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1 Pearl and Dean (Phils.) Incorporated v. Shoemart Incorporated G.R.

# 148222 Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with backlights. It was able to secure registration over these illuminated display units. The advertising light boxes were marketed under the trademark Poster Ads. In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to nonperformance. Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located in SMIs different branches. Petitioner sent letters to respondents asking them to cease using the light boxes and the discontinued use of the trademark Poster Ads. Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringement of trademark and copy right, unfair competition and damages. SMI maintained that it independently developed its poster panels using commonly known techniques and available technology without notice of or reference to P&Ds copyright. In addition, it said that registration of Poster Ads obtained by petitioner was only for stationeries such as letterheads, envelopes and the like. Poster Ads is a generic term which cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright notice as provided for by law. RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as copyrightable class O work. In addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in its certificate of registration. The registration of the trademark Poster Ads covers only stationeries such as letterheads, envelopes and calling cards and newsletter. Issue/s: Whether the owner of the registered trademark legally prevents others from using such mark if it is mere abbreviation of a term descriptive of his goods, services or business? Held: Court agrees with CA that the certificate of registration issued by the Director of Patents can confer the exclusive right to use its own symbol only to those goods specified in the certificate, subject to any conditions and limitations specified in the certificate. One who has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others for products which are of a different description.

2 Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of petitioner to secure a trademark registration for specific use on the light boxes meant that there could not have been any trademark infringement since registration was an essential element thereof. There is no evidence that petitioners use of poster Ads was distinctive or well-known. As noted by CA, petitioners expert witness himself had testified that Poster Ads was not too generic a name. SO it was difficult to identify it with any company. This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was generic and incapable of being used as a trademark because it was used in the field of poster advertising the very business engaged in by petitioner. Secondary meaning means that a word or phrase originally incapable of exclusive appropriation with reference to an article in the market might nevertheless have been used for so long and so exclusively by one producer with reference to his article that , in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his property.

3 Shangri la International Hotel Management v. CA G.R. #144802 Facts: On June 21, 1988, the Shangri-La International Hotel Management, Ltd., Shangri-La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok Philippine Properties, Inc. (hereinafter collectively referred as the Shangri-La Group), filed with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) a petition, docketed as Inter Partes Case No. 3145, praying for the cancellation of the registration of the Shangri-La mark and S device/logo issued to the Developers Group of Companies, Inc., on the ground that the same was illegally and fraudulently obtained and appropriated for the latters restaurant business. The Shangri-La Group alleged that it is the legal and beneficial owners of the subject mark and logo; that it has been using the said mark and logo for its corporate affairs and business since March 1962 and caused the same to be specially designed for their international hotels in 1975, much earlier than the alleged first use thereof by the Developers Group in 1982. Likewise, the Shangri-La Group filed with the BPTTT its own application for registration of the subject mark and logo. The Developers Group filed an opposition to the application, which was docketed as Inter Partes Case No. 3529. Almost three (3) years later, or on April 15, 1991, the Developers Group instituted a complaint for infringement and damages with prayer for injunction. On January 8, 1992, the Shangri-La Group moved for the suspension of the proceedings in the infringement case on account of the pendency of the administrative proceedings before the BPTTT. This was denied by the trial court in a Resolution issued on January 16, 1992.The Shangri-La Group filed a Motion for Reconsideration. Soon thereafter, it also filed a Motion to Inhibit against Presiding Judge Felix M. de Guzman. On July 1, 1992, the trial court denied both motions. Issue/s: Whether despite the institution of an Inter Partes case for cancellation of a mark with the BPTTT (now the Bureau of Legal Affairs, Intellectual Property Office) by one party, the adverse party can file a subsequent action for infringement with the regular courts of justice in connection with the same registered mark? Held: Section 151.2 of Republic Act No. 8293, otherwise known as the Intellectual Property Code and Similarly, Rule 8, Section 7, of the Regulations on Inter Partes Proceeding as applied in the case at bar, the earlier institution of an Inter Partes case by the Shangri-La Group for the cancellation of the Shangri-La mark and S device/logo with the BPTTT cannot effectively bar the subsequent filing of an infringement case by registrant Developers Group. The law and the rules are explicit. The rationale is plain: Certificate of Registration No. 31904, upon which the infringement case is based, remains valid and subsisting for as long as it has not been cancelled by the Bureau or by an infringement court. As such, Developers Groups Certificate of Registration in the principal register continues as prima facie evidence of the validity of the registration, the registrants ownership of the mark or trade-name, and of the registrants exclusive right to use the same in connection with the goods, business or services specified in the certificate. Since the certificate still subsists, Developers Group may thus file a corresponding infringement suit and recover damages from any person who infringes upon the formers rights. Furthermore, the issue rose before the BPTTT is quite different from that raised in the trial court. The issue rose before the BPTTT was whether the mark registered by Developers Group is subject to cancellation, as the Shangri-La Group claims prior ownership of the disputed mark. On the other hand, the issue rose before the trial court was whether the Shangri-La

4 Group infringed upon the rights of Developers Group within the contemplation of Section 22 of Republic Act 166. With the decision of the Regional Trial Court upholding the validity of the registration of the service mark Shangri-La and S logo in the name of Developers Group, the cancellation case filed with the Bureau hence becomes moot. To allow the Bureau to proceed with the cancellation case would lead to a possible result contradictory to that which the Regional Trial Court has rendered, albeit the same is still on appeal. Such a situation is certainly not in accord with the orderly administration of justice. In any event, the Court of Appeals has the competence and jurisdiction to resolve the merits of the said RTC decision.

Asia brewery Incorporated v. CA G.R. #103543 Facts: 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 latters BEER PALE PILSEN or BEER NA BEER product which has been competing with SMCs SAN MIGUEL PALE PILSEN for share of the local beer market. On August 27,1990, a decision was rendered by the Trial Court dismissing SMCs complaint because petitioner has not committed trademark infringement or unfair competition against SMC. SMC appealed to the Court of Appeals. On September30, 1991, the Court of Appeals reversed the decision made by the trial court. Issue/s: Whether petitioner, Asia Brewery, Inc. infringes SMCs trademark: San Miguel Pale Pilsen? Held: Using the holistic test, wherein all circumstances were given consideration, there was no infringement committed by petitioner. There are two tests available for colorable imitation. One is the dominancy test. If the form, marks, contents, words of other special arrangement or general appearance of the two marks or devices are such as would likely mislead persons in the ordinary course of purchasing the genuine article, then the similarity is such as would entitle the oppose to equitable protection. Under the holistic test, on the other hand, the opposing trademarks are compared in their entirety to determine confusing similarity.

Fruit of the Loom v. CA G.R. # L-32747 Facts: Petitioner is a corporation duly organized and existing under the laws of the State of Rhode Island, USA. It is the registrant of the trademark FRUIT OF THE LOOM in the Philippine Patent Office and was issued two Certificates of Registration, one of which was in 1957 and the other in 1958. Private Respondent, a domestic corporation, is the registrant of the trademark FRUIT FOR EVE in the Philippine Patent Office. Both are involved in the merchandise of garments. Petitioner filed a complaint for infringement of trademark and unfair competition against private respondent, alleging that: a. The latters trademark is confusingly similar to the formers, both trademarks being used in womens panties and other textile products. b. That the hang tags used by private respondent are colorable imitation of those of the petitioner. Private respondent alleged that there was no confusing similarity between the trademarks. At the pre-trial, the following admissions were made: a. That the registered trademark Fruit for Eve bears the notice Reg. Phil. Pat. Off. while that of Fruit of the Loom does not. b. That at the time of its registration, the plaintiff filed no opposition thereto. The lower court rendered a decision in favor of the petitioner, permanently enjoining private respondent from using the trademark Fruit for Eve. Both parties appealed to the former Court of Appeals. Petitioner questioned the lower courts failure to award damages in its favor. Private respondent sought the reversal of the lower courts decision. The former Court of Appeals rendered a decision reversing the lower courts decision and dismissing the petitioners complaint. The petitioners motion for reconsideration was denied. Issue/s: Whether or not private respondent's trademark FRUIT FOR EVE and its hang tag are confusingly similar to petitioner's trademark FRUIT OF THE LOOM and its hang tag so as to constitute an infringement of the latter's trademark rights and justify the cancellation of the former? Held: In cases involving infringement of trademark brought before this Court, it has been consistently held that there is infringement of trademark when the use of the mark involved would be likely to cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity. 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 where one is confusingly similar to the other. The similarities of the competing trademarks in this case are completely lost in the substantial differences in the design and general appearance of their respective hang tags. The Court have examined the two trademarks as they appear in the hang tags submitted by the parties and The Court is impressed more by the dissimilarities than by the similarities appearing therein. The Court held

7 that the trademarks Fruit of the Loom and Fruit for Eve do not resemble each other as to confuse or deceive an ordinary purchaser. The ordinary purchaser must be thought of as having, and credited with, at least a modicum of intelligence to be able to see the obvious differences between the two trademarks in question. Joaquin v. Drilon G.R. #108946 Facts: Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922 dated January 28, 1971 of Rhoda and Me, a dating game show aired from 1970 to 1977. In 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright specifying the shows format and style presentation. In 1991, petitioner Francisco Joaquin, Jr., president of BJPI, saw on RPN 9 an episode of Its a Date. He immediately protested the airing of the show through a letter sent to Grabriel M. Zosa, president and general manager of IXL Productions, Inc., the producer of Its a Date. Petitioner Joaquin informed respondent Zosa of a copyright to Rhoda and Me and demanded that IXL discontinue airing Its a Date. Respondent Zosa apologized to Joaquin, but continued airing the show. Zosa also sought to register IXLs copyright to the first episode of Its a Date for which a certificate of copyright was issued by the National Library on August 14, 1991. With these developments, petitioners herein filed a complaint against Zosa and other RPN Channel 9 officers as a result of which an information for violation of P.D. No. 49 was filed before the Regional Trial Court of Quezon City. Zosa appealed to the Department of Justice. The Secretary of Justice reversed the prosecutors findings and directed the dismissal of the case. Petitioner Joaquin filed a motion for reconsideration, but it was denied by the Secretary of Justice. Issue/s: Whether the format or mechanics of petitioners television show is entitled to copyright protection is a legal question for the court to make? Held: Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified in the statute. Since ...copyright in published works is purely a statutory creation, a copyright may be obtained only for a work falling within the statutory enumeration or description. Regardless of the historical viewpoint, it is authoritatively settled in the United States that there is no copyright except that which is both created and secured by act of Congress.... P.D. No. 49, Section 2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. Thus, the new INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides: SEC. 175. Unprotected Subject Matter. - Notwithstanding the provisions of Sections 172 and 173, no protection shall extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof.

8 To begin with, the format of a show is not copyrightable. Section 2 of P.D. No. 49, otherwise known as the DECREE ON INTELLECTUAL PROPERTY, enumerates the classes of work entitled to copyright protection.

La Chemise Lacoste v. Honorable Fernandez G.R. # L-63796-97 Facts: In 1975, Hemandas & Co., a duly licensed domestic firm applied for and was issued Reg. No. SR-2225 (SR stands for Supplemental Register) for the trademark "CHEMISE LACOSTE & CROCODILEDEVICE" by the Philippine Patent Office for use on T-shirts, sportswear and other garment products of the company. Two years later, it applied for the registration of the same trademark under the Principal Register. Hemandas & Co. assigned to respondent Gobindram Hemandas all rights, title, and interest in the trademark "CHEMISELACOSTE & DEVICE". On November 21, 1980, the petitioner filed its application for registration of the trademark "Crocodile Device" and "Lacoste"(Application Serial No. 43241). The former was approved for publication while the latter was opposed by Games and Garments On March 21, 1983, the petitioner filed with the National Bureau of Investigation (NBI) a lettercomplaint alleging therein the acts of unfair competition being committed by Hemandas and requesting their assistance in his apprehension and prosecution. Search warrants based on violation of Art.189 of RPC were issued against Hemandas. Hemandas filed a motion to quash the search warrants and the same was granted by the respondent court. Issue/s: Whether the trademark used by the private respondent is different from the petitioner's trade mark? Held: The purpose of the law protecting a trademark cannot be overemphasized. They are to point out distinctly the origin or ownership of the article to which it is affixed, to secure to him, who has been instrumental in bringing into market a superior article of merchandise, the fruit of his industry and skill, and to prevent fraud and imposition. The legislature has enacted laws to regulate the use of trademarks and provide for the protection thereof. Thus, Modern trade and commerce demands that depredations on legitimate trademarks of non-nationals including those who have not shown prior registration thereof should not be countenanced. The law against such depredations is not only for the protection of the owner of the trademark but also, and more importantly, for the protection of purchasers from confusion, mistake, or deception as to the goods they are buying. The law on trademarks and tradenames is based on the principle of business integrity and common justice' This law, both in letter and spirit, is laid upon the premise that, while it encourages fair trade in every way and aims to foster, and not to hamper, competition, no one, especially a trader, is justified in damaging or jeopardizing another's business by fraud, deceit, trickery or unfair methods of any sort. This necessarily precludes the trading by one dealer upon the good name and reputation built up by another.

9 The records show that the goodwill and reputation of the petitioner's products bearing the trademark LACOSTE date back even before 1964 when LACOSTE clothing apparels were first marketed in the Philippines. To allow Hemandas to continue using the trademark Lacoste for the simple reason that he was the first registrant in the Supplemental Register of a trademark used in international commerce and not belonging to him is to render nugatory the very essence of the law on trademarks and trade names.

Emeralds Garments v. CA G.R. #100098 Facts: On 18 September 1981 H.D. Lee Co., Inc.,(Delaware, U.S.A.) filed with the BPTTT a Petition for Cancellation of Registration No.SR 5054 (Supplemental Register) for the trademark "STYLISTIC MR. LEE" used on, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27October 1980 in the name of Emerald Garment (Philippines) H.D. Lee Co. invokes 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." The Director of Patents rendered a decision granting H.D. Lee's petition for cancellation and opposition to registration. Using the test of dominancy, Director of Patents 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." CA affirmed the Director of Patents' decision Emerald contends that H.D. Lee is stopped 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 Lawon Trade-marks, Trade-names and Unfair Competition. Emerald alleges that it has been using its trademark "STYLISTIC MR. LEE" since May 1975, yet, it was only on 18 September1981 that private respondent filed a petition for cancellation of petitioner's certificate of registration for the said trademark. Issue/s: Whether H. D. Lee's prior registration is enough to confer upon it the exclusive ownership of the trademark Lee in opposition to Emerald's garments? Held: The reckoning point of ownership of Emerald is 27 October 1980, 20 the date the certificate of registration SR No. 5054 was published in the Official Gazette and issued to petitioner and not May 1, 1975. 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. 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

10 giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other." Colorable imitation refers to such similarity in form, content, words, sound, meaning, special arrangement, or general appearance of the trademark or trade name with that of the other mark or trade name 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. 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 The products involved in the case at bar are, in the main, various kinds of jeans. The average Filipino consumer generally buys his jeans by brand. The ordinary purchaser is not the "completely unwary consumer" but it he "ordinarily intelligent buyer considering the type of product involved."LEE" is primarily a surname. Private respondent cannot, therefore, acquire exclusive ownership over and singular use of said term. 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. 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. For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioners use of its own mark and for failure to establish confusing similarity between said trademarks, private respondents action for infringement must necessarily fail.


246 Corporation v. Hon. Reynaldo Daway G.R.#157216 Facts: On November 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner 246 Corporation the instant suit for trademark infringement and damages with prayer for the issuance of a restraining order or writ of preliminary injunction before the RTC. Respondents alleged that sometime in July 1996, petitioner adopted and, since then, has been using without authority the mark Rolex in its business name Rolex Music Lounge as well as in its newspaper advertisements as Rolex Music Lounge, KTV, Disco & Party Club. In its answer raising in the affirmative defenses, petitioner argued that respondents have no cause of action because no trademark infringement exist; that no confusion would arise from the use by petitioner of the mark Rolex considering that its entertainment business is totally unrelated to the items catered by respondents such as watches, clocks, bracelets and parts thereof. It also contented that the complaint was not properly verified and certified against forum shopping considering that Atty. Ancheta, the counsel of record of respondents who signed the verification and certification, was not authorized to represent respondents. On July 21, 2000, petitioner filed a motion for preliminary hearing on its affirmative defenses. Subsequently, on motion of petitioner, the trial court issued a subpoena ad testificandum requiring Atty. Alonzo Ancheta to appear at the preliminary hearing. Respondents, in the meantime, filed a Comment and Opposition to the motion for preliminary hearing and a motion to quash the subpoena ad testificandum. In an Order dated October 27, 2000, the trial court quashed the subpoena ad testificandum and denied petitioners motion for preliminary hearing on affirmative defenses with motion to dismiss. With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a petition for certiorari with the Court of Appeals contending that the trial court gravely abused its discretion in issuing the October 27, 2000 and March 16, 2001 orders. Issue/s: (1) Whether the trial court denied not only petitioners motion for preliminary hearing on its affirmative defenses but its motion to dismiss as well; (2) if the answer is in the affirmative, whether or not the trial court gravely abused its discretion in denying said motions; and (3) whether the trial court gravely abused its discretion in quashing the subpoena ad testificandum issued against Atty. Ancheta. Held:

12 With regards to the first issue, we find that what was denied in the order dated October 27, 2000 was not only the motion for preliminary hearing but the motion to dismiss as well. A reading of the dispositive portion of said order shows that the trial court neither qualified its denial nor held in abeyance the ruling on petitioners motion to dismiss thus IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena Ad Testificandum is granted; and the aforecited Motion For Preliminary Hearing On Defendants Affirmative Defenses With Motion To dismiss The Instant Complaint Based On Said Affirmative Defenses is denied. The use of the word "may" in the aforequoted provision shows that such a hearing is not a matter of right demandable from the trial court; it is not mandatory but discretionary. "May" is an auxiliary verb indicating liberty, opportunity, permission and possibility. Such interpretation is specifically stated under the 1997 Rules of Civil Procedure. Rule 16, Section 6, now provides that a grant of a preliminary hearing rests on the sound discretion of the court, In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion could be ascribed to the trial courts denial of petitioners motion for preliminary hearing on its affirmative defenses with motion to dismiss. The issue of whether or not a trademark infringement exists, is a question of fact that could best be determined by the trial court. Under the old Trademark Law where the goods for which the identical marks are used are unrelated, there can be no likelihood of confusion and there is therefore no infringement in the use by the junior user of the registered mark on the entirely different goods.This ruling, however, has been to some extent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293), which took effect on January 1, 1998. A junior user of a well-known mark on goods or services which are not similar to the goods or services, and are therefore unrelated, to those specified in the certificate of registration of the well-known mark is precluded from using the same on the entirely unrelated goods or services, subject to the following requisites, to wit: 1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers,17 in determining whether a mark is well known, the following criteria or any combination thereof may be taken into account: (a) the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies; (b) the market share in the Philippines and in other countries, of the goods and/or services to which the mark applies; (c) the degree of the inherent or acquired distinction of the mark; (d) the quality-image or reputation acquired by the mark; (e) the extent to which the mark has been registered in the world; (f) the exclusivity of the registration attained by the mark in the world; (g) the extent to which the mark has been used in the world; (h) the exclusivity of use attained by the mark in the world; (i) the commercial value attributed to the mark in the world; (j) the record of successful protection of the rights in the mark; (k) the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and (l) the presence of absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark.

13 2. The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods or services and those goods or services specified in the certificate of registration in the well known mark. This requirement refers to the likelihood of confusion of origin or business or some business connection or relationship between the registrant and the user of the mark. 3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if the registrant will be precluded from expanding its business to those unrelated good or services, or if the interests of the registrant of the well-known mark will be damaged because of the inferior quality of the good or services of the user.18 Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated to respondents business involving watches, clocks, bracelets, etc. However, the Court cannot yet resolve the merits of the present controversy considering that the requisites for the application of Section 123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need to be resolved at the trial court. The existence or absence of these requisites should be addressed in a full blown hearing and not on a mere preliminary hearing. The respondent must be given ample opportunity to prove its claim, and the petitioner to debunk the same. The same is true with respect to the issue of whether Atty. Alonzo Ancheta was properly authorized to sign the verification and certification against forum shopping in behalf of respondents. This could be properly resolved during the trial together with the substantive issues raised by petitioner. Considering that the trial court correctly denied petitioners motion for preliminary hearing on its affirmative defenses with motion to dismiss, there exists no reason to compel Atty. Ancheta to testify. Hence, no abuse of discretion was committed by the trial court in quashing the subpoena ad testificandum issued against Atty. Ancheta. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. None of these was committed by the trial court; hence, the Court of Appeals correctly dismissed the petition.


Del Monte Corporation v. CA G.R. # L-78325 Facts: Petitioner Del Monte Corporation is a foreign company organized under the laws of the United States and not engaged in business in the Philippines. Both the Philippines and the United States are signatories to the Convention of Paris of September 27, 1965, which grants to the nationals of the parties rights and advantages which their own nationals enjoy for the repression of acts of infringement and unfair competition. Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to manufacture, distribute and sell in the Philippines various agricultural products, including catsup, under the Del Monte trademark and logo. On October 27,1965, Del Monte authorized Philpack to register with the Philippine Patent Office the Del Monte catsup bottle configuration, for which it was granted Certificate of Trademark Registration by the Philippine Patent Office under the Supplemental Register. On November 20, 1972, Del Monte also obtained two registration certificates for its trademark "DEL MONTE" and its logo. Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture, packing, distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. This logo was registered in the Supplemental Register on September 20, 1983. The product itself was contained in various kinds of bottles, including the Del Monte bottle, which the private respondent bought from the junk shops for recycling. Having received reports that the private respondent was using its exclusively designed bottles and a logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte filed a complaint against the private respondent for infringement of trademark and unfair competition, with a prayer for damages and the issuance of a writ of preliminary injunction. In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle and that its logo was substantially different from the Del Monte logo and would not confuse the buying public to the detriment of the petitioners. After trial, the Regional Trial Court of Makati dismissed the complaint. It held that there were substantial differences between the logos or trademarks of the parties; that the defendant had ceased using the petitioners' bottles; and that in any case the defendant became the owner of the said bottles upon its purchase thereof from the junk yards. Furthermore, the complainants

15 had failed to establish the defendant's malice or bad faith, which was an essential element of infringement of trademark or unfair competition. This decision was affirmed in toto by the respondent court, which is now faulted in this petition for certiorari under Rule 45 of the Rules of Court. Issue/s: (1) Whether the logo of Sunshine cause confusion to the buying of the public? (2) Whether the private respondent is guilty of infringement? Held: 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. It has also been held that it is not the function of the court in cases of infringement and unfair competition to educate purchasers but rather to take their carelessness for granted, and to be ever conscious of the fact that marks need not be identical. A confusing similarity will justify the intervention of equity. The judge must also be aware of the fact that usually a defendant in cases of infringement does not normally copy but makes only colorable changes. Well has it been said that the most successful form of copying is to employ enough points of similarity to confuse the public with enough points of difference to confuse the courts. We also note that the respondent court failed to take into consideration several factors which should have affected its conclusion, to wit: age, training and education of the usual purchaser, the nature and cost of the article, whether the article is bought for immediate consumption and also the conditions under which it is usually purchased . Among these, what essentially determines the attitude of the purchaser, specifically his inclination to be cautious, is the cost of the goods. 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. In this latter category is catsup. At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label is a colorable imitation of the Del Monte trademark. The predominant colors used in the Del Monte label are green and red-orange, the same with Sunshine. The word "catsup" in both bottles is printed in white and the style of the print/letter is the same. Although the logo of Sunshine is not a tomato, the figure nevertheless approximates that of a tomato. As previously stated, the person who infringes a trade mark does not normally copy out but only makes colorable changes, employing enough points of similarity to confuse the public with enough points of differences to confuse the courts. What is undeniable is the fact that when a manufacturer prepares to package his product, he has before him a boundless choice of words, phrases, colors and symbols sufficient to distinguish his product from the others. When as in this case, Sunshine chose, without a reasonable explanation, to use the same colors and letters as those used by Del Monte though the field of its selection was so broad, the inevitable conclusion is that it was done deliberately to deceive. It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as between a newcomer who by the confusion has nothing to lose and everything to gain and one who by honest dealing has already achieved favor with the public, any doubt should be resolved against the newcomer inasmuch as the field from which he can select a desirable trademark to indicate the origin of his product is obviously a large one.

16 As to the second issue, the Court held that the private respondent is not guilty of infringement for having used the Del Monte bottle. The reason is that the configuration of the said bottle was merely registered in the Supplemental Register. It can be inferred from the foregoing that although Del Monte has actual use of the bottle's configuration, the petitioners cannot claim exclusive use thereof because it has not been registered in the Principal Register. However, we find that Sunshine, despite the many choices available to it and notwithstanding that the caution "Del Monte Corporation, Not to be Refilled" was embossed on the bottle, still opted to use the petitioners' bottle to market a product which Philpack also produces. This clearly shows the private respondent's bad faith and its intention to capitalize on the latter's reputation and goodwill and pass off its own product as that of Del Monte.

Habana v. Robles G.R. #131522 Facts: Petitioners are authors and copyright owners of duly issued certificates of copyright registration covering their published works, produced through their combined resources and efforts, entitled COLLEGE ENGLISH FOR TODAY (CET for brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE FRESHMAN ENGLISH, Series 1. Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the author/publisher and distributor/seller of another published work entitled "DEVELOPING ENGLISH PROFICIENCY" (DEP for brevity), Books 1 and 2 (1985 edition) which book was covered by copyrights issued to them. In the course of revising their published works, petitioners scouted and looked around various bookstores to check on other textbooks dealing with the same subject matter. By chance they came upon the book of respondent Robles and upon perusal of said book they were surprised to see that the book was strikingly similar to the contents, scheme of presentation, illustrations and illustrative examples in their own book, CET. After an itemized examination and comparison of the two books (CET and DEP), petitioners found that several pages of the respondent's book are similar, if not all together a copy of petitioners' book, which is a case of plagiarism and copyright infringement. Petitioners then made demands for damages against respondents and also demanded that they cease and desist from further selling and distributing to the general public the infringed copies of respondent Robles' works. However, respondents ignored the demands, hence, on July 7, 1988; petitioners filed with the Regional Trial Court, Makati, a complaint for "Infringement and/or unfair competition with damages" against private respondents. In the complaint, petitioners alleged that in 1985, respondent Felicidad C. Robles being substantially familiar with the contents of petitioners' works, and without securing their permission, lifted, copied, plagiarized and/or transposed certain portions of their book CET. The textual contents and illustrations of CET were literally reproduced in the book DEP. The plagiarism, incorporation and reproduction of particular portions of the book CET in the book DEP, without the authority or consent of petitioners, and the misrepresentations of respondent Robles that the same was her original work and concept adversely affected and substantially

17 diminished the sale of the petitioners' book and caused them actual damages by way of unrealized income. Despite the demands of the petitioners for respondents to desist from committing further acts of infringement and for respondent to recall DEP from the market, respondents refused. Petitioners asked the court to order the submission of all copies of the book DEP, together with the molds, plates and films and other materials used in its printing destroyed, and for respondents to render an accounting of the proceeds of all sales and profits since the time of its publication and sale. Respondent Robles was impleaded in the suit because she authored and directly committed the acts of infringement complained of, while respondent Goodwill Trading Co., Inc. was impleaded as the publisher and joint co-owner of the copyright certificates of registration covering the two books authored and caused to be published by respondent Robles with obvious connivance with one another. Issue/s: Whether respondents committed no copyright infringement?

Held: The complaint for copyright infringement was filed at the time that Presidential Decree No. 49 was in force. At present, all laws dealing with the protection of intellectual property rights have been consolidated and as the law now stands, the protection of copyrights is governed by Republic Act No. 8293. Notwithstanding the change in the law, the same principles are reiterated in the new law under Section 177. It provides for the copy or economic rights of an owner of a copyright. The law also provided for the limitations on copyright. In the above quoted provisions, "work" has reference to literary and artistic creations and this includes books and other literary, scholarly and scientific works. 21 A perusal of the records yields several pages of the book DEP that are similar if not identical with the text of CET. The Court believes that respondent Robles' act of lifting from the book of petitioners substantial portions of discussions and examples, and her failure to acknowledge the same in her book is an infringement of petitioners' copyrights. When is there a substantial reproduction of a book? It does not necessarily require that the entire copyrighted work, or even a large portion of it, be copied. If so much is taken that the value of the original work is substantially diminished, there is an infringement of copyright and to an injurious extent, the work is appropriated. In determining the question of infringement, the amount of matter copied from the copyrighted work is an important consideration. To constitute infringement, it is not necessary that the whole or even a large portion of the work shall have been copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the original author are substantially and to an injurious extent appropriated by another, that is sufficient in point of law to constitute piracy. The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.

18 The respondents' claim that the copied portions of the book CET are also found in foreign books and other grammar books, and that the similarity between her style and that of petitioners cannot be avoided since they come from the same background and orientation may be true. However, in this jurisdiction under Sec 184 of Republic Act 8293 A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did not know whether or not he was infringing any copyright; he at least knew that what he was copying was not his, and he copied at his peril. In cases of infringement, copying alone is not what is prohibited. The copying must produce an "injurious effect". Here, the injury consists in that respondent Robles lifted from petitioners' book materials that were the result of the latter's research work and compilation and misrepresented them as her own. She circulated the book DEP for commercial use did not acknowledge petitioners as her source. Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles committed. Petitioners' work as authors is the product of their long and assiduous research and for another to represent it as her own is injury enough. In copyrighting books the purpose is to give protection to the intellectual product of an author. This is precisely what the law on copyright protected, under Section 184.1 (b). Quotations from a published work if they are compatible with fair use and only to the extent justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries are allowed provided that the source and the name of the author, if appearing on the work, are mentioned. McDonalds Corporation v. Macjoy Fast Food G.R. #166115 Facts: On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic corporation engaged in the sale of fast food products in Cebu City, filed with the then Bureau of Patents, Trademarks and Technology Transfer (BPTT), now the Intellectual Property Office (IPO), an application, thereat identified as Application Serial No. 75274, for the registration of the trademark "MACJOY & DEVICE" for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks under classes 29 and 30 of the International Classification of Goods. Petitioner McDonalds Corporation, a corporation duly organized and existing under the laws of the State of Delaware, USA, filed a verified Notice of Opposition against the respondents application claiming that the trademark "MACJOY & DEVICE" so resembles its corporate logo, otherwise known as the Golden Arches or "M" design, and its marks "McDonalds," McChicken," "MacFries," "BigMac," "McDo," "McSpaghetti," "McSnack," and "Mc," (hereinafter collectively known as the MCDONALDS marks) such that when used on identical or related goods, the trademark applied for would confuse or deceive purchasers into believing that the goods originate from the same source or origin. Likewise, the petitioner alleged that the respondents use and adoption in bad faith of the "MACJOY & DEVICE" mark would falsely tend to suggest a connection or affiliation with petitioners restaurant services and food products, thus, constituting a fraud upon the general public and further cause the dilution of the distinctiveness of petitioners registered and internationally recognized MCDONALDS marks to its prejudice and irreparable damage. The application and the opposition thereto was docketed as Inter Partes Case No. 3861. Respondent denied the aforementioned allegations of the petitioner and averred that it has used the mark "MACJOY" for the past many years in good faith and has spent considerable sums of money for said marks extensive promotion in tri-media, especially in Cebu City where it has been doing business long before the petitioner opened its outlet thereat sometime in 1992; and that its use of said mark would not confuse affiliation with the petitioners restaurant

19 services and food products because of the differences in the design and detail of the two (2) marks. In a decision dated December 28, 1998, the IPO, ratiocinating that the predominance of the letter "M," and the prefixes "Mac/Mc" in both the "MACJOY" and the "MCDONALDS" marks lead to the conclusion that there is confusing similarity between them especially since both are used on almost the same products falling under classes 29 and 30 of the International Classification of Goods, i.e., food and ingredients of food, sustained the petitioners opposition and rejected the respondents application. In time, the respondent moved for reconsideration but the IPO denied the motion in its Order of January 14, 2000. There from, the respondent went to the CA via a Petition for Review with prayer for Preliminary Injunction under Rule 43 of the Rules of Court, where at its appellate recourse was docketed as CA-G.R. SP No. 57247. Finding no confusing similarity between the marks "MACJOY" and "MCDONALDS," the CA, in its herein assailed Decision dated July 29, 2004, reversed and set aside the appealed IPO decision and order. Issue/s: Whether respondent Macjoy & Device mark is confusingly similar to petitioners McDonalds marks? Held: In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another, no set of 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. Applying the dominancy test, the Supreme Court found that petitioners and respondents marks are confusingly similar with each other such that an ordinary purchaser can conclude an association or relation between the marks. Both marks use the M design logo and the prefixes Mc and /or Mac as dominant features. The first letter M in both marks puts emphasis on the prefixes Mc and/or Mac by the similar way in which they are depicted. It is the prefix Mc, an abbreviation of Mac, which visually and aurally catches the attention of the consuming public. The word Mcjoy attracts attention the same way as McDonalds, MacFries, McSpaghetti, McDo, Big Mac and the rest of the McDonaldss marks which all use the prefixes Mc and/or Mac. Most importantly, both trademarks are used in the sale of fastfood products.


Sehwani Incorporated v. In-n-Out Burger Incorporated G.R. #171053 Facts: Respondent IN-N-OUT Burger, Inc., a foreign corporation organized under the laws of California, U.S.A., and not doing business in the Philippines, filed before the Bureau of Legal Affairs of the IPO (BLA-IPO), an administrative complaint against petitioners Sehwani, Inc. and Benitas Frites, Inc. for violation of intellectual property rights, attorneys fees and damages with prayer for the issuance of a restraining order or writ of preliminary injunction. Respondent alleged that it is the owner of the tradename IN-N-OUT and trademarks INN-OUT, IN-N-OUT Burger & Arrow Design and IN-N-OUT Burger Logo, which are used in its business since 1948 up to the present. These tradename and trademarks were registered in the United States as well as in other parts of the world. On June 2, 1997, respondent applied with the IPO for the registration of its trademark IN-N-OUT Burger & Arrow Design and servicemark IN-N-OUT.In the course of its application, respondent discovered that petitioner Sehwani, Inc. had obtained Trademark Registration No. 56666 for the mark IN N OUT (THE INSIDE OF THE LETTER O FORMED LIKE A STAR) on December 17, 1993 without its authority.[6] Respondent thus demanded that petitioner Sehwani, Inc. desist from claiming ownership of the mark IN-N-OUT and to voluntarily cancel its Trademark Registration No. 56666. Petitioner Sehwani, Inc. however refused to accede to the demand and even entered into a Licensing Agreement granting its co-petitioner Benitas Frites, Inc. license to use for a period of five years the trademark IN-N-OUT BURGER in its restaurant in Pasig City.Hence, respondent filed a complaint for violation of intellectual property rights. In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to sue because it was not doing business in the Philippines and that it has no cause of action because its mark is not registered or used in the Philippines. Petitioner Sehwani, Inc. also claimed that as the registered owner of the IN-N-OUT mark, it enjoys the presumption that the same was validly acquired and that it has the exclusive right to use the mark. Moreover, petitioners argued that other than the bare allegation of fraud in the registration of the mark, respondent failed to show the existence of any of the grounds for cancellation thereof under Section 151 of Republic Act (R.A.) No. 8293, otherwise known as The Intellectual Property Code of the Philippines. On December 22, 2003, Bureau Director Estrellita Beltran-Abelardo rendered Decision No. 2003-02 finding that respondent has the legal capacity to sue and that it is the owner of the internationally well-known trademarks; however, she held that petitioners are not guilty of unfair. Issue/s: Whether respondents trademarks are considered well-known is factual in nature, involving as it does the appreciation of evidence adduced before the BLA-IPO? Held: Trademarks from U.S. companies are protected in the Philippines even if the U.S. Company has no presence here and that their trademarks are not registered in the Philippines. Based on the international treaties which the Philippines is a party to, the Paris Convention and the WIPO Joint Recommendation have the force and effect of law, for under Section 2, Article II of the Constitution, the Philippines adopts the generally accepted principles of international law as part of the law of the land. To rule otherwise would be to defeat the equitable consideration

21 that no one other than the owner of the well-known mark shall reap the fruits of an honestly established goodwill. The fact that respondents marks are neither registered nor used in the Philippines is of no moment. The scope of protection initially afforded by Article 6bis of the Paris Convention has been expanded in the 1999 Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, wherein the World Intellectual Property Organization (WIPO) General Assembly and the Paris Union agreed to a nonbinding recommendation that a wellknown mark should be protected in a country even if the mark is neither registered nor used in that country. Part I, Article 2(3). A trade name shall be protected in all countries of the Union without the obligation of filing or registration whether or not it forms part of a trademark. Article 6b which governs the protection of well-known trademarks is a self-executing provision and does not require legislative enactment to give it effect in the member country. It may be applied directly by the tribunals and officials of each member country by the mere publication or proclamation of the Convention, after its ratification according to the public law of each state and the order for its execution. The essential requirement under this Article is that the trademark to be protected must be "well-known" in the country where protection is sought. The power to determine whether a trademark is well-known lies in the competent authority of the country of registration or use. This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before a court.