INTELLECTUAL PROPERTY LAW Reviewer (Prelims).pdf

Sources: Intellectual Property Fundamentals (by: Amador); R.A. 8293 – Intellectual Property Law; R.A. 9502 – Universally Accessible Cheaper and Quality Medicines Act of 2008, amending

R.A. 8293; Course Syllabus of Atty. Allan Gepty.

COURSE/SUBJECT: INTELLECTUAL

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Disclaimer: These notes are for review purposes only and are not

intended to replace any book on Intellectual Property Law. Readers of

these notes are responsible for its contents.

►What are the State Policies relating to the protection of

intellectual property? A: “Section 13 The State 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 the people, for such period as may be provided by law.” (1987 Constitution);

“SECTION 2 Declaration of State Policy — The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic 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 the people, for such periods as provided in this Act.” (R.A. 8293 Intellectual Property Law of 1997).

TRADEMARKS AND SERVICE MARKS

►DEFINITIONS:

[distinguish a trade mark from service mark from a collective mark; distinguish a trade name from a trade or service mark]

a. Mark – any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods.

b. Collective Mark –

b.1. Any visible sign designated as such in the application for registration;

b.2. Capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign;

b.3. Under the control of the registered owner of the collective mark.

c. Trade Name – name or designation identifying or distinguishing an enterprise.

Note: Under the IP Code, it provides for the registration of the trademarks and NOT of trade names.

►FUNCTIONS OF TRADEMARKS:

a. Source-indicating Function; b. Economic Function; c. Guarantee Function; d. Advertisement Function

a. Source-indicating Function – ability of the trademarks to distinguish the product, to which it is affixed, from all other competing products of other manufacturers. It indicates the source or origin of the goods on which it is used.

Since trademarks are considered as properties, application for it or its registration may be assigned or transferred, with or without transfer of business which uses the trademark.

b. Economic Function – it plays an important role in the vast marketplace of competing goods, targeting to attrack consumers or purchasers. The distinctiveness of a trademark plays an important role in identifying, promoting and in appealing the product(s) to the purchasers.

c. Guarantee Function – it guarantees that the product to which the trademark is affixed, comes up to a certain standard of quality and considered as a dinstinctive mark of the product’s authenticity as distinguished from those of ohter manufacturers.

“Customers rely upon the trademark owner’s reputation when selecting the trademarked goods.”

d. Advertisement Function – the guarantee function of trademarks gives effect to its advertisement function.

The more widely advertise a branded product is, the more the courts may concede that it has become distinctive of its proprietor’s goods.

Through advertisement, in the broadcast or print media, the owner of the product is able to establish a nexus between the trademarked products and the public, in regions where the owner does not manufacture or sell its own products. Therefore, the manufacturer may well estabish and earn a reputation in countries where the trademark owner has itself no established business connection.

►REGISTRABILITY OF TRADEMARKS:

SECTION 123. Registrability. —

123.1. A mark CANNOT be registered if it:

a. Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

b. Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof;

c. Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow;

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




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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;

f. Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use;

g. Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services;

h. Consists exclusively of signs that are generic for the goods or services that they seek to identify;

i. Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in bona fide and established trade practice;

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;

k. Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;

l. Consists of color alone, unless defined by a given form; or

m. Is contrary to public order or morality.

►DOMINANCY TEST VIS-A-VIS HOLISTIC TEST:

BERRIS AGRICULTURAL CO., INC. vs. NORVY ABDAYANG

FACTS:

Norvy Abyadang (Abdayang) filed with the IPO a trademark application for the mark “NS D-10 PLUS” where it was given due course and was published in the IPO Gazette for opposition.

Almost two months thereafter, Berris Agricultural Co., Inc. (Berris) filed a verified Notice of Opposition against the mark, allegedly because the “NS D-10 PLUS” is similar and/or confusingly similar to its registered trademark “D-10 80 WP” with the same active ingredient (80% Mancozeb) as that of the former mark.

IPO-BLA issued Decision No. 2006-24, holding that the “NS D-10 PLUS” is confusingly similar to the opposer’s mark, therefore, rejecting the trademark application of Abyadang.

Abyadang appealed to the IPO Director General where the latter, affirming the decision of the IPO-BLA. On appeal to the CA, the latter denied the motion for lack of merit; hence, petition to the SC was Abyadang’s recourse.

ISSUE:

Whether Abyadang’s “NS D-10 PLUS” is confusingly similar to that of Berris’ “D-10 80 WP” or not, such that the latter can rightfully prevent the IPO registration of the former.

RULING:

R.A. 8293 DID NOT expressely repeal in its entirety R.A. 166, but merely provided Sec. 293.1. That Acts and parts of Acts inconsistent with it were repealed. Only in the instance where a substantial and irreconcilable conflict is found between the provisions of R.A. 8293 and of R.A. 166 would the provisions of the latter deemed repealed.

The prima facie presumption brought about by the registration of a mark may be challenged and overcome in an appropriate action, by proof of the nullity of the registration or non-use of the mark, except when excused. Moreover, the presumption may likewise be defeated by evidence of prior use by another person x x x. This is because a trademark is a creation of use and belongs to one who first used it in trade or commerce.

Berris was able to establish that it was using its mark “D-10 80 WP” since June 20, 2002, even before it filed for its registration with the IPO on November 29, 2002, the DAU, which was under oath and notarized, bearing the stamp of the Bureau of Trademarks of teh IPO x x x.

In determining the similarity or likelihood of the confusion, jurisprdence has developed tests – the Dominancy Test and the Holistic or Totality Test.

Dominancy Test – a. Focuses on the similarity of the prevalent or dominant

features of the competing trademarks that might casue confusion, mistake and deception in the mind of the purchasing public.

b. Duplication or immitation is not necessary; c. Neither is it required that the mark sought to be registered

suggest an effort to immitate; d. Given more consideration are the aurala and visual

impressions created by the marks on the buyers of the goods, giving little weight to factors like prices, quality, sales outlets, and market segments.

Holistic or Totaity Test – a. Consideration on the entirety of the mark as applied to the

products, including the labels and packaging, in determining confusing imilarity.

b. The discerning eye of the observer must focus not only on the predominant words but also on the other features




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appearing on both labels so that the observer may draw conclusion on whether one is confusingly similar to the other.

Both Berris’ and Abyadang’s makrs on their respective packages, x x x x that both have a common component which is “D-10” is the dominant feature of the mark. The “D-10” being at the beginning of the mark is waht is most remembered of it.

Applying the Dominancy Test, it cannot be gainsaid that Abyadang’s “NS D-10 PLUS” is similar to Berris’ “D-10 80 WP” that confusion or mistake is likely to occur. Undeniably, both marks pertain to the same type of goods. They also belong to the same classification of goods under R.A. 8293. Both depictions of “D-10” as found in both marks, are similar in size, such that this prtion is what catches the eye of the purhaser. Undeniably, the likelihood of confusion is present.

The likelihood of confusion and mistake is made more manifest when the Holistic Test is applied, taking into consideration the packaging, for both use the ame type of material (foil type) and have identical color schemes (red, green, white); and the marks are both predominantly red in color with the same phrase, “Broad Spectrum Fungicide” written underneath.

Predominantly, the “D-10” buyers of both poducts, may be misled into thinking that “NS D-10 PLUS” could be an upgraded formulation of the “D-10 80 WP”.

DERMALINE , INC. vs. MYRA PHARMACEUTICALS, INC.

FACTS:

Dermaline, Inc. (Dermaline) filed before the IPO an application for registration of the trademark “DERMALINE DERMALINE, INC.”

Few months thereafter, Myra Pharmaceuticals, Inc. (Myra) filed a verified opposition, claiming that the dominant feature is the term “DERMALINE” which is practically identical with its own “DERMALIN” x x x.

It asserted that the mark “DERMALINE DERMALINE, INC.” is aurally similar to its own mark such that the registration and use of Dermaline’s applied mark will enable it to obtain benefit from Myra’s reputation, goodwill and advertising and will lead the public believing that Dermaline is, in any way, connected to Myra. That even if the subject application was under classification 44 for various skin treatments, it could still be connected to the “DERMALI” mark under classification 5 for pharmaceutical products, since ultimately, these goods are very closely related.

Dermaline countered that a simple comparison of the trademark “DERMALINE DERMALINE, INC” vis-a-vis Myra’s “DERMALIN” trademark would show that they have entirely different featuresand distinctive presentation, thus it cannot result in confusion, mistake or deception on the part of the puchasing public.

The IPO Bureau of Legal Affairs rendered a decision sustaining Myra’s opposition pursuant to Sec. 123.1 (d) of R.A. 8293. On appeal to the Office of the Director General by Dermaline, the appeal was dismissed for being filed out of time.

Dermaline appealed to the CA, but it affirmed and upheld the order of the IPO Director General.

ISSUE:

Whether CA erred in upholding the IPO’s rejection of Dermaline’s application for regstration of trademark, or not.

RULING:

As Myra correctly posits, as a registered trademark owner, it has the right under Sec. 147 of R.A. 8293 to prevent third parties from using a trademark, or similar signs or containers for goods or services, without its consent, identical or similar, to its registered trademark, where such use would result in a likelihood of confusion.

In rejecting the application of the Dermaline, the IPO used the dominancy test. It declared that both confusion of goods and service and confusion of business or of origin were apparent in both trademarks. x x x The IPO also upheld Myra’s right under Sec. 138 of R.A. 8293 where the clasification of registration is a prima facie evidenceof the validity of the registration, registrant’s ownership of the mark, and its exclusive right to use the same in connection witht the goods and those that are related thereto specified in the certificate.

While there are no set of rules that can be deduced as what constitutes a dominant feature with respect to the trademarks applied for registration; usally, 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 conumer (IPO).

Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such that, considering the current proliferation of health and beauty products in the market, the purchasers would likely be misled that Myra has already expanded its business through Dermaline from merely carrying pharmaceutical topical applications for the skin to health and beauty services.

When one applies for registration of a trademark or label which is almost the same or that very closely, or resembles one already used and registered by another, THE APPLICATION SHOULD BE REJECTED AND DISMISSED OUTRIGHT even without any opposition on the part of the owner and user of a previously registered label or trademark. This is intended not only to avoid confusion on the part of the public, but also to protect an already used and registered trademark and an established goodwill.

COFFEE PARTNERS, INC. vs. SAN FRANCISCO COFFEE & ROASTERY, INC.

FACTS:

Coffee Partners, Inc. (CPI) is a local corporation engaged in business of establishing and maintaining coffee shops in the country. It has a franchise agreement with Coffee Partners, Ltd. (CPL) for a non-exclusive right to operate coffee shops in the Philippines using the trademarks designed by CPL such as “SAN FRANCISCO COFFEE.”




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While, San Francisco Coffee & Roastery, Inc. (SFCRI) is a local corporation engaged in the wholesale and retail sale of coffee and with a registered business name with DTI as “SAN FRANCISCO COFFEE & ROASTERY, INC.”

SFCRI discovered sometime that the CPI was about to open a coffee shop under the name “SAN FRANCISCO COFFEE” in Libis, QC. SFCRI therefore claims that CPI’s shop (SAN FRANCISCO COFFEE) caused confusion in the minds of the public as it bore a similar name and it is also engaged in the business of selling coffee. It filed a complaint with the BLA-IPO for infringement and/or unfair competition with claim for damages.

CPI maintained that its marked could not be confused with respondent’s trade name because of the notable distinctions in their appearances and that it alleges that it filed an application for registration of the mark “SAN FRANCISCO COFFEE & DEVICE” with the IPO.

The BLA-IPO held that CPI’s trademark infringed on respondent’s trade name therefore, SFCRI must be protected from infringement of its trade name since it would cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression of the words “SAN FRANCISCO” which is the dominant portion of the SFCRI’s trade name and CPI’s trademark.

On appeal, the Office of the Director General ruled that CPI’s use of trademark “SAN FRANCISCO COFFEE” did not infringe on respondent’s trade name since SFCRI stopped using its trade name after it entered into a joint venture with Boyd Coffee USA in 1998.

On appeal with the CA, the latter set aside the decision of the Office of the Director General and sustained the BLA-IPO’s decision.

ISSUE:

Whether CPI’s use of the trademark “SAN FRANCISCO COFFEE” constitutes infringement of SFCRI’s trade name “SAN FRANCISCO COFFEE & ROASTERY, INC.” evn if the trade name is not registered with the IPO.

RULING:

Requisites for Infringement of Unregistered Trade Name:

a. The trademark being infringed is registered in the IPO; however, in the infringement of trade name, the same need not be registered.

b. The trademark or trade name is reproduced, counterfeited, copied, or collorably imitated by the infringer.

c. The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business, or services; or the infringing mark or trade name 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.

d. The use or application of the infringing mark or trade name 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 businesses;

e. It is without the consent of the trademark or trade name owner or the assignee thereof.

Clearly, a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringement trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines.

Section 165.2. – a. Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.

b. In particular, any subsequent use of the trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful.

Applying either the dominancy or the holisitc test, CPI’s “SAN FRANCISCO COFFEE” trademark is a clear infringement of SFCRI’s trade name, “SAN FRANCISCO COFFEE & ROASTERY, INC.” The descriptive words “SAN FRANCISCO COFFEE” are precisely the dominant features of repondent’s trade name. Petitioner and respondents are engaged in the same business of selling coffee whether wholesale or retail. The likelihood of confusion is higher in cases where the business of one corporation is the same or substantially the same as that of another corporation.

PROSOURCE INTERNATIONAL, INC. vs. HORPHAG RESEARCH MANAGEMENT, SA

FACTS:

Horphag Research Management, SA (HRM) is a corporation existing under the laws of Switzerland and owner of the trade mark PYCNOGENOL. It later discovered that Prosource International, Inc. (PII) was also distributing a similar food supplement using the mark PCO-GENOLS since 1996. This prompted HRM to demand petitioner to cease and desist from using the aforementioned mark.

Without notifying respondent, petitioner discontinued the use of and withdrew from the market all products under the name PCO-GENOLS. Despite such act, HRM filed a complaint for infringement of trademark with prayer fro preliminary injunction against petitioner, praying that the latter cease and desist from using the brand PCO-GENOLS since 1996.

PII contended that respondent counld not file the infringement case considering that the latter is not th registered owner of the trademark PYCNOGENOL but one Horphag Research Limited.

The RTC decided in favor of HRM, where both marks have the same suffix and were confusingly sounding similar.

On appeal, the CA ruled in favor of HRM and the former explained that under both test, PCO-GENOLS is deceptively similar to PYCNOGENOLS.




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ISSUE:

Whether the CA erred in affirming the ruling of the RTC that HRM’s PYGNOGENOLS was infringed by PII’s PCO-GENOLS, or not.

RULING:

HRM’s complaint for trademark infringement against PII should be decided in light of the provisions of R.A. 166 for acts committed until Dec. 31, 1997 and R.A. 8293 for those committed from January 1, 1998 until June 19, 2000.

Trademark – any distinctive word, name, symbol, emblem, sign, 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.

A trademark deserves protection.

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 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. (Sec. 22, R.A. No 166a)

It is the element of “likelihood of confusion” that is the gravamen of trademark infringment.

The trial court and the appellate court applied the Dominancy Test. Both affirmed that: PYCNOGENOLS and PCOGENOLS have the same suffix x x x when the two words are pronounced, the sound effects are confusingly similar not to mention that they are both decribed by their manufacturers as food supplements.

Although there were dissimilarities in the trademark due to the differences in the packaging and its prints, purchasers could be misled into believing that they are the same and/or originates from a common source and manufacturer. The Court agrees to such finding of the RTC and CA. Therefore, the issue of trademark infringement is factual for being meritorious.

McDONALD’S CORPORATION vs. MACJOY FASTFOOD CORPORATION

FACTS:

Macjoy Fastfood Corporation (Macjoy), a corporation selling fast food products in Cebu City filed with the BPTT-IPO an application for the registration of the trademark “MACJOY & DEVICE”.

McDonald’s Corporation, a corporation organized under the laws of Delaware, USA opposed against the respondent’s application claiming that such trademark so resembles its corporate logo (Golden Arches) design and its McDONALD’s marks such that when used on identical or related goods, the trademark applied for would confuse or deceive purchasers into believeing that the goods originated from the same source or origin.

Macjoy on the other hand averred that the it has used the mark “MACJOY” for tha past many years in good faith and has spent considerable sums of money for extensive promotions x x x.

The IPO ratiocinated that the predominnace of the lette “M” and the prefixes “Mac/Mc” in both the Macjoy and McDonald’s marks lead to the conclusion that there is confusing similarity between them x x x. Therefore, Macjoy’s application was denied.

Upon appeal to the CA it favored with MacJoy and against McDonald’s. The justifications are the following:

1. The word “MacJoy” is written in round script while the word “McDonald’s is written in single storke gothic;

2. The word “MacJoy” comes with the picture of a chicken head with cap and bowtie and wings sprouting on both sides, while the word “McDonald’s” comes with an arches “M” in gold colors, and absolutely without any picture of a chicken;

3. The word “MacJoy” is set in deep pink and white color scheme while the word “McDonald’s” is written in red, yellow, and black color combination;

4. The facade of the respective stores of the parties, are entirely different.

ISSUE:

Whether there is a confusing similarity between the McDonald’s marks of the petitioner and the respondent’s “MACJOY & DEVICE” trademark when it applied to classes 29 ad 30 of the International Classification of Goods.

RULING:

The Court agrees with the MacJoy that it is entirely unwarranted for the IPO to consider the prefix “Mac” as the predominant feature and the rest of the designs in MacJoy’s marks as details.

However, in McDonald’s Corp. Vs. LC BigMak Burge, Inc., the Court relied on the dominancy test, rather on the holistic test. Applying the dominancy test here, both marks are confusingly similar with each other such that an ordinary purchaser can conclude an association or relation between the marks.

The prefix “Mc” and abbreviation of “Mac” which visually and aurally catches the attention of the consuming public. Here, the




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predominant features such as the “M”, “Mc”, and “Mac” appearing in the marks of both parties easily attracks the attention of the would-be cstomers.

Even non-regular customers of both fastfood restaurants would readily notice the predominance of the “M” design, “Mc/Mac” prefixes shown in both marks, such that the common awareness or perception of customers that both trademarks are one and the same, or an affilitate, or under the sponsorship of the other is not far-fetched.

Since McDonald’s marks were registered successively, it is clear that it ahs duly established its ownership of the mark/s.

When one applies for registration of a trademark or label which is almost the same or that very closely, or resembles one already used and registered by another, THE APPLICATION SHOULD BE REJECTED AND DISMISSED OUTRIGHT even without any opposition on the part of the owner and user of a previously registered label or trademark.

McDONALD’S CORPORATION and MCGEORGE FOOD INDUSTIRES, INC. vs. MACJOY L.C. BIG MAK BURGER, INC., et. al.

FACTS:

McDonald’s own a family of trademarks, including “Big Mac” mark for its “double-decker hamburger sandwich” and applied for the registration of the same with then PBPTT (now IPO). Pending the approval of teh application, it introduced its “Big Mac” sandwiches in the Philippines in Sept. 1981, PBPTT allowed the registration of the “Big Mac” mark in the principal register based on its Home Registration in the USA.

McGeorge Food Industries (McGeorge) is McDonald’s Philippine franchisee.

L.C. Big Mak Burger Inc. (L.C. Big Mak) applied for the registration of teh “Big Mak” mark for its hamburger sandwiches. McDonald’s opposed on the ground that “Big Mak” was a colorable imitation of its registered “Big Mac” mark for the same food products.

Having received no reply from the respondent Dy (Corp. Pres. Of L.C. Big Mak), McDonald’s sued respondents in the RTC for trademark infringement and unfari competition.

The RTC ruled in favor of McDonald’s where the respondent corporation was liable for infringement and unfair competition.

On appeal with the CA by the respondents, the CA ruled REVERSING the RTC’s decision ordering McDonald’s to pay damages to L.C. Big Mak, ruling that by the definition of a “colorable title”, it is not sufficient that a similarity exists in both names.

ISSUES:

a) Whether L.C. Big Mak used the words “Big Mak” not only as part of the corporate name but also as a trademark for their hamburger products, and

b) Whether L.C. big Mak is laible for trademark infringment and unfair competition.

RULING:

a) The plastic wrappings and plastic bags used by the 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. Since petitioner’s 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 herein.

b) CONFUSION OF GOODS vis-a-vis CONFUSION OF BUSINESS

Confusion of Goods (a.k.a. Product Confusion) –

- An ordinary prudent purchaser will be induced to purchase one product in the belief that he was purchasing the other.

Confusion of Business (a.k.a Origin Confusion) –

- Though the goods of the other party is different from the other, the defendant’s (L.C. Big Mak) products might reasonably be assumed to originate with the plaintiff (McDonald’s), and the public would then be deceived either into that belief or into the belief that there is some connection between the plaintiff (McDonald’s) and the defendant (L.C. Big Mak), which in fact, does not exist.

- This type exists when the products are NOT competing BUT related enough to produce confusion or affiliation.

L.C. Big Mak used 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- deker, and whether wrapped in plastic or styrofoam, it reamins the sae hamburger food product. Even respondents’ use of the “Big Mak” mark on non-hamburger food products CANNOT excuse theri infringement of petitioner’s registered mark; otherwise, registered marks will lose their protection under the law.

“The totality or holistic test is contrary to the elementary postulate of 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 marketplace.”

Applying the dominancy test, respondents’ use of “Big Mak” mark resulted into likelihood of confusion.

Aurally, the two marks are the same, therefore, respondents have adopted “Big Mak” not only the dominant but also almost all features of “Big Mac”.

McDonald’s lack of proof of actual confusion does not negate their claim of trademark infringement. “While proof of actual confusion is the best evidence of infringement, its absence is inconsequential.”

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

FACTS:




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Private respondent CFC Corporation filed with the BPTTT an application for the registration of the trademark "FLAVOR MASTER" for instant coffee.

Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered under Swiss laws and domiciled in Switzerland, filed an unverified Notice of Opposition claiming that the trademark of CFC’s product is "confusingly similar to its trademarks for coffee and coffee extracts, to wit: MASTER ROAST and MASTER BLEND."

A verified Notice of Opposition was filed by Nestle Philippines, Inc., a Philippine corporation and a licensee of Societe Des Produits Nestle S.A., claiming 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.

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 – x x x.”

BPTTT denied CFC’s application for registration. CFC elevated the matter to the Court of Appeals. The latter ruled, reversing and setting aside the decision of the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) and ordered the Director of Patents to approve CFC’s application:

“That while the contending marks depict the same product, the glaring dissimilarities in their presentation far outweigh and dispel any aspect of similitude. CFC’s and appellees’ labels are entirely different in size, background, colors, contents and pictorial arrangement.”

ISSUE:

Whether the trademark FLAVOR MASTER is a colorable imitation of the trademarks MASTER ROAST and MASTER BLEND.

RULING:

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. 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.

The Court agrees with the BPTTT when it applied the test of dominancy and held tha it is sufficiently established that the word MASTER is the dominant feature of opposer’s mark.

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. Rather, the term "MASTER" is a suggestive term brought about by the advertising scheme of Nestle.

GENERIC TERMS – 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.

SUGGESTIVE TERMS – 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. They involve "an element of incongruity,""figurativeness," or " imaginative effort on the part of the observer."

The term "MASTER", therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and MASTER BLEND produced by Nestle [based on the advertising schemes of Nestle represented by Robert Jaworski and Atty. Ric Puno, Jr.]. 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., 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.”

EMERALD GARMENT MANUFACTURING CORPORATIO vs. HON. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND

TECHNOLOGY TRANSFER and H.D. LEE COMPANY, INC.

FACTS:

H.D. Lee Co., Inc., a foreign corporation organized under the laws of Delaware, U.S.A., filed with the BPTTT a Petition for Cancellation of Registration for the trademark "STYLISTIC MR. LEE" issued in the name of petitioner Emerald Garment Manufacturing Corporation, a domestic corporation organized and existing under Philippine laws. ["so closely resembled H.D. Lee’s own trademark, 'LEE' as previously registered and used in the Philippines, and not abandoned. x x x “]

H.D. Lee averred that Emerald’s trademark "so closely resembled its own trademark, 'LEE' as previously registered and used in the Philippines, and not abandoned, x x x to cause confusion, mistake and deception on the part of the purchasing public as to the origin of the goods."




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Emerald 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.

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; and in 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.

On appeal by Emerald, the Court of Appeals promulgated its decision affirming the decision of the Director of Patents in all respects.

ISSUE:

Whether or not Emerald’s trademark "STYLISTIC MR. LEE" is confusingly similar with the H.D. Lee’s trademarks "LEE or LEERIDERS, LEE-LEENS and LEE-SURES”.

RULING:

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. It does not mean such similitude as amounts to identity. Nor does it require that all the details be literally copied.

Applying the tests to the present controversy x x x, the Court considered the trademarks involved as a whole and rule that Emerlad’s "STYLISTIC MR. LEE" is not confusingly similar to private H.D. Lee’s "LEE" trademark.

The products involved are various kinds of jeans. These are not your ordinary household items. 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.

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. . . .

ORDINARY PURCHASER – is the "ordinarily intelligent buyer" considering the type of product involved.

He is one "accustomed to buy, and therefore to some extent familiar with, the goods in question.”

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.

"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.

The Court is 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)

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 (R.A. 166). Adoption is not 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.

H.V. Lee 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.

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

FACTS:

San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local beer market.

A decision was rendered by the trial Court, dismissing SMC's complaint because ABI "has not committed trademark infringement or unfair competition against" SMC. SMC appealed to the Court of Appeals and the latter reversed the trial court.

ISSUE:




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Whether ABI infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition against the latter.

RULING:

This definition of infringement implies that only registered trademarks, 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."

Infringement is determined by the "test of dominancy" rather than by differences or variations in the details of one trademark and of another. It is "similarity in the dominant features of the trademarks."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.

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, they have other dissimilarities in the trade dress or appearance of the competing products:

x x x x x x x x x

(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."

x x x x x x x x x

(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER PALE PILSEN bottle has no logo.

x x x x x x x x x

(7) Finally, there is a substantial price difference between BEER PALE PILSEN and SAN MIGUEL PALE PILSEN. 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").

The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of its registered trademark. x x x No one may appropriate generic or descriptive words. They belong to the public domain.

The true test is 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. 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.

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 provision, Sec. 29, further enumerates the more common ways of committing unfair competition.

The use of 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.

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.

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.

Petitioner 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, that competition is neither unfair nor fraudulent. Hence, we must deny SMC's prayer to suppress it.

FRUIT OF THE LOOM, INC. vs. COURT OF APPEALS and GENERAL GARMENTS CORPORATION

FACTS:

Petitioner, a corporation duly organized and existing under the laws of the State of Rhode Island, United States of America, is the registrant of a trademark, FRUIT OF THE LOOM.

Private respondent, a domestic corporation, is the registrant of a trademark FRUIT FOR EVE.




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Petitioner filed before the lower court, a complaint for infringement of trademark and unfair competition against the herein private respondent principally alleging that private respondent's trademark FRUIT FOR EVE is confusingly similar to its trademark FRUIT OF THE LOOM used also on women's panties and other textile products. Furthermore, that the color get-up and general appearance of private respondent's hang tag consisting of a big red apple is a colorable imitation to the hang tag of petitioner.

After trial, judgment was rendered by the lower court in favor of herein petitioner. On appeal, the Court of Appeals, rendered its questioned decision reversing the judgment of the lower court and dismissing herein petitioner's complaint.

ISSUE:

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.

RULING:

By mere pronouncing the two marks, it could hardly be said that it will provoke confusion, as to mistake one for the other. Standing by itself, FRUIT OF THE LOOM is wholly different from FRUIT FOR EVE.

The Court do not agree with petitioner that the dominant feature of both trademarks is the word FRUIT for even in the printing of the trademark in both hang tags, the word FRUIT is not at all made dominant over the other words.

As to the design and coloring scheme of the hang tags, the Court

believes that while there are similarities in the two marks like the

red apple at the center of each mark, the Court also fond

differences or dissimilarities which are glaring and striking to the

eye:

1. The shape of petitioner's hang tag is round with a base that looks like a paper rolled a few inches in both ends; while that of private respondent is plain rectangle without any base.

2. The designs differ. Petitioner's trademark is written in almost semi-circle while that of private respondent is written in straight line in bigger letters than petitioner's. Private respondent's tag has only an apple in its center but that of petitioner has also clusters of grapes that surround the apple in the center.

3. The colors of the hang tag are also very distinct from each other.

Petitioner's hang tag is fight brown while that of respondent is pink

with a white colored center piece.

The apples which are the only similarities in the hang tag are differently colored.

Petitioner's apple is colored dark red, while that of private

respondent is light red.

The Court is impressed more by the dissimilarities than by the similarities appearing therein. The Court holds 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.

AMIGO MANUFACTURING, INC. vs. CLUETT PEABODY CO., INC.

FACTS:

Cluett Peabody Co., Inc. (a New York corporation) of the filed a case against Amigo Manufacturing Inc. (a Philippine corporation) for cancellation of trademark is [respondent's] claim of exclusive ownership (as successor in interest of Great American Knitting Mills, Inc.) of the following trademark and devices, as used on men's socks:

a) GOLD TOE;

b) DEVICE, representation of a sock and magnifying glass on the toe of a sock;

c) DEVICE, consisting of a 'plurality of gold colored lines arranged in parallel relation within a triangular area of toe of the stocking and spread from each other by lines of contrasting color of the major part of the stocking; and

d) LINENIZED

On the other hand, [petitioner's] trademark and device 'GOLD TOP, Linenized for Extra Wear' has the dominant color 'white' at the center and a 'blackish brown' background with a magnified design of the sock's garter, and is labeled 'Amigo Manufacturing Inc., Mandaluyong, Metro Manila, Made in the Philippines'.

In the Patent Office, the decision under appeal, this was adversely against the respondent, Amigo Manufacturing, Inc. On appeal, the CA, agreed with the Director of Patents that there is hardly any variance in the appearance of the marks 'GOLD TOP' and 'GOLD TOE' since both show a representation of a man's foot wearing a sock, and the marks are printed in identical lettering.

ISSUE:

Whether or not the Court of Appeals erred in affirming the findings of the Director of Patents that petitioner's trademark [was] confusingly similar to respondent's trademarks.

Whether or not the Court of Appeals erred in applying the Paris Convention in holding that respondent had an exclusive right to the trademark 'gold toe' without taking into consideration the absence of actual use in the Philippines.

RULING:

The Petition has no merit. Petitioner contends that the claim of

respondent that it had been using the "Gold Toe" trademark at an

earlier date was not substantiated.

Based on the evidence presented, the Court concurs that respondent had actually used the trademark and the devices in question prior to petitioner's use of its own.




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The registration of the above marks in favor of respondent constitutes prima facie evidence, which petitioner failed to overturn satisfactorily, of respondent's ownership of those marks, the dates of appropriation and the validity of other pertinent facts stated therein (Section 20, R.A. 166).

Petitioner points out that the director of patents erred in its application of the idem sonans rule. It avers that since the words gold and toe are generic, respondent has no right to their exclusive use.

The Bureau of Patents, however, did not rely on the idem sonans test alone in arriving at its conclusion.

Applying the tests of idem sonans, the mark 'GOLD TOP & DEVICE' is confusingly similar with the mark 'GOLD TOE'. The difference in sound occurs only in the final letter at the end of the marks. For the same reason, hardly is there any variance in their appearance. 'GOLD TOE' and 'GOLD TOP' are printed in identical lettering. Both show [a] representation of a man's foot wearing a sock.

'GOLD TOP' blatantly incorporates petitioner's 'LINENIZED' which by itself is a registered mark." The Bureau considered the drawings and the labels, the appearance of the labels, the lettering, and the representation of a man's foot wearing a sock. Obviously, its conclusion is based on the totality of the similarities between the parties' trademarks and not on their sounds alone.

In the present case, a resort to either the Dominancy Test or the Holistic Test shows that colorable imitation exists between respondent's "Gold Toe" and petitioner's "Gold Top." A glance at petitioner's mark shows that it definitely has a lot of similarities and in fact looks like a combination of the trademark and devices that respondent has already registered; namely, "Gold Toe," therepresentation of a sock with a magnifying glass, the "Gold Toe" representation and "linenized."

Petitioner cannot therefore ignore the fact that, when compared, most of the features of its trademark are strikingly similar to those of respondent.

As to the third issue, respondent registered its trademarks under the principal register, which means that the requirement of prior use had already been fulfilled. Since the trademark was successfully registered, there exists a prima facie presumption of the correctness of the contents thereof, including the date of first use. Petitioner has failed to rebut this presumption.

SKECHERS, U.S.A., INC. vs. INTER PACIFIC INDUSTRIAL TRADING CORP., et. al.

FACTS:

Skechers filed with RTC of Manila an application for the issuance of search warrants against an outlet and warehouse operated by Inter Pacific for infringement of trademark under Section 155, in relation to Section 170 of Republic Act No. 8293.

Two search warrants were issued by the RTC and were served on the premises of respondents. As a result of the raid, more than 6,000 pairs of shoes bearing the "S" logo were seized, which was later on countered through a motion to quash by the respondent.

RTC issued an Order quashing the search warrants and directing the NBI to return the seized goods due to the glaring differences such that an ordinary prudent purchaser would not likely be misled or confused in purchasing the wrong article.

On appeal, the CA issued a Decision affirming the ruling of the RTC. Skechers filed a petition in the SC, and on November 30, 2006, the Court rendered a Decision dismissing the petition.

ISSUE:

Whether or not respondent (Inter Pacific) is guilty of trademark infringement.

RULING:

The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause confusion.

Applying the Dominancy Test to the case at bar, the use of the stylized "S" by respondent in its Strong rubber shoes infringes on the mark already registered by Skechers USA with the IPO.

The dominant feature of the trademark is the stylized "S" as it is precisely the stylized "S" which catches the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact that it used the same stylized "S", the same being the dominant feature of petitioner’s trademark, already constitutes infringement under the Dominancy Test.

Indubitably, the likelihood of confusion is present as purchasers will associate the respondent’s use of the stylized "S" as having been authorized by petitioner or that respondent’s product is connected with petitioner’s business.

Both the RTC and the CA applied the Holistic Test in ruling that respondent had not infringed petitioner’s trademark. While there may be dissimilarities between the appearances of the shoes, such dissimilarities do not outweigh the stark and blatant similarities in their general features.

The dissimilarities between the shoes are indubitable that respondent’s products will cause confusion and mistake in the eyes of the public. There is therefore colorable immitation.

The features and overall design are so similar and alike that confusion is highly likely. Even if not all the details are identical, as long as the general appearance of the two products, are such that any ordinary purchaser would be deceived, the imitator should be liable. Neither can the difference in price be a complete defense in trademark infringement.

VICTORIO P. DIAZ vs. PEOPLE OF THE PHILIPPINES and LEVI STRAUSS [PHILS.], INC.

FACTS:

The Department of Justice filed two informations in the RTC charging Diaz with violation of Section 155, in relation to Section 170, of Republic Act No. 8293 where the abovenamed accused, with criminal intent to defraud Levi’s Strauss (Phil.) Inc. (hereinafter referred to as LEVI’S), intentionally engaged in commerce by reproducing, counterfeiting, copying and colorably




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imitating Levi’s registered trademarks or dominant features, which likely caused confusion, mistake, and /or deceived the general consuming public, without the consent, permit or authority of the registered owner, LEVI’S.

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; x x x; that the jeans he produced were easily recognizable because the label "LS Jeans Tailoring"; and that the leather patch on his jeans had two buffaloes, not two horses.

RTC rendered its decision finding Diaz guilty as charged. 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.

ISSUE:

Whether the CA properly dismissed the appeal of Diaz due to the late filing of his appellant’s brief.

RULING:

The records reveal that Diaz’s counsel thrice sought an extension of the period to file the appellant’s brief. Notwithstanding the liberality of the CA, the counsel did not literally comply, filing the appellant’s brief 18 days beyond the third extension period. The failure to file the appellant’s brief on time rightly deserved the outright rejection of the appeal.

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.

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.

The holistic test is applicable here considering that the herein criminal cases also involved trademark infringement in relation to jeans products.

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.

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 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 Php 300 for a pair of made-toorder pants.

LS JEANS TAILORING" was a registered trademark of Diaz. He had registered his trademark prior to the filing of the present cases. 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.

►IDENTICAL OR RELATED GOODS AND CONFUSION OF BUSINESS:

MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. vs. E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC.

FACTS:

Gallo Winery is a foreign corporation not doing business in the Philippines but organized and existing under the laws of California, USA, where all its wineries are located, under different registered trademarks, including the GALLO and ERNEST & JULIO GALLO wine trademarks.

Mighty Corporation and La Campana and their sister company, Tobacco Industries of the Philippines (Tobacco Industries), are engaged in tobacco products for which they have been using the GALLO cigarette trademark.

Subsequently, La Campana authorized Mighty Corporation to manufacture and sell cigarettes bearing the GALLO trademark.

Respondents sued petitioners in the Makati RTC for trademark and tradename infringement and unfair competition, and charged petitioners with violating Article 6 of the Paris Convention for the Protection of Industrial Property and RA 166 (Trademark Law), specifically, Sections 22, 23, 20, 29, 30, and 37; that petitioners adopted the GALLO trademark to ride on GALLO and ERNEST & JULIO GALLO trademarks’ established reputation and popularity.

The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of preliminary injunction; that respondents’ wines and petitioners’ cigarettes were not related goods. On appeal, the CA affirmed the Makati RTC’s denial.

the Makati RTC, subsequently held petitioners liable for committing trademark infringement and unfair competition with




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respect to the GALLO trademark. On appeal, the CA affirmed the Makati RTC decision.

ISSUE:

[b] Whether or not GALLO cigarettes and GALLO wines were identical, similar or related goods;

[d] Whether or not petitioners were liable for trademark infringement and unfair competition, and damages.

RULING:

DISTINCTIONS BETWEEN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION:

TRADEMARK INFRINGEMENT UNFAIR COMPETITION

A person shall not be permitted to misrepresent his goods or his business as the goods or business of another.

More limited;

The unauthorized use of a trademark;

Fraudulent intent is unnecessary;

Prior registration of the trademark is a prerequisite

Broader and more inclusive.

The passing off of one's goods as those of another;

Fraudulent intent is essential;

Registration is not necessary.

TWO TYPES OF CONFUSION IN TRADEMARK INFRINGEMENT:

a. CONFUSION OF GOODS – 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.

b. CONFUSION OF BUSINESS – 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 summary, the Paris Convention protects well-known trademarks only, while the Trademark Law protects all trademarks, whether well-known or not, provided that they have been registered and are in actual commercial use in the Philippines.

Under both the Paris Convention and the Trademark Law, the protection of a registered trademark is limited only to goods identical or similar to those in respect of which such trademark is registered and only when there is likelihood of confusion.

Under both laws, the time element in commencing infringement cases is material in ascertaining the registrant’s express or implied consent to another’s use of its trademark or a colorable imitation thereof.

The actual commercial use of the GALLO wine trademark was subsequent to its registration in 1971 and to Tobacco Industries’ commercial use of the GALLO cigarette trademark in 1973,

respondents never enjoyed the exclusive right to use the GALLO wine trademark to the prejudice of Tobacco Industries and its successors-in-interest, herein petitioners, either under the Trademark Law or the Paris Convention.

GALLO trademark registration certificates in the Philippines and in other countries expressly state that they cover wines only, without any evidence or indication that registrant Gallo Winery expanded or intended to expand its business to cigarettes.

Whether a trademark causes confusion and is likely to deceive the public hinges on "colorable imitation."

The GALLO mark appears to be a fanciful and arbitrary mark for the cigarettes as it has no relation at all to the product but was chosen merely as a trademark due to the fondness for fighting cocks of the son of petitioners’ president. On the side of the GALLO cigarette packs are the words "MADE BY MIGHTY CORPORATION.”

On the other hand, GALLO Winery’s wine and brandy labels are diverse. Moreover, on the labels of Gallo Winery’s wines are printed the words "VINTED AND BOTTLED BY ERNEST & JULIO GALLO, MODESTO, CALIFORNIA.”

The many different features like color schemes, art works and other markings of both products drown out the similarity between them

Confusion of goods is evident where the litigants are actually in competition; but confusion of business may arise between non-competing interests as well.

In resolving whether goods are related, several factors come into play:

(a) the business (and its location) to which the goods belong

(b) the class of product to which the 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.

Petitioner’s use of the GALLO cigarette trademark is not likely to cause confusion or mistake, or to deceive the "ordinarily intelligent buyer" of either wines or cigarettes or both as to the identity of the goods, their source and origin, or identity of the business of




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petitioners and respondents. Obviously, wines and cigarettes are not identical or competing products. Neither do they belong to the same class of goods.

The petitioners never attempted to pass off their cigarettes as those of respondents. There is no evidence of bad faith or fraud imputable to petitioners; not liable for trademark infringement, unfair competition or damages.

CANON KABUSHIKI KAISHA vs. COURT OF APPEALS and NSR RUBBER CORPORATION

FACTS:

NSR Rubber Corporation (private respondent) filed an application for registration of the mark CANON for sandals in the BPTTT.

A Verified Notice of Opposition was filed by petitioner, duly organized and existing under the laws of Japan, alleging that it will be damaged by the registration of the trademark CANON in the name of private respondent.

Petitioner moved to declare private respondent in default for its failure to file its answer within the prescribed period. The BPTTT then declared private respondent in default and allowed petitioner to present its evidence ex-parte.

BPTTT issued its decision dismissing the opposition of petitioner and giving due course to private respondent's application for the registration of the trademark CANON. On appeal, the Court of Appeals that eventually affirmed the decision of BPTTT.

ISSUES:

a) Whether or not petitioner is entitled to exclusive use of the mark canon because it is its trademark and is used also for footwear.

b) Whether or not to allow private respondent to register canon for footwear is to prevent petitioner from using canon for various kinds of footwear, when in fact, petitioner has earlier used said mark for said goods.

c) Whether or not petitioner is also entitled to the right to exclusively use of canon to prevent confusion of business.

d) Whether or not petitioner is also entitled to the exclusive use of canon because it forms part of its corporate name, protected by the paris convention.

RULING:

Ordinarily, the ownership of a trademark or tradename is a property right that the owner is entitled to protect as mandated by the Trademark Law.

However, when a trademark is used by a party for a product in which the other party does not deal, the use of the same trademark on the latter's product CANNOT be validly objected to.

BPTTT correctly ruled that since the certificate of registration of petitioner for the trademark CANON covers class 2 (paints, chemical products, toner, dyestuff), private respondent can use the trademark CANON for its goods classified as class 25 (sandals).

Here, the products involved are so unrelated that the public will not be misled that there is the slightest nexus between petitioner and the goods of private respondent.

In cases of confusion of business or origin, the question that usually arises is whether the respective goods or services of the senior user and the junior user are so related as to likely cause confusion of business or origin, and thereby render the trademark or tradenames confusingly similar.

The products of petitioner and the responden flow through different trade channels. Thus, the evident disparity of the products of the parties in the case at bar renders unfounded the apprehension of petitioner that confusion of business or origin might occur, if private respondent is allowed to use the mark CANON.

FABERGE, INCORPORATED vs. THE INTERMEDIATE APPELLATE COURT and CO BENG KAY

FACTS:

The Director of Patents authorized herein private respondent Co

Beng Kay to register the trademark "BRUTE" for the briefs

manufactured and sold by his Corporation in the domestic market

vis-a-vis petitioner's opposition grounded on similarity of said

trademark with petitioner's own symbol "BRUT" which it previously

registered for after shave lotion, shaving cream, deodorant, talcum

powder, and toilet soap.

On appeal with the Second Special Cases Division of the CA, it reversed and directed against the permission granted by the Director of Patents and was later reconsidered by the CA in favor of Co Beng Kay.

ISSUE:

Whether private respondent (CO BENG KAY) may appropriate the trademark "BRUTE" for the briefs it manufactures and sells to the public albeit petitioner (FABERGE, INCORPORATED) had previously registered the symbol "BRUT" and "BRUT 33" for its own line of times.

RULING:

The controlling norm is the comparison of the trademarks in their entirely (HOLISTIC TEST) as they appear in their labels to determine whether there is confusing similarity.

Under the Civil Code:

“Art. 520. A trade-mark or trade-name duly registered in the proper government bureau or office is owned by and pertains to the person, corporation, or firm registering the same, subject to the provisions of special laws.

Art. 521. The goodwill of a business is property, and may be transferred together with the right to use the name under which the business is conducted.

Art. 522. Trade-marks and trade-names are governed by special laws.”




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Under the Intellectual Property Law:

“Sec. 11. Issuance and contents of the certificate. — contain the x x x, the particular goods or services for which it is registered, x x x.

Sec. 20. Certificate of registration prima facie evidence of validity. — A certificate of registration of a mark or trade-name shall be prima facie evidence x x x of the registrant's exclusive right to use the same in connection with the goods, business or services specified in the certificate x x x.”

Thus, Co Beng Kay may be permitted to register the trademark "BRUTE" for briefs produced by it notwithstanding petitioner's vehement protestations of unfair dealings in marketing its own set of items which are limited to: after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap. In as much as petitioner has not ventured in the production of briefs, an item which is not listed in its certificate of registration, petitioner can not and should not be allowed to feign that private respondent had invaded petitioner's exclusive domain.

Withal, judging from the physical attributes of petitioner's and private respondent's products, there can be no doubt that confusion or the likelihood of deception to the average purchaser is unlikely since the goods are non-competing and unrelated.

The glaring discrepancies between the two products had been amply portrayed to such an extent that indeed, "a purchaser who is out in the market for the purpose of buying respondent's BRUTE brief would definitely be not mistaken or misled into buying BRUT after shave lotion or deodorant" x x x.

PHILIPPINE REFINING CO., INC. vs. NG SAM and THE DIRECTOR OF PATENTS

FACTS:

The trademark "CAMIA" was first used ill the Philippines by petitioner on its products in 1922. In 1949, petitioner caused the registration of said trademark with the Philippine Patent Office, covering covers vegetable and animal fats, particularly lard, butter and cooking oil, all classified under Class 47.

On November 25, 1960, respondent Ng Sam, filed an application with the Philippine Patent office for registration of the Identical trademark "CAMIA" for his product, ham, which likewise falls under Class 47. Alleged date of first use of the trademark by respondent was on February 10, 1959.

After due publication of the application, petitioner filed an opposition. Director of patents rendered a decision allowing registration of the trademark "CAMIA" in favor of Ng Sam.

ISSUE:

Whether or not the product of respondent, Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark CAMIA" on said goods would likely result in confusion as to their source or origin.

RULING:

It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not identify petitioner as the manufacturer or producer of the goods upon which said mark is

used. That if a mark is so commonplace that it cannot be readily

distinguished from others, then it is apparent that it cannot identify a particular business; and he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived.

As observed by the Bureau of Patents, the particular goods of the parties are so unrelated that consumers would not in any probability mistake one as the source or origin of the product of the other.

In addition, the goods of petitioners are basically derived from vegetable oil and animal fats, while the product of respondent is processed from pig's legs. The Court holds further that, the businesss of the parties are non-competitive.

HICKOK MANUFACTURING CO., INC. vs. COURT OF APPEALS and SANTOS LIM BUN LIONG

FACTS:

The patent director's decision was to dismiss the private respondent's registration of the trademark of HICKOK for its Marikina shoes.

The Court of Appeals reversed the patent director's decision and instead allowed the registration of the trademark HICKOK in favor of the private respondent.

ISSUE:

Whether or not Santos Lim Bun Liong’s HICKOK Marikina Shoes would likely result into confusion against HICKOK MANUFACTURING CO., INC’s handkerchiefs, briefs, belts and wallets.

RULING:

An examination of the trademark of petitioner-appellee and that of registrant-appellant convinces us that there is a difference in the design and the coloring of, as well as in the words on the ribbons, the two trademarks.

While the law does not require that the competing trademarks be Identical, the two marks must be considered in their entirety, as they appear in the respective labels, in relation to the goods to which they are attached. There must be not only resemblance between the trademark of the plaintiff and that of the defendant, but also similarity of the goods to which the two trademarks are respectively attached.

Since in this case the trademark of petitioner-appellee is used in the sale of leather wallets, key cases, money folds made of leather, belts, men's briefs, neckties, handkerchiefs and men's socks, and the trademark of registrant-appellant is used in the sale of shoes, which have different channels of trade, the Director of Patents, ought to have reached a different conclusion.




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"Emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics."

And that "the mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on unrelated articles of a different kind."

ESSO STANDARD EASTERN, INC. vs. COURT OF APPEALS and UNITED CIGARETTE CORPORATION

FACTS:

Petitioner Esso Standard Eastern, Inc. is engaged in the sale of petroleum products identified with its trademark ESSO. Private respondent in turn is engaged in the manufacture and sale of cigarettes, and acquired the use of the trademark ESSO on its cigarettes, for which a permit had been duly granted by the Bureau of Internal Revenue.

Barely had respondent as such successor started manufacturing cigarettes with the trademark ESSO, petitioner commenced a case for trademark infringement in the Court of First Instance of Manila. Petitioner asserted that the continued use by private respondent of the same trademark ESSO on its cigarettes was being carried out for the purpose of deceiving the public as to its quality and origin to the detriment and disadvantage of its own products.

The trial court decided in favor of petitioner and ruled that respondent was guilty of infringement of trademark. On appeal with the CA, the latter found that there was no trademark infringement and dismissed the complaint.

ISSUE:

Whether the tradename ESSO petroleum products sold by the petitioner would similarly result into confusion of goods with the ESSO products of the private respondent.

RULING:

The Court finds no ground for granting the petition.

It is undisputed that the goods on which petitioner uses the trademark ESSO, petroleum products, and the product of respondent, cigarettes, are non-competing.

In the situation before us, the goods are obviously different from each other with "absolutely no iota of similitude" as stressed in respondent court's judgment. They are so foreign to each other as to make it unlikely that purchasers would think that petitioner is the manufacturer of respondent's goods.

The public knows too well that petitioner deals solely with petroleum products that there is no possibility that cigarettes with ESSO brand will be associated with whatever good name petitioner's ESSO trademark may have generated.

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.

ACCORDINGLY, the petition is dismissed and the decision of respondent Court of Appeals is hereby affirmed.

►INFRINGEMENT:

SOCIETE DES PRODUITS NESTLE, S.A. vs.MARTIN T. DY, JR.,

FACTS:

Petitioner is a foreign corporation organized under the laws of Switzerland. It manufactures food products and beverages and is the owner of the "NAN" trademark for its line of infant powdered milk products, consisting of PRE-NAN, NANH.A., NAN-1, and NAN-2. NAN is classified under Class 6 — "diatetic preparations for infant feeding."

Dy, Jr. owns 5M Enterprises. He imports Sunny Boy powdered milk from Australia and repacks the powdered milk into three sizes of plastic packs bearing the name "NANNY." It is also classified under Class 6 — "full cream milk for adults in [sic] all ages."

Nestle filed before the RTC a complaint against Dy, Jr. for infringement. Dy, Jr. filed a motion to dismiss alleging that the complaint did not state a cause of action.

The trial court found Dy, Jr. liable for infringement.. On appeal, the Court of Appeals set aside the trial court’s order and found Dy, Jr. not liable for infringement.

ISSUE:

Whether Dy, Jr. is liable for infringement.

RULING:

The petition is meritorious.

The elements of infringement under R.A. No. 8293 are as follows:

a. The trademark being infringed is registered in the Intellectual Property Office; however, in infringement of trade name, the same need not be registered;

b. The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;

c. The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name 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;

d. The use or application of the infringing mark or trade name 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 idenity of such business; and

e. It is without the consent of the trademark or trade name owner or the assignee thereof.

Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled: x x x It has been consistently held that the question of




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infringement of a trademark is to be determined by the test of dominancy.

Moreover, the totality or holistic test is contrary to the elementary postulate of the law on trademarks and unfair competition, for such 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.

Applying the dominancy test in the present case, the Court finds that "NANNY" is confusingly similar to "NAN." "NAN" is the prevalent feature of Nestle’s line of infant powdered milk products. It is written in bold letters and used in all products. The line consists of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. Clearly, "NANNY" contains the prevalent feature "NAN." The first three letters of "NANNY" are exactly the same as the letters of "NAN." When "NAN" and "NANNY" are pronounced, the aural effect is confusingly similar.

NANNY and NAN have the same classification, descriptive properties and physical attributes. Both are classified under Class 6, both are milk products, and both are in powder form. Also, NANNY and NAN are displayed in the same section of stores — the milk section.

The Court agrees with the lower courts that there are differences between NAN and NANNY. However, as the registered owner of the "NN" mark, Nestle should be free to 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.

Certificates of Registration. — shall be a prima facie evidence of validity of the registration, 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.

PHILIP MORRIS, INC., vs. FORTUNE TOBACCO CORPORATION

FACTS:

Philip Morris, Inc., a corporation organized under the laws of the State of Virginia, USA, is, per Certificate of Registration No. 18723 issued, the registered owner of the trademark "MARK VII" for cigarettes. Benson & Hedges (Canada) Inc., a subsidiary, is the registered owner of the trademark "MARK TEN" for cigarettes as evidenced by PPO Certificate of Registration. Another subsidiary Fabriques de Tabac Reunies, S.A., is the assignee of the trademark "LARK". Fortune Tobacco Corporation, a company organized in the Philippines, manufactures and sells cigarettes using the trademark "MARK."

Complaint for Infringement of Trademark and Damages against respondent Fortune Tobacco Corporation was filed by petitioners, in the Regional Trial Court, invoking the provisions of the Paris Convention for the Protection of Industrial and Intellectual

Property. Respondent on the other hand averred that “MARK” is a common word and cannot particularly identify a product to that of petitioners.

Trial court rendered its Decision finding that the Fortune Tobacco did not commit trademark infringement against the petitioners. Petitioners went on appeal to the CA. That while ruling for petitioners on the matter of their legal capacity to sue in this country for trademark infringement, nevertheless affirmed the trial court’s decision on the underlying issue of respondent’s liability for infringement.

ISSUE:

(1) Whether or not petitioners, as Philippine registrants of trademarks, are entitled to enforce trademark rights in this country; and

(2) Whether or not respondent has committed trademark infringement against petitioners by its use of the mark "MARK" for its cigarettes, hence liable for damages.

RULING:

The petition is bereft [deprived of] of merit.

For, petitioners are still foreign corporations. As such, they ought, as a condition to availment of the rights and privileges vis-à-vis their trademarks in this country, to show proof that, on top of Philippine registration, their country grants substantially similar rights and privileges to Filipino citizens pursuant to Section 21-A, and 20 of R.A. No. 166.

The certificate of registration merely constitutes prima facie evidence that the registrant is the owner of the registered mark. Evidence of non-usage of the mark rebuts the presumption of trademark ownership, as what happened here when petitioners no less admitted not doing business in this country.

The registration of a trademark unaccompanied by actual use thereof in the country accords the registrant only the standing to sue for infringement in Philippine courts. Entitlement to protection of such trademark in the country is entirely a different matter.

As already found herein, while petitioners have registered the trademarks "MARK VII," "MARK TEN" and "LARK" for cigarettes in the Philippines, prior actual commercial use thereof had not been proven. In fact, petitioners’ judicial admission of not doing business in this country effectively belies any pretension to the contrary.

As to the issue of infringement, since the word "MARK," be it alone or in combination with the word "TEN" and the Roman numeral "VII," does not point to the origin or ownership of the cigarettes to which they apply, the local buying public could not possibly be confused or deceived that respondent’s "MARK" is the product of petitioners and/or originated from the U.S.A., Canada or Switzerland.

For lack of convincing proof on the part of the petitioners of actual use of their registered trademarks prior to respondent’s use of its mark and for petitioners’ failure to demonstrate confusing similarity between said trademarks, the dismissal of their basic




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complaint for infringement and the concomitant plea for damages must be affirmed.

DEL MONTE CORPORATION vs. COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING INDUSTRIES

FACTS:

Del Monte Corporation is a foreign company not engaged in business in the Philippines. Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under the laws of the Philippines. Del Monte granted Philpack the right to manufacture, distribute and sell in the Philippines under the Del Monte trademark and logo, and authorized Philpack to register the Del Monte catsup bottle configuration, for which it was granted the Certificate.

Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by the Bureau of Domestic Trade to engage in the manufacture, packing, distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup contained in various kinds of bottles, including the Del Monte bottle, which the private respondent bought from the junk shops for recycling.

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.

Regional Trial Court dismissed the complaint. It held that there were substantial differences between the logos or trademarks of the parties. On appeal, decision was affirmed in toto by the respondent court.

ISSUE:

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.

RULING:

TRADEMARK INFRINGEMENT UNFAIR COMPETITION

unauthorized use of a trademark

passing off of one's goods as those of another.

fraudulent intent unnecessary fraudulent intent is essential.

prior registration of the trademark is a prerequisite to the action

registration is not necessary.

While the Court does recognize these distinctions, it does not agree with the conclusion that there was no infringement or unfair competition. 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.

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.

As to the second issue, the Court finds 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.

PRINCIPAL REGISTER SUPPLEMENTAL REGISTER

Gives rise to a presumption of the validity of the registration, the registrant's ownership of the mark and his right to the exclusive use thereof.

There is no such presumption in the registration

Limited to the actual owner of the trademark and pro-ceedings therein on the issue of ownership which may be contested through opposition or interference proceedings or, after registration, in a petition for cancellation.

Not subject to opposition although it may be cancelled after the issuance.

A constructive notice of the registrant's claim of owner-ship.

Merely proof of actual use of the trademark and notice that the registrant has used or appropriated it.

Basis for an action for infringement.

Not a basis for an action for infringement.

Publication of the application is necessary.

Publication of the application is not necessary

Though 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 its 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.

As Sunshine's label is an infringement of the Del Monte's trademark, calls for the cancellation of the private respondent's registration and withdrawal of all its products bearing the questioned label from the market. With regard to the use of Del Monte's bottle, the same constitutes unfair competition; hence, the respondent should be permanently enjoined from the use of such bottles.

CONVERSE RUBBER CORPORATION vs. UNIVERSAL RUBBER PRODUCTS, INC.

FACTS:

Respondent Universal Rubber Products, Inc. filed an application with the Philippine Patent office for registration of the trademark




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"UNIVERSAL CONVERSE AND DEVICE" used on rubber shoes and rubber slippers.

Petitioner Converse Rubber Corporation filed its opposition to the application for registration based on the following:

a. Trademark sought to be registered is confusingly similar to the word "CONVERSE" which is part of petitioner's corporate name "CONVERSE RUBBER CORPORATION" as to likely deceive purchasers of products x x x; and,

b. The registration of respondent's trademark will cause great and irreparable injury to the business reputation and goodwill of petitioner in the Philippines and would cause damage to said petitioner.

The Director of Patents dismissed the opposition of the petitioner and gave due course to respondent's application.

ISSUE:

Whether or not the respondent's partial appropriation of etitioner's corporate name is of such character that it is calculated to deceive or confuse the public to the injury of the petitioner to which the name belongs.

RULING:

From a cursory appreciation of the petitioner's corporate name "CONVERSE RUBBER CORPORATION,' it is evident that the word "CONVERSE" is the dominant word which Identifies petitioner from other corporations engaged in similar business.

An admission of knowledge, that petitioner since 1946, necessarily betrays its knowledge of the reputation and business of petitioner even before it applied for registration of the trademark in question.

A corporation is entitled to the cancellation of a mark that is confusingly similar to its corporate name. Appropriation by another of the dominant part of a corporate name is an infringement.

The testimony of petitioner's witness, who is a legitimate trader as well as the invoices evidencing sales of petitioner's products in the Philippines, give credence to petitioner's claim that it has earned a business reputation and goodwill in this country. The word "CONVERSE" has grown to be Identified with petitioner's products, and in this sense, has acquired a second meaning within the context of trademark and trade name laws.

Also, the confusing similarity between its trademark "UNIVERSAL CONVERSE AND DEVICE" and petitioner's corporate name and/or its trademarks "CHUCK TAYLOR" and "ALL STAR DEVICE" which could confuse the purchasing public to the prejudice of petitioner.

The mandate of the Convention of the Union of Paris for the Protection of Industrial Property finds implementation in Sec. 37 of RA No. 166, otherwise known as the Trademark Law:

Sec. 37. Rights of Foreign Registrants – Persons who are nationals of, domiciled or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or trade names on the repression of unfair competition to which the

Philippines may be a party, shall be entitled to the benefits and subject to the provisions of this Act x x x.

Trade names of persons described in the first paragraph of this section shall be protected without the obligation of filing or registration whether or not they form parts of marks.

CONVERSE RUBBER CORPORATION and EDWARDSON MANUFACTURING CORPORATION vs. JACINTO RUBBER &

PLASTICS CO., INC., and ACE RUBBER & PLASTICS CORPORATION

FACTS:

Plaintiff Converse Rubber Corporation, manufacturer and owner of trade name "Converse Chuck Taylor All Star"; owner of trademarks and patent, registered with United States Patent Office, covering the words "All Star". The trademark "Chuck Taylor" was registered by plaintiff Converse with the Philippines Patent Office.

Defendant Jacinto Rubber & Plastics Company, Inc., a local corporation, likewise, manufactures and sells canvas rubber shoes. Its trademark "Custombuilt Jayson's" was registered by the Philippines Patent Office.

Converse and Jacinto entered into licensing agreement whereby Jacinto would be the exclusive licensee of Converse in the Philippines for the manufacture and sale of "Chuck Taylor" shoes but with the right to continue manufacturing and selling its own products.

Jacinto Rubber then proposed that the licensing agreement be made in favor of its affiliates, defendant Ace Rubber. However, the licensing agreement between Jacinto Rubber and Ace Rubber did not materialize, because Hermogenes Jacinto refused to sign the guarantee. Converse and Edwardson, on the other hand executed licensing agreement, making plaintiff Edwardson the exclusive Philippine licensee for the manufacture and sale of "Chuck Taylor."

Thereafter, plaintiffs sent a written demand to defendants to stop manufacturing and selling "Custombuilt" shoes of identical appearance as "Chuck Taylor". Defendants did not reply to plaintiffs' letter.

ISSUE:

Whether the court a quo erred in arriving at the conclusion that the defendants are guilty of unfair competition when defendant Jacinto Rubber & Plastics Co., Inc., manufactured and sold rubber-soled canvass shoes under its registered trade mark "Custombuilt".

RULING:

The Court does not hesitate in holding that the plaintiffs’ complaint of unfair competition is amply justified.

The Court fully agrees with the trial court that "the respective designs, shapes, the colors of the ankle patches, the bands, the toe patch and the soles of the two products are exactly the same... (such that ) at a distance of a few meters, it is impossible to distinguish "Custombuilt" from "Chuck Taylor".

In plain language Section 29 of R.A. 166 declares that a "person who has Identified in the public the goods he manufactures or




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deals in, his business or services from those of others, whether or not a 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."

Unfair Competition – "any acts" calculated to result in the passing off of other goods "for those of the one having established such goodwill."

Absent is a requirement that the goodwill sought to be protected in an action for unfair competition must have been established in an actual competitive situation. Nor does the law require that the deception or other means contrary to good faith or any acts calculated to pass off other goods for those of one who has established a goodwill must have been committed in an actual competitive situation.

Plaintiffs-appellees have a established goodwill. This goodwill, the trial court found, defendants-appellants have pirated in clear bad faith to their unjust enrichment.

►REMEDIES:

KABUSHI KAISHA ISETAN, (ISETAN CO.,LTD.) vs. INTERMEDIATE APPELLATE COURT, DIRECTOR OF PATENTS, and ISETANN

DEPARTMENT STORE, INC.

FACTS:

Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under the laws of Japan, and the owner of the trademark "Isetan" and the "Young Leaves Design". Private respondent, Isetann Department Store, on the other hand, is a domestic corporation organized and existing under the laws of the Philippines.

The private respondent registered "Isetann Department Store, Inc." and Isetann and Flower Design in the Philippine Patent Office as well as with the Bureau of Domestic Trade. The petitioner filed with the Phil. Patent Office two petitions for the cancellation of Certificates of Supplemental Registration.

The Director of Patents ruled in favour of the private respondent. The petitioner appealed to the Intermediate Appellate Court and the latter, dismissed the appeal on the ground that it was filed out of time.

ISSUE:

Whether or not private respondent's act of registering a trademark and adopting a corporate name similar to that of the petitioner cashed the goodwill and popularity of the petitioner's reputation, thereby causing great and irreparable injury and damage to it.

RULING:

There is no dispute and the petitioner does not question the fact that the appeal was filed out of time. Not only was the appeal filed late in the Court of Appeals, the petition for review was also filed late with the SC. In common parlance, the petitioner's case is "twice dead" and may no longer be reviewed. The Court of Appeals correctly rejected the appeal on the sole ground of late filing.

The appeal shall be governed by the provisions of Republic Act No. 5434, which provides in its Section 2;

Sec. 2. Appeals to Court of Appeals. - Appeals to the Court of Appeals shall be filed x x x then within ten (10) days from notice or publication, when required by law, of the resolution denying the motion for reconsideration. No more than one motion for reconsideration shall be allowed any party. x x x x x x x x x.

The petitioner had only up to August 1, 1986 (from July 17, 1986) to file a petition for review with the SC. The present petition was posted on August 2, 1986. There is no question that it was, again, filed late because the petitioner filed an ex-parte motion for admission explaining the delay.

The decision of the Patent Office has long become final and executory. So has the Court of Appeal decision.

The records also show that the petitioner has never conducted any business in the Philippines. It has never promoted its tradename or trademark in the Philippines. It has absolutely no business goodwill in the Philippines. It is unknown to Filipinos except the very few who may have noticed it while travelling abroad. It has never paid a single centavo of tax to the Philippine government. Under the law, it has no right to the remedy it seeks.

The respondent registered its trademark in 1979. It has continuously used that name in commerce. It has established a goodwill through extensive advertising. There is no showing that the Japanese firm's registration in Japan or Hongkong has any influence whatsoever on the Filipino buying public.

SEHWANI, INCORPORATED and/or BENITA’S FRITES, INC.,vs. IN-N-OUT BURGER, INC.,

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, applied with the IPO for the registration of its trademark “IN-N-OUT Burger & Arrow Design” and servicemark “IN-N-OUT.”

It discovered that petitioner Sehwani, Inc. had obtained Trademark Registration for the mark “IN N OUT” (THE INSIDE OF THE LETTER “O” FORMED LIKE A STAR), and filed before the BLA-IPO, an administrative complaint against petitioners for violation of intellectual property rights.

The Bureau Director rendered a decision 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 competition.

Aggrieved, petitioners filed a petition before the Court of Appeals which was dismissed for lack of merit. The appeal being filed out of time, the Decision and the Orders of Bureau Director Beltran-Abelardo are now final and executory.

Meanwhile, respondent filed a Manifestation with the Court of Appeals that on December 23, 2005, Director General Adrian S.




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Cristobal, Jr. had rendered a Decision in Appeal finding petitioners guilty of unfair competition.

ISSUE:

Whether or not the Court of Appeals erred when it dismissed the petition on mere technicality which resulted in a miscarriage of justice and deprivation of intellectual property rights.

RULING:

The petition has no merit.

The Court has invariably ruled that perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional; failure to do so renders the questioned decision/final order final and executory, and deprives the appellate court of jurisdiction to alter the judgment or final order, much less to entertain the appeal. True, this rule had been relaxed but only in highly meritorious cases to prevent a grave injustice from being done. Such does not obtain in this case.

The Respondents-Appellants received a copy of the Resolution on 29 October 2004. Hence the deadline for the filing of the APPEAL MEMORANDUM was on 13 November 2004. Since said date fell on a Saturday, the appeal should have been filed on the ensuing working day, that is, 15 November 2004.

The question of whether or not respondent’s trademarks are considered “well-known” is factual in nature, involving as it does the appreciation of evidence adduced before the BLA-IPO.

In the aforementioned case, we are inclined to favor the declaration of the mark “IN-N-OUT” as an internationally well-known mark on the basis of “registrations in various countries around the world and its comprehensive advertisements therein.”

The quality image and reputation acquired by the complainant’s IN-N-OUT mark is unmistakable. With this, complainant’s mark have met other criteria set in the Implementing Rules of Republic Act 8293, namely, ‘a’ and ‘d’ of Rule 102, to wit:

“Rule 102:

(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 publicity and the presentation at fairs or exhibitions, of the goods and/or services to which the mark applies;

x x x x

(d) the quality image or reputation acquired by the mark”

The fact that respondent’s marks are neither registered nor used in the Philippines is of no moment. The scope of protection initially afforded by Article 6 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 well-known mark should be protected in a country even if the mark is neither registered nor used in that country.

MELBAROSE R. SASOT and ALLANDALE R. SASOT vs. PEOPLE OF THE PHILIPPINES

FACTS:

National Bureau of Investigation (NBI) conducted an investigation pursuant to a complaint by the NBA Properties, Inc., against petitioners for possible violation of Article 189 of the Revised Penal Code on unfair competition. It was discovered that petitioners are engaged in the manufacture, printing, sale, and distribution of counterfeit "NBA" garment products. Subsequently, the Prosecution Attorney recommended the filing of an Information against petitioners.

In a Special Power of Attorney, Rick Welts, as President of NBA Properties, Inc., constituted a law firm, as the company’s attorney-in-fact, and to act for and on behalf of the company, in the filing of criminal, civil and administrative complaints, among others.

Petitioners argue that the fiscal should have dismissed Welts’s (President of NBA Properties, Inc.) complaint because under the rules, the complaint must be sworn to before the prosecutor and the copy on record appears to be only a fax transmittal and that complainant is a foreign corporation not doing business in the Philippines, and cannot be protected by Philippine patent laws since it is not a registered patentee.

The trial court sustained the prosecution’s arguments and denied petitioners’ motion to quash. Petitioners filed a special civil action for certiorari with the Court of Appeals (CA) which was dismissed.

ISSUES:

1. Whether a foreign corporation not engaged and license (sic) to do business in the Philippines may maintain a cause of action for unfair competition.

2. Whether the respondent regional trial court correctly assumed jurisdiction over the case and the persons of the Accused.

RULING:

The petition must be denied.

In this case, Welts’s Complaint-Affidavit contains an acknowledgement by Notary Public Nicole Brown of the State of New York that the same has been subscribed and sworn to before her, duly authenticated by the Philippine Consulate. Moreover, records show that there are other supporting documents from which the prosecutor based his recommendation.

Consequently, if the information is valid on its face, and there is no showing of manifest error, grave abuse of discretion and prejudice on the part of public prosecutor, as in the present case, the trial court should respect such determination.

More importantly, the crime of Unfair Competition punishable under Article 189 of the Revised Penal Code is a public crime. It is essentially an act against the State and it is the latter which principally stands as the injured party. The complainant’s capacity to sue in such case becomes immaterial therefore.




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If prosecution follows after the completion of the preliminary investigation being conducted by the Special Prosecutor the information shall be in the name of the People of the Philippines and no longer the petitioner which is only an aggrieved party since a criminal offense is essentially an act against the State. It is the state which is principally the injured party although there is a private right violated.

In upholding the right of the petitioner to maintain the present suit before our courts for unfair competition or infringement of trademarks of a foreign corporation, we are moreover recognizing our duties and the rights of foreign states under the Paris Convention for the Protection of Industrial Property to which the Philippines and France are parties.

PUMA SPORTSCHUHFABRIKEN RUDOLF DASSLER, K.G vs. IAC and MIL-ORO MANUFACTURING CORPORATION,

FACTS:

Petitioner, a foreign corporation, and the manufacturer and producer of "PUMA PRODUCTS," filed a complaint for infringement of patent or trademark with a prayer for the issuance of a writ of preliminary injunction against the private respondent.

Prior to the filing of the said civil suit, three cases were pending before the Philippine Patent Office.

The trial court issued a temporary restraining order. Private respondent filed a motion to dismiss on the grounds that the petitioners' complaint states no cause of action, petitioner has no legal personality to sue, and litis pendentia.

The trial court denied the motion to dismiss and at the same time granted the petitioner's application for a writ of injunction. On appeal, the Court of Appeals reversed the order of the trial court and ordered the respondent judge to dismiss the civil case filed by the petitioner. With regard to the petitioner's legal capacity to sue, the Court of Appeals likewise held that it had no such capacity because it failed to allege reciprocity in its complaint.

ISSUE:

Whether or not the Court of appeals erred in holding that: (1) petitioner had no legal capacity to sue; (2) the doctrine of lis pendens is applicable as a ground for dismissing the case and (3) the writ of injunction was improperly issued.

RULING:

The Court agrees.

Thus, in Western Equipment and Supply Co. v. Reyes (51 Phil. 115) , this Court held that a foreign corporation which has never done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its corporate and trade name, has a legal right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign corporation, when it appears that

they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign corporation.

For lis pendens to be a valid ground for the dismissal of a case, the other case pending between the same parties and having the same cause must be a court action.

Under section 1(d), Rule 16 of the Rules of Court, one of the grounds for the dismissal of an action is that "there is another action pending between the same parties for the same cause." Section 1 of Rule 2, which defines the word action as an ordinary suit in a court of justice x x x.

Thus, the Court of Appeals likewise erred in holding that the requisites of lis pendens were present so as to justify the dismissal of the case below.

As regards the propriety of the issuance of the writ of preliminary injunuction, the records show that herein private respondent was given the opportunity to present its counter-evidence against the issuance thereof but it intentionally refused to do so to be consistent with its theory that the civil case should be dismissed in the first place.

Considering the fact that "PUMA" is an internationally known brand name, it is pertinent to reiterate the directive to lower courts, which equally applies to administrative agencies: The greater victim is not so much the manufacturer whose product is being faked but the Filipino consuming public and in the case of exportations, our image abroad.

Practices of business firms (among other acts, the dumping of substandard, imitated, hazardous, and cheap goods, the infringement of internationally known trade names and trademarks, and the unfair trade) have reached such proportions as to constitute economic sabotage.

TANDUAY DISTILLERS, INC vs. GINEBRA SAN MIGUEL, INC.,

FACTS:

Tanduay has been engaged in the liquor business since 1854. In 2002, Tanduay developed a new gin product distinguished by its sweet smell, smooth taste, and affordable price. The brand name eventually chosen was “Ginebra Kapitan”.

After filing the trademark application for “Ginebra Kapitan” with the IPO and after securing the approval of the permit to manufacture and sell BIR, Tanduay began selling “Ginebra Kapitan” in northern and southern Luzon areas in May 2003. In June 2003, “Ginebra Kapitan” was also launched in Metro Manila.

San Miguel filed a complaint for trademark infringement, unfair competition and damages. The trial court issued a TRO prohibiting Tanduay from manufacturing, selling and advertising “Ginebra Kapitan.”

Tanduay filed a petition for certiorari with the CA, and after the defendants were granted a writ of preliminary injuction, the petitioner filed a supplemental petition in the CA assailing the




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injunction order. The CA issued a TRO enjoining the trial court from implementing its injunction order and from further proceeding with the case.

ISSUE:

Whether San Miguel is entitled to the writ of preliminary injunction granted by the trial court as affirmed by the CA.

RULING:

The Court holds that the CA committed a reversible error.

A preliminary injunction is a provisional remedy for the protection of substantive rights and interests. It is not a cause of action in itself but merely an adjunct to the main case.

Before an injunctive writ is issued, it is essential that the following requisites are present:

(1) the existence of a right to be protected and

(2) the acts against which the injunction is directed are violative of the right.

In this case, a cloud of doubt exists over San Miguel’s exclusive right relating to the word “Ginebra.” San Miguel’s claim to the exclusive use of the word “Ginebra” is clearly still in dispute because of Tanduay’s claim that it has, as others have, also registered the word “Ginebra” for its gin products.

We find that San Miguel’s right to injunctive relief has not been clearly and unmistakably demonstrated. The right to the exclusive use of the word “Ginebra” has yet to be determined in the main case. The trial court’s grant of the writ of preliminary injunction in favor of San Miguel, despite the lack of a clear and unmistakable right on its part, constitutes grave abuse of discretion amounting to lack of jurisdiction.

Based on the affidavits and market survey report submitted during the injunction hearings, San Miguel has failed to prove the probability of irreparable injury which it will stand to suffer if the sale of “Ginebra Kapitan” is not enjoined. San Miguel has not presented proof of damages incapable of pecuniary estimation. Without the submission of proof that the damage is irreparable and incapable of pecuniary estimation, San Miguel’s claim cannot be the basis for a valid writ of preliminary injunction.

LEVI STRAUSS & CO., & LEVI STRAUSS (PHILS.) INC. vs. CLINTON APPARELLE, INC.,

FACTS:

LS & Co., a foreign corporation and engaged in the apparel business, is the owner by prior adoption and use since 1986 of the internationally famous “Dockers and Design” trademark evidenced by its valid and existing registrations in various member countries of the Paris Convention. In the Philippines, it has a Certificate of Registration No. 46619 in the Principal Register for use of said trademark.

Based on their information and belief, they added, Clinton Apparelle manufactured and continues to manufacture such “Paddocks” jeans and other apparel.

On the date of the reset hearing, either Clinton Apparelle or Olympian Garments appeared. Clinton Apparelle claimed that it was not notified of such hearing. Only Olympian Garments allegedly had been issued with summons.

The trial court issued another Order granting the writ of preliminary injunction. The trial court denied Clinton Apparelle’s Motion to Dismiss and Motion for Reconsideration in an Omnibus Order.

The Court of Appeals held that the issuance of the writ of preliminary injunction (in favour of the petitioners herein) is questionable. In its opinion, herein petitioners failed to sufficiently establish its material and substantial right to have the writ issued.

ISSUE:

Whether the issuance of the writ of preliminary injunction by the trial court was proper and whether the Court of Appeals erred in setting aside the orders of the trial court.

RULING:

There is no merit in the petition. The Court of Appeals did not err in reviewing proof adduced by petitioners to support its application for the issuance of the writ.

There are generally two kinds of preliminary injunction: (1) a prohibitory injunction which commands a party to refrain

from doing a particular act; and

(2) a mandatory injunction which commands the performance of some positive act to correct a wrong in the past.

While the matter of the issuance of a writ of preliminary injunction is addressed to the sound discretion of the trial court, this discretion must be exercised based upon the grounds and in the manner provided by law. The exercise of discretion by the trial court in injunctive matters is generally not interfered with save in cases of manifest abuse. And to determine whether there was grave abuse of discretion, a scrutiny must be made of the bases, if any, considered by the trial court in granting injunctive relief. Be it stressed that injunction is the strong arm of equity which must be issued with great caution and deliberation, and only in cases of great injury where there is no commensurate remedy in damages.

Notably, there is only one registration for both (the word mark “Dockers” and the wing-shaped design or logo) features of the trademark giving the impression that the two should be considered as a single unit.

It is not evident whether the single registration of the trademark “Dockers and Design” confers on the owner the right to prevent the use of a fraction thereof (use of “Paddocks” word mark on top of a logo, by defendant) in the course of trade. It is also unclear whether the use without the owner’s consent of a portion of a trademark registered in its entirety constitutes material or substantial invasion of the owner’s right.

The Court finds that petitioners’ right to injunctive relief has not been clearly and unmistakably demonstrated. The right has yet to be determined. Petitioners also failed to show proof that there is material and substantial invasion of their right to warrant the




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issuance of an injunctive writ. Neither were petitioners able to show any urgent and permanent necessity for the writ to prevent serious damage.

Trademark Dilution – is the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of:

(1) competition between the owner of the famous mark and other parties; or

(2) likelihood of confusion, mistake or deception.

Subject to the principles of equity, the owner of a famous mark is entitled to an injunction “against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark.”

This is intended to protect famous marks from subsequent uses that blur distinctiveness of the mark or tarnish or disparage it.

In the case at bar, petitioners have yet to establish whether “Dockers and Design” has acquired a strong degree of distinctiveness and whether the other two elements are present for their cause to fall within the ambit of the invoked protection.

SUPERIOR COMMERCIAL ENTERPRISES, INC. vs. KUNNAN ENTERPRISES LTD. AND SPORTS CONCEPT & DISTRIBUTOR, INC.

FACTS:

SUPERIOR filed a complaint for trademark infringement and unfair competition with preliminary injunction against KUNNAN and SPORTS CONCEPT with the RTC.

Prior to and during the pendency of the infringement and unfair competition case before the RTC, KUNNAN filed with the now defunct Bureau of Patents, Trademarks and Technology Transfer separate Petitions for the Cancellation of Registration Trademark, Partes, as well as Opposition to Application (Consolidated Petitions for Cancellation) involving the KENNEX and PRO KENNEX trademarks.

KUNNAN filed the Petition for Cancellation and Opposition on the ground that SUPERIOR fraudulently registered and appropriated the disputed trademarks; as mere distributor and not as lawful owner, it obtained the registrations and assignments of the disputed trademarks in violation of the terms of the Distributorship Agreement and Sections 2-A and 17 of Republic Act No. 166, as amended.

Upon the termination of its distributorship agreement with SUPERIOR, KUNNAN appointed SPORTS CONCEPT as its new distributor.

The RTC held KUNNAN liable for trademark infringement and unfair competition. CA issued its decision, reversing and setting aside the RTC’s decision.

ISSUE:

Whether or not the CA erred in reversing and setting aside the decision of the RTC, lifting the preliminary injunction issued against respondents Kunnan and sports concept and dismissing the

complaint for infringement of trademark and unfair competition with preliminary injunction.

RULING:

The Court did not find the petition meritorious.

As to whether respondent Kunnan was able to overcome the presumption of ownership in favor of Superior, the former sufficiently established the fraudulent registration of the questioned trademarks by Superior.

Thus, we have previously held that the cancellation of registration of a trademark has the effect of depriving the registrant of protection from infringement from the moment judgment or order of cancellation has become final.

In the present case, by operation of law, specifically Section 19 of RA 166, the trademark infringement aspect of SUPERIOR’s case has been rendered moot and academic in view of the finality of the decision in the Registration Cancellation Case.

Even assuming that SUPERIOR’s case for trademark infringement had not been rendered moot and academic, there can be no infringement committed by KUNNAN who was adjudged with finality to be the rightful owner of the disputed trademarks in the Registration Cancellation Case.

An exclusive distributor does not acquire any proprietary interest in the principal’s trademark and cannot register it in his own name unless it is has been validly assigned to him.

On the Issue of Unfair Competition the records shows that the neither the RTC nor the CA made any factual findings with respect to the issue of unfair competition.

Finally, SUPERIOR is left with no effective right to make a claim. In other words, with the CA’s final ruling in the Registration Cancellation Case, SUPERIOR’s case no longer presents a valid cause of action. For this reason, the unfair competition aspect of the SUPERIOR’s case likewise falls.

SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD. vs. DEVELOPERS GROUP OF COMPANIES, INC.

FACTS:

At the core of the controversy are the "Shangri-La" mark and "S" logo.

Respondent DGCI claims ownership of said mark and logo in the Philippines on the strength of its prior use thereof within the country. Since the issuance of the Certificate of Registration by the BPTTT on May 31, 1983, DGCI started using the "Shangri-La" mark and "S" logo in its restaurant business.

As far back as 1962, Kuok family adopted the name "Shangri-La" as part of the corporate names of all companies organized under the aegis of the Kuok Group of Companies.

The Kuok Group and/or petitioner SLIHM caused the registration of, and in fact registered, the "Shangri-La" mark and "S" logo in the patent offices in different countries around the world. It caused the registration of, and in fact registered, the "Shangri-La" mark and




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"S" logo in the patent offices in different countries around the world.

The petitioners filed with the BPTTT a petition, praying for the cancellation of the registration of the "ShangriLa" mark and "S" logo issued to respondent They also filed in the same office an Inter Partes Case, praying for the registration of the same mark and logo in their own names.

Respondent DGCI filed a complaint for Infringement and Damages with the RTC against the herein petitioners, alleging that DGCI has, for the last eight (8) years, been the prior exclusive user in the Philippines of the mark and logo in question and the registered owner thereof for its restaurant and allied services.

The trial court came out with its decision rendering judgment for DGCI, as to the issue of infringement. Petitioners went on appeal to the CA, and affirmed that of the lower court with the modification.

ISSUE:

Whether the issues posed by petitioners are purely factual in nature hence improper for resolution in the instant petition for review on certiorari.

RULING:

DGCI claims that the present petition for review should be dismissed outright for certain procedural defects, to wit: an insufficient certification against forum shopping and raising pure questions of fact. On both counts, we find the instant petition formally and substantially sound.

While the present law on trademarks has dispensed with the requirement of prior actual use at the time of registration, the law in force at the time of registration must be applied, and thereunder it was held that as a condition precedent to registration of trademark, trade name or service mark, the same must have been in actual use in the Philippines before the filing of the application for registration.

The word or name "Shangri-la" and the S-logo, are not uncommon.

One who has imitated the trademark of another cannot bring an action for infringement, particularly against the true owner of the mark, because he would be coming to court with unclean hands.

Priority is of no avail to the bad faith plaintiff. Good faith is required in order to ensure that a second user may not merely take advantage of the goodwill established by the true owner.

This point is further bolstered by the fact that under either Section 17 of R.A. No. 166, or Section 151 of R.A. No. 8293, or Article 6bis (3) of the Paris Convention, no time limit is fixed for the cancellation of marks registered or used in bad faith.

For, while Section 2 of R.A. 166, Section 2-A, on the other hand, sets out how ownership is acquired. These are two distinct concepts.

Section 2 of R.A. 166 Section 2-A of R.A. 166

provides for what is registrable;

sets out how ownership is acquired;

actual use in commerce is also the test of ownership but the mark must not have been so appro-priated by another.

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 2 months prior to the application for registration.

does not require that the actual use of a trademark must be within the Philippines.

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.

Trademark is a creation of use and, therefore registration is only an administrative confirmation of the existence of the right of ownership of the mark, but does not perfect such right.

UNNO COMMERCIAL ENTERPRISES, INCORPORATED vs. GENERAL MILLING CORPORATION

FACTS:

General Milling Corporation filed an application for the registration of the trademark "All Montana" to be used in the sale of wheat flour. In view of the fact that the same trademark was previously, registered in favor of Unno Commercial Enterprises, Inc., the Chief Trademark Examiner of the Philippines Patent Office declared an interference proceeding to determine which party has previously adopted and used the trademark "All Montana".

The Director of Patents, after hearing, ruled in favor of respondent General Milling Corporation prior-user of the trademark ALL MONTANA.

After its motion for reconsideration was denied, petitioner brought the instant petition seeking the reversal of the decision and praying that it be declared the owner and prior user of the trademark.

ISSUE:

Whether the Director of Patents erred when he declared the Junior Party, and defendant herein (General Milling Corp.) as the true and legal owner of the trademark “All Montana”.

RULING:

Petitioner's contention that it is the owner of the mark "All Montana" because of its certificate of registration issued by the Director of Patents, must fail, since ownership of a trademark is not acquired by the mere fact of registration alone.

Under the Trademark Law only the owner of the trademark, trade name or service mark used to distinguish his goods, business or service from the goods, business or service of others is entitled to register the same. The term owner does not include the importer




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of the goods bearing the trademark, trade name, service mark, or other mark of ownership, unless such importer is actually the owner thereof in the country from which the goods are imported. A local importer, however, may make application for the registration of a foreign trademark, trade name or service mark if he is duly authorized by the actual owner of the name or other mark of ownership.

In the case at bar, the evidence showed that the trademark "All Montana" was owned and registered in the name of Centennial Mills, Inc. which later transferred it to respondent General Milling Corporation by way of a deed of assignment. The Deed of Assignment itself constitutes sufficient proof of its ownership of the trademark "All Montana," all of which were assigned by it to respondent General Milling Corporation.

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. Registration does not perfect a trademark right. In the case at bar, the Director of Patents found that "ample evidence was presented in the record that Centennial Mills, Inc. was the owner and prior user in the Philippines of the trademark 'All Montana' through a local importer and broker. Use of a trademark by a mere importer, indentor or exporter (the Senior Party herein) inures to the benefit of the foreign manufacturer whose goods are identified by the trademark.

►REGISTRATION PROCESS:

FIRST-TO-FILE AND FIRST-TO-USE

Section 122 of the IP Code inaccurately suggests that trademark rights are acquired by mere registration in accordance with the IP Code. In truth, mere registration without actual use does not lead to the acquisition of trademark rights since the failure to use the mark in commerce within three years from the date of filing of an application leads to the rejection of the application or cancellation of the registration if the certificate has been issued.

However, a trademark owner who is first to file an application for the registration of the mark acquires a limited right to have his application examined ahead of any identical or similar mark.

The applicant who has the earliest filing date may not necessarily end up as the registered owner of a mark since his application may be rejected if it is identical with or confusingly similar to, or constitutes a translation of a mark which is considered, by competent authorities, to be well-known internationally and in the Philippines, whether or not registered here.

Q: Who are entitled for registration of Trademarks under our jursidiction? A: Any person who is:

a. A national or b. who is domiciled or c. has a real and effective industrial establishment in a

country which is a party to any convention, treaty or agreement relating to intellectual property rights or the

repression of unfair competition, to which the Philippines is also a party, or

d. extends reciprocal rights to nationals of the Philippines by law,

- shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act.

CONTENTS AND DECLARATION OF USE

The IP Code does not require any use in commerce of the trademark at the time of filing. However, the applicant must file a declaration of actual use of trademark and evidence to that effect, within three (3) years from filing of the application. Otherwise, the mark shall be removed from the registry or the application shall be refused, whether the mark involved is well-known or not.

The declaration must be under oath and refers to only one application or registration, containing the name and address of the registrant declaring that the mark is in actual use in the Philippines; mark attached; and the list and names and exact location of outlets where the products are sold or services rendered.

OWNERSHIP AS A BASIS OF REGISTRATION

The notion of “registered owner” does not mean that ownership is established by mere registration but such registration is only a “presumptive right of ownership.”

REQUIREMENTS FOR APPLICATION

Section 124. Requirements of Application. –

124.1. The application for the registration of the mark shall be in Filipino or in English and shall contain the following:

(a) A request for registration;

(b) The name and address of the applicant;

(c) The name of a State of which the applicant is a national or where he has domicile; and the name of a State in which the applicant has a real and effective industrial or commercial establishment, if any;

(d) Where the applicant is a juridical entity, the law under which it is organized and existing;

(e) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines;

(f) Where the applicant claims the priority of an earlier application, an indication of:

i) The name of the State with whose national office the earlier application was filed or if filed with an office other than a national office, the name of that office,

ii) The date on which the earlier application was filed, and

iii) Where available, the application number of the earlier application;

(g) Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as well as the name or names of the color or colors claimed and an indication, in respect of




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each color, of the principal parts of the mark which are in that color;

(h) Where the mark is a three-dimensional mark, a statement to that effect;

(i) One or more reproductions of the mark, as prescribed in the Regulations;

(j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the Regulations;

(k) The names of the goods or services for which the registration is sought, grouped according to the classes of the Nice Classification, together with the number of the class of the said Classification to which each group of goods or services belongs; and

(l) A signature by, or other self-identification of, the applicant or his representative.

124.3. One (1) application may relate to several goods and/or services, whether they belong to one (1) class or to several classes of the Nice Classification.

A non-resident foreigner may apply for trademark registration if he is a national of a member country of the Paris Convention.

An applicant seeking to register foreign trade mark, trade name, or service mark or other marks of ownership in the Philippines must prove his ownership thereof by submitting a certified and authenticated copy of the certificate of registration issued to him by his home country.

RIGHT OF REGISTRANT

The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade, identical or similar signs, containers for goods, or services which are identical or similar to those in respect of which the trademark is registered where such use would result into likelihood of confusion.

The exclusive right of an owner of a well-known mark under Sec. 123.1 (e), which is registered in the Philippines, extends to goods or services which are not similar to those in respect of which the mark is registered.

INTELLECTUAL PROPERTY LAW Reviewer (Prelims).pdf

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