OF
PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and H.D. LEE
COMPANY, INC., respondents.

Julio C. Contreras for petitioner.

Sycip, Salazar, Hernandez & Gatmaitan for private respondent.

SYLLABUS

1. COMMERCIAL LAW; TRADEMARK LAW; INFRINGEMENT; DECISION ON EACH

CASE MUST BE BASED ON ITS OWN MERIT. — In the history of trademark cases in the
Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is a
colorable imitation of another, no set rules can be deduced. Each case must be decided on
its own merits. In Esso Standard Eastern, Inc. v. Court of Appeals, 116 SCRA 336 (1982), we
held: ". . . But likelihood of confusion is a relative concept; to be determined only according
to the particular, and sometimes peculiar, circumstances of each case." Likewise, it has
been observed that: "In determining whether a particular name or mark is a "colorable
imitation" of another, no all-embracing rule seems possible in view of the great number of
factors which must necessarily be considered in resolving this question of fact, such as the
class of product or business to which the article belongs; the product's quality, quantity, or
size, including its wrapper or container; the dominant color, style, size, form, meaning of
letters, words, designs and emblems used; the nature of the package, wrapper or container;
the character of the product's purchasers; location of the business; the likelihood of
deception or the mark or name's tendency to confuse; etc." TCIHSa

2. ID.; ID.; ID.; COLORABLE IMITATION, CONSTRUED. — The essential element of

infringement is colorable imitation. This term has been defined as "such a close or ingenious
imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the
infringing mark 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."
"Colorable imitation does not mean such similitude as amounts to identity. Nor does it
require that all the details be literally copied. Colorable imitation refers to such similarity in
form, content, words, sound, meaning, special arrangement, or general appearance of the
trademark or tradename with that of the other mark or tradename in their over-all
presentation or in their essential, substantive and distinctive parts as would likely mislead or
confuse persons in the ordinary course of purchasing the genuine article."
3. ID.; ID.; ID.; ID.; TEST IN THE DETERMINATION. — In determining whether
colorable imitation exists, jurisprudence has developed two kinds of tests — the Dominancy
Test applied in Asia Brewery, Inc. v. Court of Appeals, 224 SCRA 437 (1993), and other
cases and the Holistic Test developed in Del Monte Corporation v. Court of Appeals, 181
SCRA 410 (1990), and its proponent cases. As its title implies, the test of dominancy focuses
on the similarity of the prevalent features of the competing trademarks which might cause
confusion or deception and thus constitutes infringement. On the other side of the spectrum,
the holistic test mandates that the entirety of the marks in question must be considered in
determining confusing similarity.
4. ID.; ID.; REQUISITES FOR THE ACQUISITION OF OWNERSHIP OVER
TRADEMARK. — Actual use in commerce in the Philippines is an essential prerequisite for
the acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A of the
Philippine Trademark Law (R.A. No. 166). In Sterling Products International, Inc. v.
Farbenfabriken Bayer Aktiengesellschaft, 27 SCRA 1214 (1969), we declared: . . . "It would
seem quite clear that adoption alone of a trademark would not give exclusive right thereto.
Such right "grows out of their actual use." Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but these alone would
not give exclusive right of use. For trademark is a creation of use. The underlying reason for
all these is that purchasers have come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader's right to protection in the trade he has built up and the
goodwill he has accumulated from use of the trademark. Registration of a trademark, of
course, has value: it is an administrative act declaratory of a preexisting right. Registration
does not, however, perfect a trademark right." The credibility placed on a certificate of
registration of one's trademark, or its weight as evidence of validity, ownership and exclusive
use, is qualified. A registration certificate serves merely as prima facie evidence. It is not
conclusive but can and may be rebutted by controverting evidence. cCTIaS

5. ID.; ID.; DETERMINATION OF PRIOR USER OF TRADEMARK; FINDINGS OF

FACTS BY THE DIRECTOR OF PATENTS, CONCLUSIVE UPON THE SUPREME COURT. —
The determination as to who is the prior user of the trademark is a question of fact and it is
this Court's working principle not to disturb the findings of the Director of Patents on this
issue in the absence of any showing of grave abuse of discretion. The findings of facts of the
Director of Patents are conclusive upon the Supreme Court provided they are supported by
substantial evidence.
6. ID.; ID.; NATURE OF SUPPLEMENTAL REGISTER. — Registrations in the
supplemental register do not enjoy a similar privilege. A supplemental register was created
precisely for the registration of marks which are not registrable on the principal register due
to some defects. ScaCEH

DECISION

KAPUNAN, J : p

In this petition for review on certiorari under Rule 45 of the Revised Rules of Court,
Emerald Garment Manufacturing Corporation seeks to annul the decision of the Court of
Appeals dated 29 November 1990 in CA-G.R. SP No. 15266 declaring petitioner's trademark
to be confusingly similar to that of private respondent and the resolution dated 17 May 1991
denying petitioner's motion for reconsideration.
The record reveals the following antecedent facts:
 On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign corporation
organized under the laws of Delaware, U.S.A., filed with the Bureau of Patents, Trademarks
& Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054
(Supplemental Register) 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, a domestic corporation organized and existing under Philippine laws. The
petition was docketed as Inter Partes Case No. 1558. 1
Private respondent, invoking Sec. 37 of R.A. No. 166 (Trademark Law) and Art. VIII of
the Paris Convention for the Protection of Industrial Property, averred that petitioner's
trademark "so closely resembled its own trademark, 'LEE' as previously registered and used
in the Philippines, and not abandoned, as to be likely, when applied to or used in connection
with petitioner's goods, to cause confusion, mistake and deception on the part of the
purchasing public as to the origin of the goods." 2
In its answer dated 23 March 1982, petitioner contended that its trademark was
entirely and unmistakably different from that of private respondent and that its certificate of
registration was legally and validly granted. 3
On 20 February 1984, petitioner caused the publication of its application for
registration of the trademark "STYLISTIC MR. LEE" in the Principal Register." 4
On 27 July 1984, private respondent filed a notice of opposition to petitioner's
application for registration also on grounds that petitioner's trademark was confusingly
similar to its "LEE" trademark. 5 The case was docketed as Inter Partes Case No. 1860.
On 21 June 1985, the Director of Patents, on motion filed by private respondent dated
15 May 1985, issued an order consolidating Inter Partes Cases Nos. 1558 and 1860 on
grounds that a common question of law was involved. 6
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 found private respondent to be the prior registrant of the
trademark "LEE" in the Philippines and that it had been using said mark in the Philippines. 7
Moreover, 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." 8
On 3 August 1988, petitioner appealed to the Court of Appeals and on 8 August 1988,
it filed with the BPTTT a Motion to Stay Execution of the 19 July 1988 decision of the
Director of Patents on grounds that the same would cause it great and irreparable damage
and injury. Private respondent submitted its opposition on 22 August 1988. 9
On 23 September 1988, the BPTTT issued Resolution No. 88-33 granting petitioner's
motion to stay execution subject to the following terms and conditions:
 1. That under this resolution, Respondent-Registrant is authorized only to
dispose of its current stock using the mark "STYLISTIC MR. LEE";
2. That Respondent-Registrant is strictly prohibited from further production,
regardless of mode and source, of the mark in question (STYLISTIC MR. LEE) in
addition to its current stock;
3. That this relief Order shall automatically cease upon resolution of the Appeal
by the Court of Appeals and, if the Respondent's appeal loses, all goods bearing the
mark "STYLISTIC MR. LEE" shall be removed from the market, otherwise such goods
shall be seized in accordance with the law.
SO ORDERED. 10
On 29 November 1990, the Court of Appeals promulgated its decision affirming the
decision of the Director of Patents dated 19 July 1988 in all respects. 11
In said decision the Court of Appeals expounded, thus:
xxx xxx xxx.
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, then infringement takes place; that duplication or imitation is not necessary,
a similarity in the dominant features of the trademark would be sufficient.
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. While it is true that there are other words such as
"STYLISTIC", printed in the appellant's label, such word is printed in such small
letters over the word "LEE" that it is not conspicuous enough to draw the attention of
ordinary buyers whereas the word "LEE" is printed across the label in big, bold letters
and of the same color, style, type and size of lettering as that of the trademark of the
appellee. The alleged difference is too insubstantial to be noticeable. Even
granting arguendo that the word "STYLISTIC" is conspicuous enough to draw
attention, the goods may easily be mistaken for just another variation or line of
garments under the appellee's "LEE" trademarks in view of the fact that the appellee
has registered trademarks which use other words in addition to the principal mark
"LEE" such as "LEE RIDERS", "LEESURES" and "LEE LEENS". The likelihood of
confusion is further made more probable by the fact that both parties are engaged in
the same line of business. It is well to reiterate that the determinative factor in
ascertaining whether or not the marks are confusingly similar to each other is not
whether the challenged mark would actually cause confusion or deception of the
purchasers but whether the use of such mark would likely cause confusion or
mistake on the part of the buying public.
xxx xxx xxx.
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. It is thus axiomatic that one who has identified a
 peculiar symbol or mark with his goods thereby acquires a property right in such
symbol or mark, and if another infringes the trademark, he thereby invokes this
property right.
The merchandise or goods being sold by the parties are not that expensive as
alleged to be by the appellant and are quite ordinary commodities purchased by the
average person and at times, by the ignorant and the unlettered. Ordinary purchasers
will not as a rule examine the small letterings printed on the label but will simply be
guided by the presence of the striking mark "LEE". Whatever difference there may be
will pale in insignificance in the face of an evident similarity in the dominant features
and overall appearance of the labels of the parties. 12
xxx xxx xxx.
On 19 December 1990, petitioner filed a motion for reconsideration of the above-
mentioned decision of the Court of Appeals.
Private respondent opposed said motion on 8 January 1991 on grounds that it
involved an impermissible change of theory on appeal. Petitioner allegedly raised entirely
new and unrelated arguments and defenses not previously raised in the proceedings below
such as laches and a claim that private respondent appropriated the style and appearance of
petitioner's trademark when it registered its "LEE" mark under Registration No. 44220. 13
On 17 May 1991, the Court of Appeals issued a resolution rejecting petitioner's motion
for reconsideration and ruled thus:
xxx xxx xxx.
A defense not raised in the trial court cannot be raised on appeal for the first
time. An issue raised for the first time on appeal and not raised timely in the
proceedings in the lower court is barred by estoppel.
The object of requiring the parties to present all questions and issues to the
lower court before they can be presented to this Court is to have the lower court rule
upon them, so that this Court on appeal may determine whether or not such ruling
was erroneous. The purpose is also in furtherance of justice to require the party to
first present the question he contends for in the lower court so that the other party
may not be taken by surprise and may present evidence to properly meet the issues
raised.
Moreover, for a question to be raised on appeal, the same must also be within
the issues raised by the parties in their pleadings. Consequently, when a party
deliberately adopts a certain theory, and the case is tried and decided based upon
such theory presented in the court below, he will not be permitted to change his
theory on appeal. To permit him to do so would be unfair to the adverse party. A
question raised for the first time on appeal, there having opportunity to raise them in
the court of origin constitutes a change of theory which is not permissible on appeal.
In the instant case, appellant's main defense pleaded in its answer dated
March 23, 1982 was that there was "no confusing similarity between the competing
trademark involved. On appeal, the appellant raised a single issue, to wit:
 The only issue involved in this case is whether or not respondent-registrant's
trademark "STYLISTIC MR. LEE" is confusingly similar with the petitioner's trademarks "LEE
or LEE RIDERS, LEE-LEENS and LEE-SURES."
Appellant's main argument in this motion for reconsideration on the other hand
is that the appellee is estopped by laches from asserting its right to its trademark.
Appellant claims although belatedly that appellee went to court with "unclean hands"
by changing the appearance of its trademark to make it identical to the appellant's
trademark.
Neither defenses were raised by the appellant in the proceedings before the
Bureau of Patents. Appellant cannot raise them now for the first time on appeal, let
alone on a mere motion for reconsideration of the decision of this Court dismissing
the appellant's appeal.
While there may be instances and situations justifying relaxation of this rule,
the circumstance of the instant case, equity would be better served by applying the
settled rule it appearing that appellant has not given any reason at all as to why the
defenses raised in its motion for reconsideration was not invoked earlier. 14
xxx xxx xxx.
Twice rebuffed, petitioner presents its case before this Court on the following
assignment of errors:
I. THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE RESPONDENT
CAUSED THE ISSUANCE OF A FOURTH "LEE" TRADEMARK IMITATING THAT OF THE
PETITIONER'S ON MAY 5, 1989 OR MORE THAN EIGHT MONTHS AFTER THE BUREAU
OF PATENT'S DECISION DATED JULY 19, 1988.
II. THE COURT OF APPEALS ERRED IN RULING THAT THE DEFENSE OF ESTOPPEL
BY LACHES MUST BE RAISED IN THE PROCEEDINGS BEFORE THE BUREAU OF
PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER.
III. THE COURT OF APPEALS ERRED WHEN IT CONSIDERED PRIVATE
RESPONDENT'S PRIOR REGISTRATION OF ITS TRADEMARK AND DISREGARDED THE
FACT THAT PRIVATE RESPONDENT HAD FAILED TO PROVE COMMERCIAL USE
THEREOF BEFORE FILING OF APPLICATION FOR REGISTRATION. 15
In addition, petitioner reiterates the issues it raised in the Court of Appeals:
I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER OR NOT PETITIONER'S
TRADEMARK STYLISTIC MR. LEE, IS CONFUSINGLY SIMILAR WITH THE PRIVATE
RESPONDENT'S TRADEMARK LEE OR LEE-RIDER, LEE-LEENS AND LEE-SURES.
II. PETITIONER'S EVIDENCES ARE CLEAR AND SUFFICIENT TO SHOW THAT IT IS
THE PRIOR USER AND ITS TRADEMARK IS DIFFERENT FROM THAT OF THE PRIVATE
RESPONDENT.
III. PETITIONER'S TRADEMARK IS ENTIRELY DIFFERENT FROM THE PRIVATE
RESPONDENT'S AND THE REGISTRATION OF ITS TRADEMARK IS PRIMA
FACIE EVIDENCE OF GOOD FAITH.
 IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK CANNOT BE CONFUSED
WITH PRIVATE RESPONDENT'S LEE TRADEMARK. 16
Petitioner contends that private respondent is estopped from instituting an action for
infringement before the BPTTT under the equitable principle of laches pursuant to Sec. 9-A
of R.A. No. 166, otherwise known as the Law on Trade-marks, Trade-names and Unfair
Competition:
SEC. 9-A. Equitable principles to govern proceedings. — In opposition
proceedings and in all other inter partes proceedings in the patent office under this
act, equitable principles of laches, estoppel, and acquiescence, where applicable,
may be considered and applied.
Petitioner alleges that it has been using its trademark "STYLISTIC MR. LEE" since 1
May 1975, yet, it was only on 18 September 1981 that private respondent filed a petition for
cancellation of petitioner's certificate of registration for the said trademark. Similarly, private
respondent's notice of opposition to petitioner's application for registration in the principal
register was belatedly filed on 27 July 1984. 17
Private respondent counters by maintaining that petitioner was barred from raising
new issues on appeal, the only contention in the proceedings below being the presence or
absence of confusing similarity between the two trademarks in question. 18
We reject petitioner's contention.
Petitioner's trademark is registered in the supplemental register. The Trademark
Law (R.A. No. 166) provides that "marks and tradenames for the supplemental register shall
not be published for or be subject to opposition, but shall be published on registration in the
Official Gazette." 19 The reckoning point, therefore, should not be 1 May 1975, the date of
alleged use by petitioner of its assailed trademark but 27 October 1980, 20 the date the
certificate of registration SR No. 5054 was published in the Official Gazette and issued to
petitioner.
It was only on the date of publication and issuance of the registration certificate that
private respondent may be considered "officially" put on notice that petitioner has
appropriated or is using said mark, which, after all, is the function and purpose of registration
in the supplemental register. 21 The record is bereft of evidence that private respondent was
aware of petitioner's trademark before the date of said publication and issuance. Hence,
when private respondent instituted cancellation proceedings on 18 September 1981, less
than a year had passed.
Corollarily, private respondent could hardly be accused of inexcusable delay in filing
its notice of opposition to petitioner's application for registration in the principal register
since said application was published only on 20 February 1984. 22 From the time of
publication to the time of filing the opposition on 27 July 1984 barely five (5) months had
elapsed. To be barred from bringing suit on grounds of estoppel and laches, the delay must
be lengthy. 23
More crucial is the issue of confusing similarity between the two trademarks. Petitioner
vehemently contends that its trademark "STYLISTIC MR. LEE" is entirely different from and
not confusingly similar to private respondent's "LEE" trademark.
 Private respondent maintains otherwise. It asserts that petitioner's trademark tends to
mislead and confuse the public and thus constitutes an infringement of its own mark, since
the dominant feature therein is the word "LEE."
The pertinent provision of R.A. No. 166 (Trademark Law) states thus:
SEC. 22. Infringement, what constitutes. — Any person who shall use, without
the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale, offering
for sale, or advertising of any goods, business or services on or in connection with
which such use is likely to cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services, or identity of such
business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-
name and apply such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or services, shall be liable to a
civil action by the registrant for any or all of the remedies herein provided.
Practical application, however, of the aforesaid provision is easier said than done. In
the history of trademark cases in the Philippines, particularly in ascertaining whether one
trademark is confusingly similar to or is a colorable imitation of another, no set rules can be
deduced. Each case must be decided on its own merits.
In Esso Standard Eastern, Inc. v. Court of Appeals, 24 we held:
. . . But likelihood of confusion is a relative concept; to be determined only
according to the particular, and sometimes peculiar, circumstances of each case. It is
unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.: "In trademark
cases, even more than in other litigation, precedent must be studied in the light of the
facts of the particular case."
xxx xxx xxx.
Likewise, it has been observed that:
In determining whether a particular name or mark is a "colorable imitation" of
another, no all-embracing rule seems possible in view of the great number of factors
which must necessarily be considered in resolving this question of fact, such as the
class of product or business to which the article belongs; the product's quality,
quantity, or size, including its wrapper or container; the dominant color, style, size,
form, meaning of letters, words, designs and emblems used; the nature of the
package, wrapper or container; the character of the product's purchasers; location of
the business; the likelihood of deception or the mark or name's tendency to confuse;
etc. 25
Proceeding to the task at hand, the essential element of infringement is colorable
imitation. This term has been defined as "such a close or ingenious imitation as to be
calculated to deceive ordinary purchasers, or such resemblance of the infringing mark 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." 26
Colorable imitation does not mean such similitude as amounts to identity. Nor
does it require that all the details be literally copied. Colorable imitation refers to such
 similarity in form, content, words, sound, meaning, special arrangement, or general
appearance of the trademark or tradename with that of the other mark or tradename
in their over-all presentation or in their essential, substantive and distinctive parts as
would likely mislead or confuse persons in the ordinary course of purchasing the
genuine article. 27
In determining whether colorable imitation exists, jurisprudence has developed two
kinds of tests — the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals 28and
other cases 29 and the Holistic Test developed in Del Monte Corporation v. Court of
Appeals 30 and its proponent cases. 31
As its title implies, the test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or deception and thus
constitutes infringement.
xxx xxx xxx.
. . . If the competing trademark contains the main or essential or dominant
features of another, and confusion and deception is likely to result, infringement takes
place. Duplication or imitation is not necessary; nor it is necessary that the infringing
label should suggest an effort to imitate. [C. Neilman Brewing Co. v. Independent
Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC), 180 Fed.
579]. The question at issue in cases of infringement of trademarks is whether the use
of the marks involved would be likely to cause confusion or mistakes in the mind of
the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber
Co., 107 F. 2d 588; . . . .) 32
xxx xxx xxx.
On the other side of the spectrum, the holistic test mandates that the entirety of the
marks in question must be considered in determining confusing similarity.
xxx xxx xxx.
In determining whether the trademarks are confusingly similar, a comparison
of the words is not the only determinant factor. The trademarks in their entirety as
they appear in their respective labels or hang tags must also be considered in relation
to the goods to which they are attached. The discerning eye of the observer must
focus not only on the predominant words but also on the other features appearing in
both labels in order that he may draw his conclusion whether one is confusingly
similar to the other. 33
xxx xxx xxx.
Applying the foregoing tenets to the present controversy and taking into account the
factual circumstances of this case, we considered the trademarks involved as a whole and
rule that petitioner's "STYLISTIC MR. LEE" is not confusingly similar to private respondent's
"LEE" trademark.
Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although on its label the
word "LEE" is prominent, the trademark should be considered as a whole and not
piecemeal. The dissimilarities between the two marks become conspicuous, noticeable and
substantial enough to matter especially in the light of the following variables that must be
factored in.
First, the products involved in the case at bar are, in the main, various kinds of jeans.
These are not your ordinary household items like catsup, soy sauce or soap which are of
minimal cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is
predisposed to be more cautious and discriminating in and would prefer to mull over his
purchase. Confusion and deception, then, is less likely. In Del Monte Corporation v. Court of
Appeals, 34 we noted that:
. . . Among these, what essentially determines the attitudes of the purchaser,
specifically his inclination to be cautious, is the cost of the goods. To be sure, a
person who buys a box of candies will not exercise as much care as one who buys
an expensive watch. As a general rule, an ordinary buyer does not exercise as much
prudence in buying an article for which he pays a few centavos as he does in
purchasing a more valuable thing. Expensive and valuable items are normally bought
only after deliberate, comparative and analytical investigation. But mass products,
low priced articles in wide use, and matters of everyday purchase requiring frequent
replacement are bought by the casual consumer without great care. . . .
Second, like his beer, the average Filipino consumer generally buys his jeans by brand.
He does not ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or
even an Armani. He is, therefore, more or less knowledgeable and familiar with his
preference and will not easily be distracted.
Finally, in line with the foregoing discussions, more credit should be given to the
"ordinary purchaser." Cast in this particular controversy, the ordinary purchaser is not the
"completely unwary consumer" but is the "ordinarily intelligent buyer" considering the type of
product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok 35 is better suited to the present
case. There, the "ordinary purchaser" was defined as one "accustomed to buy, and therefore
to some extent familiar with, the goods in question. The test of fraudulent simulation is to be
found in the likelihood of the deception of some persons in some measure acquainted with
an established design and desirous of purchasing the commodity with which that design has
been associated. The test is not found in the deception, or the possibility of deception, of the
person who knows nothing about the design which has been counterfeited, and who must
be indifferent between that and the other. The simulation, in order to be objectionable, must
be such as appears likely to mislead the ordinary intelligent buyer who has a need to supply
and is familiar with the article that he seeks to purchase."
There is no cause for the Court of Appeal's apprehension that petitioner's products
might be mistaken as "another variation or line of garments under private respondent's 'LEE'
trademark". 36 As one would readily observe, private respondent's variation follows a
standard format "LEERIDERS," "LEESURES" and "LEELEENS." It is, therefore, improbable
that the public would immediately and naturally conclude that petitioner's "STYLISTIC MR.
LEE" is but another variation under private respondent's "LEE" mark.
As we have previously intimated the issue of confusing similarity between trademarks
is resolved by considering the distinct characteristics of each case. In the present
controversy, taking into account these unique factors, we conclude that the similarities in the
trademarks in question are not sufficient as to likely cause deception and confusion
tantamount to infringement
Another way of resolving the conflict is to consider the marks involved from the point
of view of what marks are registrable pursuant to Sec. 4 of R.A. No. 166, particularly
paragraph 4(e):
CHAPTER II-A. — The Principal Register
(Inserted by Sec. 2, Rep. Act No. 638.)
SEC. 4. Registration of trade-marks, trade-names and service-marks on the
principal register. — There is hereby established a register of trade-marks, trade-
names and service-marks which shall be known as the principal register. The owner
of a trade-mark, trade-name or service-mark used to distinguish his goods, business
or services from the goods, business or services of others shall have the right to
register the same on the principal register, unless it:
xxx xxx xxx.
(e) Consists of a mark or trade-name which, when applied to or used in
connection with the goods, business or services of the applicant is merely descriptive
or deceptively misdescriptive of them, or when applied to or used in connection with
the goods, business or services of the applicant is primarily geographically
descriptive or deceptively misdescriptive of them, or is primarily merely a surname;
(Italics ours.)
xxx xxx xxx.
"LEE" is primarily a surname. Private respondent cannot, therefore, acquire exclusive
ownership over and singular use of said term.
. . . It has been held that a personal name or surname may not be monopolized
as a trademark or tradename as against others of the same name or surname. For in
the absence of contract, fraud, or estoppel, any man may use his name or surname in
all legitimate ways. Thus, "Wellington" is a surname, and its first user has no cause of
action against the junior user of "Wellington" as it is incapable of exclusive
appropriation. 37
In addition to the foregoing, we are constrained to agree with petitioner's contention
that private respondent failed to prove prior actual commercial use of its "LEE" trademark in
the Philippines before filing its application for registration with the BPTTT and hence, has not
acquired ownership over said mark.
Actual use in commerce in the Philippines is an essential prerequisite for the
acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A of the
Philippine Trademark Law (R.A. No. 166) which explicitly provides that:
CHAPTER II. Registration of Marks and Trade-names.
SEC. 2. What are registrable. — Trade-marks, trade-names, and service marks
owned by persons, corporations, partnerships or associations domiciled in the
Philippines and by persons, corporations, partnerships, or associations domiciled in
any foreign country may be registered in accordance with the provisions of this
 act: Provided, That said trade-marks, trade-names, or service marks are actually in
use in commerce and services not less than two months in the Philippines before the
time the applications for registration are filed: And Provided, further, That the country
of which the applicant for registration is a citizen grants by law substantially similar
privileges to citizens of the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the English language, by the
government of the foreign country to the Government of the Republic of the
Philippines. (As amended.) (Italics ours.)
SEC. 2-A. Ownership of trade-marks, trade-names and service-marks; how
acquired. — Anyone who lawfully produces or deals in merchandise of any kind or
who engages in lawful business, or who renders any lawful service in commerce, by
actual use hereof in manufacture or trade, in business and in the service rendered;
may appropriate to his exclusive use a trade-mark, a trade-name, or a service-mark
not so appropriated by another, to distinguish his merchandise, business or services
from others. The ownership or possession of trade-mark, trade-name, service-mark,
heretofore or hereafter appropriated, as in this section provided, shall be recognized
and protected in the same manner and to the same extent as are other property
rights to the law. (As amended.) (Italics ours.)
The provisions of the 1965 Paris Convention for the Protection of Industrial
Property 38 relied upon by private respondent and Sec. 21-A of the Trademark Law (R.A. No.
166) 39were sufficiently expounded upon and qualified in the recent case of Philip Morris, Inc.
v. Court of Appeals: 40
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirement of actual use in the Philippines must
subordinate an international agreement inasmuch as the apparent clash is being
decided by a municipal tribunal (Mortisen vs. Peters, Great Britain, High Court of
Judiciary of Scotland, 1906, 8 Sessions, 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that international law has been made
part of the law of the land does not by any means imply the primacy of international
law over national law in the municipal sphere. Under the doctrine of incorporation as
applied in most countries, rules of international law are given a standing equal, not
superior, to national legislative enactments.
xxx xxx xxx.
In other words, (a foreign corporation) may have the capacity to sue for
infringement irrespective of lack of business activity in the Philippines on account of
Section 21-A of the Trademark Law but the question of whether they have an
exclusive right over their symbol as to justify issuance of the controversial writ will
depend on actual use of their trademarks in the Philippines in line with Sections 2 and
2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign
corporation not licensed to do business in the Philippines files a complaint for
infringement, the entity need not be actually using its trademark in commerce in the
Philippines. Such a foreign corporation may have the personality to file a suit for
infringement but it may not necessarily be entitled to protection due to absence of
actual use of the emblem in the local market.
xxx xxx xxx.
 Undisputably, private respondent is the senior registrant, having obtained several
registration certificates for its various trademarks "LEE," "LEE RIDERS," and "LEESURES" in
both the supplemental and principal registers, as early as 1969 to 1973. 41 However,
registration alone will not suffice. In Sterling Products International, Inc. v. Farbenfabriken
Bayer Aktiengesellschaft, 42 we declared:
xxx xxx xxx.
A rule widely accepted and firmly entrenched because it has come down
through the years is that actual use in commerce or business is a prerequisite in the
acquisition of the right of ownership over a trademark.
xxx xxx xxx.
It would seem quite clear that adoption alone of a trademark would not give
exclusive right thereto. Such right "grows out of their actual use." Adoption is not
use. One may make advertisements, issue circulars, give out price lists on certain
goods; but these alone would not give exclusive right of use. For trademark is a
creation of use. The underlying reason for all these is that purchasers have come to
understand the mark as indicating the origin of the wares. Flowing from this is the
trader's right to protection in the trade he has built up and the goodwill he has
accumulated from use of the trademark. Registration of a trademark, of course, has
value: it is an administrative act declaratory of a pre-existing right. Registration does
not, however, perfect a trademark right. (Italics ours.)
xxx xxx xxx.
To augment its arguments that it was, not only the prior registrant, but also the prior
user, private respondent invokes Sec. 20 of the Trademark Law, thus:
SEC. 20. Certificate of registration prima facie evidence of validity. — A
certificate of registration of a mark or tradename shall be a prima facie evidence of
the validity of the registration, the registrant's ownership of the mark or trade-name,
and of the registrant's exclusive right to use the same in connection with the goods,
business or services specified in the certificate, subject to any conditions and
limitations stated therein.
The credibility placed on a certificate of registration of one's trademark, or its weight
as evidence of validity, ownership and exclusive use, is qualified. A registration certificate
serves merely as prima facie evidence. It is not conclusive but can and may be rebutted by
controverting evidence.
Moreover, the aforequoted provision applies only to registrations in the principal
register. 43 Registrations in the supplemental register do not enjoy a similar privilege. A
supplemental register was created precisely for the registration of marks which are not
registrable on the principal register due to some defects. 44
The determination as to who is the prior user of the trademark is a question of fact and
it is this Court's working principle not to disturb the findings of the Director of Patents on this
issue in the absence of any showing of grave abuse of discretion. The findings of facts of the
Director of Patents are conclusive upon the Supreme Court provided they are supported by
substantial evidence. 45
 In the case at bench, however, we reverse the findings of the Director of Patents and
the Court of Appeals. After a meticulous study of the records, we observe that the Director of
Patents and the Court of Appeals relied mainly on the registration certificates as proof of use
by private respondent of the trademark "LEE" which, as we have previously discussed are
not sufficient. We cannot give credence to private respondent's claim that its "LEE" mark
first reached the Philippines in the 1960's through local sales by the Post Exchanges of the
U.S. Military Bases in the Philippines 46 based as it was solely on the self-serving statements
of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the
H.D. Lee, Co., Inc., U.S.A., herein private respondent. 47 Similarly, we give little weight to the
numerous vouchers representing various advertising expenses in the Philippines for "LEE"
products. 48 It is well to note that these expenses were incurred only in 1981 and 1982 by
LEE (Phils.), Inc. after it entered into a licensing agreement with private respondent on 11
May 1981. 49
On the other hand, petitioner has sufficiently shown that it has been in the business of
selling jeans and other garments adopting its "STYLISTIC MR. LEE" trademark since 1975 as
evidenced by appropriate sales invoices to various stores and retailers. 50
Our rulings in Pagasa Industrial Corp. v. Court of Appeals 51 and Converse Rubber
Corp. v. Universal Rubber Products, Inc., 52 respectively, are instructive:
The Trademark Law is very clear. It requires actual commercial use of the mark
prior to its registration. There is no dispute that respondent corporation was the first
registrant, yet it failed to fully substantiate its claim that it used in trade or business in
the Philippines the subject mark; it did not present proof to invest it with exclusive,
continuous adoption of the trademark which should consist among others, of
considerable sales since its first use. The invoices submitted by respondent which
were dated way back in 1957 show that the zippers sent to the Philippines were to be
used as "samples" and "of no commercial value." The evidence for respondent must
be clear, definite and free from inconsistencies. "Samples" are not for sale and
therefore, the fact of exporting them to the Philippines cannot be considered to be
equivalent to the "use" contemplated by law. Respondent did not expect income
from such "samples." There were no receipts to establish sale, and no proof were
presented to show that they were subsequently sold in the Philippines.
xxx xxx xxx.
The sales invoices provide the best proof that there were actual sales of
petitioner's product in the country and that there was actual use for a protracted
period of petitioner's trademark or part thereof through these sales.
For lack of adequate proof of actual use of its trademark in the Philippines prior to
petitioner's use of its own mark and for failure to establish confusing similarity between said
trademarks, private respondent's action for infringement must necessarily fail.
WHEREFORE, premises considered, the questioned decision and resolution are
hereby REVERSED and SET ASIDE.
SO ORDERED.
Bellosillo and Hermosisima, Jr., JJ., concur.
 Davide, Jr., J., I vote to deny the petition there being no showing of an exception to
inclusiveness of findings of BPTTT and of CA.
Padilla, J., I dissent. I vote to deny the petition; I agree with BPTTT and the CA that
petitioner's trademark "STYLISTIC MR. LEE" is confusingly similar to private respondent's
earlier registered trademarks "LEE" or "LEE RIDER, LEE-LEENS and LEE-SURES" such that
the trademark "STYLISTIC MR. LEE" is an infringement of the earlier registered trademarks.
(Emerald Garment Manufacturing Corp. v. Court of Appeals, G.R. No. 100098, [December
|||

29, 1995], 321 PHIL 1001-1027)

 BRISTOL MYERS COMPANY, petitioner, vs. THE DIRECTOR OF PATENTS
and UNITED AMERICAN PHARMACEUTICALS, INC., respondents.

Picazo & Agcaoili for petitioner.

Sycip, Salazar, Luna & Associates for respondent United American
Pharmaceuticals, Inc.
Solicitor General Arturo A. Alafriz, Assistant Solicitor General A. A.
Torres and Solicitor A.V. Sempio-Diy, for Director of Patents.

SYLLABUS

1. TRADEMARK; TEST TO DETERMINE CONFUSING SIMILARITY. — In

determining whether two trademarks are confusingly similar, the test is not simply to take
their words and compare the spelling and pronunciation of said words. Rather, it is to
consider the two marks in their entirety, as they appear in the respective labels, in relation
to the goods to which they are attached. (Mead Johnson & Co. vs. N.V.J. Van Dorp, Ltd.,
G.R. No. L-17501, April 27, 1963.)
2. ID.; ID.; TRADEMARK HAVING THE SAME SUFFIX AND SIMILAR SOUNDING
PREFIXES BUT WITH STRIKINGLY DIFFERENT BACKGROUNDS; CASE AT BAR. — The
trademarks in question are not apt to confuse prospective customers. For though
the words "BIOFERIN" and "BUFFERIN" have the same suffix and similar-sounding
prefixes, they appear in their respective labels with strikingly different backgrounds and
surroundings, as to color, size and design. Furthermore, the product covered by
"BIOFERIN" is expressly stated as dispensable only upon doctor's prescription, while that
of "BUFFERIN" does not require the same. The chances of being confused into
purchasing one for the other are therefore all the more rendered negligible.

DECISION

BENGZON, J.P., J : p

A petition for registration in the Principal Register of the Patent Office of the
trademark "BIOFERIN" was filed on October 21, 1957 by United American
Pharmaceuticals, Inc. Said domestic corporation first used the afore-stated trademark in
the Philippines on August 13, 1957. It covers "a medicinal preparation of antihistaminic,
analgesic, antipyretic with vitamin C and Bioflavenoid used in the treatment of common
colds, influenza and other febrile diseases with capillary hemorrhagic tendencies." The
product falls under Class 6 of the official classification, that is, "Medicines and
Pharmaceutical Preparations".
Bristol Myers Co., a corporation of the State of Delaware, U.S.A., filed on January
6, 1959 an opposition to the application. Said oppositor is the owner in the Philippines of
the trademark "BUFFERIN" under Certificate of Registration No. 4578 issued by the
Philippine Patent Office on March 3, 1954. Its trademark is also registered in the United
States under Certificate of Registration No. 566190 issued on November 4, 1952. It was
first used in the Philippines on May 13, 1953. The product covered by "BUFFERIN" also
belongs to Class 6, Medicines and Pharmaceutical Preparations. Designated as "Antacid
analgesic", it is intended for relief in cases of "simple headaches, neuralgia, colds,
menstrual pain and minor muscular aches."
The thrust of oppositor's contention was that the registration of the applicant's
trademark "BIOFERIN" would violate its rights and interest in its registered trademark
"BUFFERIN" as well as mislead and confuse the public as to the source and origin of the
goods covered by the respective marks, in view of the allegedly practically the same
spelling, pronunciation and letter type design of the two trademarks covering goods of
the same class.
The parties thereafter filed on January 18, 1961 a joint petition stipulating as to the
facts and submitting the case upon the issue of whether or not, considering all the factors
involved, in both trademarks — as the parties would discuss in their memoranda — there
will be such confusing similarity between the two trademarks as will be likely to deceive
the purchasing public.
After submission of memoranda, on June 21, 1963 the Director of Patents rendered
a decision granting the petition and dismissing the opposition, on the ground that, all
factors considered, the trademarks in question are not confusingly similar, so that the
damage feared by the oppositor will not result.
From said decision the oppositor appealed to this Court by petition for review filed
on July 24, 1963. The sole issue raised thereby is: Are the trademarks "BIOFERIN" and
"BUFFERIN", as presented to the public in their respective labels, confusingly similar?
Appellant contends that confusing similarity will obtain because both products are
primarily used for the relief of pains such as headaches and colds; and because
the words "BIOFERIN and "BUFFERIN" are practically the same in spelling and
pronunciation.
In determining whether two trademarks are confusingly similar, the test is not
simply to take their words and compare the spelling and pronunciation of said words.
Rather, it is consider the two marks in their entirety, as they appear in the respective
labels, in relation to the goods to which they are attached. Said rule was enunciated by
this Court through Justice Felix Bautista Angelo in Mead Johnson & Co., vs. N.V.J. Van
Dorp, Ltd., L-17501, April 27, 1963, thus:
"It is true that between petitioner's trademark 'ALACTA' and respondent's
'ALASKA' there are similarities in spelling, appears and sound for both are composed
of six letters of three syllables each and each syllable has the same vowel, but in
determining if they are confusingly similar a comparison of said words is not the only
determining factor. The two marks in their marks in their entirety as they appear in the
respective labels must also be considered in relation to the goods to which they are
attached. The discerning eye of the observer must focus not only on the predominant
words but also on the other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the other. . . ."
 Applying this test to the trademarks involved in this case, it is at once evident that
the Director of Patents did not err in finding no confusing similarity. For though the words
"BIOFERING" and "BUFFERIN" and "Bufferin" have the same suffix and similar-sounding
prefixes, they appear in their respective labels with strikingly different backgrounds and
surroundings, as to color, size and design.
For convenience we sum up these differences, as follows:
Relevant Factors "BIOFERIN" "BUFFERIN"

1. Shape & Size of Rectangular about Rectangular,

Label 3-3/4" 2-1/4" 3-3/4" 1-1/4"

2. Color of Label Predominantly Predominantly

Yellow
3. Color background Olive-green
of word-mark
4. Over-all Layout At the top center
word-mark "BIOFE-
RIN"; below it are
contents of medicine,
arranged horizontally;
at bottom, center,
"United Pharma
ceuticals, Inc."
in olive-green
background. At left
side — dosage,
printed perpendicularly;
at right side, indications,
White
Blue
At left side of label —
"BUFFERIN"; with
"Bristol Myers Co.,
New York, N.Y."
below it; at right side,
contents, indications,
dosage are grouped
together, printed
perpendicularly.

also perpendicularly
printed.
5. Forms of Product Capsules — Tablets —
label says: label says:
"50 capsules" "36 Tablets"
6. Prescription Label states: No such
"To be dispensed statement
only by or on the
 prescription of a
physicians"

Accordingly, taken as they will appear to a prospective customer, the trademarks in

question are not apt to confuse. Furthermore, the product of the applicant is expressly
stated as dispensable only upon doctor's prescription, while that of oppositor does not
require the same. The chances of being confused into purchasing one for the other are
therefore all the more rendered negligible. Although oppositor avers that some drugstores
sell "BIOFERIN: without asking for a doctor's prescription, the same if true would be an
irregularity not attributable to the applicant, who has already clearly stated the
requirement of a doctor's prescription upon the face of the label of its product.
Wherefore, the decision of the Director of Patents appealed from is hereby affirmed
without costs. So ordered.
Bengzon, C.J., Bautista Angelo, Concepcion, J.B.L. Reyes, Barrera, Dizon, Regala,
Makalintal, Zaldivar and Sanchez, JJ., concur.
(Bristol Myers Co. v. Director of Patents, G.R. No. L-21587, [May 19, 1966], 123 PHIL 994-
|||

998)

MANG INASAL PHILIPPINES, INC., petitioner, vs. IFP MANUFACTURING
CORPORATION, respondent.
DECISION
VELASCO, JR., J p:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court of the Resolutions dated June 10, 2015 1 and December 2, 2015 2 of the Court of
Appeals (CA) in CA-G.R. SP No. 139020. HTcADC

The Facts

The Trademark Application and the Opposition

Respondent IFP Manufacturing Corporation is a local manufacturer of snacks

and beverages.

On May 26, 2011, respondent filed with the Intellectual Property Office (IPO) an
application 3 for the registration of the mark "OK Hotdog Inasal Cheese Hotdog Flavor
Mark" (OK Hotdog Inasal mark) in connection with goods under Class 30 of the Nice
Classification. 4 The said mark, which respondent intends to use on one of its curl snack
products, appears as follows:

The application of respondent was opposed 5 by petitioner Mang Inasal

Philippines, Inc.

Petitioner is a domestic fast food company and the owner of the mark "Mang
Inasal, Home of Real Pinoy Style Barbeque and Device" (Mang Inasal mark) for
services under Class 43 of the Nice Classification. 6 The said mark, which was
registered with the IPO in 2006 7 and had been used by petitioner for its chain of
restaurants since 2003, 8 consists of the following insignia:

Petitioner, in its opposition, contended that the registration of respondent's OK

Hotdog Inasal mark is prohibited under Section 123.1 (d) (iii) of Republic Act No. (RA)
8293. 9 Petitioner averred that the OK Hotdog Inasal mark and the Mang Inasal mark
share similarities — both as to their appearance and as to the goods or services that
they represent — which tend to suggest a false connection or association between the
said marks and, in that regard, would likely cause confusion on the part of the public. 10
As petitioner explained:

1. The OK Hotdog Inasal mark is similar to the Mang Inasal mark. Both marks feature the
same dominant element — i.e., the word "INASAL" — printed and
stylized in the exact same manner, viz.:

a. In both marks, the word "INASAL" is spelled using the same font style and red color;

b. In both marks, the word "INASAL" is placed inside the same black outline and yellow
 background; and

c. In both marks, the word "INASAL" is arranged in the same staggered format.

2. The goods that the OK Hotdog Inasal mark is intended to identify (i.e., curl snack
products) are also closely related to the services represented by the
Mang Inasal mark (i.e., fast food restaurants). Both marks cover inasal
or inasal-flavored food products.

Petitioner's opposition was referred to the Bureau of Legal Affairs (BLA) of the
IPO for hearing and disposition.

Decisions of the IPO-BLA and the IPO-DG

On September 19, 2013, after due proceedings, the IPO-BLA issued a Decision
11 dismissing petitioner's opposition. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the instant opposition is

hereby DISMISSED. Let the filewrapper [sic] of Trademark Application
Serial No. 4-2011-006098 be returned, together with a copy of this
Decision, to the Bureau of Trademarks for further information and
appropriate action.

SO ORDERED.

Aggrieved, petitioner appealed the Decision of IPO-BLA to the Director General

(DG) of the IPO. 12

On December 15, 2014, the IPO-DG rendered a Decision 13 dismissing the

appeal of petitioner. The fallo of the Decision accordingly reads:

Wherefore, premises considered, the appeal is hereby

dismissed. Let a copy of this Decision be furnished to the Director of
Bureau of Legal Affairs and the Director of Bureau of Trademarks for
their appropriate action and information. Further, let a copy of this
Decision be furnished to the library of the Documentation, Information
and Technology Transfer Bureau for records purposes.

SO ORDERED.
 Both the IPO-BLA and the IPO-DG were not convinced that the OK Hotdog
Inasal mark is confusingly similar to the Mang Inasal mark. They rebuffed petitioner's
contention, thusly:

1. The OK Hotdog Inasal mark is not similar to the Mang Inasal mark. In terms of
appearance, the only similarity between the two marks is the word
"INASAL." However, there are other words like "OK," "HOTDOG," and
"CHEESE" and images like that of curls and cheese that are found in
the OK Hotdog Inasal mark but are not present in the Mang Inasal mark.
14 aScITE

In addition, petitioner cannot prevent the application of the word "INASAL" in the OK
Hotdog Inasal mark. No person or entity can claim exclusive right to use
the word "INASAL" because it is merely a generic or descriptive word
that means barbeque or barbeque products. 15

2. Neither can the underlying goods and services of the two marks be considered as
closely related. The products represented by the two marks are not
competitive and are sold in different channels of trade. The curl snack
products of the OK Hotdog Inasal mark are sold in sari-sari stores,
grocery stores and other small distributor outlets, whereas the food
products associated with the Mang Inasal mark are sold in petitioner's
restaurants. 16

Undeterred, petitioner appealed to the CA.

Resolutions of the CA and the Instant Appeal

On June 10, 2015, the CA issued a Resolution 17 denying the appeal of

petitioner. Petitioner filed a motion for reconsideration, but this too was denied by the
CA through its Resolution 18 dated December 2, 2015. The CA, in its Resolutions,
simply agreed with the ratiocinations of the IPO-BLA and IPO-DG.

Hence, the instant appeal.

Here, petitioner prays for the reversal of the CA Resolutions. Petitioner maintains
that the OK Hotdog Inasal mark is confusingly similar to the Mang Inasal mark and
insists that the trademark application of respondent ought to be denied for that reason.

Our Ruling

We have examined the OK Hotdog Inasal and Mang Inasal marks under the lens
of pertinent law and jurisprudence. And, through it, we have determined the justness of
petitioner's claim. By our legal and jurisprudential standards, the respondent's OK
Hotdog Inasal mark is, indeed, likely to cause deception or confusion on the part of the
public. Hence, contrary to what the IPO-BLA, IPO-DG, and the CA had ruled, the
respondent's application should have been denied.
 We, therefore, grant the appeal.

The Proscription: Sec. 123.1 (d) (iii) of RA 8293

A mark that is similar to a registered mark or a mark with an earlier filing or

priority date (earlier mark) and which is likely to cause confusion on the part of the public
cannot be registered with the IPO. Such is the import of Sec. 123.1 (d) (iii) of RA 8293:

SECTION 123. Registrability. —

123.1. A mark cannot be registered if it:

xxx xxx xxx

d. x x x:

i. x x x

ii. x x x

iii. . . . nearly resembles [a registered mark belonging to a different proprietor or a

mark with an earlier filing or priority date] as to be
likely to deceive or cause confusion.

The concept of confusion, which is at the heart of the proscription, could either
refer to confusion of goods or confusion of business. In Skechers U.S.A., Inc. v.
Trendworks International Corporation, 19 we discussed and differentiated both types of
confusion, as follows:

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.

Confusion, in either of its forms, is, thus, only possible when the goods or
services covered by allegedly similar marks are identical, similar or related in some
manner. 20

Verily, to fall under the ambit of Sec. 123.1 (d) (iii) and be regarded as likely to
deceive or cause confusion upon the purchasing public, a prospective mark must be
shown to meet two (2) minimum conditions:

1. The prospective mark must nearly resemble or be similar to an earlier mark; and

2. The prospective mark must pertain to goods or services that are either identical, similar
or related to the goods or services represented by the earlier mark.

The rulings of the IPO-BLA, IPO-DG, and the CA all rest on the notion that the
OK Hotdog Inasal mark does not fulfill both conditions and so may be granted
registration.

We disagree.

II

The OK Hotdog Inasal Mark is Similar to the Mang Inasal Mark

The first condition of the proscription requires resemblance or similarity between

a prospective mark and an earlier mark. Similarity does not mean absolute identity of
marks. 21 To be regarded as similar to an earlier mark, it is enough that a prospective
mark be a colorable imitation of the former. 22 Colorable imitation denotes such likeness
in form, content, words, sound, meaning, special arrangement or general appearance of
one mark with respect to another as would likely mislead an average buyer in the
ordinary course of purchase. 23 HEITAD

In determining whether there is similarity or colorable imitation between two

marks, authorities employ either the dominancy test or the holistic test. 24 In Mighty
Corporation v. E. & J. Gallo Winery, 25 we distinguished between the two tests as
follows:
 The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or
deception, and thus infringement. If the competing trademark
contains the main, essential or dominant features of another, and
confusion or deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. The question is
whether the use of the marks involved is likely to cause confusion or
mistake in the mind of the public or deceive purchasers.

On the other hand, the Holistic Test requires that the entirety of
the marks in question be considered in resolving confusing similarity.
Comparison of words is not the only determining factor. The trademarks
in their entirety as they appear in their respective labels or hang tags
must also be considered in relation to the goods to which they are
attached. The discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing in both
labels in order that he may draw his conclusion whether one is
confusingly similar to the other. (citations omitted and emphasis
supplied)

There are currently no fixed rules as to which of the two tests can be applied in
any given case. 26 However, recent case law on trademark seems to indicate an
overwhelming judicial preference towards applying the dominancy test. 27 We conform.

Our examination of the marks in controversy yielded the following findings:

1. The petitioner's Mang Inasal mark has a single dominant feature — the word "INASAL"
written in a bold red typeface against a black outline and yellow
background with staggered design. The other perceptible elements of
the mark — such as the word "MANG" written in black colored font at
the upper left side of the mark and the phrase "HOME OF REAL PINOY
STYLE BARBEQUE" written in a black colored stylized font at the lower
portion of the mark — are not as visually outstanding as the mentioned
feature.

2. Being the sole dominant element, the word "INASAL," as stylized in the Mang
Inasal mark, is also the most distinctive and recognizable feature of
the said mark.

3. The dominant element "INASAL," as stylized in the Mang Inasal mark, is different
 from the term "inasal" per se. The term "inasal" per se is a
descriptive term that cannot be appropriated. However, the
dominant element "INASAL," as stylized in the Mang Inasal mark, is
not. Petitioner, as the registered owner of the Mang Inasal mark,
can claim exclusive use of such element.

4. The respondent's OK Hotdog Inasal mark, on the other hand, has three (3) dominant
features: (a) the word "INASAL" written in a bold red typeface against a
black and yellow outline with staggered design; (b) the word "HOTDOG"
written in green colored font; and (c) a picture of three pieces of curls.
Though there are other observable elements in the mark — such as the
word "OK" written in red colored font at the upper left side of the mark,
the small red banner overlaying the picture of the curls with the words
"CHEESE HOTDOG FLAVOR" written on it, and the image of a block of
cheese beside the picture of the curls — none of those are as prevalent
as the two features aforementioned.

5. The dominant element "INASAL" in the OK Hotdog Inasal mark is exactly the same
as the dominant element "INASAL" in the Mang Inasal mark. Both
elements in both marks are printed using the exact same red
colored font, against the exact same black outline and yellow
background and is arranged in the exact same staggered format.

6. Apart from the element "INASAL," there appear no other perceivable similarities
between the two marks.

Given the foregoing premises, and applying the dominancy test, we hold that
the OK Hotdog Inasal mark is a colorable imitation of the Mang Inasal mark.

First. The fact that the conflicting marks have exactly the same dominant
element is key. It is undisputed that the OK Hotdog Inasal mark copied and adopted as
one of its dominant features the "INASAL" element of the Mang Inasal mark. Given that
the "INASAL" element is, at the same time, the dominant and most distinctive feature of
the Mang Inasal mark, the said element's incorporation in the OK Hotdog Inasal mark,
thus, has the potential to project the deceptive and false impression that the latter mark
is somehow linked or associated with the former mark.

Second. The differences between the two marks are trumped by the overall
impression created by their similarity. The mere fact that there are other elements in the
OK Hotdog Inasal mark that are not present in the Mang Inasal mark actually does little
to change the probable public perception that both marks are linked or associated. It is
worth reiterating that the OK Hotdog Inasal mark actually brandishes a literal copy of the
most recognizable feature of the Mang Inasal mark. We doubt that an average buyer
catching a casual glimpse of the OK Hotdog Inasal mark would pay more attention to
the peripheral details of the said mark than it would to the mark's more prominent
feature, especially when the same invokes the distinctive feature of another more
popular brand.
 All in all, we find that the OK Hotdog Inasal mark is similar to the Mang Inasal
mark.

III

The Goods for which the Registration of the
OK Hotdog Inasal Mark is Sought are
Related to the
Services Being Represented by the Mang Inasal Mark

The second condition of the proscription requires that the prospective mark
pertain to goods or services that are either identical, similar or related to the goods or
services represented by the earlier mark. While there can be no quibble that the curl
snack product for which the registration of the OK Hotdog Inasal mark is sought cannot
be considered as identical or similar to the restaurant services represented by the Mang
Inasal mark, there is ample reason to conclude that the said product and services may
nonetheless be regarded as related to each other.

Related goods and services are those that, though non-identical or non-similar,
are so logically connected to each other that they may reasonably be assumed to
originate from one manufacturer or from economically-linked manufacturers. 28 In
determining whether goods or services are related, several factors may be considered.
Some of those factors recognized in our jurisprudence are: 29 ATICcS

1. the business (and its location) to which the goods belong;

2. the class of product to which the goods belong;

3. the product's quality, quantity, or size, including the nature of the package, wrapper or
container;

4. the nature and cost of the articles;

5. the descriptive properties, physical attributes or essential characteristics with reference

to their form, composition, texture or quality;

6. the purpose of the goods;

7. whether the article is bought for immediate consumption, that is, day-to-day household
items;

8. the fields of manufacture;

9. the conditions under which the article is usually purchased; and

10. the channels of trade through which the goods flow, how they are distributed,
marketed, displayed and sold.

Relative to the consideration of the foregoing factors, however, Mighty

Corporation 30 significantly imparted:
 The wisdom of this approach is its recognition that each
trademark infringement case presents its own unique set of facts. No
single factor is preeminent, nor can the presence or absence of one
determine, without analysis of the others, the outcome of an
infringement suit. Rather, the court is required to sift the evidence
relevant to each of the criteria. This requires that the entire panoply of
elements constituting the relevant factual landscape be
comprehensively examined. It is a weighing and balancing process.
With reference to this ultimate question, and from a balancing of the
determinations reached on all of the factors, a conclusion is reached
whether the parties have a right to the relief sought.

A very important circumstance though is whether there

exists a likelihood that an appreciable number of ordinarily prudent
purchasers will be misled, or simply confused, as to the source of
the goods in question. The "purchaser" is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer" considering the type
of product involved he is accustomed to buy, and therefore to some
extent familiar with, the goods in question. The test of fraudulent
simulation is to be found in the likelihood of the deception of some
persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been
associated. The test is not found in the deception, or the possibility of
deception, of the person who knows nothing about the design which
has been counterfeited, and who must be indifferent between that and
the other. The simulation, in order to be objectionable, must be such
as appears likely to mislead the ordinary intelligent buyer who has a
need to supply and is familiar with the article that he seeks to
purchase. (citations omitted and emphasis supplied)

Mindful of the foregoing precepts, we hold that the curl snack product for which
the registration of the OK Hotdog Inasal mark is sought is related to the restaurant
services represented by the Mang Inasal mark, in such a way that may lead to a
confusion of business. In holding so, we took into account the specific kind of restaurant
business that petitioner is engaged in, the reputation of the petitioner's mark, and the
particular type of curls sought to be marketed by the respondent, thus:

First. Petitioner uses the Mang Inasal mark in connection with its restaurant
services that is particularly known for its chicken inasal, i.e., grilled chicken doused in a
special inasal marinade. 31 The inasal marinade is different from the typical barbeque
 marinade and it is what gives the chicken inasal its unique taste and distinct orange
color. 32 Inasal refers to the manner of grilling meat products using an inasal marinade.

Second. The Mang Inasal mark has been used for petitioner's restaurant
business since 2003. The restaurant started in Iloilo but has since expanded its business
throughout the country. Currently, the Mang Inasal chain of restaurants has a total of
464 branches scattered throughout the nation's three major islands. 33 It is, thus, fair to
say that a sizeable portion of the population is knowledgeable of the Mang Inasal mark.

Third. Respondent, on the other hand, seeks to market under the OK Hotdog
Inasal mark curl snack products which it publicizes as having a cheese hotdog inasal
flavor. 34

Accordingly, it is the fact that the underlying goods and services of both marks
deal with inasal and inasal-flavored products which ultimately fixes the relations between
such goods and services. Given the foregoing circumstances and the aforesaid similarity
between the marks in controversy, we are convinced that an average buyer who comes
across the curls marketed under the OK Hotdog Inasal mark is likely to be confused as
to the true source of such curls. To our mind, it is not unlikely that such buyer would be
led into the assumption that the curls are of petitioner and that the latter has ventured
into snack manufacturing or, if not, that the petitioner has supplied the flavorings for
respondent's product. Either way, the reputation of petitioner would be taken advantage
of and placed at the mercy of respondent.

All in all, we find that the goods for which the registration of the OK Hotdog
Inasal mark is sought are related to the services being represented by the Mang Inasal
mark.

IV

Conclusion

The OK Hotdog Inasal mark meets the two conditions of the proscription under
Sec. 123.1 (d) (iii) of RA 8293. First, it is similar to the Mang Inasal mark, an earlier mark.
Second, it pertains to goods that are related to the services represented by such earlier
mark. Petitioner was, therefore, correct; and the IPO-BLA, IPO-DG, and the CA's rulings
must be reversed. The OK Hotdog Inasal mark is not entitled to be registered as its use
will likely deceive or cause confusion on the part of the public and, thus, also likely to
infringe the Mang Inasal mark. The law, in instances such as this, must come to the
succor of the owner of the earlier mark.

WHEREFORE, premises considered, the petition is hereby GRANTED. We

hereby render a decision as follows:

1. REVERSING and SETTING ASIDE the Resolutions dated June 10, 2015 and December
2, 2015 of the Court of Appeals in CA-G.R. SP No. 139020; TIADCc

2. SETTING ASIDE the Decision dated December 15, 2014 of the Director General of the
 Intellectual Property Office in Appeal No. 14-2013-0052;

3. SETTING ASIDE the Decision dated September 19, 2013 of the Director of the Bureau
of Legal Affairs of the Intellectual Property Office in IPC No. 14-2012-
00369; and

4. DIRECTING the incumbent Director General and Director of the Bureau of Legal Affairs
of the Intellectual Property Office to DENY respondent's Application No.
4-2011-006098 for the registration of the mark "OK Hotdog Inasal
Cheese Hotdog Flavor Mark."

SO ORDERED.

Bersamin, Reyes, Jardeleza and Tijam, JJ., concur.

||| (Mang Inasal Philippines, Inc. v. IFP Manufacturing Corp., G.R. No. 221717, [June 19,
2017], 811 PHIL 261-280)
TAIWAN KOLIN CORPORATION, LTD., petitioner, vs. KOLIN ELECTRONICS CO.,
INC., respondent.

DECISION
VELASCO, JR., J p:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court
interposed by petitioner Taiwan Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30,
2013 Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 122565 and its subsequent
November 6, 2013 Resolution. 2 The assailed issuances effectively denied petitioner's
trademark application for the use of "KOLIN" on its television and DVD players.
The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO),
then Bureau of Patents, Trademarks, and Technology Transfer, a trademark application,
docketed as Application No. 4-1996-106310, for the use of "KOLIN" on a combination of
goods, including colored televisions, refrigerators, window-type and split-type air
conditioners, electric fans and water dispensers. Said goods allegedly fall under Classes 9,
11, and 21 of the Nice Classification (NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for
Taiwan Kolin's failure to respond to IPO's Paper No. 5 requiring it to elect one class of good
for its coverage. However, the same application was subsequently revived through
Application Serial No. 4-2002-011002, 3 with petitioner electing Class 9 as the subject of its
application, particularly: television sets, cassette recorder, VCD Amplifiers, camcorders and
other audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets,
videophones, facsimile machines, teleprinters, cellular phones and automatic goods vending
machine. The application would in time be duly published. 4
On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed
petitioner's revived application, docketed as Inter Partes Case No. 14-2006-00096. As
argued, the mark Taiwan Kolin seeks to register is identical, if not confusingly similar, with its
"KOLIN" mark registered on November 23, 2003, covering the following products under
Class 9 of the NCL: automatic voltage regulator, converter, recharger, stereo booster, AC-
DC regulated power supply, step-down transformer, and PA amplified AC-DC. 5
To digress a bit, Kolin Electronics' "KOLIN" registration was, as it turns out, the
subject of a prior legal dispute between the parties in Inter Partes Case No. 14-1998-00050
before the IPO. In the said case, Kolin Electronics' own application was opposed by Taiwan
Kolin, being, as Taiwan Kolin claimed, the prior registrant and user of the "KOLIN"
trademark, having registered the same in Taipei, Taiwan on December 1, 1988. The Bureau
of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority right to Taiwan Kolin's
Taipei registration absent evidence to prove that it has already used the said mark in the
Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPO's
Decision. Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin
Electronics was able to register the "KOLIN" trademark on November 23, 2003 for its
products. 6 Subsequently, the CA, on July 31, 2006, affirmed 7 the Decision of the Director
General.
 In answer to respondent's opposition in Inter Partes Case No. 14-2006-00096,
petitioner argued that it should be accorded the benefits of a foreign-registered mark under
Secs. 3. and 131.1 of Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines (IP Code); 8 that it has already registered the "KOLIN" mark in the
People's Republic of China, Malaysia and Vietnam, all of which are parties to the Paris
Convention for the Protection of Industrial Property (Paris Convention) and the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS); and that benefits accorded to
a well-known mark should be accorded to petitioner. 9
Ruling of the BLA-IPO
By Decision 10 dated August 16, 2007, the BLA-IPO denied petitioner's application
disposing as follows:
In view of all the foregoing, the instant Opposition is as, it is
hereby SUSTAINED. Accordingly, application bearing Serial No. 4-1996-
106310 for the mark "KOLIN" filed in the name of TAIWAN KOLIN., LTD.
on February 29, 1996 for goods falling under Class 09 of the International
Classification of Goods such as cassette recorder, VCD, woofer,
amplifiers, camcorders and other audio/video electronic equipment, flat
iron, vacuum cleaners, cordless handsets, videophones, facsimile
machines, teleprinters, cellular phones, automatic goods vending
machines and other electronic equipment is hereby REJECTED. HETDAC

Let the file wrapper of "KOLIN", subject of this case be

forwarded to the Bureau of Trademarks (BOT) for appropriate action
in accordance with this Decision.

SO ORDERED.
Citing Sec. 123 (d) of the IP Code, 11 the BLA-IPO held that a mark cannot be
registered if it is identical with a registered mark belonging to a different proprietor in respect
of the same or closely-related goods. Accordingly, respondent, as the registered owner of
the mark "KOLIN" for goods falling under Class 9 of the NCL, should then be protected
against anyone who impinges on its right, including petitioner who seeks to register an
identical mark to be used on goods also belonging to Class 9 of the NCL. 12 The BLA-IPO
also noted that there was proof of actual confusion in the form of consumers writing
numerous e-mails to respondent asking for information, service, and complaints about
petitioner's products. 13
Petitioner moved for reconsideration but the same was denied on January 26, 2009
for lack of merit. 14 Thus, petitioner appealed the above Decision to the Office of the
Director General of the IPO.
Ruling of the IPO Director General
On November 23, 2011, the IPO Director General rendered a Decision 15 reversing
that of the BLA-IPO in the following wise:
 Wherefore, premises considered, the appeal is hereby GRANTED.
The Appellant's Trademark Application No. 4-1996-106310 is hereby
GIVEN DUE COURSE subject to the use limitation or restriction for the
goods "television and DVD player". Let a copy of this Decision as well as
the trademark application and records be furnished and returned to the
Director of the Bureau of Legal Affairs for appropriate action. Further, let
the Director of the Bureau of Trademarks and the library of the
Documentation, Information and Technology Transfer Bureau be furnished
a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

In so ruling, the IPO Director General ratiocinated that product classification alone
cannot serve as the decisive factor in the resolution of whether or not the goods are related
and that emphasis should be on the similarity of the products involved and not on the
arbitrary classification or general description of their properties or characteristics. As held,
the mere fact that one person has adopted and used a particular trademark for his goods
does not prevent the adoption and use of the same trademark by others on articles of a
different description. 16
Aggrieved, respondent elevated the case to the CA.
Ruling of the Court of Appeals
In its assailed Decision, the CA found for Kolin Electronics, on the strength of the
following premises: (a) the mark sought to be registered by Taiwan Kolin is confusingly
similar to the one already registered in favor of Kolin Electronics; (b) there are no other
designs, special shape or easily identifiable earmarks that would differentiate the products of
both competing companies; 17 and (c) the intertwined use of television sets with amplifier,
booster and voltage regulator bolstered the fact that televisions can be considered as within
the normal expansion of Kolin Electronics, 18 and is thereby deemed covered by its
trademark as explicitly protected under Sec. 138 19 of the IP Code. 20 Resultantly, the CA
granted respondent's appeal thusly:
WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of the Director
General of the Intellectual Property Office in Inter Partes Case No. 14-2006-0096 is
REVERSED and SET ASIDE. The September 17, 2007 Decision of the Bureau of Legal
Affairs of the same office is REINSTATED.
SO ORDERED.
Petitioner moved for reconsideration only to be denied by the CA through its equally
assailed November 6, 2013 Resolution. Hence, the instant recourse.
The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled
to its trademark registration of "KOLIN" over its specific goods of television sets and DVD
players. Petitioner postulates, in the main, that its goods are not closely related to those of
Kolin Electronics. On the other hand, respondent hinges its case on the CA's findings that its
and petitioner's products are closely-related. Thus, granting petitioner's application for
trademark registration, according to respondent, would cause confusion as to the public.
The Court's Ruling
The petition is impressed with merit.
Identical marks may be registered for
products from the same classification
To bolster its opposition against petitioner's application to register trademark
"KOLIN," respondent maintains that the element of mark identity argues against approval of
such application, quoting the BLA IPO's ruling in this regard: 21 IcSEAH
Indubitably, Respondent-Applicant's [herein petitioner] mark is
identical to the registered mark of herein Opposer [herein respondent] and
the identical mark is used on goods belonging to Class 9 to which
Opposer's goods are also classified. On this point alone, Respondent-
Applicant's application should already be denied.

The argument is specious.

The parties admit that their respective sets of goods belong to Class 9 of the NCL,
which includes the following: 22
Class 9
Scientific, nautical, surveying, photographic, cinematographic,
optical, weighing, measuring, signalling, checking (supervision), life-saving
and teaching apparatus and instruments; apparatus and instruments for
conducting, switching, transforming, accumulating, regulating or
controlling electricity; apparatus for recording, transmission or
reproduction of sound or images; magnetic data carriers, recording discs;
compact discs, DVDs and other digital recording media; mechanisms for
coin-operated apparatus; cash registers, calculating machines, data
processing equipment, computers; computer software; fire-extinguishing
apparatus.

But mere uniformity in categorization, by itself, does not automatically preclude the
registration of what appears to be an identical mark, if that be the case. In fact, this Court, in
a long line of cases, has held that such circumstance does not necessarily result in any
trademark infringement. The survey of jurisprudence cited in Mighty Corporation v. E. & J
Gallo Winery 23 is enlightening on this point:
(a) in Acoje Mining Co., Inc. vs. Director of Patents, 24 we ordered the approval of
Acoje Mining's application for registration of the trademark
LOTUS for its soy sauce even though Philippine Refining
Company had prior registration and use of such identical mark for
its edible oil which, like soy sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, 25 we upheld
the Patent Director's registration of the same trademark CAMIA
for Ng Sam's ham under Class 47, despite Philippine Refining
Company's prior trademark registration and actual use of such
mark on its lard, butter, cooking oil (all of which belonged to Class
47), abrasive detergents, polishing materials and soaps;

(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun
Liong, 26 we dismissed Hickok's petition to cancel private
respondent's HICKOK trademark registration for its Marikina
shoes as against petitioner's earlier registration of the same
trademark for handkerchiefs, briefs, belts and wallets.

Verily, whether or not the products covered by the trademark sought to be

registered by Taiwan Kolin, on the one hand, and those covered by the prior issued
certificate of registration in favor of Kolin Electronics, on the other, fall under the same
categories in the NCL is not the sole and decisive factor in determining a possible violation
of Kolin Electronics' intellectual property right should petitioner's application be granted. It is
hornbook doctrine, as held in the above-cited cases, that emphasis should be on the
similarity of the products involved and not on the arbitrary classification or general
description of their properties or characteristics. The mere fact that one person has adopted
and used a trademark on his goods would not, without more, prevent the adoption and use
of the same trademark by others on unrelated articles of a different kind. 27
The CA erred in denying petitioner's
registration application
Respondent next parlays the idea of relation between products as a factor militating
against petitioner's application. Citing Esso Standard Eastern, Inc. v. Court of Appeals, 28
respondent argues that the goods covered by petitioner's application and those covered by
its registration are actually related belonging as they do to the same class or have the same
physical characteristics with reference to their form, composition, texture, or quality, or if
they serve the same purpose. Respondent likewise draws parallelisms between the present
controversy and the following cases: 29
(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company, 30 biscuits were held related to
milk because they were both food products;

(b) In Chua Che vs. Phil. Patents Office, 31 soap and perfume, lipstick and nail polish
are held to be similarly related because they are common
household items;
(c) In Ang vs. Teodoro, 32 the trademark "Ang Tibay" for shoes and slippers was
disallowed to be used for shirts and pants because they belong to
the same general class of goods; and

(d) In Khe vs. Lever Bros. Co., 33 soap and pomade, although non-competitive, were
held to be similar or belong to the same class, since both are
toilet articles.

Respondent avers that Kolin Electronics' and Taiwan Kolin's products are closely-
related not only because both fall under Class 9 of the NCL, but mainly because they both
relate to electronic products, instruments, apparatus, or appliances. 34 Pushing the point,
respondent would argue that Taiwan Kolin and Kolin Electronics' goods are inherently similar
in that they are all plugged into electric sockets and perform a useful function. 35
Furthermore, respondent echoes the appellate court's ratiocination in denying petitioner's
application, viz.: 36 HTASIa
Significantly, Kolin Electronics' goods (automatic voltage
regulator; converter; recharger; stereo booster; AC-DC regulated power
supply; step-down transformer; and PA amplified AC-DC) and Taiwan
Kolin's television sets and DVD players are both classified under class 9 of
the NICE agreement. At first glance, it is also evident that all these goods
are generally described as electrical devices. . . . [T]he goods of both Kolin
Electronics and Taiwan Kolin will inevitably be introduced to the public as
"KOLIN" products and will be offered for sale in the same channels of
trade. Contrary to Taiwan Kolin's claim, power supply as well as audio
and stereo equipment like booster and amplifier are not only sold in
hardware and electrical shops. These products are commonly found in
appliance stores alongside television sets and DVD players. With the
present trend in today's entertainment of having a home theater system, it
is not unlikely to see a stereo booster, amplifier and automatic voltage
regulator displayed together with the television sets and DVD players.
With the intertwined use of these products bearing the identical "KOLIN"
mark, the ordinary intelligent consumer would likely assume that they are
produced by the same manufacturer.

In sum, the intertwined use, the same classification of the products as class 9 under
the NICE Agreement, and the fact that they generally flow through the same channel of
trade clearly establish that Taiwan Kolin's television sets and DVD players are closely
related to Kolin Electronics' goods. As correctly pointed out by the BLA-IPO, allowing
Taiwan Kolin's registration would only confuse consumers as to the origin of the
products they intend to purchase. Accordingly, protection should be afforded to Kolin
Electronics, as the registered owner of the "KOLIN" trademark. 37 (emphasis added)
The CA's approach and reasoning to arrive at the assailed holding that the approval
of petitioner's application is likely to cause confusion or deceive fail to persuade.
a. The products covered by
petitioner's application and
respondent's registration are
unrelated
A certificate of trademark registration confers upon the trademark owner the
exclusive right to sue those who have adopted a similar mark not only in connection with the
goods or services specified in the certificate, but also with those that are related thereto. 38
TIDcEH
In resolving one of the pivotal issues in this case — whether or not the products of
the parties involved are related — the doctrine in Mighty Corporation is authoritative. There,
the Court held that the goods should be tested against several factors before arriving at a
sound conclusion on the question of relatedness. Among these are:
(a) the business (and its location) to which the goods belong;

(b) the class of product to which the goods belong;

(c) the product's quality, quantity, or size, including the nature of the package,
wrapper or container;

(d) the nature and cost of the articles;

(e) the descriptive properties, physical attributes or essential characteristics with

reference to their form, composition, texture or quality;

(f) the purpose of the goods;

(g) whether the article is bought for immediate consumption, that is, day-to-day
household items;
(h) the fields of manufacture;

(i) the conditions under which the article is usually purchased; and

(j) the channels of trade through which the goods flow, how they are distributed,
marketed, displayed and sold. 39

As mentioned, the classification of the products under the NCL is merely part and
parcel of the factors to be considered in ascertaining whether the goods are related. It is not
sufficient to state that the goods involved herein are electronic products under Class 9 in
order to establish relatedness between the goods, for this only accounts for one of many
considerations enumerated in Mighty Corporation. In this case, credence is accorded to
petitioner's assertions that: 40
a. Taiwan Kolin's goods are classified as home appliances as opposed to Kolin
Electronics' goods which are power supply and audio equipment
accessories;

b. Taiwan Kolin's television sets and DVD players perform distinct function and
purpose from Kolin Electronics' power supply and audio
equipment; and

c. Taiwan Kolin sells and distributes its various home appliance products on
wholesale and to accredited dealers, whereas Kolin Electronics'
goods are sold and flow through electrical and hardware stores.

Clearly then, it was erroneous for respondent to assume over the CA to conclude
that all electronic products are related and that the coverage of one electronic product
necessarily precludes the registration of a similar mark over another. In this digital age
wherein electronic products have not only diversified by leaps and bounds, and are geared
towards interoperability, it is difficult to assert readily, as respondent simplistically did, that
all devices that require plugging into sockets are necessarily related goods.
It bears to stress at this point that the list of products included in Class 9 41 can be
sub-categorized into five (5) classifications, namely: (1) apparatus and instruments for
scientific or research purposes, (2) information technology and audiovisual equipment, (3)
apparatus and devices for controlling the distribution and use of electricity, (4) optical
apparatus and instruments, and (5) safety equipment. 42 From this sub-classification, it
becomes apparent that petitioner's products, i.e., televisions and DVD players, belong to
audiovisual equipment, while that of respondent, consisting of automatic voltage regulator,
converter, recharger, stereo booster, AC-DC regulated power supply, step-down
transformer, and PA amplified AC-DC, generally fall under devices for controlling the
distribution and use of electricity.
b. The ordinarily intelligent
buyer is not likely to be
confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly
similar to another, no rigid set rules can plausible be formulated. Each case must be decided
on its merits, with due regard to the goods or services involved, the usual purchaser's
character and attitude, among others. In such cases, even more than in any other litigation,
precedent must be studied in the light of the facts of a particular case. That is the reason
why in trademark cases, jurisprudential precedents should be applied only to a case if they
are specifically in point. 43
For a clearer perspective and as matter of record, the following image on the left 44
is the trademark applied for by petitioner, while the image juxtaposed to its right 45 is the
trademark registered by respondent:

While both competing marks refer to the word "KOLIN" written in upper case letters
and in bold font, the Court at once notes the distinct visual and aural differences between
them: Kolin Electronics' mark is italicized and colored black while that of Taiwan Kolin is
white in pantone red color background. The differing features between the two, though they
may appear minimal, are sufficient to distinguish one brand from the other.
It cannot be stressed enough that the products involved in the case at bar are,
generally speaking, various kinds of electronic products. These are not ordinary consumable
household items, like catsup, soy sauce or soap which are of minimal cost. 46 The products
of the contending parties are relatively luxury items not easily considered affordable.
Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and
would prefer to mull over his purchase. Confusion and deception, then, is less likely. 47 As
further elucidated in Del Monte Corporation v. Court of Appeals: 48
. . . Among these, what essentially determines the attitudes of the
purchaser, specifically his inclination to be cautious, is the cost of the
goods. To be sure, a person who buys a box of candies will not exercise
as much care as one who buys an expensive watch. As a general rule, an
ordinary buyer does not exercise as much prudence in buying an article
for which he pays a few centavos as he does in purchasing a more
valuable thing. Expensive and valuable items are normally bought only
after deliberate, comparative and analytical investigation. But mass
products, low priced articles in wide use, and matters of everyday
purchase requiring frequent replacement are bought by the casual
consumer without great care . . . . (emphasis added)
 Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe,
oblivious that they involved common household items — i.e., biscuits and milk, cosmetics,
clothes, and toilet articles, respectively — whereas the extant case involves luxury items not
regularly and inexpensively purchased by the consuming public. In accord with common
empirical experience, the useful lives of televisions and DVD players last for about five (5)
years, minimum, making replacement purchases very infrequent. The same goes true with
converters and regulators that are seldom replaced despite the acquisition of new
equipment to be plugged onto it. In addition, the amount the buyer would be parting with
cannot be deemed minimal considering that the price of televisions or DVD players can
exceed today's monthly minimum wage. In light of these circumstances, it is then expected
that the ordinary intelligent buyer would be more discerning when it comes to deciding which
electronic product they are going to purchase, and it is this standard which this Court
applies herein in determining the likelihood of confusion should petitioner's application be
granted. TaCIDS
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing
Corporation v. Court of Appeals, 49 wherein the opposing trademarks are that of Emerald
Garment Manufacturing Corporation's "Stylistic Mr. Lee" and H.D. Lee's "LEE." In the said
case, the appellate court affirmed the decision of the Director of Patents denying Emerald
Garment's application for registration due to confusing similarity with H.D. Lee's trademark.
This Court, however, was of a different beat and ruled that there is no confusing similarity
between the marks, given that the products covered by the trademark, i.e., jeans, were, at
that time, considered pricey, typically purchased by intelligent buyers familiar with the
products and are more circumspect, and, therefore, would not easily be deceived. As held:
Finally, in line with the foregoing discussions, more credit should
be given to the "ordinary purchaser." Cast in this particular controversy,
the ordinary purchaser is not the "completely unwary consumer" but is the
"ordinarily intelligent buyer" considering the type of product involved.

The definition laid down in Dy Buncio v. Tan Tiao Bok 50 is better

suited to the present case. There, the "ordinary purchaser" was defined as
one "accustomed to buy, and therefore to some extent familiar with,
the goods in question. The test of fraudulent simulation is to be found in
the likelihood of the deception of some persons in some measure
acquainted with an established design and desirous of purchasing the
commodity with which that design has been associated. The test is not
found in the deception, or the possibility of deception, of the person who
knows nothing about the design which has been counterfeited, and who
must be indifferent between that and the other. The simulation, in order
to be objectionable, must be such as appears likely to mislead the
ordinary intelligent buyer who has a need to supply and is familiar
with the article that he seeks to purchase." 51 (emphasis added)
 Consistent with the above ruling, this Court finds that the differences between the
two marks, subtle as they may be, are sufficient to prevent any confusion that may ensue
should petitioner's trademark application be granted. As held in Esso Standard Eastern, Inc.:
52
Respondent court correctly ruled that considering the general
appearances of each mark as a whole, the possibility of any confusion is
unlikely. A comparison of the labels of the samples of the goods
submitted by the parties shows a great many differences on the
trademarks used. As pointed out by respondent court in its appealed
decision, "(A) witness for the plaintiff, Mr. Buhay, admitted that the color
of the 'ESSO' used by the plaintiff for the oval design where the blue word
ESSO is contained is the distinct and unique kind of blue. In his answer to
the trial court's question, Mr. Buhay informed the court that the plaintiff
never used its trademark on any product where the combination of colors
is similar to the label of the Esso cigarettes," and "Another witness for the
plaintiff, Mr. Tengco, testified that generally, the plaintiff's trademark
comes all in either red, white, blue or any combination of the three colors.
It is to be pointed out that not even a shade of these colors appears on
the trademark of the appellant's cigarette. The only color that the
appellant uses in its trademark is green."

Even the lower court, which ruled initially for petitioner, found that
a "noticeable difference between the brand ESSO being used by the
defendants and the trademark ESSO of the plaintiff is that the former has
a rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background."

All told, We are convinced that petitioner's trademark registration not only covers
unrelated good, but is also incapable of deceiving the ordinary intelligent buyer. The ordinary
purchaser must be thought of as having, and credited with, at least a modicum of
intelligence to be able to see the differences between the two trademarks in question. 53
Questions of fact may still be entertained
On a final note, the policy according factual findings of courts a quo great respect, if
not finality, is not binding where they have overlooked, misapprehended, or misapplied any
fact or circumstance of weight and substance. 54 So it must be here; the nature of the
products involved materially affects the outcome of the instant case. A reversal of the
appellate court's Decision is then in order.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and
the Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and
November 6, 2013, respectively, are hereby REVERSED and SET ASIDE. Accordingly, the
Decision of the Intellectual Property Office Director General in Inter Partes Case No. 14-
2006-00096, dated November 23, 2011, is hereby REINSTATED. DCcHAa
SO ORDERED.
Peralta, Villarama, Jr., Reyes and Jardeleza, JJ., concur.

||| (Taiwan Kolin Corp., Ltd. v. Kolin Electronics Co., Inc., G.R. No. 209843, [March 25, 2015])
 WILTON DY and/or PHILITES ELECTRONIC & LIGHTING
PRODUCTS, petitioner, vs. KONINKLIJKE PHILIPS ELECTRONICS,
N.V., respondent.

DECISION

SERENO, C.J : p

This Petition for Review on Certiorari 1 filed by petitioner Wilton Dy and/or Philites
Electronic & Lighting Products ("PHILITES") assails the Decision 2 and Resolution 3 of the
Court of Appeals (CA) in CA-G.R. SP No. 103350. The appellate court reversed and set
aside the Decision 4 of the IPP Office of the Director General (IPP-DG), which affirmed the
Decision 5 of the Intellectual Property Philippines Bureau of Legal Affairs (IPP-BLA)
upholding petitioner's trademark application.
THE ANTECEDENT FACTS
On 12 April 2000, petitioner PHILITES filed a trademark application (Application Serial
Number 4-2000-002937) covering its fluorescent bulb, incandescent light, starter and
ballast. After publication, respondent Koninklijke Philips Electronics, N.V. ("PHILIPS") filed
a Verified Notice of Opposition on 17 March 2006, alleging the following:

(a) The approval of Application Serial No. 4-2000-002937 is contrary to the

following provisions of Republic Act No. [RA] 8293 or the Intellectual Property
Code of the Philippines (IP Code): Sections 123.1 (d), (i) and (iii), 123.1 (e),
147, and 168.
(b) The approval of Application Serial No. 4-2000-002937 will cause grave and
irreparable damage and injury to oppose.
(c) The use and registration of the applied for mark by [petitioner] will mislead the
public as to the origin, nature, quality, and characteristic of the goods on
which it is affixed;
(d) [Petitioner's] application for registration is tantamount to fraud as it seeks to
register and obtain legal protection for an identical or confusingly similar
mark that clearly infringes upon the established rights of the [respondent]
over its registered and internationally well-known mark.
(e) The registration of the trademark PHILITES & LETTER P DEVICE in the name of
the [petitioner] will violate the proprietary rights and interests, business
reputation and goodwill of the [respondent] over its trademark, considering
that the distinctiveness of the trademark PHILIPS will be diluted.
(f) The registration of the applied for mark will not only prejudice the Opposer, but
will also cause [petitioner] to unfairly profit commercially from the goodwill,
fame and notoriety of Opposer's trademark and reputation.
 (g) [Petitioner's] registration and use of the applied for mark in connection with
goods under Class 11 will weaken the unique and distinctive significance of
mark PHILIPS and will tarnish, degrade or dilute the distinctive quality of
Opposer's trademark and will result in the gradual attenuation or whittling
away of the value of Opposer's trademark, in violation of Opposer's
proprietary rights. 6
On 8 August 2006, petitioner filed a Verified Answer, stating that its PHILITES &
LETTER P DEVICE trademark and respondent's PHILIPS have vast dissimilarities in terms
of spelling, sound and meaning. 7
At the conclusion of the hearing, on 9 November 2006, IPP-BLA Director Estrellita
Beltran-Abelardo rendered a Decision 8 denying the Opposition filed by respondent
PHILIPS. The dispositive portion of the Decision reads:
WHEREFORE, premises considered the OPPOSITION filed
by Koninklijke Philips Electronics, N.V. is hereby DENIED. Accordingly, Application
Serial No. 4-2000-002937 filed by Respondent-Applicant, Wilton Dy and/or Philites
Electronic & Lighting Products on 12 April 2000 for the mark "PHILITES & LETTER
P DEVICE" used on fluorescent bulb, incandescent light, starter, ballast under class
11, is as it is, hereby GRANTED. CAIHTE

Let the filewrapper of "PHILITES & LETTER P DEVICE," subject matter of this
case together with this Decision be forwarded to the Bureau of Trademarks (BOT)
for appropriate action.
SO ORDERED.
In upholding petitioner's trademark application, the IPP-BLA stated that assuming
respondent's mark was well-known in the Philippines, there should have been prior
determination of whether or not the mark under application for registration was "identical
with, or confusingly similar to, or constitutes a translation of such well-known mark in
order that the owner of the well-known mark can prevent its registration." 9 From the
evidence presented, the IPP-BLA concluded that the PHILIPS and PHILITES marks were
so unlike, both visually and aurally. It held that no confusion was likely to occur, despite
their contemporaneous use, based on the following observations:
The Philips shield mark has four stars in different sizes located at the north
east and south west portions inside a circle within the shield. There are three wavy
lines dissecting the middle of the circle. None of these appear in the respondent's
mark.
[Respondent] declares that the word Philips is the surname of the brothers
who founded the Philips company engaged in manufacturing and selling lighting
products. [Petitioner] on the other hand has testified that the word Philites is coined
from the word 'Philippines' and 'lights,' hence 'Philites.' This Bureau finds that there
is no dictionary meaning to the [petitioner's] mark. It is a coined and arbitrary word
capable of appropriation as a trademark. x x x
Moreover, by mere pronouncing the two marks, the phonetic sounds
produced when each mark is uttered are not the same. The last syllable of
respondent's mark is uttered in a long vowel sound, while the last vowel of the
opposer's mark is not.
 x x x. This Bureau believes that opposer has no monopoly over the color or
diameter or shape of a light bulb or packaging shape unless registrations were
secured to protect the same. The images of the packages are reproduced below for
reference.
xxx xxx xxx
x x x. For one, respondent adopts a yellow to light yellow dominant color
while the oppose uses an orange yellow hue. The mark "Philites" is printed in yellow
with light blue background as compared to the "Philips" mark typed in white
against a black background.
It is fundamental in trademark jurisprudence that color alone, unless
displayed in an arbitrary design does not function as a trademark.
Secondly, there appears to be other advertising slogans that appear in
respondent's package such as the words, "new", "prolong lite life", "E-coat
finished" and "with additional 35% more than ordinary." These phrases are absent
in opposer's package. These phrases can be considered in the nature of descriptive
terms that can be appropriated by anyone. 10
Upon appeal, the IPP-DG rendered a Decision 11 on 16 April 2008, affirming the
ruling of the IPP-BLA as follows:
WHEREFORE, premises considered, that instant appeal is hereby
DISMISSED for lack of merit. Accordingly, Decision No. 2006-125 of the Director of
the Bureau of Legal Affairs dated 09 November 2006, is hereby AFFIRMED. DETACa

Let a copy of this Decision as well as the trademark application and records
be furnished and returned to the Director of Bureau of Legal Affairs for appropriate
action. Further, let also the Directors of the Bureau of Trademarks, the
Administrative, Financial and Human Resources Development Services Bureau, and
the library of the Documentation, Information and Technology Transfer Bureau be
furnished a copy of this Decision for information, guidance and records purposes.
SO ORDERED.
In so ruling, the IPP-DG noted that "[t]he dominant feature of the [respondent's]
trademark is 'PHILIPS' while that of the [petitioner's] trademark is 'PHILITES.' While the
first syllables of the marks are identical — 'PHI' — the second syllables are not. The
differences in the last syllable accounted for the variance of the trademarks visually and
aurally." 12Moreover, there were "glaring differences and dissimilarities in the design and
general appearance of the Philips shield emblem mark and the letter 'P' of Philites
mark." 13 Thus, "even if the [petitioner's] products bearing the trademark PHILIPS are
placed side by side with other brands, the purchaser would not be confused to pick up
the [petitioner's] product if this is his choice or preference, unless the resemblance in the
appearance of the trademarks is so glaring which [it] is not in this case." 14
As regards the issue of petitioner submitting a trademark drawing different from
that used in the packaging, the IPP-DG noted that this case involved an opposition to the
registration of a mark, while labels and packaging were technically not a part
thereof. 15 At best, respondent supposedly had the remedy of filing a case for trademark
infringement and/or unfair competition. 16
 Upon intermediate appellate review, the CA rendered a Decision 17 on 7 October
2008. The dispositive portion herein reads:
WHEREFORE, premises considered, the Petition for Review is GRANTED.
The Decision dated 16 April 2008 of the Director General of the Intellectual Property
Office in Appeal No. 14-06-28; IPC No. 14-2006-00034 is REVERSED and SET
ASIDE. The application for trademark registration (Application Serial Number 4-
2000-002937) of respondent Wilton Dy and/or Philites Electronic & Lighting
Products is DISMISSED. Costs against respondent.
SO ORDERED.
In so ruling, the CA reasoned that the "drawing of the trademark submitted by
[petitioner] has a different appearance from that of [petitioner's] actual wrapper or
packaging that contain the light bulbs, which We find confusingly similar with that of
[respondent's] registered trademark and packaging." 18 Moreover, it found to be "self-
serving [petitioner's] asseveration that the mark 'PHILITES' is a coined or arbitrary mark
from the words 'Philippines' and 'lights.' Of all the marks that [petitioner] could possibly
think of for his light bulbs, it is odd that [petitioner] chose a mark with the letters 'PHILI,'
which are the same prevalent or dominant five letters found in [respondent's] trademark
'PHILIPS' for the same products, light bulbs." 19 Hence, the appellate court concluded
that petitioner had intended to ride on the long-established reputation and goodwill of
respondent's trademark. 20
On 25 October 2008, petitioner filed a Motion for Reconsideration, which was
denied in a Resolution 21 issued by the CA on 18 December 2008.
Hence, this petition.
Respondent filed its Comment 22 on 23 June 2009, and petitioner filed its
Reply 23 on 10 November 2009.
THE ISSUES
From the foregoing, we reduce the issues to the following:
1. Whether or not respondent's mark is a registered and well-known mark in the
Philippines; and
2. Whether or not the mark applied for by petitioner is identical or confusingly
similar with that of respondent.
OUR RULING
The Petition is bereft of merit.
A trademark is "any distinctive word, name, symbol, emblem, sign, or device, or
any combination thereof, adopted and used by a manufacturer or merchant on his goods
to identify and distinguish them from those manufactured, sold, or dealt by others." 24 It is
"intellectual property deserving protection by law," 25 and "susceptible to registration if it
is crafted fancifully or arbitrarily and is capable of identifying and distinguishing the goods
of one manufacturer or seller from those of another." 26
Section 122 of the Intellectual Property Code of the Philippines (IPC) provides that
rights to a mark shall be acquired through registration validly done in accordance with the
provisions of this law. 27 Corollary to that rule, Section 123 provides which
marks cannot be registered.
Respondent opposes petitioner's application on the ground that PHILITES'
registration will mislead the public over an identical or confusingly similar mark of
PHILIPS, which is registered and internationally well-known mark. Specifically,
respondent invokes the following provisions of Section 123:
Section 123. Registrability. — 123.1. A mark cannot be registered if it:
xxx xxx xxx
(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;
aDSIHc

(e) Is identical with, or confusingly similar to, or constitutes a translation of 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, as
being already the mark of a person other than the applicant for registration, and
used for identical or similar goods or services: Provided, That in determining
whether a mark is well-known, account shall be taken of the knowledge of the
relevant sector of the public, rather than of the public at large, including knowledge
in the Philippines which has been obtained as a result of the promotion of the
mark. 28
Respondent's mark is a registered
and well-known mark in the
Philippines.
There is no question that respondent's mark PHILIPS is already a registered and
well-known mark in the Philippines.
As we have said in Fredco Manufacturing Corporation v. Harvard
University, 29 "[i]ndeed, 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." 30
Rule 100 (a) of the Rules and Regulations on Trademarks, Service Marks,
Tradenames and Marked or Stamped Containers defines "competent authority" in the
following manner:
(c) "Competent authority" for purposes of determining whether a mark is
well-known, means the Court, the Director General, the Director of the Bureau of
Legal Affairs, or any administrative agency or office vested with quasi-judicial or
judicial jurisdiction to hear and adjudicate any action to enforce the rights to a mark.
 We thus affirm the following findings of the CA, inasmuch as the trademark of
PHILIPS is a registered and well-known mark, as held in the Supreme Court Decision
in Philips Export B.V. v. CA: 31
Petitioner (PHILIPS) is the registered owner in the Philippines of the
"PHILIPS" and "PHILIPS SHIELD EMBLEM" trademarks, as shown by Certificates
of Registration Nos. 42271 and 42270. The Philippine trademark registrations of
petitioner's "PHILIPS" and "PHILIPS SHIELD EMBLEM" are also evidenced by
Certificates of Registration Nos. R-1651, R-29134, R-1674, and R-28981. The said
registered trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" cover classes 7,
8, 9, 10, 11, 14, and 16. The assailed Decision itself states that "(T)he Appellant's
trademark is already registered and in use in the Philippines". It also appears that
worldwide, petitioner has thousands of trademark registrations x x x in various
countries. As found by the High Court in Philips Export B.V. vs. Court of Appeals,
PHILIPS is a trademark or trade name which was registered as far back as 1922,
and has acquired the status of a well-known mark in the Philippines and
internationally as well. 32
Petitioner seeks to register a mark
nearly resembling that of respondent,
which may likely to deceive or cause
confusion among consumers.
Despite respondent's diversification to numerous and varied industries, 33 the
records show that both parties are engaged in the same line of business: selling identical
or similar goods such as fluorescent bulbs, incandescent lights, starters and ballasts.
In determining similarity and likelihood of confusion, jurisprudence has developed
two tests: the dominancy test, and the holistic or totality test. 34
On one hand, the dominancy test focuses on "the similarity of the prevalent or
dominant features of the competing trademarks that might cause confusion, mistake, and
deception in the mind of the purchasing public. Duplication or imitation is not necessary;
neither is it required that the mark sought to be registered suggests an effort to imitate.
Given more consideration are the aural and visual impressions created by the marks on
the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and
market segments." 35
On the other hand, the holistic or totality test necessitates a "consideration of the
entirety of the marks as applied to the products, including the labels and packaging, in
determining confusing similarity. The discerning eye of the observer must focus not only
on the predominant words, but also on the other features appearing on both labels so
that the observer may draw conclusion on whether one is confusingly similar to the
other." 36
Applying the dominancy test to this case requires us to look only at the mark
submitted by petitioner in its application, while we give importance to the aural and visual
impressions the mark is likely to create in the minds of the buyers. We agree with the
findings of the CA that the mark "PHILITES" bears an uncanny resemblance or confusing
similarity with respondent's mark "PHILIPS," to wit:
 Applying the dominancy test in the instant case, it shows the uncanny
resemblance or confusing similarity between the trademark applied for by
respondent with that of petitioner's registered trademark. An examination of the
trademarks shows that their dominant or prevalent feature is the five-letter "PHILI",
"PHILIPS" for petitioner, and "PHILITES" for respondent. The marks are confusingly
similar with each other such that an ordinary purchaser can conclude an
association or relation between the marks. The consuming public does not have the
luxury of time to ruminate the phonetic sounds of the trademarks, to find out which
one has a short or long vowel sound. At bottom, the letters "PHILI" visually catch
the attention of the consuming public and the use of respondent's trademark will
likely deceive or cause confusion. Most importantly, both trademarks are used in
the sale of the same goods, which are light bulbs. 37 ETHIDa

The confusing similarity becomes even more prominent when we examine the
entirety of the marks used by petitioner and respondent, including the way the products
are packaged. In using the holistic test, we find that there is a confusing similarity
between the registered marks PHILIPS and PHILITES, and note that the mark petitioner
seeks to register is vastly different from that which it actually uses in the packaging of its
products. We quote with approval the findings of the CA as follows:
Applying the holistic test, entails a consideration of the entirety of the marks
as applied to the products, including the labels and packaging, in determining
confusing similarity. A comparison between petitioner's registered trademark
"PHILIPS" as used in the wrapper or packaging of its light bulbs and that of
respondent's applied for trademark "PHILITES" as depicted in the container or
actual wrapper/packaging of the latter's light bulbs will readily show that there is a
strong similitude and likeness between the two trademarks that will likely cause
deception or confusion to the purchasing public. The fact that the parties' wrapper
or packaging reflects negligible differences considering the use of a slightly
different font and hue of the yellow is of no moment because taken in their entirety,
respondent's trademark "PHILITES" will likely cause confusion or deception to the
ordinary purchaser with a modicum of intelligence. 38
WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari is
hereby DENIED. The 7 October 2008 Decision and 18 December 2008 Resolution of the
Court of Appeals in CA-G.R. SP No. 103350 are hereby AFFIRMED.
SO ORDERED.
Leonardo-de Castro, Del Castillo, Perlas-Bernabe and Caguioa, JJ., concur.
(Dy v. Koninklijke Philips Electronics, N.V., G.R. No. 186088, [March 22, 2017], 807 PHIL
|||

819-832)
 VICTORIO P. DIAZ, petitioner, vs. PEOPLE OF THE PHILIPPINES AND LEVI
STRAUSS [PHILS.], INC., respondents.

DECISION

BERSAMIN, J : p

It is the tendency of the allegedly infringing mark to be confused with the registered
trademark that is the gravamen of the offense of infringement of a registered trademark. The
acquittal of the accused should follow if the allegedly infringing mark is not likely to cause
confusion. Thereby, the evidence of the State does not satisfy the quantum of proof beyond
reasonable doubt.
Accused Victorio P. Diaz (Diaz) appeals the resolutions promulgated on July 17,
2007 1 and November 22, 2007, 2 whereby the Court of Appeals (CA), respectively,
dismissed his appeal in C.A.-G.R. CR No. 30133 for the belated filing of the appellant's brief,
and denied his motion for reconsideration. Thereby, the decision rendered on February 13,
2006 in Criminal Case No. 00-0318 and Criminal Case No. 00-0319 by the Regional Trial
Court, Branch 255, in Las Piñas City (RTC) convicting him for two counts of infringement of
trademark were affirmed. 3
Antecedents
On February 10, 2000, the Department of Justice filed two informations in the RTC of
Las Piñas City, charging Diaz with violation of Section 155, in relation to Section 170,
of Republic Act No. 8293, also known as the Intellectual Property Code of the
Philippines (Intellectual Property Code), to wit: CAIHTE

Criminal Case No. 00-0318

That on or about August 28, 1998, and on dates prior thereto, in Las Piñas
City, and within the jurisdiction of this Honorable Court, the above-named accused,
with criminal intent to defraud Levi's Strauss (Phil.), Inc. (hereinafter referred to as
LEVI'S), did then and there, willfully, unlawfully, feloniously, knowingly and
intentionally engaged in commerce by reproducing, counterfeiting, copying and
colorably imitating Levi's registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE
LABEL WITH PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE
ARCUATE/TAB/TWO HORSE PATCH, and in connection thereto, sold, offered for
sale, manufactured, distributed counterfeit patches and jeans, including other
preparatory steps necessary to carry out the sale of said patches and jeans, which
likely caused confusion, mistake, and/or deceived the general consuming public,
without the consent, permit or authority of the registered owner, LEVI'S, thus
depriving and defrauding the latter of its right to the exclusive use of its trademarks
and legitimate trade, to the damage and prejudice of LEVI'S. CTcSAE

CONTRARY TO LAW. 4
Criminal Case No. 00-0319
 That on or about August 28, 1998, and on dates prior thereto, in Las Piñas
City, and within the jurisdiction of this Honorable Court, the above-named accused,
with criminal intent to defraud Levi's Strauss (Phil.), Inc. (hereinafter referred to as
LEVI'S), did then and there, willfully, unlawfully, feloniously, knowingly and
intentionally engaged in commerce by reproducing, counterfeiting, copying and
colorably imitating Levi's registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE
LABEL WITH PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE
ARCUATE/TAB/TWO HORSE PATCH, and in connection thereto, sold, offered for
sale, manufactured, distributed counterfeit patches and jeans, including other
preparatory steps necessary to carry out the sale of said patches and jeans, which
likely caused confusion, mistake, and/or deceived the general consuming public,
without the consent, permit or authority of the registered owner, LEVI'S, thus
depriving and defrauding the latter of its right to the exclusive use of its trademarks
and legitimate trade, to the damage and prejudice of LEVI'S.
CONTRARY TO LAW. 5
The cases were consolidated for a joint trial. Diaz entered his pleas of not guilty to
each information on June 21, 2000. 6 aIcHSC

1.
Evidence of the Prosecution
Levi Strauss and Company (Levi's), a foreign corporation based in the State of
Delaware, United States of America, had been engaged in the apparel business. It is the
owner of trademarks and designs of Levi's jeans like LEVI'S 501, the arcuate design, the
two-horse brand, the two-horse patch, the two-horse patch with pattern arcuate, and the
composite tab arcuate. LEVI'S 501 has the following registered trademarks, to wit: (1) the
leather patch showing two horses pulling a pair of pants; (2) the arcuate pattern with the
inscription "LEVI STRAUSS & CO;" (3) the arcuate design that refers to "the two parallel
stitching curving downward that are being sewn on both back pockets of a Levi's Jeans;"
and (4) the tab or piece of cloth located on the structural seam of the right back pocket,
upper left side. All these trademarks were registered in the Philippine Patent Office in the
1970's, 1980's and early part of 1990's. 7
Levi Strauss Philippines, Inc. (Levi's Philippines) is a licensee of Levi's. After receiving
information that Diaz was selling counterfeit LEVI'S 501 jeans in his tailoring shops in
Almanza and Talon, Las Piñas City, Levi's Philippines hired a private investigation group to
verify the information. Surveillance and the purchase of jeans from the tailoring shops of Diaz
established that the jeans bought from the tailoring shops of Diaz were counterfeit or
imitations of LEVI'S 501. Levi's Philippines then sought the assistance of the National Bureau
of Investigation (NBI) for purposes of applying for a search warrant against Diaz to be served
at his tailoring shops. The search warrants were issued in due course. Armed with the search
warrants, NBI agents searched the tailoring shops of Diaz and seized several fake LEVI'S
501 jeans from them. Levi's Philippines claimed that it did not authorize the making and
selling of the seized jeans; that each of the jeans were mere imitations of genuine LEVI'S 501
jeans by each of them bearing the registered trademarks, like the arcuate design, the tab,
and the leather patch; and that the seized jeans could be mistaken for original LEVI'S 501
jeans due to the placement of the arcuate, tab, and two-horse leather patch. 8 HTaSEA
 2.
Evidence of the Defense
On his part, Diaz admitted being the owner of the shops searched, but he denied any
criminal liability.
Diaz stated that he did not manufacture Levi's jeans, and that he used the label "LS
Jeans Tailoring" in the jeans that he made and sold; that the label "LS Jeans Tailoring" was
registered with the Intellectual Property Office; that his shops received clothes for sewing or
repair; that his shops offered made-to-order jeans, whose styles or designs were done in
accordance with instructions of the customers; that since the time his shops began
operating in 1992, he had received no notice or warning regarding his operations; that the
jeans he produced were easily recognizable because the label "LS Jeans Tailoring," and the
names of the customers were placed inside the pockets, and each of the jeans had an
"LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather patch on his jeans
had two buffaloes, not two horses. 9
Ruling of the RTC
On February 13, 2006, the RTC rendered its decision finding Diaz guilty as charged,
disposing thus: aAcDSC

WHEREFORE, premises considered, the Court finds accused Victorio P. Diaz,

a.k.a. Vic Diaz, GUILTY beyond reasonable doubt of twice violating Sec. 155, in
relation to Sec. 170, of RA No. 8293, as alleged in the Informations in Criminal Case
Nos. 00-0318 & 00-0319, respectively, and hereby sentences him to suffer in each of
the cases the penalty of imprisonment of TWO (2) YEARS of prision correcional, as
minimum, up to FIVE (5) YEARS of prision correcional, as maximum, as well as pay a
fine of P50,000.00 for each of the herein cases, with subsidiary imprisonment in case
of insolvency, and to suffer the accessory penalties provided for by law.
Also, accused Diaz is hereby ordered to pay to the private complainant Levi's
Strauss (Phils.), Inc. the following, thus:
1. P50,000.00 in exemplary damages; and
2. P222,000.00 as and by way of attorney's fees.
Costs de officio.
SO ORDERED. 10
Ruling of the CA
Diaz appealed, but the CA dismissed the appeal on July 17, 2007 on the ground that
Diaz had not filed his appellant's brief on time despite being granted his requested several
extension periods.
Upon denial of his motion for reconsideration, Diaz is now before the Court to plead
for his acquittal.
ACTISD

Issue
Diaz submits that:
 THE COURT OF APPEALS VIOLATED EXISTING LAW AND JURISPRUDENCE
WHEN IT APPLIED RIGIDLY THE RULE ON TECHNICALITIES AND OVERRIDE
SUBSTANTIAL JUSTICE BY DISMISSING THE APPEAL OF THE PETITIONER FOR
LATE FILING OF APPELLANT'S BRIEF. 11
Ruling
The Court first resolves whether the CA properly dismissed the appeal of Diaz due to
the late filing of his appellant's brief.
Under Section 7, Rule 44 of the Rules of Court, the appellant is required to file the
appellant's brief in the CA "within forty-five (45) days from receipt of the notice of the clerk
that all the evidence, oral and documentary, are attached to the record, seven (7) copies of
his legibly typewritten, mimeographed or printed brief, with proof of service of two (2) copies
thereof upon the appellee." Section 1 (e) of Rule 50 of the Rules of Court grants to the CA
the discretion to dismiss an appeal either motu proprio or on motion of the appellee should
the appellant fail to serve and file the required number of copies of the appellant's brief
within the time provided by the Rules of Court. 12
The usage of the word may in Section 1 (e) of Rule 50 indicates that the dismissal of
the appeal upon failure to file the appellant's brief is not mandatory, but discretionary. Verily,
the failure to serve and file the required number of copies of the appellant's brief within the
time provided by the Rules of Court does not have the immediate effect of causing the
outright dismissal of the appeal. This means that the discretion to dismiss the appeal on that
basis is lodged in the CA, by virtue of which the CA may still allow the appeal to proceed
despite the late filing of the appellant's brief, when the circumstances so warrant its liberality.
In deciding to dismiss the appeal, then, the CA is bound to exercise its sound discretion
upon taking all the pertinent circumstances into due consideration.
The records reveal that Diaz's counsel thrice sought an extension of the period to file
the appellant's brief. The first time was on March 12, 2007, the request being for an
extension of 30 days to commence on March 11, 2007. The CA granted his motion under its
resolution of March 21, 2007. On April 10, 2007, the last day of the 30-day extension, the
counsel filed another motion, seeking an additional 15 days. The CA allowed the counsel
until April 25, 2007 to serve and file the appellant's brief. On April 25, 2007, the counsel went
a third time to the CA with another request for 15 days. The CA still granted such third
motion for extension, giving the counsel until May 10, 2007. Notwithstanding the liberality of
the CA, the counsel did not literally comply, filing the appellant's brief only on May 28, 2007,
which was the 18th day beyond the third extension period granted.
Under the circumstances, the failure to file the appellant's brief on time rightly
deserved the outright rejection of the appeal. The acts of his counsel bound Diaz like any
other client. It was, of course, only the counsel who was well aware that the Rules of
Court fixed the periods to file pleadings and equally significant papers like the appellant's
brief with the lofty objective of avoiding delays in the administration of justice.TEAICc

Yet, we have before us an appeal in two criminal cases in which the appellant lost his
chance to be heard by the CA on appeal because of the failure of his counsel to serve and
file the appellant's brief on time despite the grant of several extensions the counsel
requested. Diaz was convicted and sentenced to suffer two indeterminate sentences that
would require him to spend time in detention for each conviction lasting two years, as
minimum, to five years, as maximum, and to pay fines totaling P100,000.00 (with subsidiary
imprisonment in case of his insolvency). His personal liberty is now no less at stake. This
reality impels us to look beyond the technicality and delve into the merits of the case to see
for ourselves if the appeal, had it not been dismissed, would have been worth the time of the
CA to pass upon. After all, his appellant's brief had been meanwhile submitted to the CA.
While delving into the merits of the case, we have uncovered a weakness in the evidence of
guilt that cannot be simply ignored and glossed over if we were to be true to our oaths to do
justice to everyone.
We feel that despite the CA being probably right in dismissing the excuses of oversight
and excusable negligence tendered by Diaz's counsel to justify the belated filing of the
appellant's brief as unworthy of serious consideration, Diaz should not be made to suffer the
dire consequence. Any accused in his shoes, with his personal liberty as well as his personal
fortune at stake, expectedly but innocently put his fullest trust in his counsel's abilities and
professionalism in the handling of his appeal. He thereby delivered his fate to the hands of
his counsel. Whether or not those hands were efficient or trained enough for the job of
handling the appeal was a learning that he would get only in the end. Likelier than not, he
was probably even unaware of the three times that his counsel had requested the CA for
extensions. If he were now to be left to his unwanted fate, he would surely suffer despite his
innocence. How costly a learning it would be for him! That is where the Court comes in. It is
most important for us as dispensers of justice not to allow the inadvertence or incompetence
of any counsel to result in the outright deprivation of an appellant's right to life, liberty or
property. 13SECIcT

We do not mind if this softening of judicial attitudes be mislabeled as excessive

leniency. With so much on the line, the people whose futures hang in a balance should not
be left to suffer from the incompetence, mindlessness or lack of professionalism of any
member of the Law Profession. They reasonably expect a just result in every litigation. The
courts must give them that just result. That assurance is the people's birthright. Thus, we
have to undo Diaz's dire fate.
Even as we now set aside the CA's rejection of the appeal of Diaz, we will not remand
the records to the CA for its review. In an appeal of criminal convictions, the records are laid
open for review. To avoid further delays, therefore, we take it upon ourselves to review the
records and resolve the issue of guilt, considering that the records are already before us.
Section 155 of R.A. No. 8293 defines the acts that constitute infringement of
trademark, viz.:
Remedies; Infringement. — Any person who shall, without the consent of the
owner of the registered mark:
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; or
 155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a
dominant feature thereof and apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the sale, offering for
sale, distribution, or advertising of goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the registrant for the remedies hereinafter
set forth: Provided, That the infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed regardless of whether
there is actual sale of goods or services using the infringing material.
aEcTDI

The elements of the offense of trademark infringement under the Intellectual Property
Code are, therefore, the following:
1. The trademark being infringed is registered in the Intellectual Property
Office;
2. The trademark is reproduced, counterfeited, copied, or colorably imitated by
the infringer;
3. The infringing mark is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark is
applied to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such
goods, business or services;
4. The use or application of the infringing mark is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or services or the
identity of such business; and
5. The use or application of the infringing mark is without the consent of the
trademark owner or the assignee thereof. 14
As can be seen, the likelihood of confusion is the gravamen of the offense of
trademark infringement. 15 There are two tests to determine likelihood of confusion, namely:
the dominancy test, and the holistic test. The contrasting concept of these tests was
explained in Societes Des Produits Nestle, S.A. v. Dy, Jr., thus:
. . . . The dominancy test focuses on the similarity of the main, prevalent or
essential features of the competing trademarks that might cause confusion.
Infringement takes place when the competing trademark contains the essential
features of another. Imitation or an effort to imitate is unnecessary. The question is
whether the use of the marks is likely to cause confusion or deceive purchasers.
The holistic test considers the entirety of the marks, including labels and
packaging, in determining confusing similarity. The focus is not only on the
predominant words but also on the other features appearing on the labels. 16 TSaEcH

As to what test should be applied in a trademark infringement case, we said

in McDonald's Corporation v. Macjoy Fastfood Corporation 17 that:
 In trademark cases, particularly in ascertaining whether one trademark is
confusingly similar to another, no set rules can be deduced because each case must
be decided on its merits. In such cases, even more than in any other litigation,
precedent must be studied in the light of the facts of the particular case. That is the
reason why in trademark cases, jurisprudential precedents should be applied only to
a case if they are specifically in point.
The case of Emerald Garment Manufacturing Corporation v. Court of Appeals, 18 which
involved an alleged trademark infringement of jeans products, is worth referring to. There,
H.D. Lee Co., Inc. (H.D. Lee), a corporation based in the United States of America, claimed
that Emerald Garment's trademark of "STYLISTIC MR. LEE" that it used on its jeans
products was confusingly similar to the "LEE" trademark that H.D. Lee used on its own jeans
products. Applying the holistic test, the Court ruled that there was no infringement.
The holistic test is applicable here considering that the herein criminal cases also
involved trademark infringement in relation to jeans products. Accordingly, the jeans
trademarks of Levi's Philippines and Diaz must be considered as a whole in determining the
likelihood of confusion between them. The maong pants or jeans made and sold by Levi's
Philippines, which included LEVI'S 501, were very popular in the Philippines. The consuming
public knew that the original LEVI'S 501 jeans were under a foreign brand and quite
expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear
items, and were not available in tailoring shops like those of Diaz's as well as not acquired
on a "made-to-order" basis. Under the circumstances, the consuming public could easily
discern if the jeans were original or fake LEVI'S 501, or were manufactured by other brands
of jeans. Confusion and deception were remote, for, as the Court has observed
in Emerald Garments: EAcHCI

First, the products involved in the case at bar are, in the main, various kinds of
jeans. These are not your ordinary household items like catsup, soy sauce or soap
which are of minimal cost. Maong pants or jeans are not inexpensive. Accordingly,
the casual buyer is predisposed to be more cautious and discriminating in and would
prefer to mull over his purchase. Confusion and deception, then, is less likely. In Del
Monte Corporation v. Court of Appeals, we noted that:
. . . . Among these, what essentially determines the attitudes of the purchaser,
specifically his inclination to be cautious, is the cost of the goods. To be sure,
a person who buys a box of candies will not exercise as much care as one
who buys an expensive watch. As a general rule, an ordinary buyer does not
exercise as much prudence in buying an article for which he pays a few
centavos as he does in purchasing a more valuable thing. Expensive and
valuable items are normally bought only after deliberate, comparative and
analytical investigation. But mass products, low priced articles in wide use,
and matters of everyday purchase requiring frequent replacement are bought
by the casual consumer without great care. . . .
Second, like his beer, the average Filipino consumer generally buys his jeans
by brand. He does not ask the sales clerk for generic jeans but for, say, a Levis,
Guess, Wrangler or even an Armani. He is, therefore, more or less knowledgeable
and familiar with his preference and will not easily be distracted.
 Finally, in line with the foregoing discussions, more credit should be given to
the "ordinary purchaser." Cast in this particular controversy, the ordinary purchaser is
not the "completely unwary consumer" but is the "ordinarily intelligent buyer"
considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok is better suited to the
present case. There, the "ordinary purchaser" was defined as one "accustomed to
buy, and therefore to some extent familiar with, the goods in question. The test of
fraudulent simulation is to be found in the likelihood of the deception of some
persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The test is
not found in the deception, or the possibility of deception, of the person who knows
nothing about the design which has been counterfeited, and who must be indifferent
between that and the other. The simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinary intelligent buyer who has a need to
supply and is familiar with the article that he seeks to purchase. 19
Diaz used the trademark "LS JEANS TAILORING" for the jeans he produced and sold
in his tailoring shops. His trademark was visually and aurally different from the trademark
"LEVI STRAUSS & CO" appearing on the patch of original jeans under the trademark LEVI'S
501. The word "LS" could not be confused as a derivative from "LEVI STRAUSS" by virtue of
the "LS" being connected to the word "TAILORING", thereby openly suggesting that the
jeans bearing the trademark "LS JEANS TAILORING" came or were bought from the tailoring
shops of Diaz, not from the malls or boutiques selling original LEVI'S 501 jeans to the
consuming public. cEAaIS

There were other remarkable differences between the two trademarks that the
consuming public would easily perceive. Diaz aptly noted such differences, as follows:
The prosecution also alleged that the accused copied the "two horse design"
of the petitioner-private complainant but the evidence will show that there was no
such design in the seized jeans. Instead, what is shown is "buffalo design." Again, a
horse and a buffalo are two different animals which an ordinary customer can easily
distinguish. . . . .
The prosecution further alleged that the red tab was copied by the accused.
However, evidence will show that the red tab used by the private complainant
indicates the word "LEVI'S" while that of the accused indicates the letters "LSJT"
which means LS JEANS TAILORING. Again, even an ordinary customer can
distinguish the word LEVI'S from the letters LSJT.
xxx xxx xxx
In terms of classes of customers and channels of trade, the jeans products of
the private complainant and the accused cater to different classes of customers and
flow through the different channels of trade. The customers of the private
complainant are mall goers belonging to class A and B market group — while that of
the accused are those who belong to class D and E market who can only afford
Php300 for a pair of made-to-order pants. 20 . . . .
Moreover, based on the certificate issued by the Intellectual Property Office, "LS
JEANS TAILORING" was a registered trademark of Diaz. He had registered his trademark
prior to the filing of the present cases. 21 The Intellectual Property Office would certainly not
have allowed the registration had Diaz's trademark been confusingly similar with the
registered trademark for LEVI'S 501 jeans. LibLex

Given the foregoing, it should be plain that there was no likelihood of confusion
between the trademarks involved. Thereby, the evidence of guilt did not satisfy the quantum
of proof required for a criminal conviction, which is proof beyond reasonable doubt.
According to Section 2, Rule 133 of the Rules of Court, proof beyond a reasonable doubt
does not mean such a degree of proof as, excluding possibility of error, produces absolute
certainty. Moral certainty only is required, or that degree of proof which produces conviction
in an unprejudiced mind. Consequently, Diaz should be acquitted of the charges.
WHEREFORE, the Court ACQUITS petitioner VICTORIO P. DIAZ of the crimes of
infringement of trademark charged in Criminal Case No. 00-0318 and Criminal Case No. 00-
0319 for failure of the State to establish his guilt by proof beyond reasonable doubt.
No pronouncement on costs of suit.
SO ORDERED.
Sereno, C.J., Leonardo-de Castro, Villarama, Jr. and Reyes, JJ., concur.
||| (Diaz v. People, G.R. No. 180677, [February 18, 2013], 704 PHIL 146-165)
 REPUBLIC GAS CORPORATION, ARNEL U. TY, MARI ANTONETTE N. TY,
ORLANDO REYES, FERRER SUAZO and ALVIN U. TY, petitioners, vs.
PETRON CORPORATION, PILIPINAS SHELL PETROLEUM
CORPORATION, and SHELL INTERNATIONAL PETROLEUM COMPANY
LIMITED, respondents.

DECISION

PERALTA, J : p

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of
Court filed by petitioners seeking the reversal of the Decision 1 dated July 2, 2010, and
Resolution 2 dated October 11, 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
106385.
Stripped of non-essentials, the facts of the case, as summarized by the CA, are as
follows:
Petitioners Petron Corporation ("Petron" for brevity) and Pilipinas Shell
Petroleum Corporation ("Shell" for brevity) are two of the largest bulk suppliers and
producers of LPG in the Philippines. Petron is the registered owner in the Philippines
of the trademarks GASUL and GASUL cylinders used for its LPG products. It is the
sole entity in the Philippines authorized to allow refillers and distributors to refill, use,
sell, and distribute GASUL LPG containers, products and its trademarks. Pilipinas
Shell, on the other hand, is the authorized user in the Philippines of the tradename,
trademarks, symbols or designs of its principal, Shell International Petroleum
Company Limited, including the marks SHELLANE and SHELL device in connection
with the production, sale and distribution of SHELLANE LPGs. It is the only
corporation in the Philippines authorized to allow refillers and distributors to refill,
use, sell and distribute SHELLANE LPG containers and products. Private
respondents, on the other hand, are the directors and officers of Republic Gas
Corporation ("REGASCO" for brevity), an entity duly licensed to engage in, conduct
and carry on, the business of refilling, buying, selling, distributing and marketing at
wholesale and retail of Liquefied Petroleum Gas ("LPG"). cHATSI

LPG Dealers Associations, such as the Shellane Dealers Association, Inc.,

Petron Gasul Dealers Association, Inc. and Totalgaz Dealers Association, received
reports that certain entities were engaged in the unauthorized refilling, sale and
distribution of LPG cylinders bearing the registered tradenames and trademarks of
the petitioners. As a consequence, on February 5, 2004, Genesis Adarlo (hereinafter
referred to as Adarlo), on behalf of the aforementioned dealers associations, filed a
letter-complaint in the National Bureau of Investigation ("NBI") regarding the alleged
illegal trading of petroleum products and/or underdelivery or underfilling in the sale of
LPG products.
Acting on the said letter-complaint, NBI Senior Agent Marvin E. De Jemil
(hereinafter referred to as "De Jemil") was assigned to verify and confirm the
allegations contained in the letter-complaint. An investigation was thereafter
conducted, particularly within the areas of Caloocan, Malabon, Novaliches and
Valenzuela, which showed that several persons and/or establishments, including
REGASCO, were suspected of having violated provisions of Batas Pambansa Blg. 33
(B.P. 33). The surveillance revealed that REGASCO LPG Refilling Plant in Malabon
was engaged in the refilling and sale of LPG cylinders bearing the registered marks of
the petitioners without authority from the latter. Based on its General Information
Sheet filed in the Securities and Exchange Commission, REGASCO's members of its
Board of Directors are: (1) Arnel U. Ty — President, (2) Marie Antoinette Ty —
Treasurer, (3) Orlando Reyes — Corporate Secretary, (4) Ferrer Suazo and (5) Alvin Ty
(hereinafter referred to collectively as private respondents).
TIaEDC

De Jemil, with other NBI operatives, then conducted a test-buy operation on

February 19, 2004 with the former and a confidential asset going undercover. They
brought with them four (4) empty LPG cylinders bearing the trademarks of
SHELLANE and GASUL and included the same with the purchase of J&S, a
REGASCO's regular customer. Inside REGASCO's refilling plant, they witnessed that
REGASCO's employees carried the empty LPG cylinders to a refilling station and
refilled the LPG empty cylinders. Money was then given as payment for the refilling of
the J&S's empty cylinders which included the four LPG cylinders brought in by De
Jemil and his companion. Cash Invoice No. 191391 dated February 19, 2004 was
issued as evidence for the consideration paid.
After leaving the premises of REGASCO LPG Refilling Plant in Malabon, De
Jemil and the other NBI operatives proceeded to the NBI headquarters for the proper
marking of the LPG cylinders. The LPG cylinders refilled by REGASCO were likewise
found later to be underrefilled.
Thus, on March 5, 2004, De Jemil applied for the issuance of search warrants
in the Regional Trial Court, Branch 24, in the City of Manila against the private
respondents and/or occupants of REGASCO LPG Refilling Plant located at Asucena
Street, Longos, Malabon, Metro Manila for alleged violation of Section 2 (c), in
relation to Section 4, of B.P. 33, as amended by PD 1865. In his sworn affidavit
attached to the applications for search warrants, Agent De Jemil alleged as follows:
"xxx xxx xxx.
"4. Respondent's REGASCO LPG Refilling Plant-Malabon is not one of
those entities authorized to refill LPG cylinders bearing the marks of PSPC,
Petron and Total Philippines Corporation. A Certification dated February 6,
2004 confirming such fact, together with its supporting documents, are
attached as Annex "E" hereof. SHADcT

6. For several days in the month of February 2004, the other NBI
operatives and I conducted surveillance and investigation on respondents'
REGASCO LPG refilling Plant-Malabon. Our surveillance and investigation
revealed that respondents' REGASCO LPG Refilling Plant-Malabon is engaged
in the refilling and sale of LPG cylinders bearing the marks of Shell
International, PSPC and Petron.
xxx xxx xxx.
8. The confidential asset and I, together with the other operatives of
[the] NBI, put together a test-buy operation. On February 19, 2004, I, together
with the confidential asset, went undercover and executed our test-buy
 operation. Both the confidential assets and I brought with us four (4) empty
LPG cylinders branded as Shellane and Gasul. . . . in order to have a
successful test buy, we decided to "ride-on" our purchases with the purchase
of Gasul and Shellane LPG by J & S, one of REGASCO's regular customers.
9. We proceeded to the location of respondents' REGASCO LPG
Refilling Plant-Malabon and asked from an employee of REGASCO inside the
refilling plant for refill of the empty LPG cylinders that we have brought along,
together with the LPG cylinders brought by J & S. The REGASCO employee,
with some assistance from other employees, carried the empty LPG cylinders
to a refilling station and we witnessed the actual refilling of our empty LPG
cylinders.ETIDaH

10. Since the REGASCO employees were under the impression that we
were together with J & S, they made the necessary refilling of our empty LPG
cylinders alongside the LPG cylinders brought by J & S. When we requested
for a receipt, the REGASCO employees naturally counted our LPG cylinders
together with the LPG cylinders brought by J & S for refilling. Hence, the
amount stated in Cash Invoice No. 191391 dated February 19, 2004,
equivalent to Sixteen Thousand Two Hundred Eighty-Six and 40/100
(Php16,286.40), necessarily included the amount for the refilling of our four (4)
empty LPG cylinders. . . . .
11. After we accomplished the purchase of the illegally refilled LPG
cylinders from respondents' REGASCO LPG Refilling Plant-Malabon, we left
its premises bringing with us the said LPG cylinders. Immediately, we
proceeded to our headquarters and made the proper markings of the illegally
refilled LPG cylinders purchased from respondents' REGASCO LPG Refilling
Plant-Malabon by indicating therein where and when they were purchased.
Since REGASCO is not an authorized refiller, the four (4) LPG cylinders illegally
refilled by respondents' REGASCO LPG Refilling Plant-Malabon, were without
any seals, and when [weighed], were underrefilled. Photographs of the LPG
cylinders illegally refilled from respondents' REGASCO LPG Refilling Plant-
Malabon are attached as Annex "G" hereof. . . . ."
After conducting a personal examination under oath of Agent De Jemil and his
witness, Joel Cruz, and upon reviewing their sworn affidavits and other attached
documents, Judge Antonio M. Eugenio, Presiding Judge of the RTC, Branch 24, in
the City of Manila found probable cause and correspondingly issued Search Warrants
Nos. 04-5049 and 04-5050. cSCTID

Upon the issuance of the said search warrants, Special Investigator Edgardo
C. Kawada and other NBI operatives immediately proceeded to the REGASCO LPG
Refilling Station in Malabon and served the search warrants on the private
respondents. After searching the premises of REGASCO, they were able to seize
several empty and filled Shellane and Gasul cylinders as well as other allied
paraphernalia.
Subsequently, on January 28, 2005, the NBI lodged a complaint in the
Department of Justice against the private respondents for alleged violations of
Sections 155 and 168 of Republic Act (RA) No. 8293, otherwise known as
the Intellectual Property Code of the Philippines.
 On January 15, 2006, Assistant City Prosecutor Armando C. Velasco
recommended the dismissal of the complaint. The prosecutor found that there was
no proof introduced by the petitioners that would show that private respondent
REGASCO was engaged in selling petitioner's products or that it imitated and
reproduced the registered trademarks of the petitioners. He further held that he saw
no deception on the part of REGASCO in the conduct of its business of refilling and
marketing LPG. The Resolution issued by Assistant City Prosecutor Velasco reads as
follows in its dispositive portion:
"WHEREFORE, foregoing considered, the undersigned finds the
evidence against the respondents to be insufficient to form a well-founded
belief that they have probably committed violations of Republic Act No. 9293.
The DISMISSAL of this case is hereby respectfully recommended for
insufficiency of evidence."
On appeal, the Secretary of the Department of Justice affirmed the
prosecutor's dismissal of the complaint in a Resolution dated September 18, 2008,
reasoning therein that:
TAIEcS

". . ., the empty Shellane and Gasul LPG cylinders were brought by the
NBI agent specifically for refilling. Refilling the same empty cylinders is by no
means an offense in itself — it being the legitimate business of Regasco to
engage in the refilling and marketing of liquefied petroleum gas. In other
words, the empty cylinders were merely filled by the employees of Regasco
because they were brought precisely for that purpose. They did not pass off
the goods as those of complainants' as no other act was done other than to
refill them in the normal course of its business.
"In some instances, the empty cylinders were merely swapped by
customers for those which are already filled. In this case, the end-users know
fully well that the contents of their cylinders are not those produced by
complainants. And the reason is quite simple — it is an independent refilling
station.
"At any rate, it is settled doctrine that a corporation has a personality
separate and distinct from its stockholders as in the case of herein
respondents. To sustain the present allegations, the acts complained of must
be shown to have been committed by respondents in their individual capacity
by clear and convincing evidence. There being none, the complaint must
necessarily fail. As it were, some of the respondents are even gainfully
employed in other business pursuits. . . . ." 3
Dispensing with the filing of a motion for reconsideration, respondents sought
recourse to the CA through a petition for certiorari.
In a Decision dated July 2, 2010, the CA granted respondents' certiorari petition.
The fallo states:
IHTaCE

WHEREFORE, in view of the foregoing premises, the petition filed in this case
is hereby GRANTED. The assailed Resolution dated September 18, 2008 of the
Department of Justice in I.S. No. 2005-055 is hereby REVERSED and SET ASIDE.
SO ORDERED. 4
 Petitioners then filed a motion for reconsideration. However, the same was denied by
the CA in a Resolution dated October 11, 2010.
Accordingly, petitioners filed the instant Petition for Review on Certiorari raising the
following issues for our resolution:
Whether the Petition for Certiorari filed by RESPONDENTS should have been
denied outright.
Whether sufficient evidence was presented to prove that the crimes of Trademark
Infringement and Unfair Competition as defined and penalized in Section 155 and
Section 168 in relation to Section 170 of Republic Act No. 8293 (The Intellectual
Property Code of the Philippines) had been committed.
Whether probable cause exists to hold INDIVIDUAL PETITIONERS liable for the
offense charged. 5
Let us discuss the issues in seriatim.
Anent the first issue, the general rule is that a motion for reconsideration is a
condition sine qua non before a certiorari petition may lie, its purpose being to grant an
opportunity for the court a quo to correct any error attributed to it by re-examination of the
legal and factual circumstances of the case. 6
However, this rule is not absolute as jurisprudence has laid down several recognized
exceptions permitting a resort to the special civil action for certiorari without first filing a
motion for reconsideration, viz.: DCESaI

(a) Where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) Where the questions raised in the certiorari proceedings have been duly
raised and passed upon by the lower court, or are the same as those
raised and passed upon in the lower court.
(c) Where there is an urgent necessity for the resolution of the question and any
further delay would prejudice the interests of the Government or of the
petitioner or the subject matter of the petition is perishable;
(d) Where, under the circumstances, a motion for reconsideration would be useless;
(e) Where petitioner was deprived of due process and there is extreme urgency for
relief;
(f) Where, in a criminal case, relief from an order of arrest is urgent and the granting of
such relief by the trial court is improbable;
(g) Where the proceedings in the lower court are a nullity for lack of due process;
(h) Where the proceeding was ex parte or in which the petitioner had no opportunity
to object; and,
(i) Where the issue raised is one purely of law or public interest is involved. 7
In the present case, the filing of a motion for reconsideration may already be
dispensed with considering that the questions raised in this petition are the same as those
that have already been squarely argued and passed upon by the Secretary of Justice in her
assailed resolution. AcICHD

Apropos the second and third issues, the same may be simplified to one core issue:
whether probable cause exists to hold petitioners liable for the crimes of trademark
infringement and unfair competition as defined and penalized under Sections 155 and 168, in
relation to Section 170 of Republic Act (R.A.) No. 8293.
Section 155 of R.A. No. 8293 identifies the acts constituting trademark infringement as
follows:
Section 155. Remedies; Infringement. — Any person who shall, without the
consent of the owner of the registered mark:
155.1 Use in commerce any reproduction, counterfeit, copy or
colorable imitation of a registered mark of 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; or
155.2 Reproduce, counterfeit, copy or colorably imitate a registered
mark or a dominant feature thereof and apply such reproduction,
counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with the sale, offering for
sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to
cause mistake, or to deceive, shall be liable in a civil action for
infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the
acts stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or services using
the infringing material. 8
cDCEIA

From the foregoing provision, the Court in a very similar case, made it categorically
clear that the mere unauthorized use of a container bearing a registered trademark in
connection with the sale, distribution or advertising of goods or services which is likely to
cause confusion, mistake or deception among the buyers or consumers can be considered
as trademark infringement. 9
Here, petitioners have actually committed trademark infringement when they refilled,
without the respondents' consent, the LPG containers bearing the registered marks of the
respondents. As noted by respondents, petitioners' acts will inevitably confuse the
consuming public, since they have no way of knowing that the gas contained in the LPG
tanks bearing respondents' marks is in reality not the latter's LPG product after the same
had been illegally refilled. The public will then be led to believe that petitioners are authorized
refillers and distributors of respondents' LPG products, considering that they are accepting
empty containers of respondents and refilling them for resale.
 As to the charge of unfair competition, Section 168.3, in relation to Section 170,
of R.A. No. 8293 describes the acts constituting unfair competition as follows:
Section 168. Unfair Competition, Rights, Regulations and Remedies. — . . . .
168.3 In particular, and without in any way limiting the scope of protection against
unfair competition, the following shall be deemed guilty of unfair competition:
EcICDT

(a) Any person, who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to the
goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of
their appearance, which would 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, or who otherwise clothes
the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent vendor of
such goods or any agent of any vendor engaged in selling such goods
with a like purpose;
xxx xxx xxx
Section 170. Penalties. — Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to
five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred
thousand pesos (P200,000), shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155, Section 168 and Subsection
169.1.
From jurisprudence, unfair competition has been defined as the passing off (or
palming off) or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect of deceiving
the public. 10
Passing off (or palming off) takes place where the defendant, by imitative devices on
the general appearance of the goods, misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his competitors. Thus, the
defendant gives his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor. 11
In the present case, respondents pertinently observed that by refilling and selling LPG
cylinders bearing their registered marks, petitioners are selling goods by giving them the
general appearance of goods of another manufacturer. HSacEI

What's more, the CA correctly pointed out that there is a showing that the consumers
may be misled into believing that the LPGs contained in the cylinders bearing the marks
"GASUL" and "SHELLANE" are those goods or products of the petitioners when, in fact,
they are not. Obviously, the mere use of those LPG cylinders bearing the trademarks
"GASUL" and "SHELLANE" will give the LPGs sold by REGASCO the general appearance of
the products of the petitioners.
In sum, this Court finds that there is sufficient evidence to warrant the prosecution of
petitioners for trademark infringement and unfair competition, considering that petitioner
Republic Gas Corporation, being a corporation, possesses a personality separate and
distinct from the person of its officers, directors and stockholders. 12 Petitioners, being
corporate officers and/or directors, through whose act, default or omission the corporation
commits a crime, may themselves be individually held answerable for the crime. 13Veritably,
the CA appropriately pointed out that petitioners, being in direct control and supervision in
the management and conduct of the affairs of the corporation, must have known or are
aware that the corporation is engaged in the act of refilling LPG cylinders bearing the marks
of the respondents without authority or consent from the latter which, under the
circumstances, could probably constitute the crimes of trademark infringement and unfair
competition. The existence of the corporate entity does not shield from prosecution the
corporate agent who knowingly and intentionally caused the corporation to commit a crime.
Thus, petitioners cannot hide behind the cloak of the separate corporate personality of the
corporation to escape criminal liability. A corporate officer cannot protect himself behind a
corporation where he is the actual, present and efficient actor. 14 AHCcET

WHEREFORE, premises considered, the petition is hereby DENIED and the Decision
dated July 2, 2010 and Resolution dated October 11, 2010 of the Court of Appeals in CA-
G.R. SP No. 106385 are AFFIRMED.
SO ORDERED.
Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.
||| (Republic Gas Corp. v. Petron Corp., G.R. No. 194062, [June 17, 2013], 711 PHIL 348-362)
 CENTURY CHINESE MEDICINE CO., MING SENG CHINESE DRUGSTORE,
XIANG JIAN CHINESE DRUG STORE, TEK SAN CHINESE DRUG STORE,
SIM SIM CHINESE DRUG STORE, BAN SHIONG TAY CHINESE DRUG
STORE and/or WILCENDO TAN MENDEZ, SHUANG YING CHINESE
DRUGSTORE, and BACLARAN CHINESE DRUG STORE, petitioners, vs.
PEOPLE OF THE PHILIPPINES and LING NA LAU, respondents.

DECISION

PERALTA, J : p

Before us is a petition for review on certiorari which seeks to reverse and set aside the
Decision 1 dated March 31, 2009 of the Court of Appeals in CA-G.R. CV No. 88952 and the
Resolution 2 dated July 2, 2009, which denied reconsideration thereof. The CA reversed the
Order 3 dated September 25, 2006 of the Regional Trial Court (RTC), Branch 143, Makati
City, quashing Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-
042 and 05-043, and the Order 4 dated March 7, 2007 denying reconsideration thereof.
The antecedent facts are as follows:
Respondent Ling Na Lau, doing business under the name and style Worldwide
Pharmacy, 5 is the sole distributor and registered trademark owner of TOP GEL T.G. &
DEVICE OF A LEAF papaya whitening soap as shown by Certificate of Registration 4-2000-
009881 issued to her by the Intellectual Property Office (IPO) for a period of ten years from
August 24, 2003. 6 On November 7, 2005, her representative, Ping Na Lau, (Ping) wrote a
letter 7 addressed to National Bureau of Investigation (NBI) Director Reynaldo Wycoco,
through Atty. Jose Justo Yap and Agent Joseph G. Furing (Agent Furing), requesting
assistance for an investigation on several drugstores which were selling counterfeit whitening
papaya soaps bearing the general appearance of their products. IaDcTC

Agent Furing was assigned to the case and he executed an affidavit 8 stating that: he
conducted his own investigation, and on November 9 and 10, 2005, he, together with
Junayd Esmael (Esmael), were able to buy whitening soaps bearing the trademark "TOP-
GEL", "T.G." & "DEVICE OF A LEAF" with corresponding receipts from a list of drugstores
which included herein petitioners Century Chinese Medicine Co., Min Seng Chinese
Drugstore, Xiang Jiang Chinese Drug Store, Tek San Chinese Drug Store, Sim Sim Chinese
Drug Store, Ban Shiong Tay Drugstore, Shuang Ying Chinese Drugstore, and Baclaran
Chinese Drug Store; while conducting the investigation and test buys, he was able to
confirm Ping's complaint to be true as he personally saw commercial quantities of whitening
soap bearing the said trademarks being displayed and offered for sale at the said
drugstores; he and Esmael took the purchased items to the NBI, and Ping, as the authorized
representative and expert of Worldwide Pharmacy in determining counterfeit and
unauthorized reproductions of its products, personally examined the purchased samples,
and issued a Certification 9 dated November 18, 2005 wherein he confirmed that, indeed, the
whitening soaps bearing the trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" from the
subject drugstores were counterfeit.
Esmael also executed an affidavit 10 corroborating Agent Furing's statement. Pings
affidavit 11 stated that upon his personal examination of the whitening soaps purchased from
petitioners bearing the subject trademark, he found that the whitening soaps were different
from the genuine quality of their original whitening soaps with the trademarks "TOP-GEL",
"T.G." & "DEVICE OF A LEAF" and certified that they were all counterfeit.
On November 21, 2005, Agent Furing applied for the issuance of search warrants
before the Regional Trial Court (RTC), Branch 143, Makati City, against petitioners and other
establishments for violations of Sections 168 and 155, both in relation to Section 170
of Republic Act (RA) No. 8293, otherwise known as the Intellectual Property Code of the
Philippines. Section 168, in relation to Section 170, penalizes unfair competition; while
Section 155, in relation to Section 170, punishes trademark infringement. HAEDIS

On November 23, 2005, after conducting searching questions upon Agent Furing and
his witnesses, the RTC granted the applications and issued Search Warrants Nos. 05-030,
05-033, and 05-038 for unfair competition and Search Warrants Nos. 05-022, 05-023, 05-
025, 05-042 and 05-043 for trademark infringement against petitioners.
On December 5, 2005, Agent Furing filed his Consolidated Return of Search
Warrants. 12
On December 8, 2005, petitioners collectively filed their Motion to Quash 13 the Search
Warrants contending that their issuances violated the rule against forum shopping; that
Benjamin Yu (Yu) is the sole owner and distributor of the product known as "TOP-GEL"; and
there was a prejudicial question posed in Civil Case No. 05-54747 entitled Zenna Chemical
Industry v. Ling Na Lau, et al., pending in Branch 93 of the RTC of Quezon City, which is a
case filed by Yu against respondent for damages due to infringement of
trademark/tradename, unfair competition with prayer for the immediate issuance of a
temporary restraining order and/or preliminary prohibitory injunction.
On January 9, 2006, respondent filed her Comment/Opposition 14 thereto arguing the
non-existence of forum shopping; that Yu is not a party-respondent in these cases and the
pendency of the civil case filed by him is immaterial and irrelevant; and that Yu cannot be
considered the sole owner and distributor of "TOP GEL T.G. & DEVICE OF A LEAF." The
motion was then submitted for resolution in an Order dated January 30, 2006. DAaEIc

During the pendency of the case, respondent, on April 20, 2006, filed a
Submission 15 in relation to the Motion to Quash attaching an Order 16 dated March 21, 2006
of the IPO in IPV Case No. 10-2005-00001 filed by respondent against Yu, doing business
under the name and style of MCA Manufacturing and Heidi S. Cua, proprietor of South
Ocean Chinese Drug Stores for trademark infringement and/or unfair competition and
damages with prayer for preliminary injunction. The Order approved therein the parties' Joint
Motion to Approve Compromise Agreement filed on March 8, 2006. We quote in its entirety
the Order as follows:
The Compromise Agreement between the herein complainant and
respondents provides as follows:
 1. Respondents acknowledge the exclusive right of Complainant over
the trademark TOP GEL T.G. & DEVICE OF A LEAF for use on papaya
whitening soap as registered under Registration No. 4-2000-009881 issued on
August 24, 2003.
2. Respondents acknowledge the appointment by Zenna Chemical
Industry Co., Ltd. of Complainant as the exclusive Philippine distributor of its
products under the tradename and trademark TOP GEL MCA & MCA DEVICE
(A SQUARE DEVICE CONSISTING OF A STYLIZED REPRESENTATION OF A
LETTER "M" ISSUED OVER THE LETTER "CA") as registered under
Registration No. 4-1996-109957 issued on November 17, 2000, as well as the
assignment by Zenna Chemical Industry Co., Ltd. to Complainant of said mark
for use on papaya whitening soap. cSEAHa

3. Respondents admit having used the tradename and trademark

aforesaid but after having realized that Complainant is the legitimate assignee
of TOP GEL MCA & MCA DEVICE and the registered owner of TOP GEL T.G. &
DEVICE OF A LEAF, now undertake to voluntarily cease and desist from using
the aforesaid tradename and trademark and further undertake not to
manufacture, sell, distribute, and otherwise compete with Complainant, now
and at anytime in the future, any papaya whitening soap using or bearing a
mark or name identical or confusingly similar to, or constituting a colorable
imitation of, the tradename and trademark TOP GEL MCA & MCA DEVICE
and/or TOP GEL T.G. & DEVICE OF A LEAF as registered and described
above.
4. Respondents further undertake to withdraw and/or dismiss their
counterclaim and petition to cancel and/or revoke Registration No. 4-2000-
009881 issued to Complainant. Respondents also further undertake to pull out
within 45 days from approval of the Compromise Agreement all their products
bearing a mark or name identical or confusingly similar to, or constituting a
colorable imitation of, the tradename and trademark TOP GEL MCA & MCA
DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF, from the market
nationwide. aEAIDH

5. Respondents finally agree and undertake to pay Complainant

liquidated damages in the amount of FIVE HUNDRED THOUSAND
(Php500,000.00) PESOS for every breach or violation of any of the foregoing
undertakings which complainant may enforce by securing a writ of execution
from this Office, under this case.
6. Complainant, on the other hand, agrees to waive all her claim for
damages against Respondents as alleged in her complaint filed in the
Intellectual Property Office only.
7. The Parties hereby agree to submit this Compromise Agreement for
Approval of this Office and pray for issuance of a decision on the basis
thereof.
Finding the Compromise Agreement to have been duly executed and signed
by the parties and/or their representatives/counsels and the terms and conditions
thereof to be in conformity with the law, morals, good customs, public order and
public policy, the same is hereby APPROVED. Accordingly, the above-entitled case
 is DISMISSED as all issues raised concerning herein parties have been
rendered MOOT AND ACADEMIC.
SO ORDERED. 17 CAHaST

On September 25, 2006, the RTC issued its Order 18 sustaining the Motion to Quash
the Search Warrants, the dispositive portion of which reads as follows:
WHEREFORE, finding that the issuance of the questioned search warrants
were not supported by probable cause, the Motion to Quash is GRANTED. Search
warrants nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042, 05-043 are
ordered lifted and recalled.
The NBI Officers who effected the search warrants are hereby ordered to
return the seized items to herein respondents within ten (10) days from receipt of this
Order.
So Ordered. 19
In quashing the search warrants, the RTC applied the Rules on Search and Seizure for
Civil Action in Infringement of Intellectual Property Rights. 20 It found the existence of a
prejudicial question which was pending before Branch 93 of RTC Quezon City, docketed as
Civil Case No. 05-54747, on the determination as to who between respondent and Yu is the
rightful holder of the intellectual property right over the trademark TOP GEL T.G. & DEVICE
OF A LEAF; and there was also a case for trademark infringement and/or unfair competition
filed by respondent against Yu before the IPO which was pending at the time of the
application for the search warrants. It is clear, therefore, that at the time of the filing of the
application for the search warrants, there is yet no determination of the alleged right of
respondent over the subject trademark/tradename. Also, the RTC found that petitioners
relied heavily on Yu's representation that he is the sole owner/distributor of the Top Gel
whitening soap, as the latter even presented Registration No. 4-1996-109957 from the IPO
for a term of 20 years from November 17, 2000 covering the same product. There too was
the notarized certification from Zenna Chemical Industry of Taiwan, owner of Top Gel MCA,
with the caveat that the sale, production or representation of any imitated products under its
trademark and tradename shall be dealt with appropriate legal action. SaTAED

The RTC further said that in the determination of probable cause, the court must
necessarily resolve whether or not an offense exists to justify the issuance of a search
warrant or the quashal of the one already issued. In this case, respondent failed to prove the
existence of probable cause, which warranted the quashal of the questioned search
warrants.
On November 13, 2006, respondent filed an Urgent Motion to Hold in Abeyance the
Release of Seized Evidence. 21
Respondent filed a motion for reconsideration, which the RTC denied in its
Order 22 dated March 7, 2007.
Respondent then filed her appeal with the CA. After respondent filed her appellant's
brief and petitioners their appellee's brief, the case was submitted for decision.
 On March 31, 2009, the CA rendered its assailed Decision, the dispositive portion of
which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered
by us GRANTING the appeal filed in this case and SETTING ASIDE the Order dated
March 7, 2007 issued by Branch 143 of the Regional Trial Court of the National
Capital Judicial Region stationed in Makati City in the case involving Search Warrants
Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042, 05-043. 23 HaAISC

In reversing the RTC's quashal of the search warrants, the CA found that the search
warrants were applied for and issued for violations of Sections 155 and 168, in relation to
Section 170, of the Intellectual Property Code and that the applications for the search
warrants were in anticipation of criminal actions which are to be instituted against
petitioners; thus, Rule 126 of the Rules of Criminal Procedure was applicable. It also ruled
that the basis for the applications for issuance of the search warrants on grounds of
trademarks infringement and unfair competition was the trademark TOP GEL T.G. & DEVICE
OF A LEAF; that respondent was the registered owner of the said trademark, which gave her
the right to enforce and protect her intellectual property rights over it by seeking assistance
from the NBI.
The CA did not agree with the RTC that there existed a prejudicial question, since Civil
Case No. 05-54747 was already dismissed on June 10, 2005, i.e., long before the search
warrants subject of this appeal were applied for; and that Yu's motion for reconsideration
was denied on September 15, 2005 with no appeal having been filed thereon as evidenced
by the Certificate of Finality issued by the said court.
Petitioners' motion for reconsideration was denied by the CA in a Resolution dated
July 2, 2009.HcACST

Hence, this petition filed by petitioners raising the issue that:

(A) THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION IN REVERSING THE FINDINGS OF THE REGIONAL TRIAL COURT
AND HELD THAT THE LATTER APPLIED THE RULES ON SEARCH AND SEIZURE IN
CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. 24
(B) THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION WHEN IT BASED ITS RULING ON THE ARGUMENT WHICH WAS
BROUGHT UP FOR THE FIRST TIME IN RESPONDENT LING NA LAU'S
APPELLANT'S BRIEF. 25
Petitioners contend that the products seized from their respective stores cannot be the
subject of the search warrants and seizure as those Top Gel products are not fruits of any
crime, infringed product nor intended to be used in any crime; that they are legitimate
distributors who are authorized to sell the same, since those genuine top gel products bore
the original trademark/tradename of TOP GEL MCA, owned and distributed by Yu.
Petitioners also claim that despite the RTC's order to release the seized TOP GEL products,
not one had been returned; that one or two samples from each petitioner's' drugstore would
have sufficed in case there is a need to present them in a criminal prosecution, and that
confiscation of thousands of these products was an overkill.
 Petitioners also argue that the issue that the RTC erred in applying the rules on search
and seizure in anticipation of a civil action was never raised in the RTC.
The issue for resolution is whether or not the CA erred in reversing the RTC's quashal
of the assailed search warrants.
We find no merit in the petition. SDEITC

The applications for the issuance of the assailed search warrants were for violations of
Sections 155 and 168, both in relation to Section 170 of Republic Act (RA) No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 155, in relation
to Section 170, punishes trademark infringement; while Section 168, in relation to Section
170, penalizes unfair competition, to wit:
Sec. 155.Remedies; Infringement. — Any person who shall, without the
consent of the owner of the registered mark:
155.1Use 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; or caITAC

While
Sec. 168. Unfair Competition, Rights, Regulation and Remedies. —
xxx xxx xxx
168.3. In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be deemed
guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to
the goods themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would 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,
or who otherwise clothes the goods with such appearance as shall
deceive the public and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;
And
SEC. 170. Penalties. — Independent of the civil and administrative sanctions
imposed by law, a criminal penalty of imprisonment from two (2) years to five (5)
years and a fine ranging from Fifty thousand pesos (P50,000.00) to Two hundred
thousand pesos (P200,000.00) shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155 [Infringement], Section 168
 [Unfair Competition] and Subsection 169.1 [False Designation of Origin and False
Description or Representation]. aTICAc

Thus, we agree with the CA that A.M. No. 02-1-06-SC, which provides for the Rules on
the Issuance of the Search and Seizure in Civil Actions for Infringement of Intellectual
Property Rights, is not applicable in this case as the search warrants were not applied based
thereon, but in anticipation of criminal actions for violation of intellectual property rights
under RA 8293. It was established that respondent had asked the NBI for assistance to
conduct investigation and search warrant implementation for possible apprehension of
several drugstore owners selling imitation or counterfeit TOP GEL T.G. & DEVICE OF A LEAF
papaya whitening soap. Also, in his affidavit to support his application for the issuance of the
search warrants, NBI Agent Furing stated that "the items to be seized will be used as
relevant evidence in the criminal actions that are likely to be instituted." Hence, Rule 126 of
the Rules of Criminal Procedure applies.
Rule 126 of the Revised Rules of Court, which governs the issuance of the assailed
Search Warrants, provides, to wit:
SEC. 3. Personal property to be seized. — A search warrant may be issued for
the search and seizure of personal property:
(a) Subject of the offense;
(b) Stolen or embezzled and other proceeds or fruits of the offense; or
(c) Used or intended to be used as the means of committing an
offense. ASHaDT

SEC. 4. Requisites for issuing search warrant. — A search warrant shall not
issue except upon probable cause in connection with one specific offense to be
determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place
to be searched and the things to be seized which may be anywhere in the
Philippines.
SEC. 5. Examination of complainant; record. — The judge must, before issuing
the warrant, personally examine in the form of searching questions and answers, in
writing and under oath, the complainant and the witnesses he may produce on facts
personally known to them and attach to the record their sworn statements together
with the affidavits submitted.
A core requisite before a warrant shall validly issue is the existence of a probable
cause, meaning "the existence of such facts and circumstances which would lead a
reasonably discreet and prudent man to believe that an offense has been committed and that
the objects sought in connection with the offense are in the place to be searched." 26And
when the law speaks of facts, the reference is to facts, data or information personally known
to the applicant and the witnesses he may present. Absent the element of personal
knowledge by the applicant or his witnesses of the facts upon which the issuance of a
search warrant may be justified, the warrant is deemed not based on probable cause and is
a nullity, its issuance being, in legal contemplation, arbitrary. 27 The determination of
probable cause does not call for the application of rules and standards of proof that a
judgment of conviction requires after trial on the merits. 28 As implied by the words
themselves, "probable cause" is concerned with probability, not absolute or even moral
certainty. The prosecution need not present at this stage proof beyond reasonable doubt.
The standards of judgment are those of a reasonably prudent man, 29 not the exacting
calibrations of a judge after a full-blown trial. 30
EITcaH

The RTC quashed the search warrants, saying that (1) there exists a prejudicial
question pending before Branch 93 of the RTC of Quezon City, docketed as Civil Case No.
05-54747, i.e., the determination as to who between respondent and Yu is the rightful holder
of the intellectual property right over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and
there was also a case for trademark infringement and/or unfair competition filed by
respondent against Yu pending before the IPO, docketed as IPV Case No. 10-2005-00001;
and (2) Yu's representation that he is the sole distributor of the Top Gel whitening soap, as
the latter even presented Registration No. 4-1996-109957 issued by the IPO to Zenna
Chemical Industry as the registered owner of the trademark TOP GEL MCA & DEVICE MCA
for a term of 20 years from November 17, 2000 covering the same product.
We do not agree. We affirm the CA's reversal of the RTC Order quashing the search
warrants.
The affidavits of NBI Agent Furing and his witnesses, Esmael and Ling, clearly showed
that they are seeking protection for the trademark "TOP GEL T.G. and DEVICE OF A LEAF"
registered to respondent under Certificate of Registration 4-2000-009881 issued by the IPO
on August 24, 2003, and no other. While petitioners claim that the product they are
distributing was owned by Yu with the trademark TOP GEL MCA and MCA DEVISE under
Certificate of Registration 4-1996-109957, it was different from the trademark TOP GEL T.G.
and DEVICE OF A LEAF subject of the application. We agree with the CA's finding in this
wise:
. . . It bears stressing that the basis for the applications for issuances of the search
warrants on grounds of trademark infringement and unfair competition is the
trademark TOP GEL T.G. & DEVICE OF A LEAF. Private complainant-appellant was
issued a Certificate of Registration No. 4-2000-009881 of said trademark on August
24, 2003 by the Intellectual Property Office, and is thus considered the lawful holder
of the said trademark. Being the registrant and the holder of the same, private
complainant-appellant had the authority to enforce and protect her intellectual
property rights over it. This prompted her to request for assistance from the agents
of the NBI, who thereafter conducted a series of investigation, test buys and
inspection regarding the alleged trademark infringement by herein respondents-
appellees. Subsequently, Ping Na Lau, private complainant-appellant's
representative, issued a certification with the finding that the examined goods were
counterfeit. This prompted the NBI agents to apply for the issuances of search
warrants against the respondents-appellees. Said applications for the search
warrants were granted after by Judge Laguilles after examining under oath the
applicant Agent Furing of the NBI and his witnesses Ping Na Lau and Junayd R.
Ismael. TAHCEc

Based on the foregoing, it is clear that the requisites for the issuance of the
search warrants had been complied with and that there is probable cause to believe
that an offense had been committed and that the objects sought in connection with
the offense were in the places to be searched. The offense pertains to the alleged
 violations committed by respondents-appellees upon the intellectual property rights
of herein private complainant-appellant, as holder of the trademark TOP GEL T.G. &
DEVICE OF A LEAF under Certificate of Registration No. 4-2000-009881, issued on
August 24, 2003 by the Intellectual Property Office. 31
Notably, at the time the applications for the issuance of the search warrants were filed
on November 21, 2005, as the CA correctly found, Civil Case No. Q-05-54747, which the
RTC found to be where a prejudicial question was raised, was already dismissed on June 10,
2005, 32 because of the pendency of a case involving the same issues and parties before the
IPO. Yu's motion for reconsideration was denied in an Order 33 dated September 15, 2005.
In fact, a Certificate of Finality 34 was issued by the RTC on January 4, 2007.
Moreover, the IPO case for trademark infringement and unfair competition and
damages with prayer for preliminary injunction filed by respondent against Yu and Heidi Cua,
docketed as IPV Case No. 10-2005-00001, would not also be a basis for quashing the
warrants. In fact, prior to the applications for the issuance of the assailed search warrants on
November 21, 2005, the IPO had issued an Order 35 dated October 20, 2005 granting a writ
of preliminary injunction against Yu and Cua, the dispositive portion of which reads: cESDCa

WHEREFORE, the WRIT OF PRELIMINARY INJUNCTION is hereby issued

against Respondent, Benjamin Yu, doing business under the name and style of MCA
Manufacturing and Heidi S. Cua, Proprietor of South Ocean Chinese Drug Store, and
their agents, representatives, dealers and distributors and all persons acting in their
behalf, to cease and desist using the trademark "TOP GEL T.G. & DEVICE OF A
LEAF" or any colorable imitation thereof on Papaya whitening soaps they
manufacture, sell, and/or offer for sale, and otherwise, from packing their Papaya
Whitening Soaps in boxes with the same general appearance as those of
complainant's boxes within a period of NINETY (90) DAYS, effective upon the receipt
of respondent of the copy of the COMPLIANCE filed with this Office by the
Complainant stating that it has posted a CASH BOND in the amount of ONE
HUNDRED THOUSAND PESOS (Php100,000.00) together with the corresponding
Official Receipt Number and date thereof. Consequently, complainant is directed to
inform this Office of actual date of receipt by Respondent of the aforementioned
COMPLIANCE. 36 DcIHSa

To inform the public of the issuance of the writ of preliminary injunction, respondent's
counsel had the dispositive portion of the Order published in The Philippine Star newspaper
on October 30, 2005. 37 Thus, it was clearly stated that Yu, doing business under the name
and style of MCA Manufacturing, his agents, representatives, dealers and distributors and all
persons acting in his behalf, were to cease and desist from using the trademark "TOP GEL &
DEVICE OF A LEAF" or any colorable imitation thereof on Papaya Whitening soaps they
manufacture, sell and/or offer for sale. Petitioners, who admitted having derived their TOP
GEL products from Yu, are, therefore, notified of such injunction and were enjoined from
selling the same.
Notwithstanding, at the time of the application of the search warrants on November
21, 2005, and while the injunction was in effect, petitioners were still selling the alleged
counterfeit products bearing the trademark TOP GEL T.G. & DEVICE OF A LEAF. There
exists a probable cause for violation of respondent's intellectual property rights, which
entitles her as the registered owner of the trademark TOP GEL and DEVICE OF A LEAF to be
protected by the issuance of the search warrants.
More importantly, during the pendency of petitioners' motion to quash in the RTC,
respondent submitted the Order dated March 8, 2006 of the IPO in IPV Case No. 10-2005-
00001, where the writ of preliminary injunction was earlier issued, approving the compromise
agreement entered into by respondent with Yu and Cua where it was stated, among others,
that:
1. Respondents acknowledge the exclusive right of Complainant over the
trademark TOP GEL T.G. & DEVICE OF A LEAF for use on papaya whitening soap
as registered under Registration No. 4-2000-009881 issued on August 24, 2003.
2. Respondents acknowledge the appointment by Zenna Chemical Industry Co.,
Ltd. of Complainant as the exclusive Philippine distributor of its products under the
tradename and trademark TOP GEL MCA & MCA DEVICE (A SQUARE DEVICE
CONSISTING OF A STYLIZED REPRESENTATION OF A LETTER "M" OVER THE
LETTER "CA") as registered under Registration No. 4-1996-109957 issued on
November 17, 2000, as well as the assignment by Zenna Chemical Industry Co.,
Ltd. to Complainant of said mark for use on papaya whitening soap. STIcaE

3. Respondents admit having used the tradename and trademark aforesaid, but
after having realized that Complainant is the legitimate assignee of TOP GEL MCA
& MCA DEVICE and the registered owner of TOP GEL T.G. & DEVICE OF A LEAF,
now undertake to voluntarily cease and desist from using the aforesaid tradename
and trademark, and further undertake not to manufacture, sell and distribute and
otherwise compete with complainant, now and at anytime in the future, any papaya
whitening soap using or bearing a mark or name identical or confusingly similar to,
or constituting a colorable imitation of the tradename and trademark TOP GEL MCA
& MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF as registered and
described above. 38
Hence, it appears that there is no more controversy as to who is the rightful holder of
the trademark TOP GEL T.G. & DEVICE OF A LEAF. Therefore, respondent, as owner of such
registered trademark has the right to the issuance of the search warrants.
Anent petitioners' claim that one or two samples of the Top Gel products from each of
them, instead of confiscating thousands of the products, would have sufficed for the
purpose of an anticipated criminal action, citing our ruling in Summerville General
Merchandising Co. v. Court of Appeals, 39 is not meritorious. DHCSTa

We do not agree.
The factual milieu of the two cases are different. In Summerville, the object of the
violation of Summerville's intellectual property rights, as assignee of Royal playing cards and
Royal brand playing cards case, was limited to the design of Summerville's Royal plastic
container case which encased and wrapped the Crown brand playing cards. In the
application for the search warrant which the RTC subsequently issued, one of the items to
be seized were the Crown brand playing cards using the copyright plastic and Joker of Royal
brand. Thus, numerous boxes containing Crown playing cards were seized and upon the
RTC's instruction were turned over to Summerville, subject to the condition that the key to
the said warehouse be turned over to the court sheriff. Respondents moved for the quashal
of the search warrant and for the return of the seized properties. The RTC partially granted
the motion by ordering the release of the seized Crown brand playing cards and the printing
machines; thus, only the Royal plastic container cases of the playing cards were left in the
custody of Summerville. The CA sustained the RTC order. On petition with us, we affirmed
the CA. We found therein that the Crown brand playing cards are not the subject of the
offense as they are genuine and the Crown trademark was registered to therein respondents'
names; that it was the design of the plastic container/case that is alleged to have been
utilized by respondents to deceive the public into believing that the Crown brand playing
cards are the same as those manufactured by Summerville. We then said that assuming that
the Crown playing cards could be considered subject of the offense, a sample or two are
more than enough to retain should there have been a need to examine them along with the
plastic container/case; and that there was no need to hold the hundreds of articles seized.
We said so in the context that since what was in dispute was the design of the Royal plastic
cases/containers of playing cards and not the playing card per se, a small number of Crown
brand playing cards would suffice to examine them with the Royal plastic cases/containers.
And the return of the playing cards would better serve the purposes of justice and
expediency.
However, in this case, the object of the violation of respondent's intellectual property
right is the alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap
being sold by petitioners, so there is a need to confiscate all these articles to protect
respondent's right as the registered owner of such trademark.
Petitioners next contend that the CA's ruling on the applicability of Rule 126 of
the Rules of Court that the search warrants were issued in anticipation of a criminal action
was only based on respondent's claim which was only brought for the first time in her
appellant's brief. ADaEIH

We are not persuaded.

We find worth quoting respondent's argument addressing this issue in its Comment,
thus:
In the assailed Decision, the Court of Appeals found that the Rule correctly
applicable to the subject search warrants was Rule 126 of the Rules of Court.
Petitioners fault the appellate court for ruling that the Regional Trial Court incorrectly
applied the Rules on Search and Seizure in Civil Actions for Infringement of
Intellectual Property Rights on the basis of an argument that private respondent
brought up for the first time in her Appellant's Brief.
A cursory perusal of the Appellant's Brief shows that the following
issues/errors were raised, that: (1) the Honorable Trial Court erred in holding that the
"Rules on Search and Seizure for Infringement of Intellectual Property Rights" apply
to the search warrants at bar; (2) . . . .
It must be remembered that there was no trial on the merits to speak of in the
trial court, and the matter of the application of the wrong set of Rules only arose in
the Order dated 25th September 2006 which sustained the Motion to Quash. A
thorough examination of the Appellee's Brief filed by petitioners (respondents-
appellees in the Court of Appeals) reveals, however, that petitioners NEVER
assailed the first issue/error on the ground that the same was raised for the
 first time on appeal. It is only now, after the appellate court rendered a Decision
and Resolution unfavorable to them, that petitioners questioned the alleged
procedural error. Petitioners should now be considered in estoppel to question
the same. 40
Indeed, perusing the appellee's (herein petitioners) brief filed with the CA, the matter of
the non-applicability of the rules on search and seizure in civil action for infringement of
intellectual property rights was never objected as being raised for the first time. On the
contrary, petitioners had squarely faced respondent's argument in this wise: IDaCcS

Appellant (herein respondent) contends that the rule (SC Adm. Memo 1-06,
No. 02-1-06, Rule on Search and Seizure in Civil Actions for Infringement of
Intellectual Property Rights) does [not] apply to the search warrants in the [case] at
bar, for the reason that the search warrants themselves reveal that the same were
applied for and issued for violations of "Section 155 in relation to Section 170 of RA
8293" and violations of "Section 168 in relation to Section 170 of RA 8293," and that
a perusal of the records would show that there is no mention of a civil action or
anticipation thereof, upon which the search warrants are applied for.
Appellees (herein petitioners) cannot agree with the contention of the
appellant. Complainant NBI Agent Joseph G. Furing, who applied for the search
warrants, violated the very rule on search and seizure for infringement of Intellectual
Property Rights. The search warrants applied for by the complainants cannot be
considered a criminal action. There was no criminal case yet to speak of when
complainants applied for issuance of the search warrants. There is distinction here
because the search applied for is civil in nature and no criminal case had been filed.
The complaint is an afterthought after the respondents-appellees filed their Motion to
Quash Search Warrant before the Regional Trial Court of Manila, Branch 24. The
grounds enumerated in the rule must be complied with in order to protect the
constitutional mandate that "no person shall be deprived of life liberty or property
without due process of law nor shall any person be denied the equal protection of the
law." Clearly, the application of the search warrants for violation of unfair competition
and infringement is in the nature of a civil action. 41
ACaTIc

WHEREFORE, the petition for review is DENIED. The Decision dated March 31, 2009
and the Resolution dated July 2, 2009 of the Court of Appeals, in CA-G.R. CV No. 88952, are
hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.
(Century Chinese Medicine Co. v. People, G.R. No. 188526, [November 11, 2013], 720 PHIL
|||

795-818)
 PILIPINAS SHELL PETROLEUM CORPORATION and PETRON
CORPORATION, petitioners, vs. ROMARS INTERNATIONAL GASES
CORPORATION, respondent.

DECISION

PERALTA, J : p

This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of
Court praying that the Decision 1 of the Court of Appeals (CA), dated March 13, 2009, and
the Resolution 2 dated September 14, 2009, denying petitioner's motion for reconsideration
thereof, be reversed and set aside.
The antecedent facts are:
Petitioners received information that respondent was selling, offering for sale, or
distributing liquefied petroleum gas (LPG) by illegally refilling the steel cylinders
manufactured by and bearing the duly registered trademark and device of respondent
Petron. Petron then obtained the services of a paralegal investigation team who sent their
people to investigate. The investigators went to respondent's premises located in San Juan,
Baao, Camarines Sur, bringing along four empty cylinders of Shellane, Gasul, Total and
Superkalan and asked that the same be refilled. Respondent's employees then refilled said
empty cylinders at respondent's refilling station. The refilled cylinders were brought to the
Marketing Coordinator of Petron Gasul who verified that respondent was not authorized to
distribute and/or sell, or otherwise deal with Petron LPG products, and/or use or imitate any
Petron trademarks. Petitioners then requested the National Bureau of Investigation (NBI) to
investigate said activities of respondent for the purpose of apprehending and prosecuting
establishments conducting illegal refilling, distribution and/or sale of LPG products using the
same containers of Petron and Shell, which acts constitute a violation of Section 168, 3 in
relation to Section 170 4 of Republic Act (R.A.) No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, and/or Section 2 5 of R.A. No. 623, otherwise known as An
Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and
Other Similar Containers.
The NBI proceeded with their investigation and reportedly found commercial quantities
of Petron Gasul and Shellane cylinders stockpiled at respondent's warehouse. They also
witnessed trucks coming from respondent's refilling facility loaded with Gasul, Shellane and
Marsflame cylinders, which then deposit said cylinders in different places, one of them a
store called "Edrich Enterprises" located at 272 National. Highway, San Nicolas, Iriga City.
The investigators then bought Shellane and Gasul cylinders from Edrich Enterprises, for
which they were issued an official receipt.ADcEST

Thus, the NBI, in behalf of Petron and Shell, filed with the Regional Trial Court of
Naga City (RTC-Naga), two separate Applications for Search Warrant for Violation of
Section 155.1, 6 in relation to Section 170 7 of R.A. No. 8293 against respondent and/or its
occupants. On October 23, 2002, the RTC-Naga City issued an Order granting said
Applications and Search Warrant Nos. 2002-27 and 2002-28 were issued. On the same day,
the NBI served the warrants at the respondent's premises in an orderly and peaceful
manner, and articles or items described in the warrants were seized.
On November 4, 2002, respondent filed a Motion to Quash Search Warrant Nos. 2002-
27 and 2002-28, where the only grounds cited were: (a) there was no probable cause; (b)
there had been a lapse of four weeks from the date of the test-buy to the date of the search
and seizure operations; (c) most of the cylinders seized were not owned by respondent but
by a third person; and (d) Edrich Enterprises is an authorized outlet of Gasul and Marsflame.
In an Order dated February 21, 2003, the RTC-Naga denied the Motion to Quash.
However, on March 27, 2003, respondent's new counsel filed an Appearance with
Motion for Reconsideration. It was only in said motion where respondent raised for the first
time, the issue of the impropriety of filing the Application for Search Warrant at the RTC-
Naga City when the alleged crime was committed in a place within the territorial
jurisdiction of the RTC-Iriga City. Respondent pointed out that the application filed with
the RTC-Naga failed to state any compelling reason to justify the filing of the same in a
court which does not have territorial jurisdiction over the place of the commission of the
crime, as required by Section 2 (b), Rule 126 of the Revised Rules of Criminal Procedure.
Petitioner opposed the Motion for Reconsideration, arguing that it was already too late for
respondent to raise the issue regarding the venue of the filing of the application for search
warrant, as this would be in violation of the Omnibus Motion Rule.
In an Order dated July 28, 2003, the RTC-Naga issued an Order granting respondent's
Motion for Reconsideration, thereby quashing Search Warrant Nos. 2002-27 and 2002-28.
Petitioner then appealed to the CA, but the appellate court, in its Decision dated
March 13, 2009, affirmed the RTC Order quashing the search warrants. Petitioner's motion
for reconsideration of the CA Decision was denied per Resolution dated September 14,
2009.
Elevating the matter to this Court via a petition for review on certiorari, petitioner
presents herein the following issues:
A.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT VENUE IN AN
APPLICATION FOR SEARCH WARRANT IS JURISDICTIONAL. THIS IS BECAUSE A
SEARCH WARRANT CASE IS NOT A CRIMINAL CASE.
B.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT RESPONDENT'S
MOTION TO QUASH IS NOT SUBJECT TO THE OMNIBUS MOTION RULE AND
THAT THE ISSUE OF LACK OF JURISDICTION MAY NOT BE WAIVED AND MAY
EVEN BE RAISED FOR THE FIRST TIME ON APPEAL. 8
Petitioner's arguments deserve closer examination.
Section 2, Rule 126 of the Revised Rules of Criminal Procedure provides thus:
SEC. 2. Court where applications for search warrant shall be filed. — An
application for search warrant shall be filed with the following:
 (a) Any court within whose territorial jurisdiction a crime was committed.
(b) For compelling reasons stated in the application, any court
within the judicial region where the crime was committed if the place of
the commission of the crime is known, or any court within the judicial
region where the warrant shall be enforced. SDIaHE

However, if the criminal action has already been filed, the application shall only
be made in the court where the criminal action is pending. (Emphasis supplied)
The above provision is clear enough. Under paragraph (b) thereof, the application for
search warrant in this case should have stated compelling reasons why the same was being
filed with the RTC-Naga instead of the RTC-Iriga City, considering that it is the latter court
that has territorial jurisdiction over the place where the alleged crime was committed and
also the place where the search warrant was enforced. The wordings of the provision is of a
mandatory nature, requiring a statement of compelling reasons if the application is filed in a
court which does not have territorial jurisdiction over the place of commission of the crime.
Since Section 2, Article III of the 1987 Constitution guarantees the right of persons to be free
from unreasonable searches and seizures, and search warrants constitute a limitation on this
right, then Section 2, Rule 126 of the Revised Rules of Criminal Procedure should be
construed strictly against state authorities who would be enforcing the search warrants. On
this point, then, petitioner's application for a search warrant was indeed insufficient for failing
to comply with the requirement to state therein the compelling reasons why they had to file
the application in a court that did not have territorial jurisdiction over the place where the
alleged crime was committed.
Notwithstanding said failure to state the compelling reasons in the application, the
more pressing question that would determine the outcome of the case is, did the RTC-Naga
act properly in taking into consideration the issue of said defect in resolving respondent's
motion for reconsideration where the issue was raised for the very first time? The record
bears out that, indeed, respondent failed to include said issue at the first instance in its
motion to quash. Does the omnibus motion rule cover a motion to quash search warrants?
The omnibus motion rule embodied in Section 8, Rule 15, in relation to Section 1, Rule
9, demands that all available objections be included in a party's motion, otherwise, said
objections shall be deemed waived; and, the only grounds the court could take
cognizance of, even if not pleaded in said motion are: (a) lack of jurisdiction over the
subject matter; (b) existence of another action pending between the same parties for the
same cause; and (c) bar by prior judgment or by statute of limitations. 9 It should be stressed
here that the Court has ruled in a number of cases that the omnibus motion rule is applicable
to motions to quash search warrants. 10 Furthermore, the Court distinctly stated in Abuan v.
People, 11 that "the motion to quash the search warrant which the accused may file
shall be governed by the omnibus motion rule, provided, however, that objections not
available, existent or known during the proceedings for the quashal of the warrant may
be raised in the hearing of the motion to suppress . . . ." 12
In accordance with the omnibus motion rule, therefore, the trial court could only take
cognizance of an issue that was not raised in the motion to quash if, (1) said issue was not
available or existent when they filed the motion to quash the search warrant; or (2) the issue
was one involving jurisdiction over the subject matter. Obviously, the issue of the defect in
the application was available and existent at the time of filing of the motion to quash. What
remains to be answered then is, if the newly raised issue of the defect in the application is an
issue of jurisdiction.
In resolving whether the issue raised for the first time in respondent's motion for
reconsideration was an issue of jurisdiction, the CA ratiocinated, thus:
It is jurisprudentially settled that the concept of venue of actions in criminal
cases, unlike in civil cases, is jurisdictional. The place where the crime was
committed determines not only the venue of the action but is an essential element of
jurisdiction. It is a fundamental rule that for jurisdiction to be acquired by courts in
criminal cases, the offense should have been committed or any one of its essential
ingredients should have taken place within the territorial jurisdiction of the court.
Territorial jurisdiction in criminal cases is the territory where the court has jurisdiction
to take cognizance or to try the offense allegedly committed therein by the accused.
Thus, it cannot take jurisdiction over a person charged with an offense allegedly
committed outside of that limited territory. 13 aIHSEc

Unfortunately, the foregoing reasoning of the CA, is inceptionally flawed, because as

pronounced by the Court in Malaloan v. Court of Appeals, 14 and reiterated in the more
recent Worldwide Web Corporation v. People of the Philippines, 15 to wit:
. . . as we held in Malaloan v. Court of Appeals, an application for a search
warrant is a "special criminal process," rather than a criminal action:
The basic flaw in this reasoning is in erroneously equating the
application for and the obtention of a search warrant with the institution
and prosecution of a criminal action in a trial court. It would thus
categorize what is only a special criminal process, the power to issue
which is inherent in all courts, as equivalent to a criminal action, jurisdiction
over which is reposed in specific courts of indicated competence. It ignores
the fact that the requisites, procedure and purpose for the issuance of a
search warrant are completely different from those for the institution of a
criminal action.
For, indeed, a warrant, such as a warrant of arrest or a search warrant,
merely constitutes process. A search warrant is defined in our jurisdiction as
an order in writing issued in the name of the People of the Philippines signed
by a judge and directed to a peace officer, commanding him to search for
personal property and bring it before the court. A search warrant is in the
nature of a criminal process akin to a writ of discovery. It is a special and
peculiar remedy, drastic in its nature, and made necessary because of a public
necessity.
In American jurisdictions, from which we have taken our jural
concept and provisions on search warrants, such warrant is definitively
considered merely as a process, generally issued by a court in the
exercise of its ancillary jurisdiction, and not a criminal action to be
entertained by a court pursuant to its original jurisdiction. . . . (Emphasis
supplied)
 Clearly then, an application for a search warrant is not a criminal action. .
. . 16 (Emphasis supplied)
The foregoing explanation shows why the CA arrived at the wrong conclusion. It
gravely erred in equating the proceedings for applications for search warrants with criminal
actions themselves. As elucidated by the Court, proceedings for said applications are not
criminal in nature and, thus, the rule that venue is jurisdictional does not apply thereto.
Evidently, the issue of whether the application should have been filed in RTC-Iriga City or
RTC-Naga, is not one involving jurisdiction because, as stated in the afore-quoted case, the
power to issue a special criminal process is inherent in all courts.
Inferring from the foregoing, the Court deems it improper for the RTC-Naga to have
even taken into consideration an issue which respondent failed to raise in its motion to
quash, as it did not involve a question of jurisdiction over the subject matter. It is quite clear
that the RTC-Naga had jurisdiction to issue criminal processes such as a search warrant.
Moreover, the Court must again emphasize its previous admonition in Spouses
Anunciacion v. Bocanegra, 17 that:
We likewise cannot approve the trial court's act of entertaining supplemental
motions . . . which raise grounds that are already deemed waived. To do so would
encourage lawyers and litigants to file piecemeal objections to a complaint in order to
delay or frustrate the prosecution of the plaintiff's cause of action. 18
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals, dated
March 13, 2009, and the Resolution dated September 14, 2009 in CA-G.R. CV No. 80643
are REVERSED. The Order dated February 21, 2003 issued by the Regional Trial Court of
Naga, Camarines Sur, Branch 24, denying respondent's motion to quash,
is REINSTATED. cCaSHA

SO ORDERED.
Velasco, Jr., Del Castillo, Villarama, Jr. and Reyes, JJ., concur.
*

(Pilipinas Shell Petroleum Corp. v. Romars International Gases Corp., G.R. No. 189669,
|||

[February 16, 2015], 753 PHIL 707-719)

 SONY COMPUTER ENTERTAINMENT, INC., petitioner, vs. SUPERGREEN,
INCORPORATED, respondent.

DECISION

QUISUMBING, J : p

This petition for review seeks to reverse the Decision 1 dated June 30, 2003 of the
Court of Appeals in CA-G.R. SP No. 67612 and the Resolution 2 dated January 16, 2004,
denying reconsideration. The Court of Appeals had denied the petition for certiorari assailing
the trial court's quashal of the search warrant.AIaHES

The case stemmed from the complaint filed with the National Bureau of Investigation
(NBI) by petitioner Sony Computer Entertainment, Inc., against respondent Supergreen,
Incorporated. The NBI found that respondent engaged in the reproduction and distribution of
counterfeit "PlayStation" game software, consoles and accessories in violation
of SonyComputer's intellectual property rights. Thus, NBI applied with the Regional Trial
Court (RTC) of Manila, Branch 1 for warrants to search respondent's premises in Parañaque
City and Cavite. On April 24, 2001, the RTC of Manila issued Search Warrants Nos. 01-1986
to 01-1988 covering respondent's premises at Trece-Tanza Road, Purok 7, Barangay de
Ocampo, Trece Martires City, Cavite, and Search Warrants Nos. 01-1989 to 01-1991
covering respondent's premises at Room 302, 3rd Floor Chateau de Baie Condominium, 149
Roxas Boulevard corner Airport Road, Parañaque City. The NBI simultaneously served the
search warrants on the subject premises and seized a replicating machine and several units
of counterfeit "PlayStation" consoles, joy pads, housing, labels and game software.
On June 11, 2001, respondent filed a motion to quash Search Warrants Nos. 01-1986
to 01-1988 and/or release of seized properties on the ground that the search warrant failed
to particularly describe the properties to be seized. The trial court denied the motion for lack
of merit.
On August 4, 2001, respondent filed another motion to quash, this time, questioning
the propriety of the venue. Petitioner opposed the motion on the ground that it violated the
omnibus motion rule wherein all objections not included shall be deemed waived. In an
Order 3 dated October 5, 2001, the trial court affirmed the validity of Search Warrants Nos.
01-1989 to 01-1991 covering respondent's premises in Parañaque City, but quashed Search
Warrants Nos. 01-1986 to 01-1988 covering respondent's premises in Cavite. The trial court
held that lack of jurisdiction is an exception to the omnibus motion rule and may be raised at
any stage of the proceedings. The dispositive portion of the order read,
Accordingly, Search Warrants Nos. 01-1986, 01-1987 and 01-1988 are hereby
ordered quashed and set aside. HTSAEa

The National Bureau of Investigation and/or any other person in actual custody
of the goods seized pursuant thereto are hereby directed to return the same to the
respondents.
 SO ORDERED. 4
Petitioner elevated the matter to the Court of Appeals, which dismissed the petition
for certiorari. The appellate court ruled that under Section 2, 5 Rule 126 of the Rules of Court,
the RTC of Manila had no jurisdiction to issue a search warrant enforceable in Cavite, and
that lack of jurisdiction was not deemed waived. Petitioner moved for reconsideration but the
same was denied. The Court of Appeals disposed, as follows:
WHEREFORE, the instant Petition is hereby denied and
accordingly DISMISSED.
SO ORDERED. 6
Petitioner now comes before us raising the following issues:
I
WHETHER OR NOT VENUE IN SEARCH WARRANT APPLICATIONS INVOLVES
TERRITORIAL JURISDICTION.
II
WHETHER OR NOT THE CORRECTNESS OF VENUE IN AN APPLICATION FOR
SEARCH WARRANT IS DEEMED WAIVED IF NOT RAISED BY THE RESPONDENT IN
ITS MOTION TO QUASH.
III
WHETHER OR NOT THE OFFENSES INVOLVED IN THE SUBJECT SEARCH
WARRANTS ARE "CONTINUING CRIMES" WHICH MAY BE VALIDLY TRIED IN
ANOTHER JURISDICTION WHERE THE OFFENSE WAS PARTLY COMMITTED. 7
In sum, we are asked to resolve whether the quashal of Search Warrants Nos. 01-1986
to 01-1988 was valid. AECacS

Citing Malaloan v. Court of Appeals, 8 where this Court clarified that a search warrant
application is only a special criminal process and not a criminal action, petitioner contends
that the rule on venue for search warrant application is not jurisdictional. Hence, failure to
raise the objection waived it. Moreover, petitioner maintains that applying for search
warrants in different courts increases the possibility of leakage and contradictory outcomes
that could defeat the purpose for which the warrants were issued.
Petitioner further asserts that even granting that the rules on search warrant
applications are jurisdictional, the application filed either in the courts of the National Capital
Region or Fourth Judicial Region is still proper because the crime was continuing and
committed in both Parañaque City and Cavite.
Respondent counters that Section 2 is explicit on where applications should be filed
and provided the territorial limitations on search warrants. Respondent claims
thatMalaloan is no longer applicable jurisprudence with the promulgation of the 2000 Rules
of Criminal Procedure. Even granting that petitioner has compelling reasons, respondent
maintains that petitioner cannot file the application with the RTC of Manila because Cavite
belongs to another judicial region. Respondent also argues that the doctrine on continuing
crime is applicable only to the institution of a criminal action, not to search warrant
applications which is governed by Rule 126, and in this case Section 2.
To start, we cautioned that our pronouncement in Malaloan should be read into the
Judiciary Reorganization Act of 1980 9 conferring on the regional trial courts and their judges
a territorial jurisdiction, regional in scope. Both the main decision and the dissent
in Malaloan recognized this.
Now, in the present case, respondent's premises in Cavite, within the Fourth Judicial
Region, is definitely beyond the territorial jurisdiction of the RTC of Manila, in the National
Capital Region. Thus, the RTC of Manila does not have the authority to issue a search
warrant for offenses committed in Cavite. Hence, petitioner's reliance in Malaloan is
misplaced.Malaloan involved a court in the same judicial region where the crime was
committed. The instant case involves a court in another region. Any other interpretation re-
defining territorial jurisdiction would amount to judicial legislation. 10
Nonetheless, we agree with petitioner that this case involves a transitory or continuing
offense of unfair competition under Section 168 of Republic Act No. 8293, 11 which provides,
SEC. 168. Unfair Competition, Rights, Regulation and Remedies. — . . .
168.2. Any person who shall employ deception or any other means contrary to
good faith by which he shall pass off the goods manufactured by him or in which he
deals, or his business, or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce said result, shall be
guilty of unfair competition, and shall be subject to an action therefor.
168.3. In particular, and without in any way limiting the scope of protection
against unfair competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which they are contained, or the
devices or words thereon, or in any other feature of their appearance, which would 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, or who
otherwise clothes the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent vendor of such goods or
any agent of any vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or
(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of another.
Pertinent too is Article 189 (1) of the Revised Penal Code that enumerates the
elements of unfair competition, to wit:
(a) That the offender gives his goods the general appearance of the goods of another
manufacturer or dealer;
 (b) That the general appearance is shown in the (1) goods themselves, or in the (2)
wrapping of their packages, or in the (3) device or words therein, or in (4) any
other feature of their appearance;
(c) That the offender offers to sell or sells those goods or gives other persons a
chance or opportunity to do the same with a like purpose; and
(d) That there is actual intent to deceive the public or defraud a competitor. 12
Respondent's imitation of the general appearance of petitioner's goods was done
allegedly in Cavite. It sold the goods allegedly in Mandaluyong City, Metro Manila. The
alleged acts would constitute a transitory or continuing offense. Thus, clearly, under Section
2 (b) of Rule 126, Section 168 of Rep. Act No. 8293 and Article 189 (1) of the Revised Penal
Code, petitioner may apply for a search warrant in any court where any element of the
alleged offense was committed, including any of the courts within the National Capital
Region (Metro Manila). 13
WHEREFORE, the petition is GRANTED. The Decision dated June 30, 2003 and the
Resolution dated January 16, 2004 of the Court of Appeals in CA-G.R. SP No. 67612 are
SET ASIDE. The Order dated October 5, 2001 of the Regional Trial Court of Manila, Branch
1, is PARTLY MODIFIED. Search Warrants Nos. 01-1986 to 01-1988 are hereby declared
valid.
SO ORDERED.
Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.
(Sony Computer Entertainment, Inc. v. Supergreen, Inc., G.R. No. 161823, [March 22, 2007],
|||

547 PHIL 639-646)

 WILLAWARE PRODUCTS CORPORATION, petitioner, vs. JESICHRIS
MANUFACTURING CORPORATION, respondent.

DECISION

PERALTA, J : p

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeking to set aside the Decision 1 dated November 24, 2010 and Resolution 2 dated
February 10, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744.
The facts, as found by the Regional Trial Court (RTC), are as follows:
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed
this present complaint for damages for unfair competition with prayer for permanent
injunction to enjoin [petitioner] Willaware Products Corporation ([petitioner] for short)
from manufacturing and distributing plastic-made automotive parts similar to those of
[respondent].
[Respondent] alleged that it is a duly registered partnership engaged in the
manufacture and distribution of plastic and metal products, with principal office at
No. 100 Mithi Street, Sampalukan, Caloocan City. Since its registration in 1992,
[respondent] has been manufacturing in its Caloocan plant and distributing
throughout the Philippines plastic-made automotive parts. [Petitioner], on the other
hand, which is engaged in the manufacture and distribution of kitchenware items
made of plastic and metal has its office near that of [respondent].
[Respondent] further alleged that in view of the physical proximity of
[petitioner's] office to [respondent's] office, and in view of the fact that some of the
[respondent's] employees had transferred to [petitioner], [petitioner] had developed
familiarity with [respondent's] products, especially its plastic-made automotive parts.
That sometime in November 2000, [respondent] discovered that [petitioner]
had been manufacturing and distributing the same automotive parts with exactly
similar design, same material and colors but was selling these products at a lower
price as [respondent's] plastic-made automotive parts and to the same customers.
[Respondent] alleged that it had originated the use of plastic in place of rubber
in the manufacture of automotive underchassis parts such as spring eye bushing,
stabilizer bushing, shock absorber bushing, center bearing cushions, among others.
[Petitioner's] manufacture of the same automotive parts with plastic material was
taken from [respondent's] idea of using plastic for automotive parts. Also, [petitioner]
deliberately copied [respondent's] products all of which acts constitute unfair
competition, is and are contrary to law, morals, good customs and public policy and
have caused [respondent] damages in terms of lost and unrealized profits in the
amount of TWO MILLION PESOS as of the date of [respondent's] complaint.
Furthermore, [petitioner's] tortuous conduct compelled [respondent] to
institute this action and thereby to incur expenses in the way of attorney's fees and
 other litigation expenses in the amount of FIVE HUNDRED THOUSAND PESOS
(P500,000.00).
In its Answer, [petitioner] denies all the allegations of the [respondent] except
for the following facts: that it is engaged in the manufacture and distribution of
kitchenware items made of plastic and metal and that there's physical proximity of
[petitioner's] office to [respondent]'s office, and that some of [respondent's]
employees had transferred to [petitioner] and that over the years [petitioner] had
developed familiarity with [respondent's] products, especially its plastic made
automotive parts.
As its Affirmative Defenses, [petitioner] claims that there can be no unfair
competition as the plastic-made automotive parts are mere reproductions of original
parts and their construction and composition merely conforms to the specifications
of the original parts of motor vehicles they intend to replace. Thus, [respondent]
cannot claim that it "originated" the use of plastic for these automotive parts. Even
assuming for the sake of argument that [respondent] indeed originated the use of
these plastic automotive parts, it still has no exclusive right to use, manufacture and
sell these as it has no patent over these products. Furthermore, [respondent] is not
the only exclusive manufacturer of these plastic-made automotive parts as there are
other establishments which were already openly selling them to the public. 3 HDIaST

After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner
clearly invaded the rights or interest of respondent by deliberately copying and performing
acts amounting to unfair competition. The RTC further opined that under the circumstances,
in order for respondent's property rights to be preserved, petitioner's acts of manufacturing
similar plastic-made automotive parts such as those of respondent's and the selling of the
same products to respondent's customers, which it cultivated over the years, will have to be
enjoined. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the court finds the defendant liable to
plaintiff Two Million (P2,000,000.00) Pesos, as actual damages, One Hundred
Thousand (P100,000.00) Pesos as attorney's fees and One Hundred Thousand
(P100,000.00) Pesos for exemplary damages. The court hereby permanently [enjoins]
defendant from manufacturing the plastic-made automotive parts as those
manufactured by plaintiffs.
SO ORDERED. 4
Thus, petitioner appealed to the CA.
On appeal, petitioner asserts that if there is no intellectual property protecting a good
belonging to another, the copying thereof for production and selling does not add up to
unfair competition as competition is promoted by law to benefit consumers. Petitioner further
contends that it did not lure away respondent's employees to get trade secrets. It points out
that the plastic spare parts sold by respondent are traded in the market and the copying of
these can be done by simply buying a sample for a mold to be made.
Conversely, respondent averred that copyright and patent registrations are immaterial
for an unfair competition case to prosper under Article 28 of the Civil Code.It stresses that
the characteristics of unfair competition are present in the instant case as the parties are
trade rivals and petitioner's acts are contrary to good conscience for deliberately copying its
products and employing its former employees.
In a Decision dated November 24, 2010, the CA affirmed with modification the ruling of
the RTC. Relevant portions of said decision read:
Despite the evidence showing that Willaware took dishonest steps in
advancing its business interest against Jesichris, however, the Court finds no basis
for the award by the RTC of actual damages. One is entitled to actual damages as
one has duly proven. The testimony of Quejada, who was engaged by Jesichris in
2001 to audit its business, only revealed that there was a discrepancy between the
sales of Jesichris from 2001 to 2002. No amount was mentioned. As for Exhibit "Q,"
which is a copy of the comparative income statement of Jesichris for 1999-2002, it
shows the decline of the sales in 2002 in comparison with those made in 2001 but it
does not disclose if this pertains to the subject automotive parts or to the other
products of Jesichris like plates.
In any event, it was clearly shown that there was unfair competition on the part
of Willaware that prejudiced Jesichris. It is only proper that nominal damages be
awarded in the amount of Two Hundred Thousand Pesos (P200,000.00) in order to
recognize and vindicate Jesichris' rights. The RTC's award of attorney's fees and
exemplary damages is also maintained.
xxx xxx xxx
WHEREFORE, premises considered, the Decision dated April 15, 2003 of the
Regional Trial Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is
hereby MODIFIED. The award of Two Million Pesos (P2,000,000.00) actual damages
is deleted and in its place, Two Hundred Thousand Pesos nominal damages is
awarded.
SO ORDERED. 5
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for
lack of merit by the CA in a Resolution dated February 10, 2011.
Hence, the present Petition for Review wherein petitioner raises the following issues
for our resolution:
(1) Whether or not there is unfair competition under human relations when the parties
are not competitors and there is actually no damage on the part of Jesichris?
(2) Consequently, if there is no unfair competition, should there be moral damages
and attorney's fees?
(3) Whether or not the addition of nominal damages is proper although no rights have
been established?
(4) If ever the right of Jesichris refers to its copyright on automotive parts, should it be
considered in the light of the said copyrights were considered to be void by no
less than this Honorable Court in SC GR No. 161295?
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has
established "goodwill?" 6HaTAEc
 In essence, the issue for our resolution is: whether or not petitioner committed acts
amounting to unfair competition under Article 28 of the Civil Code.
Prefatorily, we would like to stress that the instant case falls under Article 28 of
the Civil Code on human relations, and not unfair competition under Republic Act No.
8293, 7 as the present suit is a damage suit and the products are not covered by patent
registration. A fortiori, the existence of patent registration is immaterial in the present case.
The concept of "unfair competition" under Article 28 is very much broader than that
covered by intellectual property laws. Under the present article, which follows the extended
concept of "unfair competition" in American jurisdictions, the term covers even cases of
discovery of trade secrets of a competitor, bribery of his employees, misrepresentation of all
kinds, interference with the fulfillment of a competitor's contracts, or any malicious
interference with the latter's business. 8
With that settled, we now come to the issue of whether or not petitioner committed
acts amounting to unfair competition under Article 28 of the Civil Code.
We find the petition bereft of merit.
Article 28 of the Civil Code provides that "unfair competition in agricultural,
commercial or industrial enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method shall give rise to a right
of action by the person who thereby suffers damage."
From the foregoing, it is clear that what is being sought to be prevented is not
competition per se but the use of unjust, oppressive or high-handed methods which may
deprive others of a fair chance to engage in business or to earn a living. Plainly, what the law
prohibits is unfair competition and not competition where the means used are fair and
legitimate.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it
must involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or
interest is a minor factor; the essence of the matter appears to be a private wrong
perpetrated by unconscionable means. 9
Here, both characteristics are present.
First, both parties are competitors or trade rivals, both being engaged in the
manufacture of plastic-made automotive parts. Second, the acts of the petitioner were
clearly "contrary to good conscience" as petitioner admitted having employed respondent's
former employees, deliberately copied respondent's products and even went to the extent of
selling these products to respondent's customers. 10
To bolster this point, the CA correctly pointed out that petitioner's hiring of the former
employees of respondent and petitioner's act of copying the subject plastic parts of
respondent were tantamount to unfair competition, viz.:
 The testimonies of the witnesses indicate that [petitioner] was in bad faith in
competing with the business of [respondent]. [Petitioner's] acts can be characterized
as executed with mischievous subtle calculation. To illustrate, in addition to the
findings of the RTC, the Court observes that [petitioner] is engaged in the production
of plastic kitchenware previous to its manufacturing of plastic automotive spare
parts, it engaged the services of the then mold setter and maintenance operator of
[respondent], De Guzman, while he was employed by the latter. De Guzman was
hired by [petitioner] in order to adjust its machinery since quality plastic automotive
spare parts were not being made. It baffles the Court why [petitioner] cannot rely on
its own mold setter and maintenance operator to remedy its problem. [Petitioner's]
engagement of De Guzman indicates that it is banking on his experience gained from
working for [respondent].
Another point we observe is that Yabut, who used to be a warehouse and
delivery man of [respondent], was fired because he was blamed of spying in favor of
[petitioner]. Despite this accusation, he did not get angry. Later on, he applied for and
was hired by [petitioner] for the same position he occupied with [respondent]. These
sequence of events relating to his employment by [petitioner] is suspect too like the
situation with De Guzman. 11
Thus, it is evident that petitioner is engaged in unfair competition as shown by his act
of suddenly shifting his business from manufacturing kitchenware to plastic-made
automotive parts; his luring the employees of the respondent to transfer to his employ and
trying to discover the trade secrets of the respondent. 12 aESICD

Moreover, when a person starts an opposing place of business, not for the sake of
profit to himself, but regardless of loss and for the sole purpose of driving his competitor out
of business so that later on he can take advantage of the effects of his malevolent purpose,
he is guilty of wanton wrong. 13 As aptly observed by the court a quo, the testimony of
petitioner's witnesses indicate that it acted in bad faith in competing with the business of
respondent, to wit:
[Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was
never engaged in the business of plastic-made automotive parts until recently, year
2000:
Atty. Bautista:
The business name of Willaware Product Corporation is kitchenware, it is (sic) not?
Manufacturer of kitchenware and distributor of kitchenware, is it not?
Mr. Salinas:
Yes, sir.
Atty. Bautista:
And you said you have known the [respondent] Jesichris Manufacturing Co., you
have known it to be manufacturing plastic automotive products, is it not?
Mr. Salinas:
Yes, sir.
Atty. Bautista:
In fact, you have been (sic) physically become familiar with these products, plastic
automotive products of Jesichris?
Mr. Salinas:
Yes, sir.
How [petitioner] was able to manufacture the same products, in terms of color,
size, shape and composition as those sold by Jesichris was due largely to the
sudden transfer of Jesichris' employees to Willaware.
Atty. Bautista:
Since when have you been familiar with Jesichris Manufacturing Company?
Mr. Salinas:
Since they transferred there (sic) our place.
Atty. Bautista:
And that was in what year?
Mr. Salinas:
Maybe four (4) years. I don't know the exact date.
Atty. Bautista:
And some of the employees of Jesichris Manufacturing Co. have transferred to your
company, is it not?
Mr. Salinas:
Yes, sir.
Atty. Bautista:
How many, more or less?
Mr. Salinas:
More or less, three (3).
Atty. Bautista:
And when, in what year or month did they transfer to you?
Mr. Salinas:
First, November 1.
Atty. Bautista:
Year 2000?
Mr. Salinas:
Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.
That [petitioner] was clearly out to take [respondent] out of business was
buttressed by the testimony of [petitioner's] witness, Joel Torres:
 Q: Are you familiar with the [petitioner], Willaware Product Corporation?
A: Yes, sir.
Q: Will you kindly inform this court where is the office of this Willaware Product
Corporation (sic)?
A: At Mithi Street, Caloocan City, sir.
Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly
inform this court what unusual even (sic) transpired between you and Mr.
Salinas on said date?
A: There was, sir.
Q: What is that?
A: Sir, I was walking at that time together with my wife going to the market and then I
passed by the place where they were having a drinking spree, sir.
Q: You mentioned they, who were they who were drinking at that time?
A: I know one Jun Molina, sir.
Q: And who else was there?
A: William Salinas, sir.
Q: And will you kindly inform us what happened when you spotted upon them
drinking?
A: Jun Molina called me, sir.
Q: And what happened after that?
A: At that time, he offered me a glass of wine and before I was able to drink the wine,
Mr. Salinas uttered something, sir.
Q: And what were those words uttered by Mr. Salinas to you?
A: "O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?"
Q: And what did you do after that, after hearing those words?
A: And he added these words, sir. "sabihin mo sa amo mo, dalawang taon na lang
pababagsakin ko na siya." DHITSc

Q: Alright, hearing those words, will you kindly tell this court whom did you gather to
be referred to as your "amo"?
A: Mr. Jessie Ching, sir. 14
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (P2,000,000.00) in actual damages
had been deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal
damages is awarded, the attorney's fees should concomitantly be modified and lowered to
Fifty Thousand Pesos (P50,000.00).
WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010
and Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744
are hereby AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to
Fifty Thousand Pesos (P50,000.00).
SO ORDERED.
Velasco, Jr., Bersamin, * Villarama, Jr. and Reyes, JJ., concur.
(Willaware Products Corp. v. Jesichris Manufacturing Corp., G.R. No. 195549, [September
|||

3, 2014], 742 PHIL 308-319)

 SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG
GRAND TOWER CORPORATION) and SHANG PROPERTIES, INC.
(formerly EDSA PROPERTIES HOLDINGS, INC.), petitioners, vs. ST.
FRANCIS DEVELOPMENT CORPORATION, respondent.

DECISION

PERLAS-BERNABE, J : p

Assailed in this petition for review on certiorari 1 is the Decision 2 dated December 18,
2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105425 which affirmed with
modification the Decision 3 dated September 3, 2008 of the Intellectual Property Office (IPO)
Director-General. The CA: (a) affirmed the denial of the application for registration of the
mark "ST. FRANCIS TOWERS" filed by petitioners Shang Properties Realty Corporation and
Shang Properties, Inc. (petitioners); (b) found petitioners to have committed unfair
competition for using the marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS
SHANGRI-LA PLACE"; (c) ordered petitioners to cease and desist from using "ST. FRANCIS"
singly or as part of a composite mark; and (c) ordered petitioners to jointly and severally pay
respondent St. Francis Square Development Corporation (respondent) a fine in the amount
of P200,000.00.
The Facts
Respondent — a domestic corporation engaged in the real estate business and the
developer of the St. Francis Square Commercial Center, built sometime in 1992, located at
Ortigas Center, Mandaluyong City, Metro Manila (Ortigas Center) 4 — filed separate
complaints against petitioners before the IPO-Bureau of Legal Affairs (BLA), namely: (a) an
intellectual property violation case for unfair competition, false or fraudulent declaration, and
damages arising from petitioners' use and filing of applications for the registration of the
marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE,"
docketed as IPV Case No. 10-2005-00030 (IPV Case); and (b) an inter partes case opposing
the petitioners' application for registration of the mark "THE ST. FRANCIS TOWERS" for use
relative to the latter's business, particularly the construction of permanent buildings or
structures for residential and office purposes, docketed as Inter Partes Case No. 14-2006-
00098 (St. Francis Towers IP Case); and (c) an inter partes case opposing the petitioners'
application for registration of the mark "THE ST. FRANCIS SHANGRI-LA PLACE," docketed
as IPC No. 14-2007-00218 (St. Francis Shangri-La IP Case). 5
In its complaints, respondent alleged that it has used the mark "ST. FRANCIS" to
identify its numerous property development projects located at Ortigas Center, such as the
aforementioned St. Francis Square Commercial Center, a shopping mall called the "St.
Francis Square," and a mixed-use realty project plan that includes the St. Francis Towers.
Respondent added that as a result of its continuous use of the mark "ST. FRANCIS" in its
real estate business, it has gained substantial goodwill with the public that consumers and
traders closely identify the said mark with its property development projects. Accordingly,
respondent claimed that petitioners could not have the mark "THE ST. FRANCIS TOWERS"
registered in their names, and that petitioners' use of the marks "THE ST. FRANCIS
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" in their own real estate
development projects constitutes unfair competition as well as false or fraudulent
declaration. 6CSIcTa

Petitioners denied committing unfair competition and false or fraudulent declaration,

maintaining that they could register the mark "THE ST. FRANCIS TOWERS" and "THE ST.
FRANCIS SHANGRI-LA PLACE" under their names. They contended that respondent is
barred from claiming ownership and exclusive use of the mark "ST. FRANCIS" because the
same is geographically descriptive of the goods or services for which it is intended to be
used. 7 This is because respondent's as well as petitioners' real estate development projects
are located along the streets bearing the name "St. Francis," particularly, St. Francis Avenue
and St. Francis Street (now known as Bank Drive), 8 both within the vicinity of the Ortigas
Center.
The BLA Rulings
On December 19, 2006, the BLA rendered a Decision 9 in the IPV Case, and found
that petitioners committed acts of unfair competition against respondent by its use of the
mark "THE ST. FRANCIS TOWERS" but not with its use of the mark "THE ST. FRANCIS
SHANGRI-LA PLACE." It, however, refused to award damages in the latter's favor,
considering that there was no evidence presented to substantiate the amount of damages it
suffered due to the former's acts. The BLA found that "ST. FRANCIS," being a name of a
Catholic saint, may be considered as an arbitrary mark capable of registration when used in
real estate development projects as the name has no direct connection or significance when
used in association with real estate. The BLA neither deemed "ST. FRANCIS" as a
geographically descriptive mark, opining that there is no specific lifestyle, aura, quality or
characteristic that the real estate projects possess except for the fact that they are located
along St. Francis Avenue and St. Francis Street (now known as Bank Drive), Ortigas Center.
In this light, the BLA found that while respondent's use of the mark "ST. FRANCIS" has not
attained exclusivity considering that there are other real estate development projects bearing
the name "St. Francis" in other areas, 10 it must nevertheless be pointed out that respondent
has been known to be the only real estate firm to transact business using such name within
the Ortigas Center vicinity. Accordingly, the BLA considered respondent to have gained
goodwill and reputation for its mark, which therefore entitles it to protection against the use
by other persons, at least, to those doing business within the Ortigas Center. 11
Meanwhile, on March 28, 2007, the BLA rendered a Decision 12 in the St. Francis
Towers IP Case, denying petitioners' application for registration of the mark "THE ST.
FRANCIS TOWERS". Excluding the word "TOWERS" in view of petitioners' disclaimer
thereof, the BLA ruled that petitioners cannot register the mark "THE ST. FRANCIS" since it
is confusingly similar to respondent's "ST. FRANCIS" marks which are registered with the
Department of Trade and Industry (DTI). It held that respondent had a better right over the
use of the mark "ST. FRANCIS" because of the latter's appropriation and continuous usage
thereof for a long period of time. 13
A little over a year after, or on March 31, 2008, the BLA then rendered a Decision 14 in
the St. Francis Shangri-La IP Case, allowing petitioners' application for registration of the
mark "THE ST. FRANCIS SHANGRI-LA PLACE." It found that respondent cannot preclude
petitioners from using the mark "ST. FRANCIS" as the records show that the former's use
thereof had not been attended with exclusivity. More importantly, it found that petitioners
had adequately appended the word "Shangri-La" to its composite mark to distinguish it from
that of respondent, in which case, the former had removed any likelihood of confusion that
may arise from the contemporaneous use by both parties of the mark "ST. FRANCIS".
Both parties appealed the decision in the IPV Case, while petitioners appealed the
decision in the St. Francis Towers IP Case. Due to the identity of the parties and issues
involved, the IPO Director-General ordered the consolidation of the separate
appeals. 15 Records are, however, bereft of any showing that the decision in the St. Francis
Shangri-La IP Case was appealed by either party and, thus, is deemed to have lapsed into
finality.
SITCEA

The IPO Director-General Ruling

In a Decision 16 dated September 3, 2008, then IPO Director-General Adrian S.
Cristobal, Jr. affirmed the rulings of the BLA that: (a) petitioners cannot register the mark
"THE ST. FRANCIS TOWERS"; and (b) petitioners are not guilty of unfair competition in its
use of the mark "THE ST. FRANCIS SHANGRI-LA PLACE." However, the IPO Director-
General reversed the BLA's finding that petitioners committed unfair competition through
their use of the mark "THE ST. FRANCIS TOWERS," thus dismissing such charge. He found
that respondent could not be entitled to the exclusive use of the mark "ST. FRANCIS," even
at least to the locality where it conducts its business, because it is a geographically
descriptive mark, considering that it was petitioners' as well as respondent's intention to use
the mark "ST. FRANCIS" in order to identify, or at least associate, their real estate
development projects/businesses with the place or location where they are
situated/conducted, particularly, St. Francis Avenue and St. Francis Street (now known as
Bank Drive), Ortigas Center. He further opined that respondent's registration of the name
"ST. FRANCIS" with the DTI is irrelevant since what should be controlling are the trademark
registrations with the IPO itself. 17 Also, the IPO Director-General held that since the parties
are both engaged in the real estate business, it would be "hard to imagine that a prospective
buyer will be enticed to buy, rent or purchase [petitioners'] goods or services believing that
this is owned by [respondent] simply because of the name 'ST. FRANCIS'. The prospective
buyer would necessarily discuss things with the representatives of [petitioners] and would
readily know that this does not belong to [respondent]". 18
Disagreeing solely with the IPO Director-General's ruling on the issue of unfair
competition (the bone of contention in the IPV Case), respondent elevated the same to the
CA.
In contrast, records do not show that either party appealed the IPO Director-General's
ruling on the issue of the registrability of the mark "THE ST. FRANCIS TOWERS" (the bone of
contention in the St. Francis Towers IP Case). As such, said pronouncement is also deemed
to have lapsed into finality.
The CA Ruling
In a Decision 19 dated December 18, 2009, the CA found petitioners guilty of unfair
competition not only with respect to their use of the mark "THE ST. FRANCIS TOWERS" but
also of the mark "THE ST. FRANCIS SHANGRI-LA PLACE". Accordingly, it ordered
petitioners to cease and desist from using "ST. FRANCIS" singly or as part of a composite
mark, as well as to jointly and severally pay respondent a fine in the amount of P200,000.00.
The CA did not adhere to the IPO Director-General's finding that the mark "ST.
FRANCIS" is geographically descriptive, and ruled that respondent — which has exclusively
and continuously used the mark "ST. FRANCIS" for more than a decade, and, hence, gained
substantial goodwill and reputation thereby — is very much entitled to be protected against
the indiscriminate usage by other companies of the trademark/name it has so painstakingly
tried to establish and maintain. Further, the CA stated that even on the assumption that "ST.
FRANCIS" was indeed a geographically descriptive mark, adequate protection must still be
given to respondent pursuant to the Doctrine of Secondary Meaning. 20
Dissatisfied, petitioners filed the present petition.
The Issue Before the Court
With the decisions in both Inter Partes Cases having lapsed into finality, the sole issue
thus left for the Court's resolution is whether or not petitioners are guilty of unfair
competition in using the marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS
SHANGRI-LA PLACE".
The Court's Ruling
The petition is meritorious.
Section 168 of Republic Act No. 8293, 21 otherwise known as the "Intellectual
Property Code of the Philippines" (IP Code), provides for the rules and regulations on unfair
competition.
To begin, Section 168.1 qualifies who is entitled to protection against unfair
competition. It states that "[a] person who has identified in the mind of the public the goods
he manufactures or deals in, his business or services from those of others, whether or not a
registered mark is employed, has a property right in the goodwill of the said goods, business
or services so identified, which will be protected in the same manner as other property
rights".
cHSTEA

Section 168.2 proceeds to the core of the provision, describing forthwith who may be
found guilty of and subject to an action of unfair competition — that is, "[a]ny person who
shall employ deception or any other means contrary to good faith by which he shall
pass off the goods manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or who shall commit
any acts calculated to produce said result . . . ."
Without limiting its generality, Section 168.3 goes on to specify examples of acts
which are considered as constitutive of unfair competition, viz.:
168.3. In particular, and without in any way limiting the scope of protection against
unfair competition, the following shall be deemed guilty of unfair competition:
(a) Any person who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to
the goods themselves or in the wrapping of the packages in which
 they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would 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,
or who otherwise clothes the goods with such appearance as shall
deceive the public and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any
other means calculated to induce the false belief that such person is
offering the service of another who has identified such services in the
mind of the public; or
(c) Any person who shall make any false statement in the course of
trade or who shall commit any other act contrary to good faith of a
nature calculated to discredit the goods, business or services of
another.
Finally, Section 168.4 dwells on a matter of procedure by stating that the "[t]he
remedies provided by Sections 156, 22 157, 23 and 161 24 shall apply mutatis mutandis."
The statutory attribution of the unfair competition concept is well-supplemented by
jurisprudential pronouncements. In the recent case of Republic Gas Corporation v. Petron
Corporation, 25 the Court has echoed the classic definition of the term which is "'the passing
off (or palming off) or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect of deceiving
the public'. Passing off (or palming off) takes place where the defendant, by imitative devices
on the general appearance of the goods, misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his competitors. [In other
words], the defendant gives his goods the general appearance of the goods of his
competitor with the intention of deceiving the public that the goods are those of his
competitor." 26 The "true test" of unfair competition has thus been "whether the acts of the
defendant have the intent of deceiving or are calculated to deceive the ordinary buyer
making his purchases under the ordinary conditions of the particular trade to which
the controversy relates". Based on the foregoing, it is therefore essential to prove the
existence of fraud, or the intent to deceive, actual or probable, 27 determined through a
judicious scrutiny of the factual circumstances attendant to a particular case. 28 TAcCDI

Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair
competition. The CA's contrary conclusion was faultily premised on its impression that
respondent had the right to the exclusive use of the mark "ST. FRANCIS," for which the
latter had purportedly established considerable goodwill. What the CA appears to have
disregarded or been mistaken in its disquisition, however, is the geographically-descriptive
nature of the mark "ST. FRANCIS" which thus bars its exclusive appropriability, unless a
secondary meaning is acquired. As deftly explained in the U.S. case of Great Southern Bank
v. First Southern Bank: 29 "[d]escriptive geographical terms are in the 'public domain'in
the sense that every seller should have the right to inform customers of the
geographical origin of his goods. A 'geographically descriptive term' is any noun or
adjective that designates geographical location and would tend to be regarded by buyers as
descriptive of the geographic location of origin of the goods or services. A geographically
descriptive term can indicate any geographic location on earth, such as continents,
nations, regions, states, cities, streets and addresses, areas of cities, rivers, and any other
location referred to by a recognized name. In order to determine whether or not the
geographic term in question is descriptively used, the following question is relevant: (1) Is
the mark the name of the place or region from which the goods actually come? If the
answer is yes, then the geographic term is probably used in a descriptive sense, and
secondary meaning is required for protection". 30
In Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc., 31 it was held
that secondary meaning is established when a descriptive mark no longer causes the
public to associate the goods with a particular place, but to associate the goods with a
particular source. In other words, it is not enough that a geographically-descriptive mark
partakes of the name of a place known generally to the public to be denied registration as it
is also necessary to show that the public would make a goods/place association —
that is, to believe that the goods for which the mark is sought to be registered originate in
that place. To hold such a belief, it is necessary, of course, that the purchasers perceive the
mark as a place name, from which the question of obscurity or remoteness then comes to
the fore. 32 The more a geographical area is obscure and remote, it becomes less likely that
the public shall have a goods/place association with such area and thus, the mark may not
be deemed as geographically descriptive. However, where there is no genuine issue that
the geographical significance of a term is its primary significance and where
the geographical place is neither obscure nor remote, a public association of the
goods with the place may ordinarily be presumed from the fact that the applicant's
own goods come from the geographical place named in the mark. 33
Under Section 123.2 34 of the IP Code, specific requirements have to be met in order
to conclude that a geographically-descriptive mark has acquired secondary meaning, to wit:
(a) the secondary meaning must have arisen as a result of substantial commercial use
of a mark in the Philippines; (b) such use must result in the distinctiveness of the mark
insofar as the goods or the products are concerned; and (c) proof of substantially
exclusive and continuous commercial use in the Philippines for five (5) years before the
date on which the claim of distinctiveness is made. Unless secondary meaning has been
established, a geographically-descriptive mark, due to its general public domain
classification, is perceptibly disqualified from trademark registration. Section 123.1 (j) of
the IP Code states this rule as follows:
SEC. 123. Registrability. —
123.1 A mark cannot be registered if it:
xxx xxx xxx
(j) Consists exclusively of signs or of indications that may serve in
trade to designate the kind, quality, quantity, intended purpose,
value, geographical origin, time or production of the goods or
rendering of the services, or other characteristics of the goods or
services; (Emphasis supplied) HcSETI

xxx xxx xxx

 Cognizant of the foregoing, the Court disagrees with the CA that petitioners committed
unfair competition due to the mistaken notion that petitioner had established goodwill for the
mark "ST. FRANCIS" precisely because said circumstance, by and of itself, does not equate
to fraud under the parameters of Section 168 of the IP Code as above-cited. In fact, the
records are bereft of any showing that petitioners gave their goods/services the general
appearance that it was respondent which was offering the same to the public. Neither did
petitioners employ any means to induce the public towards a false belief that it was offering
respondent's goods/services. Nor did petitioners make any false statement or commit acts
tending to discredit the goods/services offered by respondent. Accordingly, the element of
fraud which is the core of unfair competition had not been established.
Besides, respondent was not able to prove its compliance with the requirements
stated in Section 123.2 of the IP Code to be able to conclude that it acquired a secondary
meaning — and, thereby, an exclusive right — to the "ST. FRANCIS" mark, which is, as the
IPO Director-General correctly pointed out, geographically-descriptive of the location in
which its realty developments have been built, i.e., St. Francis Avenue and St. Francis Street
(now known as "Bank Drive"). Verily, records would reveal that while it is true that
respondent had been using the mark "ST. FRANCIS" since 1992, its use thereof has been
merely confined to its realty projects within the Ortigas Center, as specifically mentioned. As
its use of the mark is clearly limited to a certain locality, it cannot be said that there was
substantial commercial use of the same recognized all throughout the country. Neither is
there any showing of a mental recognition in buyers' and potential buyers' minds that
products connected with the mark "ST. FRANCIS" are associated with the same source 35 —
that is, the enterprise of respondent. Thus, absent any showing that there exists a clear
goods/service-association between the realty projects located in the aforesaid area and
herein respondent as the developer thereof, the latter cannot be said to have acquired a
secondary meaning as to its use of the "ST. FRANCIS" mark.
In fact, even on the assumption that secondary meaning had been acquired, said
finding only accords respondents protectional qualification under Section 168.1 of the IP
Code as above quoted. Again, this does not automatically trigger the concurrence of the
fraud element required under Section 168.2 of the IP Code, as exemplified by the acts
mentioned in Section 168.3 of the same. Ultimately, as earlier stated, there can be no unfair
competition without this element. In this respect, considering too the notoriety of the
Shangri-La brand in the real estate industry which dilutes petitioners' propensity to merely
ride on respondent's goodwill, the more reasonable conclusion is that the former's use of the
marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" was
meant only to identify, or at least associate, their real estate project/s with its geographical
location. As aptly observed by the IPO Director-General: 36
In the case at hand, the parties are business competitors engaged in real estate or
property development, providing goods and services directly connected thereto. The
"goods" or "products" or "services" are real estate and the goods and the services
attached to it or directly related to it, like sale or lease of condominium units, offices,
and commercial spaces, such as restaurants, and other businesses. For these kinds
of foods or services there can be no description of its geographical origin as
precise and accurate as that of the name of the place where they are situated.
(Emphasis and underscoring supplied)
 Hence, for all the reasons above-discussed, the Court hereby grants the instant
petition, and, thus, exonerates petitioners from the charge of unfair competition in the IPV
Case. As the decisions in the Inter Partes Cases were not appealed, the registrability issues
resolved therein are hereby deemed to have attained finality and, therefore, are now
executory.
WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2009 of
the Court of Appeals in CA-G.R. SP No. 105425 is hereby REVERSED and SET ASIDE.
Accordingly, the Decision dated September 3, 2008 of the Intellectual Property Office-
Director General is REINSTATED. CHaDIT

SO ORDERED.
Carpio, Brion, Peralta * and Perez, JJ., concur.
(Shang Properties Realty Corp. v. St. Francis Development Corp., G.R. No. 190706, [July
|||

21, 2014])