8/4/2019 246 vs DAWAY

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246 CORPORATION vs DAWAY (416 SCRA 315; 2003) trademark

FACTS:

PR 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 withprayer 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 usingwithout authority the mark "Rolex" in its business name "Rolex Music Lounge" as well as in itsnewspaper advertisements as "Rolex Music Lounge, KTV, Disco & Party Club."

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 itsentertainment business is totally unrelated to the items catered by respondents such as watches,clocks, bracelets and parts thereof.

TC: denied petitioners motion for preliminary hearing on affirmative defenses with motion to dismiss.

CA dismissed petition.

ISSUE:

W/N no trademark infringement can possibly occur where the contending parties deal with goods andservices that are totally unrelated and non-competing with each other.

HELD:

Under the old Trademark Lawwhere 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 junioruser of the registered mark on the entirely different goods.This ruling, however, has been to someextent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293

A junior user of a well-known mark on goods or services which are not similar to the goods orservices, 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 tothe following requisites, to wit:

1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules andRegulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers,17 indetermining whether a mark is well known, the following criteria or any combination thereof may be takeninto 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 towhich 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 identicalor similar goods or services and owned by persons other than the person claiming that his markis a well-known mark.

2. The use of the well-known mark on the entirely unrelated goods or services would indicate a connectionbetween such unrelated goods or services and those goods or services specified in the certificate ofregistration in the well known mark.3. The interests of the owner of the well-known mark are likely to be damaged.

Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated torespondents business involving watches, clocks, bracelets, etc. However, the Court cannot yet resolvethe merits of the present controversy considering that the requisites for the application of Section123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need tobe resolved at the trial court. The existence or absence of these requisites should be addressed in afull blown hearing and not on a mere preliminary hearing. The respondent must be given ampleopportunity to prove its claim, and the petitioner to debunk the same.