intelectual property law

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FIRST DIVISION [G.R. No. 114508. November 19,1999]PRIBHDAS J. MIRPURI, petitioner, vs. CUR! "APP#A$S, DIR#C!R " PA!#N!S %&' ()e BARBI*N

CRPRA!IN, respondents.

D # C I S I N

PUN, J .+

The Convention of Paris for the Protection of Industrial Property

is a multi-lateral treaty hich the Philippines !ound itself to honor

and enforce in this country" #s to hether or not the treaty affords

protection to a forei$n corporation a$ainst a Philippine applicant for

the re$istration of a similar trademar% is the principal issue in this

case"

On &une '() '*+,) one olita .sco!ar) the predecessor-in-

interest of petitioner Pri!hdas &" /irpuri) filed an application ith the

0ureau of Patents for the re$istration of the trademar% 10ar!i2on1 for

use in !rassieres and ladies under$arments" .sco!ar alle$ed that

she had !een manufacturin$ and sellin$ these products under the

firm name 1 3 0/ Commercial1 since /arch 4) '*+,"

Private respondent 0ar!i2on Corporation) a corporation

or$ani2ed and doin$ !usiness under the las of Ne 5or%) 6"S"#")

opposed the application" It claimed that7

1The mar% 0#R0I8ON of respondent-applicant is confusin$ly similar

to the trademar% 0#R0I8ON hich opposer ons and has not

a!andoned"

That opposer ill !e dama$ed !y the re$istration of the mar%

0#R0I8ON and its !usiness reputation and $oodill ill suffer $reat

and irrepara!le in9ury"

That the respondent-applicant:s use of the said mar% 0#R0I8ON

hich resem!les the trademar% used and oned !y opposer)

constitutes an unlaful appropriation of a mar% previously used in

the Philippines and not a!andoned and therefore a statutory violation

of Section ; <d= of Repu!lic #ct No" '>>) as amended"1 ?'@

This as doc%eted as I&(er P%r(e C%e No. -8- IPC No.-8-/. #fter filin$ of the pleadin$s) the parties su!mitted the case for

decision"

On &une 'A) '*+;) the Director of Patents rendered 9ud$ment

dismissin$ the opposition and $ivin$ due course to .sco!ar:s

application) thus7

1B.R.FOR.) the opposition should !e) as it is here!y)

DIS/ISS.D" #ccordin$ly) #pplication Serial No" '*,', for the

re$istration of the trademar% 0#R0I8ON) of respondent olita R"

.sco!ar) is $iven due course"

IT IS SO ORD.R.D"1?@

This decision !ecame final and on Septem!er '') '*+;) olita

.sco!ar as issued a certificate of re$istration for the trademar%

10ar!i2on"1 The trademar% as 1for use in 1!rassieres and lady:s

underear $arments li%e panties"1?4@

.sco!ar later assi$ned all her ri$hts and interest over the

trademar% to petitioner Pri!hdas &" /irpuri ho) under his firm name

then) the 10onito .nterprises)1 as the sole and eEclusive distri!utor

of .sco!ar:s 10ar!i2on1 products"

In '*+*) hoever) .sco!ar failed to file ith the 0ureau of

Patents the #ffidavit of 6se of the trademar% reuired under Section

' of Repu!lic #ct <R"#"= No" '>>) the Philippine Trademar%

a" Due to this failure) the 0ureau of Patents cancelled .sco!ar:s

certificate of re$istration"

http://sc.judiciary.gov.ph/jurisprudence/1999/nov99/114508.htm#_edn1








On /ay +) '*A') .sco!ar reapplied for re$istration of the

cancelled trademar%" /irpuri filed his on application for re$istration

of .sco!ar:s trademar%" .sco!ar later assi$ned her application to

herein petitioner and this application as opposed !y private

respondent" The case as doc%eted as I&(er P%r(e C%e No. 049

IPC No. 049/.

In its opposition) private respondent alle$ed that7

1<a= The Opposer has adopted the trademar% 0#R0I8ON <ord=)

sometime in &une '*44 and has then used it on various %inds of

earin$ apparel" On #u$ust ';) '*4;) Opposer o!tained from the

6nited States Patent Office a more recent re$istration of the said

mar% under Certificate of Re$istration No" 4'>)'>'" On /arch ')

'*;*) Opposer o!tained from the 6nited States Patent Office a more

recent re$istration for the said trademar% under Certificate of

Re$istration No" (,+)';) a copy of hich is hereith attached as #nneE G#": Said Certificate of Re$istration covers the folloin$

$oods-- earin$ apparel7 ro!es) pa9amas) lin$erie) ni$ht$ons and

slipsH

<!= Sometime in /arch '*+>) Opposer further adopted the trademar%

0#R0I8ON and 0ee desi$n and used the said mar% in various %inds

of earin$ apparel" On /arch '() '*++) Opposer secured from the

6nited States Patent Office a re$istration of the said mar% under

Certificate of Re$istration No" '),>')++) a copy of hich is herein

enclosed as #nneE G0": The said Certificate of Re$istration covers

the folloin$ $oods7 ro!es) pa9amas) lin$erie) ni$ht$ons and slipsH

<c= Still further) sometime in '*>') Opposer adopted the trademar%

0#R0I8ON and a Representation of a Boman and thereafter used

the said trademar% on various %inds of earin$ apparel"Opposer

o!tained from the 6nited States Patent Office re$istration of the said

mar% on #pril () '*A4 under Certificate of Re$istration No" ')44)>>>

for the folloin$ $oods7 earin$ apparel7ro!es) pa9amas) ni$ht$ons

and lin$erie" # copy of the said certificate of re$istration is hereith

enclosed as #nneE GC":

<d= #ll the a!ove re$istrations are su!sistin$ and in force and

Opposer has not a!andoned the use of the said trademar%s" In fact)

Opposer) throu$h a holly-oned Philippine su!sidiary) the

Philippine in$erie Corporation) has !een manufacturin$ the $oods

covered !y said re$istrations and sellin$ them to various countries)

there!y earnin$ valua!le forei$n eEchan$e for the country"#s a resultof respondent-applicant:s misappropriation of Opposer:s 0#R0I8ON

trademar%) Philippine in$erie Corporation is prevented f rom sellin$

its $oods in the local mar%et) to the dama$e and pre9udice of

Opposer and its holly-oned su!sidiary"

<e= The Opposer:s $oods !earin$ the trademar% 0#R0I8ON have

!een used in many countries) includin$ the Philippines) for at least

;, years and has en9oyed international reputation and $ood ill for

their uality" To protect its re$istrations in countries here the $oods

covered !y the re$istrations are !ein$ sold) Opposer has procured

the re$istration of the trademar% 0#R0I8ON in the folloin$countries7 #ustralia) #ustria) #!u Dha!i) #r$entina) 0el$ium) 0olivia)

0ahrain) Canada) Chile) Colom!ia) Denmar%) .cuador) France) Best

ermany) reece) uatemala) on$%on$) onduras) Italy) &apan)

&ordan) e!anon) /eEico) /orocco) Panama) Ne 8ealand) Noray)

Seden) Sit2erland) Syria) .l Salvador) South #frica) 8am!ia)

.$ypt) and Iran) amon$ othersH

<f= To enhance its international reputation for uality $oods and to

further promote $oodill over its name) mar%s and products)

Opposer has eEtensively advertised its products) trademar%s and

name in various pu!lications hich are circulated in the 6nitedStates and many countries around the orld) includin$ the

PhilippinesH

<$= The trademar% 0#R0I8ON as fraudulently re$istered in the

Philippines !y one olita R" .sco!ar under Re$istration No" '*,)

issued on Septem!er '') '*+;) in violation of #rticle 'A* <4= of the

Revised Penal Code and Section ; <d= of the Trademar% a" erein

respondent applicant acuired !y assi$nment the Gri$hts: to the said

mar% previously re$istered !y olita .sco!ar) hence respondent-



applicant:s title is vitiated !y the same fraud and criminal

act" 0esides) Certificate of Re$istration No" '*, has !een

cancelled for failure of either olita .sco!ar or herein respondent-

applicant) to seasona!ly file the statutory affidavit of use" 0y applyin$

for a re-re$istration of the mar% 0#R0I8ON su!9ect of this

opposition) respondent-applicant see%s to perpetuate the fraud andcriminal act committed !y olita .sco!ar"

<h= Opposer:s 0#R0I8ON as ell as its 0#R0I8ON and 0ee Desi$n

and 0#R0I8ON and Representation of a Boman trademar%s ualify

as ell-%non trademar%s entitled to protection under #rticle 6bis of

the Convention of Paris for the Protection of Industrial Property and

further amplified !y the /emorandum of the /inister of Trade to the

onora!le Director of Patents dated Octo!er () '*A4 ?sic @)?;@ .Eecutive Order No" *'4 dated Octo!er +) '*>4 and the

/emorandum of the /inister of Trade and Industry to the onora!le

Director of Patents dated Octo!er () '*A4"

<i= The trademar% applied for !y respondent applicant is identical to

Opposer:s 0#R0I8ON trademar% and constitutes the dominant part

of Opposer:s to other mar%s namely) 0#R0I8ON and 0ee desi$n

and 0#R0I8ON and a Representation of a Boman" The continued

use !y respondent-applicant of Opposer:s trademar% 0#R0I8ON on

$oods !elon$in$ to Class ( constitutes a clear case of commercial

and criminal piracy and if alloed re$istration ill violate not only the

Trademar% a !ut also #rticle 'A* of the Revised Penal Code and

the commitment of the Philippines to an international treaty"1?(@

Replyin$ to private respondent:s opposition) petitioner raised the

defense of res judicata"

On /arch ) '*A) .sco!ar assi$ned to petitioner the use of the

!usiness name 10ar!i2on International"1 Petitioner re$istered the

name ith the Department of Trade and Industry <DTI= for hich a

certificate of re$istration as issued in '*A+"

Forthith) private respondent filed !efore the Office of e$al

#ffairs of the DTI a petition for cancellation of petitioner:s !usiness

name"

On Novem!er >) '**') the DTI) Office of e$al #ffairs)

cancelled petitioner:s certificate of re$istration) and declared privaterespondent the oner and prior user of the !usiness name 10ar!i2on

International"1 Thus7

1B.R.FOR.) the petition is here!y R#NT.D and petitioner is

declared the oner and prior user of the !usiness name 10#R0I8ON

INT.RN#TION#1 under Certificate of Re$istration No" A+-,*,,,

dated /arch ',) '*A+ and issued in the name of respondent) is ?sic @

here!y ordered revo%ed and cancelled" E E E"1?>@

/eanhile) in IPC No" ,;*) the evidence of !oth parties ere

received !y the Director of Patents" On &une 'A) '**) the Director rendered a decision declarin$ private respondent:s opposition !arred

!y res judicata and $ivin$ due course to petitioner:s application for

re$istration) to it7

1B.R.FOR.) the present Opposition in Inter Partes Case No"

,;* is here!y D.C#R.D 0#RR.D !y res 9udicata and is here!y

DIS/ISS.D" #ccordin$ly) #pplication Serial No" ;(,'' for trademar%

0#R0I8ON filed !y Pri!hdas &" /irpuri is IV.N D6. CO6RS."

SO ORD.R.D"1?+@

Private respondent uestioned this decision !efore the Court of

#ppeals in C#-"R" SP No" A;'(" On #pril 4,) '**4) the Court of

#ppeals reversed the Director of Patents findin$ that IPC No" >A>

as not !arred !y 9ud$ment in IPC No" ,;* and ordered that the

case !e remanded to the 0ureau of Patents for further

proceedin$s) viz 7

1B.R.FOR.) the appealed Decision No" *-'4 dated &une 'A)

'** of the Director of Patents in Inter Partes Case No" ,;* is












here!y S.T #SID.H and the case is here!y remanded to the 0ureau

of Patents for further proceedin$s) in accordance ith this

pronouncement" No costs"1?A@

In a Resolution dated /arch '>) '**;) the Court of #ppeals

denied reconsideration of its decision"?*@ ence) this recourse"

0efore us) petitioner raises the folloin$ issues7

1'" B.T.R OR NOT T. D.CISION OF T. DIR.CTOR OF

P#T.NTS IN INT.R P#RT.S C#S. NO" >A> R.ND.R.D ON

&6N. 'A) '*+;) #NN.J C .R.OF) CONSTIT6T.D R.S

&6DIC#T# IN SO F#R #S T. C#S. 0.FOR. T. DIR.CTOR OF

P#T.NTS IS CONC.RN.DH

" B.T.R OR NOT T. DIR.CTOR OF P#T.NTS

CORR.CT5 #PPI.D T. PRINCIP. OF R.S &6DIC#T# INDIS/ISSIN PRIV#T. R.SPOND.NT 0#R0I8ON:S OPPOSITION

TO P.TITION.R:S #PPIC#TION FOR R.ISTR#TION FOR T.

TR#D./#RK 0#R0I8ON) BIC #S SINC. RIP.N.D TO

C.RTIFIC#T. OF R.ISTR#TION NO" (4*, ON NOV./0.R '>)

'**H

4" B.T.R OR NOT T. R.L6ISIT. T#T # :&6D/.NT ON

T. /.RITS: R.L6IR.D # :.#RIN B.R. 0OT P#RTI.S

#R. S6PPOS.D TO #DD6C. .VID.NC.: #ND B.T.R T.

&OINT S60/ISSION OF T. P#RTI.S TO # C#S. ON T. 0#SIS

OF T.IR R.SP.CTIV. P.#DINS BITO6T PR.S.NTINT.STI/ONI# OR DOC6/.NT#R5 .VID.NC. F#S BITIN

T. /.#NIN OF :&6D/.NT ON T. /.RITS: #S ON. OF

T. R.L6ISIT.S TO CONSTIT6T. R.S &6DIC#T#H

;" B.T.R # D.CISION OF T. D.P#RT/.NT OF TR#D.

#ND IND6STR5 C#NC.IN P.TITION.R:S FIR/ N#/.

:0#R0I8ON INT.RN#TION#: #ND BIC D.CISION IS STI

P.NDIN R.CONSID.R#TION N.V.R OFF.R.D IN .VID.NC.

0.FOR. T. DIR.CTOR OF P#T.NTS IN INT.R P#RT.S C#S.

NO" ,;* #S T. RIT TO D.CID. S6C C#NC.#TION

NOT ON T. 0#SIS OF T. 06SIN.SS N#/. #B <#S

I/P./.NT.D 05 T. 06R.#6 OF DO/.STIC TR#D.= 06T

ON T. 0#SIS OF T. P#RIS CONV.NTION #ND T.

TR#D./#RK #B <R"#" '>>= BIC IS BITIN T. ORIIN#

#ND .JC6SIV. &6RISDICTION OF T. DIR.CTOR OFP#T.NTS"1?',@

0efore rulin$ on the issues of the case) there is need for a !rief

!ac%$round on the function and historical development of

trademar%s and trademar% la"

# 1trademar%1 is defined under R"#" '>>) the Trademar% a) as

includin$ 1any ord) name) sym!ol) em!lem) si$n or device or any

com!ination thereof adopted and used !y a manufacturer or

merchant to identify his $oods and distin$uish them from those

manufactured) sold or dealt in !y others"1 ?''@ This definition has !eensimplified in R"#" No" A*4) the Intellectual Property Code of the

Philippines) hich defines a 1trademar%1 as 1any visi!le si$n capa!le

of distin$uishin$ $oods"1?'@ In Philippine 9urisprudence) the function

of a trademar% is to point out distinctly the ori$in or onership of the

$oods to hich it is affiEedH to secure to him) ho has !een

instrumental in !rin$in$ into the mar%et a superior article of

merchandise) the fruit of his industry and s%illH to assure the pu!lic

that they are procurin$ the $enuine articleH to prevent fraud and

impositionH and to protect the manufacturer a$ainst su!stitution and

sale of an inferior and different article as his product" ?'4@

/odern authorities on trademar% la vie trademar%s as

performin$ three distinct functions7 <'= they indicate ori$in or

onership of the articles to hich they are attachedH <= they

$uarantee that those articles come up to a certain standard of

ualityH and <4= they advertise the articles they sym!oli2e"?';@

Sym!ols have !een used to identify the onership or ori$in of

articles for several centuries"?'(@ #s early as (),,, 0"C") mar%in$s on

pottery have !een found !y archaeolo$ists" Cave drain$s in






















southestern .urope sho !ison ith sym!ols on their flan%s"?'>@ #rchaeolo$ical discoveries of ancient ree% and Roman

inscriptions on sculptural or%s) paintin$s) vases) precious stones)

$lassor%s) !ric%s) etc" reveal some features hich are thou$ht to !e

mar%s or sym!ols" These mar%s ere affiEed !y the creator or ma%er

of the article) or !y pu!lic authorities as indicators for the payment of taE) for disclosin$ state monopoly) or devices for the settlement of

accounts !eteen an entrepreneur and his or%men"?'+@

In the /iddle #$es) the use of many %inds of mar%s on a variety

of $oods as commonplace" Fifteenth century .n$land sa the

compulsory use of identifyin$ mar%s in certain trades" There ere the

!a%er:s mar% on !read) !ottlema%er:s mar%s) smith:s mar%s) tanner:s

mar%s) atermar%s on paper) etc" ?'A@ .very $uild had its on mar%

and every master !elon$in$ to it had a special mar% of his on" The

mar%s ere not trademar%s !ut police mar%s compulsorily imposed

!y the soverei$n to let the pu!lic %no that the $oods ere not1forei$n1 $oods smu$$led into an area here the $uild had a

monopoly) as ell as to aid in tracin$ defective or% or poor

craftsmanship to the artisan"?'*@ For a similar reason) merchants also

used merchants: mar%s" /erchants dealt in $oods acuired from

many sources and the mar%s ena!led them to identify and reclaim

their $oods upon recovery after shiprec% or piracy"?,@

Bith constant use) the mar% acuired popularity and !ecame

voluntarily adopted" It as not intended to create or continue

monopoly !ut to $ive the customer an indeE or $uarantee of uality"?'@

It as in the late 'Ath century hen the industrial revolution $averise to mass production and distri!ution of consumer $oods that the

mar% !ecame an important instrumentality of trade and commerce"?@ 0y this time) trademar%s did not merely identify the $oodsH they

also indicated the $oods to !e of satisfactory uality) and there!y

stimulated further purchases !y the consumin$ pu!lic" ?4@ .ventually)

they came to sym!oli2e the $oodill and !usiness reputation of the

oner of the product and !ecame a property ri$ht protected !y la"?;@ The common la developed the doctrine of trademar%s and

tradenames 1to prevent a person from palmin$ off his $oods as

another:s) from $ettin$ another:s !usiness or in9urin$ his reputation

!y unfair means) and) from defraudin$ the pu!lic"1 ?(@ Su!seuently)

.n$land and the 6nited States enacted national le$islation on

trademar%s as part of the la re$ulatin$ unfair trade" ?>@ It !ecame the

ri$ht of the trademar% oner to eEclude others from the use of his

mar%) or of a confusin$ly similar mar% here confusion resulted indiversion of trade or financial in9ury" #t the same time) the trademar%

served as a arnin$ a$ainst the imitation or fa%in$ of products to

prevent the imposition of fraud upon the pu!lic"?+@

Today) the trademar% is not merely a sym!ol of ori$in and

$oodillH it is often the most effective a$ent for the actual creation

and protection of $oodill" It imprints upon the pu!lic mind an

anonymous and impersonal $uaranty of satisfaction) creatin$ a

desire for further satisfaction" In other ords) the mar% actually sells

the $oods"?A@ The mar% has !ecome the 1silent salesman)1 the

conduit throu$h hich direct contact !eteen the trademar% oner and the consumer is assured" It has invaded popular culture in ays

never anticipated that it has !ecome a more convincin$ sellin$ point

than even the uality of the article to hich it refers"?*@ In the last half

century) the unparalleled $roth of industry and the rapid

development of communications technolo$y have ena!led

trademar%s) tradenames and other distinctive si$ns of a product to

penetrate re$ions here the oner does not actually manufacture or

sell the product itself" oodill is no lon$er confined to the territory of

actual mar%et penetrationH it eEtends to 2ones here the mar%ed

article has !een fiEed in the pu!lic mind throu$h advertisin$"?4,@ Bhether in the print) !roadcast or electronic communications

medium) particularly on the Internet)?4'@ advertisin$ has paved the

ay for $roth and eEpansion of the product !y creatin$ and earnin$

a reputation that crosses over !orders) virtually turnin$ the hole

orld into one vast mar%etplace"

This is the mise-en-scene of the present controversy" Petitioner

!rin$s this action claimin$ that 10ar!i2on1 products have !een sold in

the Philippines since '*+," Petitioner developed this mar%et !y

or%in$ lon$ hours and spendin$ considera!le sums of money on







































advertisements and promotion of the trademar% and its

products" No) almost thirty years later) private respondent) a forei$n

corporation) 1sa$$ers into the country li%e a conuerin$ hero)1

usurps the trademar% and invades petitioner:s mar%et"?4@ &ustice and

fairness dictate that private respondent !e prevented from

appropriatin$ hat is not its on" e$ally) at the same time) privaterespondent is !arred from uestionin$ petitioner:s onership of the

trademar% !ecause of res judicata"?44@

iterally) res judicata means a matter ad9ud$ed) a thin$ 9udicially

acted upon or decidedH a thin$ or matter settled !y 9ud$ment"?4;@ In res judicata) the 9ud$ment in the first action is considered

conclusive as to every matter offered and received therein) as to any

other admissi!le matter hich mi$ht have !een offered for that

purpose) and all other matters that could have !een ad9ud$ed

therein"?4(@ Res judicata is an a!solute !ar to a su!seuent action for

the same causeH and its reuisites are7 <a= the former 9ud$ment or order must !e finalH <!= the 9ud$ment or order must !e one on the

meritsH <c= it must have !een rendered !y a court havin$ 9urisdiction

over the su!9ect matter and partiesH <d= there must !e !eteen the

first and second actions) identity of parties) of su!9ect matter and of

causes of action"?4>@

The Solicitor eneral) on !ehalf of respondent Director of

Patents) has 9oined cause ith petitioner" 0oth claim that all the four

elements of res judicata have !een complied ith7 that the 9ud$ment

in IPC No" >A> as final and as rendered !y the Director of Patents

ho had 9urisdiction over the su!9ect matter and partiesH that the 9ud$ment in IPC No" >A> as on the meritsH and that the lac% of a

hearin$ as immaterial !ecause su!stantial issues ere raised !y

the parties and passed upon !y the Director of Patents"?4+@

The decision in IPC No" >A> reads as follos7

1E E E"

Neither party too% testimony nor adduced documentary

evidence" They su!mitted the case for decision !ased on the

pleadin$s hich) to$ether ith the pertinent records) have all !een

carefully considered"

#ccordin$ly) the only issue for my disposition is hether or not theherein opposer ould pro!a!ly !e dama$ed !y the re$istration of the

trademar% 0#R0I8ON sou$ht !y the respondent-applicant on the

$round that it so resem!les the trademar% 0#R0I8ON alle$edly used

and oned !y the former to !e Gli%ely to cause confusion) mista%e or

to deceive purchasers":

On record) there can !e no dou!t that respondent-applicant:s sou$ht-

to-!e-re$istered trademar% 0#R0I8ON is similar) in fact o!viously

identical) to opposer:s alle$ed trademar% 0#R0I8ON) in spellin$ and

pronunciation" The only apprecia!le !ut very ne$li$i!le difference

lies in their respective appearances or manner ofpresentation" Respondent-applicant:s trademar% is in !old letters <set

a$ainst a !lac% !ac%$round=) hile that of the opposer is offered in

stylish script letters"

It is opposer:s assertion that its trademar% 0#R0I8ON has !een

used in trade or commerce in the Philippines prior to the date of

application for the re$istration of the identical mar% 0#R0I8ON !y

the respondent-applicant" oever) the alle$ation of facts in

opposer:s verified notice of opposition is devoid of such material

information" In fact) a readin$ of the teEt of said verified opposition

reveals an apparent) if not deli!erate) omission of the date <or year=hen opposer:s alle$ed trademar% 0#R0I8ON as first used in

trade in the Philippines <see par" No" ') p" ) Verified Notice of

Opposition) Rec"=" Thus) it cannot here and no !e ascertained

hether opposer:s alle$ed use of the trademar% 0#R0I8ON could !e

prior to the use of the identical mar% !y the herein respondent-

applicant) since the opposer attempted neither to su!stantiate its

claim of use in local commerce ith any proof or evidence" Instead)

the opposer su!mitted the case for decision !ased merely on the

pleadin$s"

















On the other hand) respondent-applicant asserted in her amended

application for re$istration that she first used the trademar%

0#R0I8ON for !rassiere <or :!rasseire:= and ladies underear

$arments and panties as early as /arch 4) '*+," 0e that as it may)

there !ein$ no testimony ta%en as to said date of first use)

respondent-applicant ill !e limited to the filin$ date) &une '() '*+,)of her application as the date of first use <Rule '+4) Rules of Practice

in Trademar% Cases="

From the fore$oin$) I conclude that the opposer has not made out a

case of pro!a!le dama$e !y the re$istration of the respondent-

applicant:s mar% 0#R0I8ON"

B.R.FOR.) the opposition should !e) as it is here!y)

DIS/ISS.D" #ccordin$ly) #pplication Serial No" '*,',) for the

re$istration of the trademar% 0#R0I8ON of respondent olita R"

.sco!ar) is $iven due course"1?4A@

The decision in IPC No" >A> as a 9ud$ment on the merits and

it as error for the Court of #ppeals to rule that it as not" #

9ud$ment is on the merits hen it determines the ri$hts and lia!ilities

of the parties !ased on the disclosed facts) irrespective of formal)

technical or dilatory o!9ections"?4*@ It is not necessary that a trial

should have !een conducted" If the court:s 9ud$ment is $eneral) and

not !ased on any technical defect or o!9ection) and the parties had a

full le$al opportunity to !e heard on their respective claims and

contentions) it is on the merits althou$h there as no actual hearin$

or ar$uments on the facts of the case"?;,@

In the case at !ar) theDirector of Patents did not dismiss private respondent:s opposition

on a sheer technicality" #lthou$h no hearin$ as conducted) !oth

parties filed their respective pleadin$s and ere $iven opportunity to

present evidence" They) hoever) aived their ri$ht to do so and

su!mitted the case for decision !ased on their pleadin$s" The lac% of

evidence did not deter the Director of Patents from rulin$ on the

case) particularly on the issue of prior use) hich $oes into the very

su!stance of the relief sou$ht !y the parties" Since private

respondent failed to prove prior use of its trademar%) .sco!ar:s claim

of first use as upheld"

The 9ud$ment in IPC No" >A> !ein$ on the merits) petitioner and

the Solicitor eneral alle$e that IPC No" >A> and IPC No" ,;* also

comply ith the fourth reuisite of res judicata) i.e.) they involve thesame parties and the same su!9ect matter) and have identical

causes of action"

6ndisputedly) IPC No" >A> and IPC No" ,;* involve the same

parties and the same su!9ect matter" Petitioner herein is the

assi$nee of .sco!ar hile private respondent is the same #merican

corporation in the first case" The su!9ect matter of !oth cases is the

trademar% 10ar!i2on"1 Private respondent counter-ar$ues) hoever)

that the to cases do not have identical causes of action" Ne

causes of action ere alle$edly introduced in IPC No" ,;*) such as

the prior use and re$istration of the trademar% in the 6nited Statesand other countries orldide) prior use in the Philippines) and the

fraudulent re$istration of the mar% in violation of #rticle 'A* of the

Revised Penal Code" Private respondent also cited protection of the

trademar% under the Convention of Paris for the Protection of

Industrial Property) specifically #rticle >bis thereof) and the

implementation of #rticle >bis !y to /emoranda dated Novem!er

,) '*A, and Octo!er () '*A4 of the /inister of Trade and Industry

to the Director of Patents) as ell as .Eecutive Order <."O"= No" *'4"

The Convention of Paris for the Protection of Industrial Property)

otherise %non as the Paris Convention) is a multilateral treaty thatsee%s to protect industrial property consistin$ of patents) utility

models) industrial desi$ns) trademar%s) service mar%s) trade names

and indications of source or appellations of ori$in) and at the same

time aims to repress unfair competition"?;'@The Convention is

essentially a compact amon$ various countries hich) as mem!ers

of the 6nion) have pled$ed to accord to citi2ens of the other mem!er

countries trademar% and other ri$htscompara!le to those accorded

their on citi2ens !y their domestic las for an effective protection

a$ainst unfair competition"?;@ In short) forei$n nationals are to !e














$iven the same treatment in each of the mem!er countries as that

country ma%es availa!le to its on citi2ens"?;4@ Nationals of the

various mem!er nations are thus assured of a certain minimum of

international protection of their industrial property"?;;@

The Convention as first si$ned !y eleven countries in Paris on/arch ,) 'AA4"?;(@ It underent several revisions-- at 0russels in

'*,,) at Bashin$ton in '*'') at The a$ue in '*() at ondon in

'*4;) at is!on in '*(A)?;>@ and at Stoc%holm in '*>+" 0oth the

Philippines and the 6nited States of #merica) herein private

respondent:s country) are si$natories to the Convention"The 6nited

States acceded on /ay 4,) 'AA+ hile the Philippines) throu$h its

Senate) concurred on /ay ',) '*>("?;+@ The Philippines: adhesion

!ecame effective on Septem!er +) '*>() ?;A@ and from this date) the

country o!li$ated itself to honor and enforce the provisions of the

Convention"?;*@

In the case at !ar) private respondent anchors its cause of

action on the first para$raph of #rticle > bis of the Paris Convention

hich reads as follos7

1#rticle >bis

1/ !)e o2&(r3e o ()e U&3o& 2&'er(%e, e3()er %'m3&3(r%(3ve673 ()e3r 6e36%(3o& o erm3(, or %( ()e re:2e( o %& 3&(ere(e'%r(7, (o re2e or (o %&e6 ()e re3(r%(3o& %&' (o ro)3b3( ()e2e, o % (r%'em%r ;)3) o&(3(2(e % rero'2(3o&, %&

3m3(%(3o&, or % (r%&6%(3o&, 63%b6e (o re%(e o&23o&, o % m%ro&3'ere' b7 ()e ome(e&( %2()or3(7 o ()e o2&(r7 ore3(r%(3o& or 2e (o be ;e66<&o;& 3& ()%( o2&(r7 % be3&%6re%'7 ()e m%r o % ero& e&(3(6e' (o ()e be&e3( o ()3Co&ve&(3o& %&' 2e' or 3'e&(3%6 or 3m36%r oo'.!)eerov33o& )%66 %6o %67 ;)e& ()e ee&(3%6 %r( o ()e m%ro&(3(2(e % rero'2(3o& o %&7 2) ;e66<&o;& m%r or %&3m3(%(3o& 63%b6e (o re%(e o&23o& ()ere;3().

<= # period of at least five years from the date of re$istration shall !e

alloed for see%in$ the cancellation of such a mar%" The countries of

the 6nion may provide for a period ithin hich the prohi!ition of use

must !e sou$ht"

<4= No time limit shall !e fiEed for see%in$ the cancellation or theprohi!ition of the use of mar%s re$istered or used in !ad faith"1?(,@

This #rticle $overns protection of ;e66<&o;& (r%'em%r" 6nder the first para$raph) each country of the

6nion !ound itself to underta%e to refuse or cancel the re$istration)

and prohi!it the use of a trademar% hich is a reproduction) imitation

or translation) or any essential part of hich trademar% constitutes a

reproduction) lia!le to create confusion) of a mar% considered !y the

competent authority of the country here protection is sou$ht) to !e

ell-%non in the country as !ein$ already the mar% of a person

entitled to the !enefits of the Convention) and used for identical or similar $oods"

#rticle >bis as first introduced at The a$ue in '*( and

amended in is!on in '*("?('@ It is a self-eEecutin$ provision and

does not reuire le$islative enactment to $ive it effect in the mem!er

country"?(@ It may !e applied directly !y the tri!unals and officials of

each mem!er country !y the mere pu!lication or proclamation of the

Convention) after its ratification accordin$ to the pu!lic la of each

state and the order for its eEecution"?(4@

The essential reuirement under #rticle >bis is that thetrademar% to !e protected must !e 1ell-%non1 in the country here

protection is sou$ht" The poer to determine hether a trademar% is

ell-%non lies in the 1competent authority of the country of

re$istration or use"1 This competent authority ould !e either the

re$isterin$ authority if it has the poer to decide this) or the courts of

the country in uestion if the issue comes !efore a court"?(;@

































Pursuant to #rticle >bis) on Novem!er ,) '*A,) then /inister

uis Villafuerte of the /inistry of Trade issued a /emorandum to the

Director of Patents" The /inister ordered the Director that7

1Pursuant to the Paris Convention for the Protection of Industrial

Property to hich the Philippines is a si$natory) you are here!ydirected to re9ect all pendin$ applications for Philippine re$istration of

si$nature and other orld-famous trademar%s !y applicants other

than its ori$inal oners or users"

The conflictin$ claims over internationally %non trademar%s involve

such name !rands as acoste) &ordache) Vander!ilt) Sasson) Fila)

Pierre Cardin) ucci) Christian Dior) Oscar de la Renta) Calvin Klein)

ivenchy) Ralph auren) eoffrey 0eene) anvin and Ted apidus"

It is further directed that) in cases here arranted) Philippine

re$istrants of such trademar%s should !e as%ed to surrender theircertificates of re$istration) if any) to avoid suits for dama$es and

other le$al action !y the trademar%s: forei$n or local oners or

ori$inal users"

5ou are also reuired to su!mit to the undersi$ned a pro$ress report

on the matter"

For immediate compliance"1?((@

Three years later) on Octo!er () '*A4) then /inister Ro!erto

On$pin issued another /emorandum to the Director of Patents) viz 7

1Pursuant to .Eecutive Order No" *'4 dated + Octo!er '*A4 hich

stren$thens the rule-ma%in$ and ad9udicatory poers of the /inister

of Trade and Industry and provides inter alia) that Gsuch rule-ma%in$

and ad9udicatory poers should !e revitali2ed in order that the

/inister of Trade and Industry can E E E apply more sift and

effective solutions and remedies to old and ne pro!lems E E E such

as infrin$ement of internationally-%non tradenames and trademar%s

E E E: and in vie of the decision of the Intermediate #ppellate Court

in the case of # C./IS. #COST.) S"#") versus R#/

S#DB#NI ?#C-"R" SP NO" '44(* <'+= &une '*A4@ ?(>@ hich

affirms the validity of the /./OR#ND6/ of then /inister uis R"

Villafuerte dated , Novem!er '*A, confirmin$ our o!li$ations under

the P#RIS CONV.NTION FOR T. PROT.CTION OF

IND6STRI# PROP.RT5 to hich the Repu!lic of the Philippines isa si$natory) you are here!y directed to implement measures

necessary to effect compliance ith our o!li$ations under said

Convention in $eneral) and) more e33%667, (o )o&or o2romm3(me&( 2&'erSe(3o& -bis?(+@ ()ereo ) as follos7

'" Bhether the trademar% under consideration is ell-%non in the

Philippines or is a mar% already !elon$in$ to a person entitled to the

!enefits of the CONV.NTION) this should !e esta!lished) pursuant

to Philippine Patent Office procedures in inter partes and eE parte

cases) accordin$ to any of the folloin$ criteria or any com!ination

thereof7

<a= a declaration !y the /inister of Trade and Industry that the

trademar% !ein$ considered is already ell-%non in the Philippines

such that permission for its use !y other than its ori$inal oner ill

constitute a reproduction) imitation) translation or other infrin$ementH

<!= that the trademar% is used in commerce internationally) supported

!y proof that $oods !earin$ the trademar% are sold on an

international scale) advertisements) the esta!lishment of factories)

sales offices) distri!utorships) and the li%e) in different countries)

includin$ volume or other measure of international trade andcommerceH

<c= that the trademar% is duly re$istered in the industrial property

office<s= of another country or countries) ta%in$ into consideration the

date of such re$istrationH

<d= that the trademar% has lon$ !een esta!lished and o!tained

$oodill and international consumer reco$nition as !elon$in$ to one

oner or sourceH










<e= that the trademar% actually !elon$s to a party claimin$ onership

and has the ri$ht to re$istration under the provisions of the

aforestated P#RIS CONV.NTION"

" The ord trademar%) as used in this /./OR#ND6/) shall

include tradenames) service mar%s) lo$os) si$ns) em!lems) insi$niaor other similar devices used for identification and reco$nition !y

consumers"

4" The Philippine Patent Office shall refuse all applications for) or

cancel the re$istration of) trademar%s hich constitute a

reproduction) translation or imitation of a trademar% oned !y a

person) natural or corporate) ho is a citi2en of a country si$natory

to the P#RIS CONV.NTION FOR T. PROT.CTION OF

IND6STRI# PROP.RT5"

;" The Philippine Patent Office shall $ive due course to theOpposition in cases already or hereafter filed a$ainst the re$istration

of trademar%s entitled to protection of Section 6 bis of said P#RIS

CONV.NTION as outlined a!ove) !y remandin$ applications filed !y

one not entitled to such protection for final disalloance !y the

.Eamination Division"

(" #ll pendin$ applications for Philippine re$istration of si$nature and

other orld-famous trademar%s filed !y applicants other than their

ori$inal oners or users shall !e re9ected forthith"Bhere such

applicants have already o!tained re$istration contrary to the

a!ovementioned P#RIS CONV.NTION andMor Philippine a) theyshall !e directed to surrender their Certificates of Re$istration to the

Philippine Patent Office for immediate cancellation proceedin$s"

E E E"1?(A@

In the Villafuerte /emorandum) the /inister of Trade instructed

the Director of Patents to re9ect all pendin$ applications for Philippine

re$istration of si$nature and other orld-famous trademar%s !y

applicants other than their ori$inal oners or users" The /inister

enumerated several internationally-%non trademar%s and ordered

the Director of Patents to reuire Philippine re$istrants of such mar%s

to surrender their certificates of re$istration"

In the On$pin /emorandum) the /inister of Trade and Industry

did not enumerate ell-%non trademar%s !ut laid don $uidelinesfor the Director of Patents to o!serve in determinin$ hether a

trademar% is entitled to protection as a ell-%non mar% in the

Philippines under #rticle >bis of the Paris Convention" This as to !e

esta!lished throu$h Philippine Patent Office procedures in inter

partes and ex parte cases pursuant to the criteria enumerated

therein" The Philippine Patent Office as ordered to refuse

applications for) or cancel the re$istration of) trademar%s hich

constitute a reproduction) translation or imitation of a trademar%

oned !y a person ho is a citi2en of a mem!er of the 6nion" #ll

pendin$ applications for re$istration of orld-famous trademar%s !y

persons other than their ori$inal oners ere to !e re9ectedforthith" The On$pin /emorandum as issued pursuant to

.Eecutive Order No" *'4 dated Octo!er +) '*A4 of then President

/arcos hich stren$thened the rule-ma%in$ and ad9udicatory poers

of the /inister of Trade and Industry for the effective protection of

consumers and the application of sift solutions to pro!lems in trade

and industry"?(*@

0oth the Villafuerte and On$pin /emoranda ere sustained !y

the Supreme Court in the '*A; landmar% case of La Chemise

Lacoste, S.A. v. Fernandez "?>,@ This court ruled therein that under the

provisions of #rticle >bis of the Paris Convention) the /inister of Trade and Industry as the 1competent authority1 to determine

hether a trademar% is ell-%non in this country"?>'@

The Villafuerte /emorandum as issued in '*A,) i"e") fifteen

<'(= years after the adoption of the Paris Convention in '*>(" In the

case at !ar) the first inter partes case) IPC No" >A>) as filed in

'*+,) beore the Villafuerte /emorandum !ut five <(= years %(er the

effectivity of the Paris Convention" #rticle >bis as already in effect

five years !efore the first case as instituted"Private respondent)













hoever) did not cite the protection of #rticle >bis) neither did it

mention the Paris Convention at all" It as only in '*A' hen IPC

No" ,;* as instituted that the Paris Convention and the Villafuerte

/emorandum) and) durin$ the pendency of the case) the '*A4

On$pin /emorandum ere invo%ed !y private respondent"

The Solicitor eneral ar$ues that the issue of hether the

protection of #rticle >bis of the Convention and the to /emoranda

is !arred !y res judicata has already !een ansered inWoverine

Word!ide, "nc. v. Court o# Appeas"?>@ In this case) petitioner

Bolverine) a forei$n corporation) filed ith the Philippine Patent

Office a petition for cancellation of the re$istration certificate of

private respondent) a Filipino citi2en) for the trademar% 1ush

Puppies1 and 1Do$ Device"1 Petitioner alle$ed that it as the

re$istrant of the internationally-%non trademar% in the 6nited States

and other countries) and cited protection under the Paris Convention

and the On$pin /emorandum" The petition as dismissed !y thePatent Office on the $round of res judicata" It as found that in '*+4

petitioner:s predecessor-in-interest filed to petitions for cancellation

of the same trademar% a$ainst respondent:s predecessor-in-

interest" The Patent Office dismissed the petitions) ordered the

cancellation of re$istration of petitioner:s trademar%) and $ave due

course to respondent:s application for re$istration" This decision as

sustained !y the Court of #ppeals) hich decision as not elevated

to us and !ecame final and eEecutory"?>4@

Bolverine claimed that hile its previous petitions ere filed

under R"#" No" '>>) the Trademar% a) its su!seuent petition as!ased on a ne cause of action) i"e") the On$pin /emorandum and

."O" No" *'4 issued in '*A4) after finality of the previous

decision" Be held that the said /emorandum and ."O" did not $rant

a ne cause of action !ecause it did 1not amend the Trademar%

a)1 E E E 1nor did it indicate a ne policy ith respect to the

re$istration in the Philippines of orld-famous trademar%s"1 ?>;@ This

conclusion as !ased on the findin$ that Bolverine:s to previous

petitions and su!seuent petition dealt ith the same issue of

onership of the trademar%"?>(@ In other ords) since the first and

second cases involved the same issue of onership) then the first

case as a !ar to the second case"

In the instant case) the issue of onership of the trademar%

10ar!i2on1 as not raised in IPC No" >A>" Private respondent:s

opposition therein as merely anchored on7

<a= 1confusin$ similarity1 of its trademar% ith that of .sco!ar:sH

<!= that the re$istration of .sco!ar:s similar trademar% ill cause

dama$e to private respondent:s !usiness reputation and $oodillH

and

<c= that .sco!ar:s use of the trademar% amounts to an unlaful

appropriation of a mar% previously used in the Philippines hich act

is penali2ed under Section ; <d= of the Trademar% a"

In IPC No" ,;*) private respondent:s opposition set forth

several issues summari2ed as follos7

<a= as early as '*44) it adopted the ord 10#R0I8ON1 as trademar%

on its products such as ro!es) pa9amas) lin$erie) ni$ht$ons and

slipsH

<!= that the trademar% 10#R0I8ON1 as re$istered ith the 6nited

States Patent Office in '*4; and '*;*H and that variations of the

same trademar%) i"e") 10#R0I8ON1 ith 0ee desi$n and

10#R0I8ON1 ith the representation of a oman ere alsore$istered ith the 6"S" Patent Office in '*>' and '*+>H

<c= that these mar%s have !een in use in the Philippines and in many

countries all over the orld for over forty years" 10ar!i2on1 products

have !een advertised in international pu!lications and the mar%s

re$istered in 4> countries orldideH













<d= .sco!ar:s re$istration of the similar trademar% 10#R0I8ON1 in

'*+; as !ased on fraudH and this fraudulent re$istration as

cancelled in '*+*) strippin$ .sco!ar of hatsoever ri$ht she had to

the said mar%H

<e= Private respondent:s trademar% is entitled to protection as a ell-%non mar% under #rticle >bis of the Paris Convention) .Eecutive

Order No" *'4) and the to /emoranda dated Novem!er ,) '*A,

and Octo!er () '*A4 of the /inister of Trade and Industry to the

Director of PatentsH

<f= .sco!ar:s trademar% is identical to private respondent:s and its

use on the same class of $oods as the latter:s amounts to a violation

of the Trademar% a and #rticle 'A* of the Revised Penal Code"

IPC No" ,;* raised the issue of onership of the trademar%) the

first re$istration and use of the trademar% in the 6nited States andother countries) and the international reco$nition and reputation of

the trademar% esta!lished !y eEtensive use and advertisement of

private respondent:s products for over forty years here and

a!road" These are different from the issues of confusin$ similarity

and dama$e in IPC No" >A>" The issue of prior 2e may have !een

raised in IPC No" >A> !ut this claim as limited to prior use in the

Philippines only" Prior use in IPC No" ,;* stems from private

respondent:s claim as or33&%(or of the ord and sym!ol

10ar!i2on)1?>>@ as the first and re$istered user of the mar% attached to

its products hich have !een sold and advertised orldide for a

considera!le num!er of years prior to petitioner:s first application for re$istration of her trademar% in the Philippines" Indeed) these are

su!stantial alle$ations that raised ne issues and necessarily $ave

private respondent a ne cause of action" Res judicata does not

apply to ri$hts) claims or demands) althou$h $roin$ out of the same

su!9ect matter) hich constitute separate or distinct causes of action

and ere not put in issue in the former action" ?>+@

Respondent corporation also introduced in the second case a

fact that did not eEist at the time the first case as filed and

terminated" The cancellation of petitioner:s certificate of re$istration

for failure to file the affidavit of use arose only after IPC No" >A>" It

did not and could not have occurred in the first case) and this $ave

respondent another cause to oppose the second application"Res

judicata eEtends only to facts and conditions as they eEisted at the

time 9ud$ment as rendered and to the le$al ri$hts and relations of the parties fiEed !y the facts so determined" ?>A@ Bhen ne facts or

conditions intervene !efore the second suit) furnishin$ a ne !asis

for the claims and defenses of the parties) the issues are no lon$er

the same) and the former 9ud$ment cannot !e pleaded as a !ar to

the su!seuent action"?>*@

It is also noted that the oppositions in the first and second cases

are !ased on different las" The opposition in IPC No" >A> as

!ased on specific provisions of the Trademar% a) i"e") Section ; <d=?+,@ on confusin$ similarity of trademar%s and Section A?+'@ on the

reuisite dama$e to file an opposition to a petition for re$istration" The opposition in IPC No" ,;* invo%ed the Paris

Convention) particularly #rticle >bis thereof) ."O" No" *'4 and the

to /emoranda of the /inister of Trade and Industry" This

opposition also invo%ed #rticle 'A* of the Revised Penal Code hich

is a statute totally different from the Trademar% a"?+@ Causes of

action hich are distinct and independent from each other) althou$h

arisin$ out of the same contract) transaction) or state of facts) may

!e sued on separately) recovery on one !ein$ no !ar to su!seuent

actions on others"?+4@ The mere fact that the same relief is sou$ht in

the su!seuent action ill not render the 9ud$ment in the prior action

operative as res judicata) such as here the to actions are !ased

on different statutes" ?+;@ Res judicata therefore does not apply to the

instant case and respondent Court of #ppeals did not err in so rulin$"

Intellectual and industrial property ri$hts cases are not simple

property cases" Trademar%s deal ith the psycholo$ical function of

sym!ols and the effect of these sym!ols on the pu!lic at lar$e"?+(@ Trademar%s play a si$nificant role in communication) commerce

and trade) and serve valua!le and interrelated !usiness functions)

!oth nationally and internationally" For this reason) all a$reements



























concernin$ industrial property) li%e those on trademar%s and

tradenames) are intimately connected ith economic development"?+>@ Industrial property encoura$es investments in ne ideas and

inventions and stimulates creative efforts for the satisfaction of

human needs" They speed up transfer of technolo$y and

industriali2ation) and there!y !rin$ a!out social and economicpro$ress"?++@ These advanta$es have !een ac%noled$ed !y the

Philippine $overnment itself" The Intellectual Property Code of the

Philippines declares that 1an effective intellectual and industrial

property system is vital to the development of domestic and creative

activity) facilitates transfer of technolo$y) it attracts forei$n

investments) and ensures mar%et access for our products"1 ?+A@ The

Intellectual Property Code too% effect on &anuary ') '**A and !y its

eEpress provision)?+*@ repealed the Trademar% a)?A,@ the Patent a)?A'@ #rticles 'AA and 'A* of the Revised Penal Code) the Decree on

Intellectual Property)?A@ and the Decree on Compulsory Reprintin$ of

Forei$n TeEt!oo%s"

?A4@

The Code as enacted to stren$then theintellectual and industrial property system in the Philippines as

mandated !y the country:s accession to the #$reement .sta!lishin$

the Borld Trade Or$ani2ation <BTO=" ?A;@

The BTO is a common institutional frameor% for the conduct

of trade relations amon$ its mem!ers in matters related to the

multilateral and plurilateral trade a$reements anneEed to the BTO

#$reement"?A(@ The BTO frameor% ensures a 1sin$le underta%in$

approach1 to the administration and operation of all a$reements and

arran$ements attached to the BTO #$reement"#mon$ those

anneEed is the #$reement on Trade-Related #spects of Intellectual

Property Ri$hts or TRIPs"?A>@ /em!ers to this #$reement 1desire to

reduce distortions and impediments to international trade) ta%in$ into

account the need to promote effective and adeuate protection of

intellectual property ri$hts) and to ensure that measures and

procedures to enforce intellectual property ri$hts do not themselves

!ecome !arriers to le$itimate trade"1 To fulfill these o!9ectives) the

mem!ers have a$reed to adhere to minimum standards of protection

set !y several Conventions"?A+@ These Conventions are7 the 0erne

Convention for the Protection of iterary and #rtistic Bor%s <'*+'=)

the Rome Convention or the International Convention for the

Protection of Performers) Producers of Phono$rams and

0roadcastin$ Or$anisations) the Treaty on Intellectual Property in

Respect of Inte$rated Circuits) %&' ()e P%r3 Co&ve&(3o& 19-=/, as

revised in Stoc%holm on &uly ';) '*>+"?AA@

# ma9or proportion of international trade depends on the

protection of intellectual property ri$hts" ?A*@ Since the late '*+,:s) the

unauthori2ed counterfeitin$ of industrial property and trademar%ed

products has had a considera!le adverse impact on domestic and

international trade revenues"?*,@ The TRIPs #$reement see%s to $rant

adeuate protection of intellectual property ri$hts !y creatin$ a

favora!le economic environment to encoura$e the inflo of forei$n

investments) and stren$thenin$ the multi-lateral tradin$ system to

!rin$ a!out economic) cultural and technolo$ical independence"?*'@ The Philippines and the 6nited States of #merica have acceded to

the BTO #$reement" This #$reement has revolutioni2edinternational !usiness and economic relations amon$ states) and

has propelled the orld toards trade li!erali2ation and economic

$lo!ali2ation"?*@ Protectionism and isolationism !elon$ to the

past" Trade is no lon$er confined to a !ilateral system" There is no

1a ne era of $lo!al economic cooperation) reflectin$ the idespread

desire to operate in a fairer and more open multilateral tradin$

system"1 ?*4@ Conforma!ly) the State must reaffirm its commitment to

the $lo!al community and ta%e part in evolvin$ a ne international

economic order at the dan of the ne millenium"

IN >I#? ?H#R#") the petition is denied and the Decision

and Resolution of the Court of #ppeals in C#-"R" SP No" A;'( are

affirmed"

S RD#R#D.














































[G.R. No. 10900. J267 0, 000]

CANN @ABUSHI@I @AISHA, petitioner, vs. CUR! "APP#A$S %&' NSR RUBB#R CRPRA!IN, respondents.

D # C I S I N

GN*AGA<R##S, J .+

0efore us is a petition for revie that see%s to set aside the

Decision?'@ dated Fe!ruary ') '**( of the Court of #ppeals in C#-

R SP No" 4,,4) entitled 1Canon Ka!ushi%i Kaisha vs" NSR

Ru!!er Corporation1 and its Resolution dated &une +) '**( denyin$

the motion for reconsideration of herein petitioner Canon Ka!ushi%i

Kaisha <petitioner="

On &anuary '() '*A() private respondent NSR Ru!!er Corporation<private respondent= filed an application for re$istration of the mar%

C#NON for sandals in the 0ureau of Patents) Trademar%s) and

Technolo$y Transfer <0PTTT=" # Verified Notice of Opposition as

filed !y petitioner) a forei$n corporation duly or$ani2ed and eEistin$

under the las of &apan) alle$in$ that it ill !e dama$ed !y the

re$istration of the trademar% C#NON in the name of private

respondent" The case as doc%eted as Inter Partes Case No" 4,;4"

Petitioner moved to declare private respondent in default for its

failure to file its anser ithin the prescri!ed period" The 0PTTT then

declared private respondent in default and alloed petitioner to

present its evidence ex-parte.

0ased on the records) the evidence presented !y petitionerconsisted of its certificates of re$istration for the mar% C#NON in

various countries coverin$ $oods !elon$in$ to class <paints)

chemical products) toner) and dye stuff=" Petitioner also su!mitted in

evidence its Philippine Trademar% Re$istration No" 4*4*A) shoin$

its onership over the trademar% C#NON also under class "

On Novem!er ',) '**) the 0PTTT issued its decision dismissin$

the opposition of petitioner and $ivin$ due course to private

respondents application for the re$istration of the trademar%

C#NON" On Fe!ruary '>) '**4) petitioner appealed the decision of

the 0PTTT ith pu!lic respondent Court of #ppeals that eventuallyaffirmed the decision of 0PTTT" ence) this petition for revie"

Petitioner anchors this instant petition on these $rounds7

#= P.TITION.R IS .NTIT.D TO .JC6SIV.

6S. OF T. /#RK C#NON 0.C#6S. IT IS ITS

TR#D./#RK #ND IS 6S.D #SO FOR

FOOTB.#R"

0= TO #OB PRIV#T. R.SPOND.NT TO

R.IST.R C#NON FOR FOOTB.#R IS TOPR.V.NT P.TITION.R FRO/ 6SIN C#NON

FOR V#RIO6S KINDS OF FOOTB.#R) B.N IN

F#CT) P.TITION.R #S .#RI.R 6S.D S#ID

/#RK FOR S#ID OODS"

C= P.TITION.R IS #SO .NTIT.D TO T.

RIT TO .JC6SIV.5 6S. C#NON TO

PR.V.NT CONF6SION OF 06SIN.SS"

http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htm#_ftn1




D= P.TITION.R IS #SO .NTIT.D TO T.

.JC6SIV. 6S. OF C#NON 0.C#6S. IT

FOR/S P#RT OF ITS CORPOR#T. N#/.)

PROT.CT.D 05 T. P#RIS CONV.NTION"?@

The 0PTTT and the Court of #ppeals share the opinion that thetrademar% 1C#NON1 as used !y petitioner for its paints) chemical

products) toner) and dyestuff) can !e used !y private respondent for

its sandals !ecause the products of these to parties are dissimilar"

Petitioner protests the appropriation of the mar% C#NON !y private

respondent on the $round that petitioner has used and continues to

use the trademar% C#NON on its ide ran$e of $oods orldide"

#lle$edly) the corporate name or tradename of petitioner is also used

as its trademar% on diverse $oods includin$ footear and other

related products li%e shoe polisher and polishin$ a$ents" To lend

credence to its claim) petitioner points out that it has !ranched out in

its !usiness !ased on the various $oods carryin$ its trademar%C#NON?4@) includin$ footear hich petitioner contends covers

sandals) the $oods for hich private respondent sou$ht to re$ister

the mar% C#NON" For petitioner) the fact alone that its trademar%

C#NON is carried !y its other products li%e footear) shoe polisher

and polishin$ a$ents should have precluded the 0PTTT from $ivin$

due course to the application of private respondent"

Be find the ar$uments of petitioner to !e unmeritorious" Ordinarily)

the onership of a trademar% or tradename is a property ri$ht that

the oner is entitled to protect?;@ as mandated !y the Trademar% a"?(@ oever) hen a trademar% is used !y a party for a product in

hich the other party does not deal) the use of the same trademar%

on the latters product cannot !e validly o!9ected to"?>@

# revie of the records shos that ith the order of the 0PTTT

declarin$ private respondent in default for failure to file its anser)

petitioner had every opportunity to present ex-parte all of its

evidence to prove that its certificates of re$istration for the trademar%

C#NON cover footear" The certificates of re$istration for the

trademar% C#NON in other countries and in the Philippines as

presented !y petitioner) clearly shoed that said certificates of

re$istration cover $oods !elon$in$ to class <paints) chemical

products) toner) dyestuff=" On this !asis) the 0PTTT correctly ruled

that since the certificate of re$istration of petitioner for the trademar%

C#NON covers class <paints) chemical products) toner) dyestuff=)

private respondent can use the trademar% C#NON for its $oodsclassified as class ( <sandals=" Clearly) there is a orld of difference

!eteen the paints) chemical products) toner) and dyestuff of

petitioner and the sandals of private respondent"

Petitioner counters that notithstandin$ the dissimilarity of the

products of the parties) the trademar% oner is entitled to protection

hen the use of !y the 9unior user 1forestalls the normal eEpansion of

his !usiness1"?+@ Petitioners opposition to the re$istration of its

trademar% C#NON !y private respondent rests upon petitioners

insistence that it ould !e precluded from usin$ the mar% C#NON for

various %inds of footear) hen in fact it has earlier used said mar%for said $oods" Stretchin$ this ar$ument) petitioner claims that it is

possi!le that the pu!lic could presume that petitioner ould also

produce a ide variety of footear considerin$ the diversity of its

products mar%eted orldide"

Be do not a$ree" .ven in this instant petition) eEcept for its !are

assertions) petitioner failed to attach evidence that ould convince

this Court that petitioner has also em!ar%ed in the production of

footear products" Be uote ith approval the o!servation of the

Court of #ppeals that7

1The herein petitioner has not made %non that it

intends to venture into the !usiness of producin$

sandals" This is clearly shon in its Trademar%

Principal Re$ister <.Ehi!it 161= here the products of

the said petitioner had !een clearly and specifically

descri!ed as 1Chemical products) dyestuffs)

pi$ments) toner developin$ preparation) shoe

polisher) polishin$ a$ent1" It ould !e taEin$ ones

credi!ility to aver at this point that the production of


















sandals could !e considered as a possi!le 1natural

or normal eEpansion1 of its !usiness operation1"?A@

In Faber$e, "ncorporated vs. "ntermediate Appeate Court )?*@ the

Director of patents alloed the 9unior user to use the trademar% of

the senior user on the $round that the !riefs manufactured !y the 9unior user) the product for hich the trademar% 0R6T. as sou$ht

to !e re$istered) as unrelated and non-competin$ ith the products

of the senior user consistin$ of after shave lotion) shavin$ cream)

deodorant) talcum poder) and toilet soap" The senior user

vehemently o!9ected and claimed that it as eEpandin$ its trademar%

to !riefs and ar$ued that permittin$ the 9unior user to re$ister the

same trademar% ould allo the latter to invade the senior users

eEclusive domain" In sustainin$ the Director of Patents) this Court

said that since 1<the senior user= has not ventured in the production

of !riefs) an item hich is not listed in its certificate of re$istration)

<the senior user=) cannot and should not !e alloed to fei$n that <the 9unior user= had invaded <the senior users= eEclusive domain"1?',@ Be

reiterated the principle that the certificate of re$istration confers upon

the trademar% oner the eEclusive ri$ht to use its on sym!ol on% to

those $oods speci#ied in the certi#icate) su!9ect to the conditions and

limitations stated therein"?''@ Thus) the eEclusive ri$ht of petitioner in

this case to use the trademar% C#NON is limited to the products

covered !y its certificate of re$istration"

Petitioner further ar$ues that the alle$ed diversity of its products all

over the orld ma%es it plausi!le that the pu!lic mi$ht !e misled into

thin%in$ that there is some supposed connection !eteen private

respondents $oods and petitioner" Petitioner is apprehensive that

there could !e confusion as to the ori$in of the $oods) as ell as

confusion of !usiness) if private respondent is alloed to re$ister the

mar% C#NON" In such a case) petitioner ould alle$edly !e

immensely pre9udiced if private respondent ould !e permitted to

ta%e 1a free ride on) and reap the advanta$es of) the $oodill and

reputation of petitioner Canon1" ?'@ In support of the fore$oin$

ar$uments) petitioner invo%es the rulin$s in Sta. Ana vs. &ai!at ?'4@,

An$ vs. 'eodoro?';@ and Converse Rubber Corporation vs. (niversa

Rubber )roducts, "nc.?'(@.

The li%elihood of confusion of $oods or !usiness is a relative

concept) to !e determined only accordin$ to the particular) and

sometimes peculiar) circumstances of each case"?'>@Indeed) intrademar% la cases) even more than in other liti$ation) precedent

must !e studied in the li$ht of the facts of the particular case"?'+@ Contrary to petitioners supposition) the facts of this case ill sho

that the cases of Sta. Ana vs. &ai!at,, An$ vs. 'eodoro and

Converse Rubber Corporation vs. (niversa Rubber )roducts,

"nc. are hardly in point" The 9ust cited cases involved $oods that ere

confusin$ly similar) if not identical) as in the case of Converse

Rubber Corporation vs. (niversa Rubber )roducts, "nc " ere) the

products involved are so unrelated that the pu!lic ill not !e misled

that there is the sli$htest neEus !eteen petitioner and the $oods of

private respondent"

In cases of confusion of !usiness or ori$in) the uestion that usually

arises is hether the respective $oods or services of the senior user

and the 9unior user are so related as to li%ely cause confusion of

!usiness or ori$in) and there!y render the trademar% or tradenames

confusin$ly similar"?'A@ oods are related hen they !elon$ to the

same class or have the same descriptive propertiesH hen they

possess the same physical attri!utes or essential characteristics ith

reference to their form) composition) teEture or uality"?'*@They may

also !e related !ecause they serve the same purpose or are sold in

$rocery stores"?,@

Thus) in *sso Standard *astern, "nc. vs. Court o# Appeas) this Court

ruled that the petroleum products on hich the petitioner therein

used the trademar% .SSO) and the product of respondent) ci$arettes

are 1so forei$n to each other as to ma%e it unli%ely that purchasers

ould thin% that petitioner is the manufacturer of respondents

$oods1?'@" /oreover) the fact that the $oods involved therein flo

throu$h different channels of trade hi$hli$hted their dissimilarity) a

factor eEplained in this ise7




































1The products of each party move alon$ and are

disposed throu$h different channels of distri!ution"

The <petitioners= products are distri!uted principally

throu$h $asoline service and lu!rication stations)

automotive shops and hardare stores" On the other

hand) the <respondents= ci$arettes are sold in sari-sari stores) $rocery store) and other small distri!utor

outlets" <Respondents= ci$arettes are even peddled

in the streets hile <petitioners= $asul !urners are

not" Finally) there is a mar%ed distinction !eteen oil

and to!acco) as ell as !eteen petroleum and

ci$arettes" .vidently) in %ind and nature the products

of <respondent= and of <petitioner= are poles

apart"1?@

6ndou!tedly) the paints) chemical products) toner and dyestuff of

petitioner that carry the trademar% C#NON are unrelated to sandals)the product of private respondent" Be a$ree ith the 0PTTT)

folloin$ the .sso doctrine) hen it noted that the to classes of

products in this case flo throu$h different trade channels" The

products of petitioner are sold throu$h special chemical stores or

distri!utors hile the products of private respondent are sold in

$rocery stores) sari-sari stores and department stores"?4@ Thus) the

evident disparity of the products of the parties in the case at !ar

renders unfounded the apprehension of petitioner that confusion of

!usiness or ori$in mi$ht occur if private respondent is alloed to use

the mar% C#NON"

In its !id to !ar the re$istration of private respondent of the mar%

C#NON) petitioner invo%es the protective mantle of the Paris

Convention" Petitioner asserts that it has the eEclusive ri$ht to the

mar% C#NON !ecause it forms part of its corporate name or

tradename) protected !y #rticle A of the Paris Convention) to it7

1# tradename shall !e protected in all the countries

of the 6nion ithout the o!li$ation of filin$ or

re$istration) hether or not it forms part of a

trademar%"1

Pu!lic respondents 0PTTT and the Court of #ppeals alle$edly

committed an oversi$ht hen they reuired petitioner to prove that

its mar% is a ell-%non mar% at the time the application of privaterespondent as filed" Petitioner uestions the applica!ility of the

$uidelines em!odied in the /emorandum of then /inister of Trade

and Industry Ro!erto On$pin <On$pin= dated Octo!er () '*A4

hich accordin$ to petitioner implements #rticle >!is of the Paris

Convention) the provision referrin$ to the protection of trademar%s"

The memorandum reads7

1a= the mar% must !e internationally %nonH

!= the su!9ect of the ri$ht must !e a trademar%) not a

patent or copyri$ht or anythin$ elseH

c= the mar% must !e for use in the same or similar

class of $oodsH

d= the person claimin$ must !e the oner of the

mar%"1

#ccordin$ to petitioner) it should not !e reuired to prove that its

trademar% is ell-%non and that the products are not similar as

reuired !y the uoted memorandum" Petitioner emphasi2es that the

$uidelines in the memorandum of On$pin implement #rticle >!is ofthe Paris Convention) the provision for the protection of trademar%s)

not tradenames" #rticle >!is of the Paris Convention states7

<'=""""The countries of the 6nion underta%e) either

administratively if their le$islation so permits) or at

the reuest of an interested party) to refuse or to

cancel the re$istration and to prohi!it the use of a

trademar% hich constitutes a reproduction) imitation

or translation) lia!le to create confusion) of a mar%







considered !y the competent authority of the country

of re$istration or use to !e ell-%non in that country

as !ein$ already the mar% of a person entitled to the

!enefits of the present Convention and used for

identical or similar $oods" These provisions shall

also apply hen the essential part of the mar%constitutes a reproduction of any such ell-%non

mar% or an imitation lia!le to create confusion

thereith"

<="""" # period of at least five years from the date of

re$istration shall !e alloed for see%in$ the

cancellation of such a mar%" The countries of the

6nion may provide for a period ithin hich the

prohi!ition of use must !e sou$ht"

<4=""""No time limit shall !e fiEed for see%in$ thecancellation or the prohi!ition of the use of mar%s or

used in !ad faith"1

Petitioner insists that hat it see%s is the protection of #rticle A of the

Paris Convention) the provision that pertains to the protection of

tradenames" Petitioner !elieves that the appropriate memorandum to

consider is that issued !y the then /inister of Trade and Industry)

uis Villafuerte) directin$ the Director of patents to7

1re9ect all pendin$ applications for Philippine

re$istration of si$nature and other orld famoustrademar%s !y applicants other than the ori$inal

oners or users"1

#s far as petitioner is concerned) the fact that its tradename is at ris%

ould call for the protection $ranted !y #rticle A of the Paris

Convention" Petitioner calls attention to the fact that #rticle A) even

as em!odied in par" >) sec" 4+ of R# '>>) mentions no reuirement

of similarity of $oods" Petitioner claims that the reason there is no

mention of such a reuirement) is 1!ecause there is a difference

!eteen the referent of the name and that of the mar%1 ?;@ and that

1since #rt" A protects the tradename in the countries of the 6nion)

such as &apan and the Philippines) Petitioners tradename should !e

protected here"1?(@

Be cannot uphold petitioners position"

The term 1trademar%1 is defined !y R# '>>) the Trademar% a) as

includin$ 1any ord) name) sym!ol) em!lem) si$n or device or any

com!ination thereof adopted and used !y a manufacturer or

merchant to identify his $oods and distin$uish them for those

manufactured) sold or dealt in !y others"1?>@ Tradename is defined !y

the same la as includin$ 1individual names and surnames) firm

names) tradenames) devices or ords used !y manufacturers)

industrialists) merchants) a$riculturists) and others to identify their

!usiness) vocations) or occupationsH the names or titles lafully

adopted and used !y natural or 9uridical persons) unions) and anymanufacturin$) industrial) commercial) a$ricultural or other

or$ani2ations en$a$ed in trade or commerce"1?+@ Simply put) a trade

name refers to the !usiness and its $oodillH a trademar% refers to

the $oods"?A@

The Convention of Paris for the Protection of Industrial Property)

otherise %non as the Paris Convention) of hich !oth the

Philippines and &apan) the country of petitioner) are si$natories?*@) is

a multilateral treaty that see%s to protect industrial property

consistin$ of patents) utility models) industrial desi$ns) trademar%s)

service mar%s) trade names and indications of source or appellationsof ori$in) and at the same time aims to repress unfair competition"?4,@ Be a$ree ith pu!lic respondents that the controllin$ doctrine

ith respect to the applica!ility of #rticle A of the Paris Convention is

that esta!lished in +abushi +aisha "setan vs. "ntermediate Appeate

Court.?4'@ #s pointed out !y the 0PTTT7

1Re$ardin$ the applica!ility of #rticle A of the Paris

Convention) this Office !elieves that there is no

automatic protection afforded an entity hose




















tradename is alle$ed to have !een infrin$ed throu$h

the use of that name as a trademar% !y a local

entity"

In Ka!ushi%i Kaisha Isetan vs" The Intermediate

#ppellate Court) et" al") "R" No" +(;,) '(Novem!er '**') the onora!le Supreme Court held

that7

The Paris Convention for the

Protection of Industrial Property

does not automatically eEclude all

countries of the orld hich have

si$ned it from usin$ a tradename

hich happens to !e used in one

country" To illustrate if a taEica! or

!us company in a ton in the 6nitedKin$dom or India happens to use

the tradename 1Rapid

Transportation1) it does not

necessarily follo that 1Rapid1 can

no lon$er !e re$istered in 6$anda)

Fi9i) or the Philippines"

This office is not unmindful that in the Treaty of Paris

for the Protection of Intellectual Property re$ardin$

ell-%non mar%s and possi!le application thereof in

this case" Petitioner) as this office sees it) is tryin$ tosee% refu$e under its protective mantle) claimin$ that

the su!9ect mar% is ell %non in this country at the

time the then application of NSR Ru!!er as filed"

oever) the then /inister of Trade and Industry)

the on" Ro!erto V" On$pin) issued a memorandum

dated ( Octo!er '*A4 to the Director of Patents) a

set of $uidelines in the implementation of #rticle >!is

<sic= of the Treaty of Paris" These conditions are7

a= the mar% must !e internationally %nonH

!= the su!9ect of the ri$ht must !e a trademar%) not a

patent or copyri$ht or anythin$ elseH

c = the mar% must !e for use in the same or similar%inds of $oodsH and

d= the person claimin$ must !e the oner of the

mar% <The Parties Convention Commentary on the

Paris Convention" #rticle !y Dr" 0o$sch) Director

eneral of the Borld Intellectual Property

Or$ani2ation) eneva) Sit2erland) '*A(=

From the set of facts found in the records) it is ruled

that the Petitioner failed to comply ith the third

reuirement of the said memorandum that is themar% must !e for use in the same or similar %inds of

$oods" The Petitioner is usin$ the mar% 1C#NON1 for

products !elon$in$ to class <paints) chemical

products= hile the Respondent is usin$ the same

mar% for sandals <class (=" ence) Petitioners

contention that its mar% is ell-%non at the time the

Respondent filed its application for the same mar%

should fail" 1?4@

Petitioner assails the application of the case of +abushi +aisha

"setan vs. "ntermediate Appeate Court to this case" Petitioner pointsout that in the case of +abushi +aisha "setan vs. "ntermediate

Appeate Court, petitioner therein as found to have never at all

conducted its !usiness in the Philippines unli%e herein petitioner ho

has eEtensively conducted its !usiness here and also had its

trademar% re$istered in this country" ence) petitioner su!mits that

this factual difference renders inapplica!le our rulin$ in the case

of +abushi +aisha "setan vs. "ntermediate Appeate Court that #rticle

A of the Paris Convention does not automatically eEtend protection to

a tradename that is in dan$er of !ein$ infrin$ed in a country that is





also a si$natory to said treaty. This contention deserves scant

consideration" Suffice it to say that the 9ust uoted pronouncement in

the case of +abushi +aisha "setan vs. "ntermediate Appeate

Court, as made independent of the factual findin$ that petitioner in

said case had not conducted its !usiness in this country"

?H#R#"R#, in vie of the fore$oin$) the instant petition for

revie on certiorari is D.NI.D for lac% of merit"

S RD#R#D.

Philip moris v fortune Ta!aco

D # C I S I N

GARCIA, J .+ ia this petition for revie under Rule ;( of the Rules of Court)herein petitioners Philip /orris) Inc") 0enson 3 ed$es <Canada=Inc") and Fa!riues de Ta!ac Reunies) S"#" <no Philip /orrisProducts S"#"= see% the reversal and settin$ aside of the folloin$issuances of the Court of #ppeals <C#= inCA-.R. C o. 666/0) toit7

'" De33o& '%(e' J%&2%r7 1, 00?'@ affirmin$ anearlier decision of the Re$ional Trial Court of Pasi$ City) 0ranch '>>) in its Civil Case No";+4+;) hich dismissed the complaint for trademar% infrin$ement and dama$esthereat commenced !y the petitionersa$ainst respondent Fortune To!accoCorporationH and

" Reo62(3o& '%(e' M%7 0, 00?@ denyin$

petitioners motion for reconsideration"

Petitioner Philip /orris) Inc") a corporation or$ani2ed under the lasof the State of Vir$inia) 6nited States of #merica) is) per Certificate of Re$istration No" 'A+4 issued on #pril >) '*+4 !y the PhilippinePatents Office <PPO=) the re$istered oner of the trademar% MARK VII for ci$arettes" Similarly) petitioner 0enson 3 ed$es <Canada=)Inc") a su!sidiary of Philip /orris) Inc") is the re$istered oner of thetrademar% MARK TEN for ci$arettes as evidenced !yPPO Certificate of Re$istration No" ''';+. #nd as can !e seen inTrademar% Certificate of Re$istration No" '*,(4 , another su!sidiary

of Philip /orris) Inc") the Siss company Fa!riues de Ta!acReunies) S"#") is the assi$nee of the trademar% LARK, hich asori$inally re$istered in '*>; !y i$$et and /yers To!acco Company"On the other hand) respondent Fortune To!acco Corporation) acompany or$ani2ed in the Philippines) manufactures and sellsci$arettes usin$ the trademar% MARK. The le$al dispute !eteen the parties started hen the hereinpetitioners) on the claim that an infrin$ement of their respectivetrademar%s had !een committed) filed) on #u$ust 'A) '*A)

http://sc.judiciary.gov.ph/jurisprudence/2006/june2006/G.R.%20No.%20158589.htm#_ftn1







a Compaint #or "n#rin$ement o# 'rademar1 and 2ama$es a$ainstrespondent Fortune To!acco Corporation)doc%eted as Civil Case No";+4+; of the Re$ional Trial Court of Pasi$) 0ranch '>>"The decision under revie summari2ed hat happened neEt) asfollos7

In the Compaint EEE ith prayer for the issuance of a preliminary in9unction) ?petitioners@ alle$ed thatthey are forei$n corporations not doin$ !usiness inthe Philippines and are suin$ on an isolatedtransaction" EEE they averred that the countries inhich they are domiciled $rant EEE to corporate or

9uristic persons of the Philippines the privile$e to!rin$ action for infrin$ement) EEE ithout need of alicense to do !usiness in thosecountries" ?Petitioners@ li%eise manifested ?!ein$re$istered oners of the trademar% /#RK VII and/#RK T.N for ci$arettes as evidenced !y thecorrespondin$ certificates of re$istration and anapplicant for the re$istration of the trademar% #RK/IDS@" EEE" ?Petitioners@ claimed that they havere$istered the aforementioned trademar%s in their respective countries of ori$in and that) !y virtue of the lon$ and eEtensive usa$e of the same) thesetrademar%s have already $ained international fameand acceptance" Imputin$ !ad faith on the part of the?respondent@) petitioners claimed that the?respondent@) ithout any previous consent from anyof the ?petitioners@) manufactured and sold ci$arettes!earin$ the identical andMor confusin$ly similar

trademar% /#RK EEE #ccordin$ly) they ar$ued that?respondents@ use of the trademar% /#RK in itsci$arette products have caused and is li%ely to causeconfusion or mista%e) or ould deceive purchasersand the pu!lic in $eneral into !uyin$ these productsunder the impression and mista%en !elief that theyare !uyin$ ?petitioners@ products"

Invo%in$ the provisions of the )aris Convention #or the )rotection o# "ndustria and "nteectua

)ropert% <Paris Convention) for !revity=) to hich thePhilippines is a si$natory EEE) ?petitioners@ pointedout that upon the reuest of an interested party) acountry of the 6nion may prohi!it the use of atrademar% hich constitutes a reproduction)imitation) or translation of a mar% already !elon$in$to a person entitled to the !enefits of the saidConvention" They li%eise ar$ued that) inaccordance ith Section '-# in relation to Section4 of Repu!lic #ct '>>) as amended) they areentitled to relief in the form of dama$es EEE ?and@ theissuance of a rit of preliminary in9unction hichshould !e made permanent to en9oin perpetually the?respondent@ from violatin$ ?petitioners@ ri$ht to theeEclusive use of their aforementioned trademar%s"

?Respondent@ filed its Ans!er EEE denyin$?petitioners@ material alle$ations and EEE averred?amon$ other thin$s@ EEE that /#RK is a commonord) hich cannot particularly identify a product to!e the product of the ?petitioners@ EEE

EEE EEE EEE"

/eanhile) after the ?respondent@ f iledits 3pposition <Records) Vo" I) p" >=) the matter of the ?petitioners@ prayer for the issuance of a rit of preliminary in9unction as ne$atively resolved !y thecourt in an 3rder EEE dated /arch A) '*+4" ?Theincidental issue of the propriety of an in9unction

ould eventually !e elevated to the C# and ouldfinally !e resolved !y the Supreme Court in itsDecision dated &uly '>) '**4 in "R" No" *'44@"EEE"

EEE EEE EEE

#fter the termination of the trial on the

merits EEE trial court rendered its 2ecision EEEdated Novem!er 4) '*** dismissin$ the complaint



and counterclaim after ma%in$ a findin$ that the?respondent@ did not commit trademar% infrin$ementa$ainst the ?petitioners@" Resolvin$ first the issue of hether or not ?petitioners@ have capacity to institutethe instant action) the trial court opined that?petitioners@ failure to present evidence to supporttheir alle$ation that their respective countries indeed$rant Philippine corporations reciprocal or similar privile$es !y la EEE 9ustifies the dismissal of thecomplaint EEE" It added that the testimonies of ?petitioners@ itnesses EEE essentially declared that?petitioners@ are in fact doin$ !usiness inthe Philippines) !ut ?petitioners@ failed to esta!lishthat they are doin$ so in accordance ith the le$alreuirement of first securin$ a license" ence) thecourt declared that ?petitioners@ are !arred frommaintainin$ any action in Philippine courts pursuantto Section '44 of the Corporation Code"

The issue of hether or not there as infrin$ementof the ?petitioners@ trademar%s !y the ?respondent@as li%eise ansered EEE in the ne$ative" IteEpounded that in order for a name) sym!ol or device to constitute a trademar%) it must) either !yitself or !y association) point distinctly to the ori$in or onership of the article to hich it is applied and !eof such nature as to permit an eEclusiveappropriation !y one person" #pplyin$ such principleto the instant case) the trial court as of the opinionthat the ords /#RK) T.N) #RK and the Roman

Numerals VII) either alone or in com!ination of eachother do not !y themselves or !y association pointdistinctly to the ori$in or onership of the ci$arettesto hich they refer) such that the !uyin$ pu!lic couldnot !e deceived into !elievin$ that ?respondents@/#RK ci$arettes ori$inated either from the 6S#)Canada) or Sit2erland" .mphasi2in$ that the test in an infrin$ement case isthe li%elihood of confusion or deception) the trial

court stated that the $eneral rule is that aninfrin$ement eEists if the resem!lance is so closethat it deceives or is li%ely to deceive a customer eEercisin$ ordinary caution in his dealin$s andinduces him to purchase the $oods of onemanufacturer in the !elief that they are those of another" EEE" The trial court ruled that the?petitioners@ failed to pass these tests as it neither presented itnesses or purchasers attestin$ thatthey have !ou$ht ?respondents@ product !elievin$that they !ou$ht ?petitioners@ /#RK VII) /#RK T.Nor #RK) and have also failed to introduce inevidence a specific ma$a2ine or periodical circulatedlocally) hich promotes and populari2es their products in the Philippines" It) moreover) elucidatedthat the ords consistin$ of the trademar%s alle$edlyinfrin$ed !y ?respondent@ failed to sho that theyhave acuired a secondary meanin$ as to identify

them as ?petitioners@ products" ence) the courtruled that the ?petitioners@ cannot avail themselves of the doctrine of secondary meanin$"

#s to the issue of dama$es) the trial court deemed it 9ust not to aard any to either party statin$ that)since the ?petitioners@ filed the action in the !elief that they ere a$$rieved !y hat they perceived to!e an infrin$ement of their trademar%) no ron$fulact or omission can !e attri!uted to them" EEE"?4@ <Bords in !rac%ets supplied=

/aintainin$ to have the standin$ to sue in the local forum and thatrespondent has committed trademar% infrin$ement) petitioners enton appeal to the C# hereat their appellate recourse as doc%etedas CA-.R. C o. 666/0.

.ventually) the C#) in its De33o& '%(e' J%&2%r7 1,00, hile rulin$ for petitioners on the matter of their le$al capacityto sue in this country for trademar% infrin$ement) neverthelessaffirmed the trial courts decision on the underlyin$ issue of respondents lia!ility for infrin$ement as it found that7






EEE the appellants ?petitioners@ trademar%s)

i"e") /#RK VII) /#RK T.N and #RK) do not ualifyas ell-%non mar%s entitled to protection evenithout the !enefit of actual use in the local mar%etand that the similarities in the trademar%s in uestionare insufficient as to cause deception or confusiontantamount to infrin$ement" Conseuently) asre$ards the third issue) there is li%eise no !asis for the aard of dama$es prayed for !y the appellantsherein"?;@ <Bord in !rac%et supplied=

Bith their motion for reconsideration havin$ !een denied !y

the C# in its eually challen$ed Reo62(3o& o M%7 0,00, petitioners are no ith this Court via this petition for revieessentially raisin$ the folloin$ issues7 <'= hether or not petitioners)as Philippine re$istrants of trademar%s) are entitled to enforcetrademar% ri$hts in this countryH and <= hether or not respondent

has committed trademar% infrin$ement a$ainst petitioners !y its useof the mar% /#RK for its ci$arettes) hence lia!le for dama$es"

In its Comment,?(@ respondent) aside from assertin$ thecorrectness of the C#s findin$ on its lia!ility for trademar%infrin$ement and dama$es) also puts in issue the propriety of thepetition as it alle$edly raises uestions of fact"

The petition is !ereft of merit"Dealin$ first ith the procedural matter interposed !y

respondent) e find that the petition raises !oth uestions of fact andla contrary to the prescription a$ainst raisin$ factual uestions in apetition for revie on certiorari filed !efore the Court" # uestion of la eEists hen the dou!t or difference arises as to hat the la is

on a certain state of factsH there is a uestion of fact hen the dou!tor difference arises as to the truth or falsity of alle$ed facts"?>@

Indeed) the Court is not the proper venue to consider factual

issues as it is not a trier of facts" ?+@ 6nless the factual findin$s of theappellate court are mista%en) a!surd) speculative) conflictin$) taintedith $rave a!use of discretion) or contrary to the findin$s culled !ythe court of ori$in)?A@e ill not distur! them"

It is petitioners posture) hoever) that their contentionsshould!e treated as purely le$al since they are assailin$ erroneousconclusions deduced from a set of undisputed facts"

Concededly) hen the facts are undisputed) the uestion of hether or not the conclusion dran therefrom !y the C# is correct isone of la"?*@0ut) even if e consider and accept as pure uestions of la the issues raised in this petition) still) the Court is not inclined todistur! the conclusions reached !y the appellate court) theesta!lished rule !ein$ that all dou!ts shall !e resolved in favor of thecorrectness of such conclusions"?',@

0e that as it may) e shall deal ith the issues tendered anddetermine hether the C# ruled in accordance ith la andesta!lished 9urisprudence in arrivin$ at its assailed decision"

# trademar% is any distinctive ord) name) sym!ol) em!lem)

si$n) or device) or any com!ination thereof adopted and used !y amanufacturer or merchant on his $oods to identify and distin$uishthem from those manufactured) sold) or dealt in !y others"?''@ Inar$ua!ly) a trademar% deserves protection" For) as /r" &usticeFran%furter o!served in &isha!a1a &#$. Co. v. +res$e Co.7?'@

The protection of trademar%s is the lasreco$nition of the psycholo$ical function of sym!ols" If it is true that e live !y sym!ols) it is noless true that e purchase $oods !y them" # trade-mar% is a merchandisin$ short-cut hich induces apurchaser to select hat he ants) or hat he has!een led to !elieve hat he ants" The oner of a

mar% eEploits this human propensity !y ma%in$every effort to impre$nate the atmosphere of themar%et ith the drain$ poer of a con$enialsym!ol" Bhatever the means employed) the aim isthe same - to convey throu$h the mar%) in the mindsof potential customers) the desira!ility of thecommodity upon hich it appears" Once this isattained) the trade-mar% oner has somethin$ of value" If another poaches upon the commercial

























ma$netism of the sym!ol he has created) the oner can o!tain le$al redress"

It is thus understanda!le for petitioners to invo%e in this

recourse their entitlement to enforce trademar% ri$hts in this country)specifically) the ri$ht to sue for trademar% infrin$ement in Philippinecourts and !e accorded protection a$ainst unauthori2ed use of their Philippine-re$istered trademar%s"

In support of their contention respectin$ their ri$ht of

action) petitioners assert that) as corporate nationals of mem!er-countries of the Paris 6nion) they can sue !efore Philippine courtsfor infrin$ement of trademar%s) or for unfair competition) ;3()o2(&ee' o ob(%3&3& re3(r%(3o& or % 63e&e (o 'o b23&e 3&()e P)3633&e, %&' ;3()o2( &ee3(7 o %(2%667 'o3&b23&e 3& ()e P)3633&e" To petitioners) these $rievance ri$htand mechanism are accorded not only !y Section '-# of Repu!lic

#ct <R"#"= No" '>>) as amended) or the 'rademar1 La!, !ut also !y

#rticle of the )aris Convention #or the )rotection o# "ndustria )ropert%, otherise %non as the )aris Convention"

In any event) petitioners point out that there is actual use of their trademar%s in the Philippines as evidenced !y the certificates of re$istration of their trademar%s" The mar%s &AR+ '* and LAR+ ere re$istered on the !asis of actual use inaccordance ith Sections -#?'4@ and (<a=?';@ of R"#" No" '>>) asamended) providin$ for a -month pre-re$istration use in localcommerce and trade hile the re$istration of /#RK VII as on the!asis of re$istration in the forei$n country of ori$in pursuant toSection 4+ of the same la herein it is eEplicitly provided that prior

use in commerce need not !e alle$ed"?'(@

0esides) petitioners ar$ue that their not doin$ !usiness in

the Philippines) if that !e the case) does not mean that ci$arettes!earin$ their trademar%s are not availa!le and sold locally"Citin$ Converse Rubber Corporation v. (niversa Rubber )roducts,"nc.,[16] petitioners state that such availa!ility and sale may !eeffected throu$h the acts of importers and distri!utors"Finally) petitioners ould press on their entitlement to protection evenin the a!sence of actual use of trademar%s in the country in vie of

the Philippines adherence to the 'rade Reated Aspects o# "nteectua )ropert% Ri$hts or the TRIPS #$reement and theenactment of R"#" No" A*4) or the Intellectual Property Code<hereinafter the IP Code=) !oth of hich provide that the fame of atrademar% may !e acuired throu$h promotion or advertisin$ ith noeEplicit reuirement of actual use in local trade or commerce"

0efore discussin$ petitioners claimed entitlement to enforce

trademar% ri$hts in the Philippines) it must !e emphasi2ed that their standin$ to sue in Philippine courts had !een reco$ni2ed) and ri$htlyso) !y the C#" It ou$ht to !e pointed out) hoever) that the appellatecourt ualified its holdin$ ith a statement) folloin$ .R. o.0/445, entitled )hiip &orris, "nc., et a. v. 'he Court o# Appeas and Fortune 'obacco Corporation,[17] that such ri$ht to sue does notnecessarily mean protection of their re$istered mar%s in the a!senceof actual use in the Philippines"

Thus clarified) hat petitioners no harp a!out is their entitlement to protection o& ()e (re&() o re3(r%(3o& o ()e3r

(r%'em%r 3& ()eP)3633&e.

#s e ruled in .R. o. 0/445,?'A@ supra, so it must !e here"

#dmittedly) the re$istration of a trademar%$ives the re$istrant) such as petitioners) advanta$es denied non-re$istrants or ordinary users) li%e respondent" 0ut hile petitionersen9oy the statutory presumptions arisin$ from such re$istration)?'*@ i.e., as to the validity of the re$istration) onership and theeEclusive ri$ht to use the re$istered mar%s) they may notsuccessfully sue on the !asis alone of their respective certificates of re$istration of trademar%s" For) petitioners are still forei$n

corporations" #s such) they ou$ht) as a condition to availment of theri$hts and privile$esvis--vis their trademar%s in this country) (o )o;roo ()%(, o& (o o P)3633&e re3(r%(3o&, ()e3r o2&(r7 r%&(2b(%&(3%667 3m36%r r3)( %&' r3v36ee (o "3633&o 3(3e&2r2%&( (o Se(3o& 1<A[0] o R.A. No. 1--.

In Leviton "ndustries v. Savador )?'@ the Court further heldthat the aforementioned reciprocity reuirement is a condition sineua non to filin$ a suit !y a forei$n corporation hich) unless alle$edin the complaint) ould 9ustify dismissal thereof) a mere alle$ationthat the suit is !ein$ pursued under Section '-# of R"#" No" '>> not
























!ein$ sufficient" In a su!seuent case) ?@ hoever) the Court heldthat here the complainant is a national of a Paris Convention-adherin$ country) its alle$ation that it is suin$ under said Section '-

# ould suffice) !ecause the reciprocal a$reement !eteen the tocountries is em!odied and supplied !y the Paris Convention hich)!ein$ considered part of Philippine municipal las) can !e ta%en

9udicial notice of in infrin$ement suits"?4@

#s ell) the fact that their respective home countries)

namely) the 6nited States) Sit2erland and Canada) are) to$ether ith the Philippines) mem!ers of the Paris 6nion does notautomatically entitle petitioners to the protection of their trademar%sin this country %be&( %(2%6 2e o ()e m%r 3& 6o%6 ommere%&' (r%'e.True) the Philippines adherence to the Paris Convention?;@ effectivelyo!li$ates the country to honor and enforce its provisions?(@ asre$ards the protection of industrial property of forei$n nationals inthis country" oever) any protection accorded has to !e made

su!9ect to the limitations of Philippine las" ?>@ ence) despite #rticle of the Paris Convention hich su!stantially provides that <'=nationals of mem!er-countries shall have in this country ri$htsspecially provided !y the Convention as are consistent ithPhilippine las) and en9oy the privile$es that Philippine las no$rant or may hereafter $rant to its nationals) and <= hile nodomicile reuirement in the country here protection is claimed shall!e reuired of persons entitled to the !enefits of the 6nion for theen9oyment of any industrial property ri$hts)?+@ forei$n nationals muststill o!serve and comply ith the conditions imposed !y Philippinela on its nationals"

Considerin$ that R"#" No" '>>) as amended) specifically Sections?A@ and -#?*@ thereof) mandates %(2%6 2e of the mar%s andMor em!lems in local commerce and trade !efore they may !e re$isteredand onership thereof acuired) the petitioners cannot) therefore)dispense ith the element of actual use" Their !ein$ nationals of mem!er-countries of the Paris 6nion does not alter the le$alsituation"

In *merad arment &#$. Corporation v. Court o# Appeas)?4,@ the Court reiterated its rulin$s in Sterin$ )roducts "nternationa,"nc. v. Farben#abri1en 7a%er A1tien$esescha#t, [31] +abushi +aisha

"setan v. "ntermediate Appeate Court,[3] and )hiip &orris v. Court o# Appeas and Fortune 'obacco Corporation ?44@ on the importanceof actua commercia use of a trademar% inthe Philippines notithstandin$ the Paris Convention7

The provisions of the '*>( Paris Convention

relied upon !y private respondent and Sec" '-# of the Trademar% a ere sufficiently eEpoundedupon and ualified in the recent case of )hiip&orris, "nc., et. a. vs. Court o# Appeas8

EEE EEE EEEFolloin$ universal acuiescence and

comity) our municipal la on trademar%s re$ardin$the reuirements of actual use inthe Philippines must su!ordinate an internationala$reement inasmuch as the apparent clash is !ein$decided !y a municipal tri!unal" JEE" Bithal) the fact

that international la has !een made part of the laof the land does not !y any means imply the primacyof international la over national la in the municipalsphere" 6nder the doctrine of incorporation asapplied in most countries) rules of International aare $iven a standin$ eual) not superior) to nationalle$islative enactments"

EEE EEE EEE

In other ords) <a forei$n corporation= may have thecapacity to sue for infrin$ement !ut the uestion of

hether they have an eEclusive ri$ht over their sym!ol as to 9ustify issuance of the controversial ritill depend on actual use of their trademar%s in thePhilippines in line ith Sections and -# of thesame la" It is thus incon$ruous for petitioners toclaim that hen a forei$n corporation not licensed todo !usiness in the Philippines files a complaint for infrin$ement) the entity need not !e actually usin$ itstrademar% in commerce in the Philippines" Such aforei$n corporation may have the personality to file a































suit for infrin$ement !ut it may not necessarily !eentitled to protection due to a!sence of actual use of the em!lem in the local mar%et"Contrary to hat petitioners su$$est) the re$istration of

trademar% cannot !e deemed conclusive as to the actual use of suchtrademar% in local commerce" #s it ere) re$istration does not confer upon the re$istrant an a!solute ri$ht to the re$istered mar%" Thecertificate of re$istration merely constitutes prima #acie evidence thatthe re$istrant is the oner of the re$istered mar%" .vidence of non-usa$e of the mar% re!uts the presumption of trademar% onership)?4;@ as hat happened here hen petitioners no less admitted notdoin$ !usiness in this country"?4(@

/ost importantly) e stress that re$istration inthe Philippines of trademar%s does not ipso #acto convey an a!soluteri$ht or eEclusive onership thereof" To !orro from Shan$ri-La"nternationa 9ote &ana$ement, Ltd. v. 2eveopment roup o# Companies, "nc.[36] trademar% is a creation of use and) therefore)actual use is a pre-reuisite to eEclusive onershipH re$istration is

only an administrative confirmation of the eEistence of the ri$ht of onership of the mar%) !ut does not perfect such ri$htH actual usethereof is the perfectin$ in$redient"?4+@

Petitioners reliance on Converse Rubber Corporation[3!] isuite misplaced) that case !ein$ cast in a different factual milieu"There) e ruled that a forei$n oner of a Philippine trademar%) al!eitnot licensed to do) and not so en$a$ed in) !usiness inthe Philippines) may actually earn reputation or $oodill for its $oodsin the country" 0ut unli%e in the instant case) evidence of actual salesof Converse ru!!er shoes) such as sales invoices) receipts and thetestimony of a le$itimate trader) as presented in Converse"This Court also finds the IP Code and the TRIPS #$reement to !e

inapplica!le) the infrin$ement complaint herein havin$ !een filed in #u$ust '*A and tried under the ae$is of R"#" No" '>>) as amended"The IP Code) hoever) too% effect only on &anuary ') '**A ithout aprovision as to its retroactivity"?4*@ In the same vein) the TRIPS

#$reement as ineEistent hen the suit for infrin$ement as filed)the Philippines havin$ adhered thereto only on Decem!er '>) '**;" Bith the fore$oin$ perspective) it may !e stated ri$ht off that there$istration of a trademar% unaccompanied !y actual use thereof inthe country accords the re$istrant only the standin$ to sue for

infrin$ement in Philippine courts" .ntitlement to protection of suchtrademar% in the country is entirely a different matter" This !rin$s us to the principal issue of infrin$ement"

Section of R"#" No" '>>) as amended) defines hatconstitutes trademar% infrin$ement) as follos7

Sec" " "n#rin$ement, !hat constitutes. #ny personho shall use) ithout the consent of the re$istrant)any reproduction) counterfeit) copy or colora!leimitation of any re$istered mar% or tradename inconnection ith the sale) offerin$ for sale) or advertisin$ of any $oods) !usiness or services on or in connection ith hich such use is li%ely to causeconfusion or mista%e or to deceive purchasers or others as to the source or ori$in of such $oods or services) or identity of such !usinessH or reproduce)

counterfeit) copy of color a!ly imitate any such mar%or tradename and apply such reproduction)counterfeit) copy or colora!le imitation to la!els)si$ns) prints) pac%a$es) rappers) receptacles or advertisements intended to !e used upon or inconnection ith such $oods) !usiness) or services)shall !e lia!le to a civil action !y the re$istrant for any or all of the remedies herein provided"

Petitioners ould insist on their thesis of infrin$ement since

respondents mar% /#RK for ci$arettes is confusin$ly or deceptivelysimilar ith theirduly re$istered /#RK VII) /#RK T.N

and #RK mar%s li%eise for ci$arettes" To them) the ord /#RKould li%ely cause confusion in the trade) or deceive purchasers)particularly as to the source or ori$in of respondents ci$arettes"

The li%elihood of confusion is the $ravamen of trademar%

infrin$ement"?;,@ 0ut li%elihood of confusion is a relative concept) theparticular) and sometimes peculiar) circumstances of each case!ein$ determinative of its eEistence" Thus) in trademar% infrin$ementcases) more than in other %inds of liti$ation) precedents must !eevaluated in the li$ht of each particular case"?;'@






















In determinin$ similarity and li%elihood of confusion)

9urisprudence has developed to tests7 the dominanc% test andthe hoistic test"?;@ The dominancy test?;4@ sets si$ht on thesimilarity of the prevalent features of the competin$ trademar%s thatmi$ht cause confusion and deception) thus constitutesinfrin$ement" 6nder this norm) the uestion at issue turns onhether the use of the mar%s involved ould !e li%ely to causeconfusion or mista%e in the mind of the pu!lic or deceive purchasers"?;;@

In contrast) the holistic test?;(@ entails a consideration of theentirety of the mar%s as applied to the products) includin$ the la!elsand pac%a$in$) in determinin$ confusin$ similarity"

6pon consideration of the fore$oin$ in the li$ht of the

peculiarity of this case) e rule a$ainst the li%elihood of confusionresultin$ in infrin$ement arisin$ from the respondents use of thetrademar% /#RK for its particular ci$arette product"

For one) as ri$htly concluded !y the C# after comparin$ the

trademar%s involved in their entirety as they appear on the products)?;>@ the stri%in$ dissimilarities are si$nificant enou$h to arn anypurchaser that one is different from the other" Indeed) althou$h theperceived offendin$ ord /#RK is itself prominent in petitionerstrademar%s /#RK VII and /#RK T.N) the entire mar%in$ systemshould !e considered as a hole and not dissected) !ecause adiscernin$ eye ould focus not only on the predominant ord !utalso on the other features appearin$ in the la!els" Only then ouldsuch discernin$ o!server dra his conclusion hether one mar%ould !e confusin$ly similar to the other and hether or not sufficient

differences eEisted !eteen the mar%s"?;+@

This said) the C# then) in findin$ that respondents $oods

cannot !e mista%en as any of the three ci$arette !rands of thepetitioners) correctly relied on the holistic test"

0ut) even if the dominancy test ere to !e used) as ur$ed !ythe petitioners) !ut !earin$ in mind that a trademar% serves as a toolto point out distinctly the ori$in or onership of the $oods to hich itis affiEed)?;A@ the li%elihood of confusion tantamount to infrin$ementappears to !e farfetched" The reason for the ori$in andMor onership

an$le is that unless the ords or devices do so point out the ori$in or onership) the person ho first adopted them cannot !e in9ured !yany appropriation or imitation of them !y others) nor can the pu!lic!e deceived"?;*@

Since the ord /#RK) !e it alone or in com!ination ith the

ord T.N and the Roman numeral VII) does not point to the ori$in or onership of the ci$arettes to hich they apply) the local !uyin$pu!lic could not possi!ly !e confused or deceived that respondents/#RK is the product of petitioners andMor ori$inated from the 6"S"#")Canada or Sit2erland" #nd lest it !e overloo%ed) no actualcommercial use of petitioners mar%s in local commerce as proven"There can thus !e no occasion for the pu!lic in this country)unfamiliar in the first place ith petitioners mar%s) to !e confused"

For another) a comparison of the trademar%s as they appear

on the $oods is 9ust one of the apprecia!le circumstances indeterminin$ li%elihood of confusion" 2e &onte Corp. v.

CA["#] dealt ith another) here e instructed to $ive due re$ard tothe ordinary purchaser) thus7

The uestion is not hether the to articles

are distin$uisha!le !y their la!el hen set side !yside !ut hether the $eneral confusion made !y thearticle upon the eye of the casual purchaser ho isunsuspicious and off his $uard) is such as to li%elyresult in his confoundin$ it ith the ori$inal" #so!served in several cases) the $eneral impression of the ordinary purchaser) !uyin$ under the normallyprevalent conditions in trade and $ivin$ the attention

such purchasers usually $ive in !uyin$ that class of $oods is the touchstone"

Bhen e spo%e of an ordinary purchaser) the reference as

not to the completely unary customer !ut to the ordinarily intelli$ent!uyer considerin$ the type of product involved" ?('@

It cannot !e over-emphasi2ed that the products involved areaddictin$ ci$arettes purchased mainly !y those ho are alreadypredisposed to a certain !rand" #ccordin$ly) the ordinary !uyer thereof ould !e all too familiar ith his !rand and discriminatin$ as

























ell" Be) thus) concur ith the C# hen it held) citin$ a definitionfound in 2% 7uncio v. 'an 'iao 7o1, ["] that the ordinar% purchaser inthis case means one accustomed to bu%, and there#ore to someextent #amiiar !ith, the $oods in uestion.

Pressin$ on ith their contention respectin$ the commission of

trademar% infrin$ement) petitioners finally point to Section of R"#"No" '>>) as amended" #s ar$ued) actual use of trademar%s in localcommerce is) under said section) not a reuisite !efore an a$$rievedtrademar% oner can restrain the use of his trademar% upon $oodsmanufactured or dealt in !y another) it !ein$ sufficient that he hadre$istered the trademar% or trade-name ith the IP Office" In fine)petitioners su!mit that respondent is lia!le for infrin$ement)havin$ manufactured and sold ci$arettes ith the trademar% /#RKhich) as it ere) are identical andMor confusin$ly similar ith their duly re$istered trademar%s /#RK VII) /#RK T.N and #RK"

This Court is not persuaded"

In &i$ht% Corporation v. * : ; ao Winer% )?(4@ the Court

held that the folloin$ constitute the elements of trademar%infrin$ement in accordance not only ith Section of R"#" No"'>>) as amended) !ut also Sections ) -#) *-#?(;@ and , thereof7

<a= a trademar% actually used in commerce inthe Philippines and re$istered in the principalre$ister of the Philippine Patent Office) <!= is used !y another person in connection ith thesale) offerin$ for sale) or advertisin$ of any $oods)

!usiness or services or in connection ith hichsuch use is i1e% to cause con#usion or mista1e or todeceive purchasers or others as to the source or ori$in of such $oods or services) or identit% of such!usinessH or such trademar% is reproduced)counterfeited) copied or colora!ly imitated !yanother person and such reproduction) counterfeit)copy or colora!le imitation is applied to la!els) si$ns)prints) pac%a$es) rappers) receptacles or advertisements intended to !e used upon or in

connection ith such $oods) !usiness or services asto li%ely cause confusion or mista%e or to deceivepurchasers) <c= the trademar% is used for identical or similar $oods) and

<d= such act is done ithout the consent of thetrademar% re$istrant or assi$nee"

#s already found herein) hile petitioners have re$isteredthe trademar%s /#RK VII) /#RK T.N and #RK for ci$arettes inthe Philippines) prior actual commercial use thereof had not !eenproven" In fact) petitioners 9udicial admission of not doin$ !usiness inthis country effectively !elies any pretension to the contrary"

i%eise) e note that petitioners even failed to support their

claim that their respective mar%s are ell-%non andMor haveacuired $oodill in the Philippines so as to !e entitled to protection

even ithout actual use in this country in accordance ith #rticle>!is?((@ of the Paris Convention" #s correctly found !y the C#)affirmin$ that of the trial court7

EEE the records are !ereft of evidence toesta!lish that the appellants ?petitioners@ productsare indeed ell-%non in the Philippines) either throu$h actual sale of the product or throu$hdifferent forms of advertisin$" This findin$ issupported !y the fact that appellants admit intheir Compaint that they are not doin$ !usiness inthe Philippines) hence) admittin$ that their products

are not !ein$ sold in the local mar%et" Be li%eisesee no co$ent reason to distur! the trial courtsfindin$ that the appellants failed to esta!lish thattheir products are idely %non !y local purchasersas <n=o specific ma$a2ine or periodical pu!lished inthe Philippines) or in other countries !ut circulatedlocally have !een presented !y the appellants durin$trial" The appellants also ere not a!le to sho thelen$th of time or the eEtent of the promotion or












advertisement made to populari2e their products inthe Philippines"?(>@

ast) !ut not least) e must reiterate that the

issue of trademar% infrin$ement is factual) ith !oth the trial andappellate courts havin$ peremptorily found alle$ations of

infrin$ement on the part of respondent to !e ithout !asis" #s esaid time and time a$ain) factual determinations of the trial court)concurred in !y the C#) are final and !indin$ on this Court" ?(+@

For lac% of convincin$ proof on the part of the petitioners of

actual use of their re$istered trademar%s prior to respondents use of its mar% and for petitioners failure to demonstrate confusin$ similarity!eteen said trademar%s) the dismissal of their !asic complaint for infrin$ement and the concomitant plea for dama$es must !eaffirmed" The la) the surroundin$ circumstances and the euities of the situation call for this disposition"

?H#R#"R#) the petition is here!y D#NI#D" #ccordin$ly)

the assailed decision and resolution of the Court of #ppealsare A""IRM#D"

Costs a$ainst the petitioners" S RD#R#D"

.thepa v Director of Patents

To the uestion7 /ay trademar% #T6SSIN !e re$istered) $iven the

fact that P.RT6SSIN) another trademar%) had !een previously

re$istered in the Patent Office the Director of Patents ansered

affirmatively" ence this appeal"

On #pril 4) '*(*) respondent Bestmont Pharmaceuticals) Inc") a

Ne 5or% corporation) sou$ht re$istration of trademar% 1#tussin1

placed on its 1medicinal preparation of eEpectorant antihistaminic)

!ronchodilator sedative) ascor!ic acid <Vitamin C= used in the

treatment of cou$h1" The trademar% is used eEclusively in the

Philippines since &anuary ') '*(*"'

Petitioner) .tepha) #" ") a iechtenstin <principality= corporation)

o!9ected" Petitioner claims that it ill !e dama$ed !ecause #tussin is

so confusedly similar to its Pertussin <Re$istration No" >,A*) issued

on Septem!er () '*(+= used on a preparation for the treatment of

cou$hs) that the !uyin$ pu!lic ill !e misled into !elievin$ that

Bestmont:s product is that of petitioner:s hich alle$edly en9oys

$oodill"

'" The o!9ects of a trademar% are 1to point out distinctly the

ori$in or onership of the articles to hich it is affiEed) tosecure to him ho has !een instrumental in !rin$in$ into

mar%et a superior article or merchandise the fruit of his

industry and s%ill) and to prevent fraud and imposition"1 Our

over-all tas% then is to ascertain hether or not #tussin so

resem!les Pertussin 1as to !e li%ely) hen applied to or used

in connection ith the $oods """ of the applicant) to cause

confusion or mista%e or to deceive purchasers1"4 #nd) e are

to !e $uided !y the rule that the validity of a cause for

infrin$ement is predicated upon colora!le imitation" The







phrase 1colora!le imitation1 denotes such a 1close or

in$enious imitation as to !e calculated to deceive ordinary

persons) or such a resem!lance to the ori$inal as to deceive

an ordinary purchaser) $ivin$ such attention as a purchaser

usually $ives) and to cause him to purchase the one

supposin$ it to !e the other"1

;

" That the ord 1tussin1 fi$ures as a component of !oth

trademar%s is nothin$ to onder at" The Director of Patents

aptly o!serves that it is 1the common practice in the dru$

and pharmaceutical industries to :fa!ricate: mar%s !y usin$

sylla!les or ords su$$estive of the ailments for hich they

are intended and addin$ thereto distinctive prefiEes or

suffiEes1"( #nd appropriately to !e considered no is the fact

that) concededly) the 1tussin1 <in Pertussin and #tussin= as

derived from the atin root-ord 1tussis1 meanin$ cou$h">

1Tussin1 is merely descriptiveH it is $enericH it furnishes to the

!uyer no indication of the ori$in of the $oodsH it is open for

appropriation !y anyone" It is accordin$ly !arred from

re$istration as trademar%" Bith 9urisprudence holdin$ the

line) e feel safe in ma%in$ the statement that any other

conclusion ould result in 1appellant havin$ practically a

monopoly1+ of the ord 1tussin1 in a trademar%"A

Bhile 1tussin1 !y itself cannot thus !e used eEclusively to

identify one:s $oods) it may properly !ecome the su!9ect of a

trademar% 1!y com!ination ith another ord or

phrase1"* #nd this union of ords is reflected in

petitioner:s )ertussin and respondent:s Atussin) the first ith

prefiE 1Per1 and the second ith PrefiE 1#1"/<!ph=/.>?t

4" # practical approach to the pro!lem of similarity or

dissimilarity is to $o into the !hoe of the to trademar%s

pictured in their manner of display" Inspection should !e

underta%en from the viepoint of a prospective !uyer" The

trademar% complained of should !e compared and

contrasted ith the purchaser:s memory <not in 9uEtaposition=

of the trademar% said to !e infrin$ed" ', Some such factors

as 1soundH appearanceH form) style) shape) si2e or formatH

colorH ideas connoted !y mar%sH the meanin$) spellin$) and

pronunciation) of ords usedH and the settin$ in hich the

ords appear1 may !e considered"

''

For) indeed) trademar%infrin$ement is a form of unfair competition" '

Be ta%e a casual loo% at the to la!els ithout spellin$

out the details !earin$ in mind the easy-to-remem!er

earmar%s thereof" Respondent:s la!el underscores the

trademar% #tussin in !old) !loc% letters hori2ontally ritten"

In petitioner:s) on the other hand) Pertussin is printed

dia$onally upards and across in semiscript style ith

flourishes and ith only the first letter 1P1 capitali2ed" .ach

la!el plainly shos the source of the medicine7 petitioner:s at

the foot !ears 1.tepha td" Schaan Fl1) and on top)

1#pothecary ." Taeschner:s1H respondent:s pro9ects

1Bestmont Pharmaceuticals) Inc" Ne 5or%) 6S#1 at the

!ottoms) and on the loer left side the ord 1Bestmont1

upon a hite diamond shaped enclosure and in red in% a

color different from that of the ords a!ove and !elo it"

Printed prominently alon$ the left) !ottom and ri$ht ed$es of

petitioner:s la!el are indications of the use7 1for !ronchial

catarrh hoppin$-cou$h cou$hs and asthma1"

Respondent:s for its part !riefly represents hat its produce

actually is - a 1cou$h syrup1" The to la!els are entirely

different in colors) contents) arran$ement of ords thereon)

si2es) shapes and $eneral appearance" The contrasts inpictorial effects and appeals to the eye is so pronounced that

the la!el of one cannot !e mista%en for that of the other) not

even !y persons unfamiliar ith the to trademar%s" '4

On this point the folloin$ culled from a recent decision of

the 6nited States Court of Customs and Patent #ppeals

<&une '() '*(>= is persuasive7 ';



Confusion is li%ely !eteen trademar%s) hoever)

only if their over-a presentations in any of the

particulars of sound) appearance) or meanin$ are

such as ould lead the purchasin$ pu!lic into

!elievin$ that the products to hich the mar%s are

applied emanated from the same source" In testin$this issue) fiEed le$al rules eEist if not in harmony)

certainly in a!undance !ut) in the final analysis)

the application of these rules in any $iven situation

necessarily reflects a matter of individual 9ud$ment

lar$ely predicated on opinion" There is) hoever)

and can !e no disa$reement ith the rule that the

purchaser is confused) if at all) !y the mar%s as a

!hoe"

;" Be no consider eEclusively the to ords Pertussin

and #tussin as they appear on the respective la!els" #s

previously adverted to) these ords are presented to the

pu!lic in different styles of ritin$ and methods of desi$n"

The hori2ontal plain) !loc% letters of #tussin and the

dia$onally and artistically upard ritin$ of Pertussin leave

distinct visual impressions" One loo% is enou$h to denude

the mind of that illuminatin$ similarity so essential for a

trademar% infrin$ement case to prosper"

(" #s e ta%e up Pertussin and #tussin once a$ain) e

cannot escape notice of the fact that the to ords do not

sound ali%e hen pronounced" There is not much

phonetic similarity !eteen the to" The Solicitor eneral

ell-o!served that in Pertussin the pronunciation of the

prefiE 1Per1) hether correct or incorrect) includes a

com!ination of three letters P) e and r H hereas) in #tussin

the hole starts ith the sin$le letter # added to suffiE

1tussin1" #ppeals to the ear are disimilar" #nd this) !ecause

in a ord com!ination) the part that comes first is the most

pronounced " #n eEpositor of the applica!le rule here is the

decision in the Syrocol-Cheracol controversy" '( There) the

rulin$ is that trademar% Syrocol <a cou$h medicine

preparation= is not confusedly similar to

trademar% Cheraco <also a cou$h medicine preparation="

Reason7 the to ords 1do not loo% or sound enou$h ali%e to

9ustify a holdin$ of trademar% infrin$ement1) and the 1only

similarity is in the last sylla!le) and that is not uncommon innames $iven dru$ compounds1"

>" In the solution of a trademar% infrin$ement pro!lem)

re$ard too should !e $iven to the cass of persons ho !uy

the particular product and the circumstances ordinarily

attendant to its acuisition" '> The medicinal preparation

clothed ith the trademar%s in uestion) are unli%e articles of

everyday use such as candies) ice cream) mil%) soft drin%s

and the li%e hich may !e freely o!tained !y anyone)

anytime) anyhere" Petitioner:s and respondent:s products

are to !e dispensed upon medical prescription" The

respective la!els say so" #n intendin$ !uyer must have to $o

first to a licensed doctor of medicineH he receives instructions

as to hat to purchaseH he reads the doctor:s prescriptionH

he %nos hat he is to !uy" e is not of the incautious)

unary) uno!servant or unsuspectin$ typeH he eEamines the

product sold to himH he chec%s to find out hether it

conforms to the medical prescription" The common trade

channel is the pharmacy or the dru$store" Similarly) the

pharmacist or dru$$ist verifies the medicine sold" The mar$in

of error in the acuisition of one for the other is uite remote"

Be concede the possi!ility that !uyers mi$ht !e a!le to o!tain

Pertussin or #ttusin ithout prescription" Bhen this happens) then

the !uyer must !e one throu$hly familiar ith hat he intends to $et)

else he ould not have the temerity to as% for a medicine

specifically needed to cure a $iven ailment" In hich case) the more

impro!a!le it ill !e to palm off one for the other" For a person ho

purchases ith open eyes is hardly the man to !e deceived"



For the reasons $iven) the appealed decision of the respondent

Director of Patents $ivin$ due course to the application for the

re$istration of trademar% #TT6SIN is here!y affirmed" Costa a$ainst

petitioner" So ordered"

G.R. No. 1054 J267 5, 199

ASIA BR#?#R, INC., petitioner)

vs"

!H# HN. CUR! " APP#A$S %&' SAN MIGU#$CRPRA!IN, respondents"

Abad Santos : Associates and S%cip, Saazar, 9ernandez :

atmaitan #or petitioner.

Roco, 7una$, +apunan La! 3##ice #or private respondent.

GRI<AEUIN, J.$

On Septem!er '() '*AA) San /i$uel Corporation <S/C= filed a

complaint a$ainst #sia 0reery Inc" <#0I= for infrin$ement of

trademar% and unfair competition on account of the latter:s 0..R

P#. PIS.N or 0..R N# 0..R product hich has !een

competin$ ith S/C:s S#N /I6. P#. PIS.N for a share of

the local !eer mar%et" <San /i$uel Corporation vs" #sia 0reery Inc")

Civ" Case" No" (>4*,) RTC 0ranch '>>) Pasi$) /etro /anila"="

On #u$ust +) '**,) a decision as rendered !y the trial Court)

presided over !y &ud$e &esus O" 0ersamira) dismissin$ S/C:scomplaint !ecause #0I 1has not committed trademar% infrin$ement

or unfair competition a$ainst1 S/C <p" 'A*) Roo="

S/C appealed to the Court of #ppeals <C"#"-"R" CV No" A',;="

On Septem!er 4,) '**') the Court of #ppeals <SiEth Division

composed of &ustice &ose C" Campos) &r") chairman and ponente)

and &ustices Venancio D" #ldecoa &r" and Filemon " /endo2a) as

mem!ers= reversed the trial court" The dispositive part of the

decision reads as follos7

In the li$ht of the fore$oin$ analysis and under theplain lan$ua$e of the applica!le rule and principle on

the matter) Be find the defendant #sia 0reery

Incorporated 6IT5 of infrin$ement of trademar%

and unfair competition" The decision of the trial court

is here!y R.V.RS.D) and a ne 9ud$ment entered

in favor of the plaintiff and a$ainst the defendant as

follos7

<'= The defendant #sia 0reery Inc" its officers)

a$ents) servants and employees are here!y

permanently en9oined and restrained from

manufacturin$) puttin$ up) sellin$) advertisin$)

offerin$ or announcin$ for sale) or supplyin$ 0eer

Pale Pilsen) or any similar preparation) manufacture

or !eer in !ottles and under la!els su!stantially

identical ith or li%e the said !ottles and la!els of

plaintiff San /i$uel Corporation employed for that

purpose) or su!stantially identical ith or li%e the

!ottles and la!els no employed !y the defendant

for that purpose) or in !ottles or under la!els hich



are calculated to deceive purchasers and consumers

into the !elief that the !eer is the product of the

plaintiff or hich ill ena!le others to su!stitute) sell

or palm off the said !eer of the defendant as and for

the !eer of the plaintiff-complainant"

<= The defendant #sia 0reery Inc" is here!y

ordered to render an accountin$ and pay the San

/i$uel Corporation dou!le any and all the payments

derived !y defendant from operations of its !usiness

and the sale of $oods !earin$ the mar% 10eer Pale

Pilsen1 estimated at approEimately Five /illion

Pesos <P(),,,),,,",,=H to recall all its products

!earin$ the mar% 10eer Pale Pilsen1 from its retailers

and deliver these as ell as all la!els) si$ns) prints)

pac%a$es) rappers) receptacles and

advertisements !earin$ the infrin$in$ mar% and all

plates) molds) materials and other means of ma%in$

the same to the Court authori2ed to eEecute this

9ud$ment for destruction"

<4= The defendant is here!y ordered to pay plaintiff

the sum of To /illion Pesos <P),,,),,,",,= as

moral dama$es and alf a /illion Pesos

<P(),,,),,,",,= !y ay of eEemplary dama$es"

<;= The defendant is further ordered to pay the

plaintiff attorney:s fees in the amount of P(,),,,",,

plus costs to this suit" <p" *,) Roo"=

6pon a motion for reconsideration filed !y #0I) the a!ove dispositive

part of the decision) as modified !y the separate opinions of the

Special SiEth Division 1 so that it should read thus7

In the li$ht of the fore$oin$ analysis and under the

plain lan$ua$e of the applica!le rule and principle on

the matter) Be find the defendant #sia 0reery

Incorporated ("L'@ o# in#rin$ement o# trademar1

and un#air competition" The decision of the trial court

is here!y R.V.RS.D) and a ne 9ud$ment entered

in favor of the plaintiff and a$ainst the defendant as

follos7

<'= The defendant #sia 0reery Inc") its officers)

a$ents) servants and employees are here!y

permanently en9oined and restrained from

manufacturin$) puttin$ up) sellin$) advertisin$)

offerin$ or announcin$ for sale) or supplyin$ 0eer

Pale Pilsen) or any similar preparation) manufacture

or !eer in !ottles and under la!els su!stantially

identical ith or li%e the said !ottles and la!els of

plaintiff San /i$uel Corporation employed for that

purpose) or su!stantially identical ith or li%e the

!ottles and la!els no employed !y the defendant

for that purpose) or in !ottles or under la!els hich

are calculated to deceive purchasers and consumers

into the !elief that the !eer if the product of the

plaintiff or hich ill ena!le others to su!stitute) sell

or palm off the said !eer of the defendant as and for

the !eer of the plaintiff-complainant"

<= The defendant #sia 0reery Inc" is here!y

ordered to recall all its products !earin$ the mar%

0eer Pale Pilsen from its retailers and deliver these

as ell as all la!els) si$ns) prints) pac%a$es)

rappers) receptacles and advertisements !earin$the infrin$in$ mar% and all plates) molds) materials

and other means of ma%in$ the same to the Court

authori2ed to eEecute this 9ud$ment for destruction"

<4= The defendant is here!y ordered to pay plaintiff

the sum of To /illion Pesos <P),,,),,,",,= as

moral dama$es and alf a /illion Pesos

<P(,,),,,",,= !y ay of eEemplary dama$es"



<;= The defendant is further ordered to pay the

plaintiff attorney:s fees in the amount of P(,),,,",,

plus costs of this suit"

In due time) #0I appealed to this Court !y a petition

for certiorari under Rule ;( of the Rules of Court" The lone issue inthis appeal is hether #0I infrin$es S/C:s trademar%7 San &i$ue

)ae )isen !ith Rectan$uar 9ops and &at 2esi$n) and there!y

commits unfair competition a$ainst the latter" It is a factual issue

<Phil" Nut Industry Inc" v" Standard 0rands Inc") >( SCR# (+(= and

as a $eneral rule) the findin$s of the Court of #ppeals upon factual

uestions are conclusive and ou$ht not to !e distur!ed !y us"

oever) there are eEceptions to this $eneral rule) and they are7

<'= Bhen the conclusion is $rounded entirely on

speculation) surmises and con9ecturesH

<= Bhen the inference of the Court of #ppeals from

its findin$s of fact is manifestly mista%en) a!surd and

impossi!leH

<4= Bhere there is $rave a!use of discretionH

<;= Bhen the 9ud$ment is !ased on a

misapprehension of factsH

<(= Bhen the appellate court) in ma%in$ its findin$s)

ent !eyond the issues of the case) and the sameare contrary to the admissions of !oth the appellant

and the appelleeH

<>= Bhen the findin$s of said court are contrary to

those of the trial courtH

<+= Bhen the findin$s are ithout citation of specific

evidence on hich they are !asedH

<A= Bhen the facts set forth in the petition as ell as

in the petitioner:s main and reply !riefs are not

disputed !y the respondentsH and

<*= Bhen the findin$s of facts of the Court of

#ppeals are premised on the a!sence of evidenceand are contradicted on record" <Reynolds Philippine

Corporation vs" Court of #ppeals) '>* SCR# ,)

4 citin$) /endo2a vs" Court of #ppeals) '(>

SCR# (*+H /anlapa2 vs" Court of #ppeals) ';+

SCR# 4AH Sacay vs" Sandi$an!ayan) '; SCR#

(*4) >,*H uita vs" C#) '4* SCR# (+>H Casanayan

vs" Court of #ppeals) '*A SCR# 444) 44>H also #peE

Investment and Financin$ Corp" vs" I#C) '>> SCR#

;(A ?citin$ Tolentino vs" De &esus) (> SCR# '>+H

Carolina Industries) Inc" vs" C/S Stoc% 0ro%era$e)

Inc") *+ SCR# +4;H /anero vs" C#) ', SCR# A'+H

and /oran) &r" vs" C#) '44 SCR# AA@"=

6nder any of these eEceptions) the Court has to revie the evidence

in order to arrive at the correct findin$s !ased on the record <Roman

Catholic 0ishop of /alolos) Inc" vs" I#C) '*' SCR# ;'') ;,"= Bhere

findin$s of the Court of #ppeals and trial court are contrary to each

other) the Supreme Court may scrutini2e the evidence on record"

<Cru2 vs" C#) '* SCR# ) +"=

The present case is one of the eEceptions !ecause there is no

concurrence !eteen the trial court and the Court of #ppeals on the

lone factual issue of hether #0I) !y manufacturin$ and sellin$ its

0..R P#. PIS.N in am!er colored steinie !ottles of 4, ml"

capacity ith a hite painted rectan$ular la!el has committed

trademar% infrin$ement and unfair competition a$ainst S/C"

Infrin$ement of trademar% is a form of unfair competition <Clar%e vs"

/anila Candy Co") 4> Phil" ',,) ',>=" Sec" of Repu!lic #ct No"

'>>) otherise %non as the Trademar% a) defines hat

constitutes infrin$ement7



Sec" " "n#rin$ement, !hat constitutes" #ny

person ho shall use) ithout the consent of the

re$istrant) any reproduction) counterfeit) copy or

colora!le imitation of any re$istered mar% or trade-

name in connection ith the sale) offerin$ for sale) or

advertisin$ of any $oods) !usiness or services on orin connection ith hich such use is li%ely to cause

confusion or mista%e or to deceive purchasers or

others as to the source or ori$in of such $oods or

services) or identity of such !usinessH or reproduce)

counterfeit) copy or colora!ly imitate any such mar%

or trade-name and apply such reproduction)

counterfeit) copy) or colora!le imitation to la!els)

si$ns) prints) pac%a$es) rappers) receptacles or

advertisements intended to !e used upon or in

connection ith such $oods) !usiness or services)

shall !e lia!le to a civil action !y the re$istrant for

any or all of the remedies herein provided"<.mphasis supplied"=

This definition implies that only re$istered trade mar%s) trade names

and service mar%s are protected a$ainst infrin$ement or

unauthori2ed use !y another or others" The use of someone else:s

re$istered trademar%) trade name or service mar% is unauthori2ed)

hence) actiona!le) if it is done 1ithout the consent of the re$istrant"1

<"bid "=

The re$istered trademar% of S/C for its pale pilsen !eer is7

San &i$ue )ae )isen With Rectan$uar 9ops and

&at 2esi$n. <Philippine 0ureau of Patents)

Trademar%s and Technolo$y Transfer Trademar%

Certificate of Re$istration No" 4>',4) dated 4 Oct"

'*A>)

<p" '+;) Roo"=

#s descri!ed !y the trial court in its decision <Pa$e '++) Roo=7

" " " " a rectan$ular desi$n ?is@ !ordered !y hat

appears to !e minute $rains arran$ed in ro!s o#

three in !hich there appear in each corner hop

desi$ns" #t the top is a phrase ritten in small print

1Re$" Phil" Pat" Off"1 and at the !ottom 1Net

Contents7 4, /l"1 The dominant feature is thephrase 1San &i$ue 1 ritten hori2ontally at the upper

portion" 0elo are the ords 1Pale Pilsen1 ritten

dia$onally across the middle of the rectan$ular

desi$n" In !eteen is a coat of arms and the phrase

1.Epertly 0reed"1 The 1S1 in 1San1 and the 1/1 of

1/i$uel)1 1P1 of 1Pale1 and 1Pilsen1 are ritten in

othic letters ith fine stro%es of serifs) the %ind that

first appeared in the '+A,s in .n$land and used for

printin$ erman as distin$uished from Roman and

Italic" 0elo 1Pale Pilsen1 is the statement 1#nd

0ottled !y1 <first line) 1San /i$uel 0reery1 <second

line=) and 1Philippines1 <third line=" <p" '++) RooH.mphasis supplied"=

On the other hand) #0I:s trademar%) as descri!ed !y the trial court)

consists of7

" " " a rectan$ular desi$n !ordered !y hat appear to

!e buds of #o!ers !ith eaves" The dominant feature

is 17eer 1 ritten across the upper portion of the

rectan$ular desi$n" The phrase 1Pale Pilsen1

appears immediately !elo in smaller !loc% letters"

To the left is a hop desi$n and to the ri$ht) ritten insmall prints) is the phrase 1Net Contents 4, ml"1

Immediately !elo 1Pale Pilsen1 is the statement

ritten in three lines 1.specially !reed and !ottled

!y1 <first line=) 1#sia 0reery Incorporated1 <second

line=) and 1Philippines1 <third line=) <p" '++) RooH

.mphasis supplied"=



Does #0I:s 0..R P#. PIS.N la!el or 1desi$n1 infrin$e upon

S/C:s S#N /I6. P#. PIS.N BIT R.CT#N6#R /#T

#ND OPS D.SIN The anser is 1No"1

Infrin$ement is determined !y the 1test of dominancy1 rather than !y

differences or variations in the details of one trademar% and ofanother" The rule as formulated in Co 'ion$ Sa vs. 2irector o#

)atents, *( Phil" ') ; <'*(;=H reiterated in Lim 9oa vs. 2irector o#

)atents) ',, Phil" ';) '>-'+ <'*(>=) thus7

It has !een consistently held that the uestion of

infrin$ement of a trademar% is to !e determined !y

thetest o# dominanc% " Similarity in si2e) form and

color) hile relevant) is not conclusive" If the

competin$ trademar% contains the main or essential

or dominant features of another) and confusion and

deception is li%ely to result) infrin$ement ta%es place"

Duplication or imitation is not necessaryH nor it is

necessary that the infrin$in$ la!el should su$$est an

effort to imitate" ?C" Neilman 0rein$ Co" vs"

Independent 0rein$ Co") '*' F") ;A*) ;*() citin$

.a$le Bhite ead Co") vs" Pflu$h <CC= 'A, Fed"

(+*@" The uestion at issue in cases of infrin$ement

of trademar%s is hether the use of the mar%s

involved ould !e li%ely to cause con#usion or

mista1es in the mind o# the pubic or deceive

purchasers" <#u!urn Ru!!er Corporation vs"

onover Ru!!er Co") ',+ F" d (AAH " " " "=

<.mphasis supplied"=

In Forbes, &unn : Co. Ltd.B vs. An$ San 'o) ;, Phil" +) +() the

test as similarity or 1resem!lance !eteen the to <trademar%s=

such as ould !e li%ely to cause the one mar% to !e mista%en for the

other" " " " ?0ut@ this is not such similitude as amounts to identity"1

"n )hi. ut "ndustr% "nc. vs. Standard 7rands "nc.) >( SCR# (+() the

court as more specific7 the test is 1similarity in the dominant

features of the trademar%s"1

Bhat are the dominant features of the competin$ trademar%s !efore

us

There is hardly any dispute that the dominant feature of S/C:s

trademar% is the name of the product7 S#N /I6. P#. PIS.N)

ritten in hite othic letters ith ela!orate serifs at the !e$innin$

and end of the letters 1S1 and 1/1 on an am!er !ac%$round across

the upper portion of the rectan$ular desi$n"

On the other hand) the dominant feature of #0I:s trademar% is the

name7 0..R P#. PIS.N) ith the ord 10eer1 ritten in lar$e

am!er letters) lar$er than any of the letters found in the S/C la!el"

The trial court perceptively o!served that the ord 10..R1 does not

appear in S/C:s trademar%) 9ust as the ords 1S#N /I6.1 do not

appear in #0I:s trademar%" ence) there is a!solutely no similarity in

the dominant features of !oth trademar%s"

Neither in sound) spellin$ or appearance can 0..R P#. PIS.N

!e said to !e confusin$ly similar to S#N /I6. P#. PIS.N" No

one ho purchases 0..R P#. PIS.N can possi!ly !e deceived

that it is S#N /I6. P#. PIS.N" No evidence hatsoever as

presented !y S/C provin$ otherise"

0esides the dissimilarity in their names) the folloin$ other

dissimilarities in the trade dress or appearance of the competin$

products a!ound7

<'= The S#N /I6. P#. PIS.N !ottle has a slender tapered

nec%"

The 0..R P#. PIS.N !ottle has a fat) !ul$in$ nec%"



<= The ords 1pale pilsen1 on S/C:s la!el are printed in !old and

laced letters alon$ a dia$ona !and) hereas the ords 1pale pilsen1

on #0I:s !ottle are half the si2e and printed in slender !loc% letters on

a strai$ht horizonta !and" <See .Ehi!it 1A-a1"="

<4= The names of the manufacturers are prominently printed on theirrespective !ottles"

S#N /I6. P#. PIS.N is 10ottled !y the San /i$uel 0reery)

Philippines)1 hereas 0..R P#. PIS.N is 1.specially !reed

and !ottled !y #sia 0reery Incorporated) Philippines"1

<;= On the !ac% of #0I:s !ottle is printed in !i$) !old letters) under a

ro of floer !uds and leaves) its copyri$hted slo$an7

10..R N# 0..R1

Bhereas S/C:s !ottle carries no slo$an"

<(= The !ac% of the S#N /I6. P#. PIS.N !ottle carries the

S/C lo$o) hereas the 0..R P#. PIS.N !ottle has no lo$o"

<>= The S#N /I6. P#. PIS.N !ottle cap is stamped ith a

coat of arms and the ords 1San /i$uel 0reery Philippines1

encirclin$ the same"

The 0..R P#. PIS.N !ottle cap is stamped ith the name

10..R1 in the center) surrounded !y the ords 1#sia 0reeryIncorporated Philippines"1

<+= Finally) there is a su!stantial price difference !eteen 0..R

P#. PIS.N <currently at P;"( per !ottle= and S#N /I6.

P#. PIS.N <currently at P+",, per !ottle=" One ho pays only

P;"( for a !ottle of !eer cannot eEpect to receive San /i$uel Pale

Pilsen from the store%eeper or !artender"

The fact that the ords pae pisen are part of #0I:s trademar% does

not constitute an infrin$ement of S/C:s trademar%7 S#N /I6.

P#. PIS.N) for 1pale pilsen1 are $eneric ords descriptive of the

color <1pale1=) of a type of !eer <1pilsen1=) hich is a li$ht !ohemian

!eer ith a stron$ hops flavor that ori$inated in the City of Pilsen in

C2echoslova%ia and !ecame famous in the /iddle #$es" <Be!ster:s

Third Ne International Dictionary of the .n$lish an$ua$e)

6na!rid$ed" .dited !y Philip 0a!coc% ove" Sprin$field) /ass"7 3

C /erriam Co") ?c@ '*+>) pa$e '+'>"= 1Pilsen1 is a 1primarily

$eo$raphically descriptive ord)1 <Sec" ;) su!par" ?e@ Repu!lic #ct

No" '>>) as inserted !y Sec" of R"#" No" >4A= hence) non-

re$istera!le and not appropria!le !y any !eer manufacturer" The

Trademar% a provides7

Sec" ;" " " "" The oner of trade-mar%) trade-name or

service-mar% used to distin$uish his $oods) !usiness

or services from the $oods) !usiness or services of

others shall have the ri$ht to re$ister the same ?on

the principal re$ister@) unless it7

EEE EEE EEE

<e= Consists of a mar% or trade-name hich) hen

applied to or used in connection ith the $oods)

!usiness or services of the applicant is mere%

descriptive or deceptive% misdescriptive o# them) or

hen applied to or used in connection ith the

$oods) !usiness or services of the applicant

is primari% $eo$raphica% descriptive or deceptively

misdescriptive of them) or is primarily merely a

surname"1 <.mphasis supplied"=

The ords 1pale pilsen1 may not !e appropriated !y S/C for its

eEclusive use even if they are part of its re$istered trademar%7 S#N

/I6. P#. PIS.N) any more than such descriptive ords as

1evaporated mil%)1 1tomato %etchup)1 1cheddar cheese)1 1corn fla%es1

and 1coo%in$ oil1 may !e appropriated !y any sin$le manufacturer of



these food products) for no other reason than that he as the first to

use them in his re$istered trademar%" In &asso 9ermanos, S.A. vs.

2irector o# )atents) *; Phil" '4>) '4* <'*(4=) it as held that a

dealer in shoes cannot re$ister 1eather Shoes1 as his trademar%

!ecause that ould !e merely descriptive and it ould !e un9ust to

deprive other dealers in leather shoes of the ri$ht to use the same

ords ith reference to their merchandise" No one may appropriate

$eneric or descriptive ords" They !elon$ to the pu!lic domain <On$

#i ui vs" Director of Patents) *> Phil" >+4) >+> ?'*((@=7

# ord or a com!ination of ords hich is merely

descriptive of an article of trade) or of its

composition) characteristics) or ualities) cannot !e

appropriated and protected as a trademar% to the

eEclusion of its use !y others" " " " inasmuch as all

persons have an eual ri$ht to produce and vend

similar articles) they also have the ri$ht to descri!e

them properly and to use any appropriate lan$ua$e

or ords for that purpose) and no person can

appropriate to himse# excusive% an% !ord or

expression, proper% descriptive o# the artice, its

uaities, in$redients or characteristics) and thus limit

other persons in the use of lan$ua$e appropriate to

the description of their manufactures) the ri$ht to the

use o# such an$ua$e bein$ common to a " This rule

eEcludin$ descriptive terms has also !een held to

apply to trade-names" #s to hether ords

employed fall ithin this prohi!ition) it is said that the

true test is not hether they are eEhaustivelydescriptive of the article desi$nated) !ut hether in

themselves) and as they are commonly used !y

those ho understand their meanin$) they are

reasona!ly indicative and descriptive of the thin$

intended" If they are thus descriptive) and not

ar!itrary) they cannot !e appropriated from $eneral

use and !ecome the eEclusive property of anyone"

<( #m" &ur" (;-(;4"=

" " " " Others may use the same or similar descriptive

ord in connection ith their on ares) provided

they ta%e proper steps to prevent the pu!lic !ein$

deceived" <Richmond Remedies Co" vs" Dr" /iles

/edical Co") '> ." ?d@ (*A"=

" " " " # descriptive ord may !e admittedly

distinctive) especially if the user is the first creator of

the article" It ill) hoever) !e denied protection) not

!ecause it lac%s distinctiveness) !ut rather !ecause

others are eually entitled to its use" < Callman"

6nfair Competition and Trademar%s) pp" A>*-A+,"=1

<.mphasis supplied"=

The circumstance that the manufacturer of 0..R P#. PIS.N)

#sia 0reery Incorporated) has printed its name all over the !ottle of

its !eer product7 on the la!el) on the !ac% of the !ottle) as ell as on

the !ottle cap) disproves S/C:s char$e that #0I dishonestly and

fraudulently intends to palm off its 0..R P#. PIS.N as S/C:s

product" In vie of the visi!le differences !eteen the to products)

the Court !elieves it is uite unli%ely that a customer of avera$e

intelli$ence ould mista%e a !ottle of 0..R P#. PIS.N for S#N

/I6. P#. PIS.N"

The fact that 0..R P#. PIS.N li%e S#N /I6. P#. PIS.N

is !ottled in am!er-colored steinie !ottles of 4, ml" capacity and is

also advertised in print) !roadcast) and television media) does not

necessarily constitute unfair competition"

6nfair competition is the employment of deception or any other

means contrary to $ood faith !y hich a person shall pass off the

$oods manufactured !y him or in hich he deals) or his !usiness) or

services) for those of another ho has already esta!lished $oodill

for his similar $oods) !usiness or services) or any acts calculated to

produce the same result" <Sec" *) Repu!lic #ct No" '>>) as

amended"= The la further enumerates the more common ays of

committin$ unfair competition) thus7



Sec" *" " " "

In particular) and ithout in any ay limitin$ the

scope of unfair competition) the folloin$ shall !e

deemed $uilty of unfair competition7

<a= #ny person) ho in sellin$ his $oods shall $ive

them the $eneral appearance of $oods of another

manufacturer or dealer) either as to the $oods

themselves or in the rappin$ of the pac%a$es in

hich they are contained) or the devices or ords

thereon) or in any other feature of their appearance)

hich ould !e li%ely to influence purchasers to

!elieve that the $oods offered are those of a

manufacturer or dealer other than the actual

manufacturer or dealer) or ho otherise clothes the

$oods ith such appearance as shall deceive the

pu!lic and defraud another of his le$itimate trade) or

any su!seuent vendor of such $oods or any a$ent

of any vendor en$a$ed in sellin$ such $oods ith a

li%e purpose"

<!= #ny person ho !y any artifice) or device) or ho

employs any other means calculated to induce the

false !elief that such person is offerin$ the services

of another ho has identified such services in the

mind of the pu!licH or

<c= #ny person ho shall ma%e any false statement

in the course of trade or ho shall commit any other

act contrary to $ood faith of a nature calculated to

discredit the $oods) !usiness or services of another"

In this case) the uestion to !e determined is hether #0I is usin$ a

name or mar% for its !eer that has previously come to desi$nate

S/C:s !eer) or hether #0I is passin$ off its 0..R P#. PIS.N as

S/C:s S#N /I6. P#. PIS.N"

" " ""The universal test uestion is hether the pu!lic

is li%ely to !e deceived" Nothin$ less than conduct

tendin$ to pass off one man:s $oods or !usiness as

that of another ill constitute unfair competition"

#ctual or pro!a!le deception and confusion on the

part of the customers !y reason of defendant:s

practices must alays appear" <Shell Co") of the

Philippines) td" vs" Insular Petroleum Refinin$ Co"

td" et al") ', Phil" ;4;) ;4*"=

The use of #0I of the steinie !ottle) similar !ut not identical to the

S#N /I6. P#. PIS.N !ottle) is not unlaful" #s pointed out !y

#0I:s counsel) S/C did not invent !ut merely !orroed the steinie

!ottle from a!road and it claims neither patent nor trademar%

protection for that !ottle shape and desi$n" <See roo) pa$e (("= The

Cerve2a .special and the .fes Pale Pilsen use the 1steinie1 !ottle"

<See .Ehi!its (+-D) (+-."= The trial court found no infrin$ement of

S/C:s !ottle

The court a$rees ith defendant that there is no

infrin$ement of plaintiff:s !ottle) firstly) !ecause

accordin$ to plaintiff:s itness Deo$racias Villadolid)

it is a standard type of !ottle called steinie) and to

itness &ose #ntonio arcia) it is not a San /i$uel

Corporation desi$n !ut a desi$n ori$inally developed

in the 6nited States !y the lass Container

/anufacturer:s Institute and therefore lac%s

eEclusivity" Secondly) the shape as never

re$istered as a trademar%" .Ehi!it 1C1 is not are$istration of a !eer !ottle desi$n reuired under

Rep" #ct '>( !ut the re$istration of the name and

other mar%s of onership stamped on containers as

reuired !y Rep" #ct >4" Thirdly) the nec% of

defendant:s !ottle is much lar$er and has a distinct

!ul$e in its uppermost part" <p" 'A>) Roo"=



The petitioner:s contention that !ottle si2e) shape and color may not

!e the eEclusive property of any one !eer manufacturer is ell ta%en"

S/C:s !ein$ the first to use the steinie !ottle does not $ive S/C a

vested ri$ht to use it to the eEclusion of everyone else" 0ein$ of

functional or common use) and not the eEclusive invention of any

one) it is availa!le to all ho mi$ht need to use it ithin the industry"

No!ody can acuire any eEclusive ri$ht to mar%et articles supplyin$

simple human needs in containers or rappers of the $eneral form)

si2e and character commonly and immediately used in mar%etin$

such articles <Dy 0uncio vs" Tan Tiao 0o%) ; Phil" '*,) '*;-'*("=

" " " protection a$ainst imitation should !e properly

confined to nonfunctional features" .ven if purely

functional elements are slavishly copied) the

resem!lance ill not support an action for unfair

competition) and the first user cannot claim

secondary meanin$ protection" Nor can the first user

predicate his claim to protection on the ar$ument

that his !usiness as esta!lished in reliance on any

such unpatented nonfunctional feature) even 1at

lar$e eEpenditure of money"1 <Callman 6nfair

Competition) Trademar%s and /onopolies) Sec"

'*"44 ?;th .d"@"= <Petition for Revie) p" A"=

#0I does not use S/C:s steinie !ottle" Neither did #0I copy it" #0I

ma%es its on steinie !ottle hich has a fat !ul$in$ nec% to

differentiate it from S/C:s !ottle" The am!er color is a functional

feature of the !eer !ottle" #s pointed out !y #0I) all !ottled !eer

produced in the Philippines is contained and sold in am!er-colored!ottles !ecause am!er is the most effective color in preventin$

transmission of li$ht and provides the maEimum protection to !eer"

#s as ruled in Cai#ornia Crushed Fruit Corporation vs. 'a%or 7.

and Cand% Co") 4A Fd AA() a merchant cannot !e en9oined from

usin$ a type or color of !ottle here the same has the useful

purpose of protectin$ the contents from the deleterious effects of

li$ht rays" /oreover) no one may have a monopoly of any color" Not

only !eer) !ut most medicines) hether in liuid or ta!let form) are

sold in am!er-colored !ottles"

That the #0I !ottle has a 4, ml" capacity is not due to a desire to

imitate S/C:s !ottle !ecause that !ottle capacity is the standard

prescri!ed under /etrication Circular No" ++A) dated ; Decem!er'*+*) of the Department of Trade) /etric System 0oard"

Bith re$ard to the hite la!el of !oth !eer !ottles) #0I eEplained that

it used the color hite for its la!el !ecause hite presents the

stron$est contrast to the am!er color of #0I:s !ottleH it is also the

most economical to use on la!els) and the easiest to 1!a%e1 in the

furnace <p" '>) TSN of Septem!er ,) '*AA=" No one can have a

monopoly of the color am!er for !ottles) nor of hite for la!els) nor of

the rectan$ular shape hich is the usual confi$uration of la!els"

Needless to say) the shape of the !ottle and of the la!el is

unimportant" Bhat is all important is the name of the product ritten

on the la!el of the !ottle for that is ho one !eer may !e

distin$uished form the others"

In 2% 7uncio v. 'an 'iao 7o1 ) ; Phil" '*,) '*>-'*+) here to

competin$ tea products ere !oth la!elled as Formosan tea) !oth

sold in (-ounce pac%a$es made of ordinary rappin$ paper of

conventional color) !oth ith la!els containin$ desi$ns dran in

$reen in% and Chinese characters ritten in red in%) one la!el

shoin$ a dou!le-dec%ed 9ar in the center) the other) a floer pot)

this court found that the resem!lances !eteen the desi$ns ere not

sufficient to mislead the ordinary intelli$ent !uyer) hence) there as

no unfair competition" The Court held7

" " " " In order that there may !e deception of the

!uyin$ pu!lic in the sense necessary to constitute

unfair competition) it is necessary to suppose a

pu!lic accustomed to !uy) and therefore to some

eEtent familiar ith) the $oods in uestion" The test

of fraudulent simulation is to !e found in the

li%elihood of the deception of persons in some



measure acuainted ith an esta!lished desi$n and

desirous of purchasin$ the commodity ith hich

that desi$n has !een associated" The test is not

found in the deception) or possi!ility of the

deception) of the person ho %nos nothin$ a!out

the desi$n hich has !een counterfeited) and ho

must !e indifferent as !eteen that and the other"

The simulation) in order to !e o!9ectiona!le) must !e

such as appears li%ely to mislead the ordinarily

intelli$ent !uyer ho has a need to supply and is

familiar ith the article that he see%s to purchase"

The main thrust of S/C:s complaint if not infrin$ement of its

trademar%) !ut unfair competition arisin$ form the alle$edly

1confusin$ similarity1 in the $eneral appearance or trade dress of

#0I:s 0..R P#. PIS.N !eside S/C:s S#N /I6. P#.

PIS.N <p" ,*) Roo=

S/C claims that the 1trade dress1 of 0..R P#. PIS.N is

1confusin$ly similar1 to its S#N /I6. P#. PIS.N !ecause !oth

are !ottled in 4, ml" steinie type) am!er-colored !ottles ith hite

rectan$ular la!els"

oever) hen as in this case) the names of the competin$ products

are clearly different and their respective sources are prominently

printed on the la!el and on other parts of the !ottle) mere similarity in

the shape and si2e of the container and la!el) does not constitute

unfair competition" The steinie !ottle is a standard !ottle for !eer and

is universally used" S/C did not invent it nor patent it" The fact that

S/C:s !ottle is re$istered under R"#" No" >4 <as amended !y R#

(+,,) #n #ct to Re$ulate the 6se of Duly Stamped or /ar%ed

0ottles) 0oEes) Cas%s) Ke$s) 0arrels and Other Similar Containers=

simply prohi!its manufacturers of other foodstuffs from the

unauthori2ed use of S/C:s !ottles !y refillin$ these ith their

products" It as not uncommon then for products such as patis <fish

sauce= and to%o <soy sauce= to !e sold in recycled S#N /I6.

P#. PIS.N !ottles" Re$istration of S/C:s !eer !ottles did not

$ive S/C a patent on the steinie or on !ottles of similar si2e) shape

or color"

/ost containers are standardi2ed !ecause they are usually made !y

the same manufacturer" /il%) hether in podered or liuid form) is

sold in uniform tin cans" The same can !e said of the standard%etchup or vine$ar !ottle ith its familiar elon$ated nec%" /any other

$rocery items such as coffee) mayonnaise) pic%les and peanut !utter

are sold in standard $lass 9ars" The manufacturers of these

foodstuffs have eual ri$ht to use these standards tins) !ottles and

9ars for their products" Only their respective la!els distin$uish them

from each other" &ust as no mil% producer may sue the others for

unfair competition !ecause they sell their mil% in the same si2e and

shape of mil% can hich he uses) neither may S/C claim unfair

competition arisin$ from the fact that #0I:s 0..R P#. PIS.N is

sold) li%e S/C:s S#N /I6. P#. PIS.N in am!er steinie

!ottles"

The record does not !ear out S/C:s apprehension that 0..R P#.

PIS.N is !ein$ passed off as S#N /I6. P#. PIS.N" This is

unli%ely to happen for consumers or !uyers of !eer $enerally order

their !eer !y !rand" #s pointed out !y #0I:s counsel) in supermar%ets

and tiendas) !eer is ordered !y !rand) and the customer surrenders

his empty replacement !ottles or pays a deposit to $uarantee the

return of the empties" If his empties are S#N /I6. P#.

PIS.N) he ill $et S#N /I6. P#. PIS.N as replacement" In

sari-sari stores) !eer is also ordered from the tindera !y !rand" The

same is true in restaurants) pu!s and !eer $ardens !eer is

ordered from the aiters !y !rand" <3p. cit " pa$e (,"=

Considerin$ further that S#N /I6. P#. PIS.N has virtually

monopoli2ed the domestic !eer mar%et for the past hundred years)

those ho have !een drin%in$ no other !eer !ut S#N /I6. P#.

PIS.N these many years certainly %no their !eer too ell to !e

deceived !y a necomer in the mar%et" If they $ravitate to #0I:s

cheaper !eer) it ill not !e !ecause they are confused or deceived)

!ut !ecause they find the competin$ product to their taste"



Our decision in this case ill not diminish our rulin$ in 1Del /onte

Corporation vs" Court of #ppeals and Sunshine Sauce /anufacturin$

Industries)1 'A' SCR# ;',) ;'*) that7

" " " to determine hether a trademar% has !een

infrin$ed) e must consider the mar% as a hole andnot as dissected" If the !uyer is deceived) it is

attri!uta!le to the mar%s as a totality) not usually to

any part of it"

That rulin$ may not apply to a %inds of products" The Court itself

cautioned that in resolvin$ cases of infrin$ement and unfair

competition) the courts should 1 ta%e into consideration several

factors hich ould affect its conclusion) to it7 the a$e) trainin$ and

education of the usual purchaser) the nature and cost of the article)

hether the article is !ou$ht for immediate consumption and also the

conditions under hich it is usually purchased1 <'A' SCR# ;',) ;'A-

;'*="

The Del /onte case involved catsup) a common household item

hich is !ou$ht off the store shelves !y houseives and house help

ho) if they are illiterate and cannot identify the product !y name or

!rand) ould very li%ely identify it !y mere recollection of its

appearance" Since the competitor) Sunshine Sauce /f$" Industries)

not only used recycled Del /onte !ottles for its catsup <despite the

arnin$ em!ossed on the !ottles7 1Del /onte Corporation" Not to !e

refilled"1= !ut also used la!els hich ere 1a colora!le imitation1 of

Del /onte:s la!el) e held that there as infrin$ement of Del

/onte:s trademar% and unfair competition !y Sunshine"

Our rulin$ in Del /onte ould not apply to !eer hich is not usually

pic%ed from a store shelf !ut ordered !y !rand !y the !eer drin%er

himself from the store%eeper or aiter in a pu! or restaurant"

/oreover) S/C:s !rand or trademar%7 1S#N /I6. P#. PIS.N1

is not infrin$ed !y #0I:s mar%7 10..R N# 0..R1 or 10..R P#.

PIS.N"1 #0I ma%es its on !ottle ith a !ul$in$ nec% to

differentiate it from S/C:s !ottle) and prints #0I:s name in three <4=

places on said !ottle <front) !ac% and !ottle cap= to prove that it has

no intention to pass of its 10..R1 as 1S#N /I6."1

There is no confusin$ similarity !eteen the competin$ !eers for the

name of one is 1S#N /I6.1 hile the competitor is plain 10..R1and the points of dissimilarity !eteen the to outnum!er their

points of similarity"

Petitioner #0I has neither infrin$ed S/C:s trademar% nor committed

unfair competition ith the latter:s S#N /I6. P#. PIS.N

product" Bhile its 0..R P#. PIS.N admittedly competes ith the

latter in the open mar%et) that competition is neither unfair nor

fraudulent" ence) e must deny S/C:s prayer to suppress it"

B.R.FOR.) findin$ the petition for revie meritorious) the same

is here!y $ranted" The decision and resolution of the Court of #ppeals in C#-"R" CV No" A',; are here!y set aside and that of

the trial court is R.INST#T.D and #FFIR/.D" Costs a$ainst the

private respondent"

SO ORD.R.D"



G.R. No. 1101 Ar36 4, 001

SCI#!# D#S PRDUI!S N#S!$#, S.A. %&' N#S!$#PHI$IPPIN#S, INC., petitioners)

vs"

CUR! " APP#A$S %&' C"C CRPRA!IN., respondents"

NAR#S<SAN!IAG, J .+

This is a petition for revie assailin$ the Decision of the Court of

#ppeals in C#-"R" SP No" ;',')' reversin$ and settin$ aside thedecision of the 0ureau of Patents) Trademar%s and Technolo$y

Transfer <0PTTT=) hich denied private respondentQs application for

re$istration of the trade-mar%) F#VOR /#ST.R"

On &anuary 'A) '*A;) private respondent CFC Corporation filed ith

the 0PTTT an application for the re$istration of the trademar%

1F#VOR /#ST.R1 for instant coffee) under Serial No" (**;" The

application) as a matter of due course) as pu!lished in the &uly 'A)

'*AA issue of the 0PTTTQs Official a2ette"

Petitioner Societe Des Produits Nestle) S"#") a Siss company

re$istered under Siss las and domiciled in Sit2erland) filed an

unverified Notice of Opposition)

4

claimin$ that the trademar% ofprivate respondentQs product is 1confusin$ly similar to its trademar%s

for coffee and coffee eEtracts) to it7 /#ST.R RO#ST and /#ST.R

0.ND"1

i%eise) a verified Notice of Opposition as filed !y Nestle

Philippines) Inc") a Philippine corporation and a licensee of Societe

Des Produits Nestle S"#") a$ainst CFCQs application for re$istration

of the trademar% F#VOR /#ST.R";Nestle claimed that the use) if

any) !y CFC of the trademar% F#VOR /#ST.R and its re$istration

ould li%ely cause confusion in the tradeH or deceive purchasers and

ould falsely su$$est to the purchasin$ pu!lic a connection in the

!usiness of Nestle) as the dominant !ord present in the three <4=

trademar%s is 1/#ST.R1H or that the $oods of CFC mi$ht !e

mista%en as havin$ ori$inated from the latter"

In anser to the to oppositions) CFC ar$ued that its trademar%)

F#VOR /#ST.R) is not confusin$ly similar ith the formerQs

trademar%s) /#ST.R RO#ST and /#ST.R 0.ND) alle$in$ that)

1eEcept for the ord /#ST.R <hich cannot !e eEclusively

appropriated !y any person for !ein$ a descriptive or $eneric name=)

the other ords that are used respectively ith said ord in the three

trademar%s are very different from each other in meanin$) spellin$)

pronunciation) and sound1" CFC further ar$ued that its trademar%)F#VOR /#ST.R) 1is clearly very different from any of NestleQs

alle$ed trademar%s /#ST.R RO#ST and /#ST.R 0.ND)

especially hen the mar%s are vieed in their entirety) !y considerin$

their pictorial representations) color schemes and the letters of their

respective la!els"1

In its Decision No" *,-;+ dated Decem!er +) '**,) the 0PTTT

denied CFCQs application for re$istration"( CFC elevated the matter

http://www.lawphil.net/judjuris/juri2001/apr2001/gr_112012_2001.html#fnt1










to the Court of #ppeals) here it as doc%eted as C#-"R" SP No"

;','"

The Court of #ppeals defined the issue thus7 1Does appellant CFCQs

trade dress !ear a stri%in$ resem!lance ith appelleeQs trademar%s

as to create in the purchasin$ pu!licQs mind the mista%en impressionthat !oth coffee products come from one and the same source1

#s stated a!ove) the Court of #ppeals) in the assailed decision dated

Septem!er 4) '**4) reversed Decision No" *,-;+ of the 0PTTT and

ordered the Director of Patents to approve CFCQs application" The

Court of #ppeals ruled7

Bere Be to ta%e even a lac%adaisical $lance at the overall

appearance of the contendin$ mar%s) the physical

discrepancies !eteen appellant CFCQs and appelleeQs

respective lo$os are so ostensi!le that the casual purchaser

cannot li%ely mista%e one for the other" #ppellant CFCQs la!el

<.Ehi!it 1;1= is predominantly a !lend of dar% and li$hter

shade of oran$e here the ords 1F#VOR /#ST.R1)

1F#VOR1 appearin$ on top of 1/#ST.R1) shaded in mocha

ith thin hite inner and outer sidin$s per letter and

identically lettered eEcept for the sli$htly protrudin$ !ottom

curve of the letter 1S1 ad9oinin$ the !ottom tip of the letter 1#1

in the ord 1/#ST.R1) are printed across the top of a

simmerin$ red coffee cup" 6nderneath 1F#VOR /#ST.R1

appears 1Premium Instant Coffee1 printed in hite) slim and

slanted letters" #ppelleesQ 1/#ST.R RO#ST1 la!el <.Ehi!it

1+1=) hoever) is almost dou!le the idth of appellant CFCQs" #t the top is printed in !ron color the ord 1N.SC#F.1

a$ainst a hite !ac%drop" Occupyin$ the center is a suare-

shaped confi$uration shaded ith dar% !ron and picturin$ a

heap of coffee !eans) here the ord 1/#ST.R1 is

inscri!ed in the middle" 1/#ST.R1 in appelleesQ la!el is

printed in taller capital letters) ith the letter 1/1 further

capitali2ed" The letters are shaded ith red and !ounded

ith thin $old-colored inner and outer sidin$s" &ust a!ove the

ord 1/#ST.R1 is a red indo li%e portrait of hat

appears to !e a coffee shru! clad in $old" 0elo the

1/#ST.R1 appears the ord 1RO#ST1 impressed in smaller)

hite print" #nd further !elo are the inscriptions in hite7 1#

selection of prime #ra!ica and Ro!usta coffee"1 Bith re$ard

to appelleesQ 1/#ST.R 0.ND1 la!el <.Ehi!it 1>1= of hich

only a EeroEed copy is su!mitted) the letters are !older and

taller as compared to appellant CFCQs and the ord

1/#ST.R1 appears on top of the ord 10.ND1 and !elo it

are the ords 1',, pure instant coffee1 printed in small

letters"

From the fore$oin$ description) hile the contendin$ mar%s

depict the same product) the $larin$ dissimilarities in their

presentation far outei$h and dispel any aspect of

similitude" To !orro the ords of the Supreme Court in

#merican Cyanamid Co" v" Director of Patents <+> SCR#

(>A=) appellant CFCQs and appelleesQ la!els are entirelydifferent in si2e) !ac%$round) colors) contents and pictorial

arran$ementH in short) the $eneral appearances of the la!els

!earin$ the respective trademar%s are so distinct from each

other that appellees cannot assert that the dominant

features) if any) of its trademar%s ere used or appropriated

in appellant CFCQs on" The distinctions are so ell-defined

so as to foreclose any pro!a!ility or li%elihood of confusion

or deception on the part of the normally intelli$ent !uyer

hen he or she encounters !oth coffee products at the

$rocery shelf" The anser therefore to the uery is a clear-

cut NO">

Petitioners are no !efore this Court on the folloin$ assi$nment of

errors7

'" R.SPOND.NT CO6RT R#V.5 .RR.D IN

R.V.RSIN #ND S.TTIN #SID. T. D.CISION <NO"

*,-;+= OF T. DIR.CTOR OF T. 06R.#6 OF



P#T.NTS) TR#D./#RKS #ND T.CNOO5

TR#NSF.R <0PTTT= D#T.D D.C./0.R +) '**,"

" R.SPOND.NT CO6RT .RR.D IN FINDIN T#T

#PP.#NT CFCQS TR#D. DR.SS IS 0.5OND T.

SCOP. OF T. PROSCRIPTION #ID DOBN 05&6RISPR6D.NC. #ND T. TR#D./#RK #B"

4" R.SPOND.NT CO6RT .RR.D IN ODIN T#T T.

TOT#IT5 R6.) R#T.R T#N T. T.ST OF

DO/IN#NC5) #PPI.S TO T. C#S."

;" R.SPOND.NT CO6RT .RR.D IN INVOKIN T.

TOT#IT5 R6. #PPI.D IN T. C#S.S OF 0RISTO

/5.RS V" DIR.CTOR OF P#T.NTS) .T #" <'+ SCR#

'A=) /.#D &ONSON 3 CO" V" NV& V#N DORF TD") <+

SCR# +>A= #ND #/.RIC#N C5#N#/ID CO" V" DIR.CTOR

OF P#T.NTS <+> SCR# (>A="

The petition is impressed ith merit"

# trademar% has !een $enerally defined as 1any ord) name) sym!ol

or device adopted and used !y a manufacturer or merchant to

identify his $oods and distin$uish them from those manufactured and

sold !y others"1+

# manufacturerQs trademar% is entitled to protection" #s /r" &ustice

Fran%furter o!served in the case of &isha!a1a &#$. Co. v. +res$eCo"7A

The protection of trade-mar%s is the laQs reco$nition of the

psycholo$ical function of sym!ols" If it is true that e live !y

sym!ols) it is no less true that e purchase $oods !y them"

# trade-mar% is a merchandisin$ short-cut hich induces a

purchaser to select hat he ants) or hat he has !een led

to !elieve he ants" The oner of a mar% eEploits this

human propensity !y ma%in$ every effort to impre$nate the

atmosphere of the mar%et ith the drain$ poer of a

con$enial sym!ol" Bhatever the means employed) the aim is

the same --- to convey throu$h the mar%) in the minds of

potential customers) the desira!ility of the commodity upon

hich it appears" Once this is attained) the trade-mar% oner

has somethin$ of value" If another poaches upon the

commercial ma$netism of the sym!ol he has created) the

oner can o!tain le$al redress"

Section ; <d= of Repu!lic #ct No" '>> or the Trademar% a) as

amended) hich as in force at the time) provides thus7

Re$istration o# trade-mar1s, trade-names and service-mar1s

on the principa re$ister " - There is here!y esta!lished a

re$ister of trade-mar%s) trade-names and service mar%s

hich shall !e %non as the principal re$ister" The oner of

a trade-mar%) trade-name or service-mar% used to

distin$uish his $oods) !usiness or services from the $oods)

!usiness or services of others shall have the ri$ht to re$ister

the same on the principal re$ister) unless it7

E E E E E E E E E

<d= Consists of or comprises a mar% or trade-name hich so

resem!les a mar% or trade-name re$istered in the

Philippines or a mar% or trade-name previously used in the

Philippines !y another and not a!andoned) as to be i1e% )

hen applied to or used in connection ith the $oods)

!usiness or services of the applicant) to cause con#usion or

mista1e or to deceive purchasersH

E E E E E E E E E

<.mphasis supplied=



The la prescri!es a more strin$ent standard in that there should not

only !e confusin$ similarity !ut that it should not li%ely cause

confusion or mista%e or deceive purchasers"

ence) the uestion in this case is hether there is a li%elihood that

the trademar% F#VOR /#ST.R may cause confusion or mista%e or

may deceive purchasers that said product is the same or is

manufactured !y the same company" In other ords) the issue is

hether the trademar% F#VOR /#ST.R is a colora!le imitation of

the trademar%s /#ST.R RO#ST and /#ST.R 0.ND"

Colora!le imitation denotes such a close or in$enious imitation as to

!e calculated to deceive ordinary persons) or such a resem!lance to

the ori$inal as to deceive an ordinary purchaser $ivin$ such attention

as a purchaser usually $ives) as to cause him to purchase the one

supposin$ it to !e the other"* In determinin$ if colora!le imitation

eEists) 9urisprudence has developed to %inds of tests - the

Dominancy Test and the olistic Test"', The test of dominancy

focuses on the similarity of the prevalent features of the competin$

trademar%s hich mi$ht cause confusion or deception and thus

constitute infrin$ement" On the other side of the spectrum) the

holistic test mandates that the entirety of the mar%s in uestion must

!e considered in determinin$ confusin$ similarity"''

In the case at !ar) the Court of #ppeals held that7

The determination of hether to trademar%s are indeed

confusin$ly similar must !e ta%en from the viepoint of the

ordinary purchasers ho are) in $eneral) undiscernin$ly rash

in !uyin$ the more common and less eEpensive household

products li%e coffee) and are therefore less inclined to closely

eEamine specific details of similarities and dissimilarities

!eteen competin$ products" The Supreme Court in 2e

&onte Corporation v. CA) 'A' SCR# ;',) held that7

1The uestion is not hether the to articles are

distin$uisha!le !y their la!els hen set side !y side

!ut hether the $eneral confusion made !y the

article upon the eye of the casual purchaser ho is

unsuspicious and off his $uard) is such as to li%ely

result in his confoundin$ it ith the ori$inal" #s

o!served in several cases) the $eneral impression of

the ordinary purchaser) !uyin$ under the normally

prevalent conditions in trade and $ivin$ the attention

such purchasers usually $ive in !uyin$ that class of

$oods) is the touchstone"1

From this perspective) the test of similarity is to consider the

to mar%s in their entirety) as they appear in the respective

la!els) in relation to the $oods to hich they are attached

<7risto &%ers Compan% v. 2irector o# )atents, et a ") '+

SCR# 'A) citin$ &ead ;ohnson : Co. v. ; an 2orp,

Ltd., et a ") + SCR# +>A=" The mar% must !e considered as a

hole and not as dissected" If the !uyer is deceived) it is

attri!uta!le to the mar%s as a totality) not usually to any partof it <2e &onte Corp. v. CA) supra=) as hat appellees ould

ant it to !e hen they essentially ar$ue that much of the

confusion sprin$s from appellant CFCQs use of the ord

1/#ST.R1 hich appellees claim to !e the dominant feature

of their on trademar%s that captivates the prospective

consumers" 0e it further emphasi2ed that the discernin$ eye

of the o!server must focus not only on the predominant

ords !ut also on the other features appearin$ in !oth la!els

in order that he may dra his conclusion hether one is

confusin$ly similar to the other <&ead ;ohnson : Co. v. ;

an 2orp, Ltd ")supra="'

The Court of #ppeals applied some 9udicial precedents hich are not

on all fours ith this case" It must !e emphasi2ed that in infrin$ement

or trademar% cases in the Philippines) particularly in ascertainin$

hether one trademar% is confusin$ly similar to or is a colora!le

imitation of another) no set rules can !e deduced" .ach case must

!e decided on its on merits"'4 In *sso Standard, "nc. v. Court o#

Appeas)'; e ruled that the li%elihood of confusion is a relative
















conceptH to !e determined only accordin$ to the particular) and

sometimes peculiar) circumstances of each case" In trademar%

cases) even more than in any other liti$ation) precedent must !e

studied in li$ht of the facts of the particular case" The isdom of the

li%elihood of confusion test lies in its reco$nition that each trademar%

infrin$ement case presents its on uniue set of facts" Indeed) the

compleEities attendant to an accurate assessment of li%elihood of

confusion reuire that the entire panoply of elements constitutin$ the

relevant factual landscape !e comprehensively eEamined"'(

The Court of #ppealsQ application of the case of 2e &onte

Corporation v. Court o# Appeas'> is) therefore) misplaced" In 2e

&onte) the issue as a!out the alle$ed similarity of Del /onteQs lo$o

ith that of Sunshine Sauce /anufacturin$ Industries" 0oth

corporations mar%et the catsup product hich is an ineEpensive and

common household item"

Since Del /onte alle$ed that SunshineQs lo$o as confusin$ly similar

to or as a colora!le imitation of the formerQs lo$o) there as a need

to $o into the details of the to lo$os as ell as the shapes of the

la!els or mar%s) the !rands printed on the la!els) the ords or

letterin$ on the la!els or mar%s and the shapes and colors of the

la!els or mar%s" The same criteria) hoever) cannot !e applied in the

instant petition as the facts and circumstances herein are peculiarly

different from those in the 2e &onte case"

In the same manner) the Court of #ppeals erred in applyin$ the

totality rule as defined in the cases of 7risto &%ers v. 2irector o#

)atentsH'+ &ead ;ohnson : Co. v. ; an 2or#Ltd "H'A and American C%anamid Co. v. 2irector o# )atents"'* The

totality rule states that 1the test is not simply to ta%e their ords and

compare the spellin$ and pronunciation of said ords" In determinin$

hether to trademar%s are confusin$ly similar) the to mar%s in

their entirety as they appear in the respective la!els must !e

considered in relation to the $oods to hich they are attachedH the

discernin$ eye of the o!server must focus not only on the

predominant ords !ut also on the other features appearin$ on !oth

la!els"1,

#s this Court has often declared) each case must !e studied

accordin$ to the peculiar circumstances of each case" That is the

reason hy in trademar% cases) 9urisprudential precedents should !e

applied only to a case if they are specifically in point"

In the a!ove cases cited !y the Court of #ppeals to 9ustify the

application of the totality or holistic test to this instant case) the

factual circumstances are su!stantially different" In the 7risto

&%ers case) this Court held that althou$h !oth 0IOF.RIN and

06FF.RIN are primarily used for the relief of pains such as

headaches and colds) and their names are practically the same in

spellin$ and pronunciation) !oth la!els have stri%in$ly different

!ac%$rounds and surroundin$s" In addition) one is dispensa!le only

upon doctorQs prescription) hile the other may !e purchased over-

the-counter"

In the &ead ;ohnson case) the differences !eteen ##CT# and

##SK# are $larin$ and stri%in$ to the eye" #lso) ##CT# refers to

1Pharmaceutical Preparations hich Supply Nutritional Needs)1

fallin$ under Class > of the official classification of /edicines and

Pharmaceutical Preparations to !e used as prescri!ed !y

physicians" On the other hand) ##SK# refers to 1Foods and

In$redients of Foods1 fallin$ under Class ;+) and does not reuire

medical prescription"

In the American C%anamid case) the ord S6/.T is

distin$uisha!le from the ord S6/.TIN.) as the former is derived

from a com!ination of the sylla!les 1S61 hich is derived from sulfa

and 1/.T1 from methyl) !oth of hich are chemical compounds

present in the article manufactured !y the contendin$ parties" This

Court held that the addition of the sylla!le 1IN.1 in respondentQs la!el

is sufficient to distin$uish respondentQs product or trademar% from

that of petitioner" #lso) !oth products are for medicinal veterinary use

and the !uyer ill !e more ary of the nature of the product he is


















!uyin$" In any case) !oth products are not identical as S6/.TQs

la!el indicates that it is used in a drin%in$ ater solution hile that of

S6/.TIN. indicates that they are ta!lets"

It cannot also !e said that the products in the a!ove cases can !e

!ou$ht off the shelf eEcept) perhaps) for ##SK#" The said products

are not the usual 1common and ineEpensive1 household items hich

an 1undiscernin$ly rash1 !uyer ould unthin%in$ly !uy"In the case at

!ar) other than the fact that !oth NestleQs and CFCQs products are

ineEpensive and common household items) the similarity ends there"

Bhat is !ein$ uestioned here is the use !y CFC of the trademar%

/#ST.R" In vie of the difficulty of applyin$ 9urisprudential

precedents to trademar% cases due to the peculiarity of each case)

9udicial fora should not readily apply a certain test or standard 9ust

!ecause of seemin$ similarities" #s this Court has pointed a!ove)

there could !e more tellin$ differences than similarities as to ma%e a

9urisprudential precedent inapplica!le"

Nestle points out that the dominancy test should have !een applied

to determine hether there is a confusin$ similarity !eteen CFCQs

F#VOR /#ST.R and NestleQs /#ST.R RO#ST and /#ST.R

0.ND"

Be a$ree"

#s the Court of #ppeals itself has stated) 1?t@he determination of

hether to trademar%s are indeed confusin$ly similar must !e

ta%en from the viepoint of the ordinary purchasers ho are) in

$eneral) undiscernin$ly rash in !uyin$ the more common and less

eEpensive household products li%e coffee) and are therefore less

inclined to closely eEamine specific details of similarities and

dissimilarities !eteen competin$ products"1'

The !asis for the Court of #ppealsQ application of the totality or

holistic test is the 1ordinary purchaser1 !uyin$ the product under

1normally prevalent conditions in trade1 and the attention such

products normally elicit from said ordinary purchaser" #n ordinary

purchaser or !uyer does not usually ma%e such scrutiny nor does he

usually have the time to do so" The avera$e shopper is usually in a

hurry and does not inspect every product on the shelf as if he ere

!rosin$ in a li!rary"

The Court of #ppeals held that the test to !e applied should !e the

totality or holistic test reasonin$) since hat is of paramount

consideration is the ordinary purchaser ho is) in $eneral)

undiscernin$ly rash in !uyin$ the more common and less eEpensive

household products li%e coffee) and is therefore less inclined to

closely eEamine specific details of similarities and dissimilarities

!eteen competin$ products"

This Court cannot a$ree ith the a!ove reasonin$" If the ordinary

purchaser is 1undiscernin$ly rash1 in !uyin$ such common and

ineEpensive household products as instant coffee) and ould

therefore !e 1less inclined to closely eEamine specific details of

similarities and dissimilarities1 !eteen the to competin$ products)

then it ould !e less li%ely for the ordinary purchaser to notice that

CFCQs trademar% F#VOR /#ST.R carries the colors oran$e and

mocha hile that of NestleQs uses red and !ron" The application of

the totality or holistic test is improper since the ordinary purchaser

ould not !e inclined to notice the specific features) similarities or

dissimilarities) considerin$ that the product is an ineEpensive and

common household item"

It must !e emphasi2ed that the products !earin$ the trademar%s in

uestion are 1ineEpensive and common1 household items !ou$ht off

the shelf !y 1undiscernin$ly rash1 purchasers" #s such) if theordinary purchaser is 1undiscernin$ly rash1) then he ould not have

the time nor the inclination to ma%e a %een and perceptive

eEamination of the physical discrepancies in the trademar%s of the

products in order to eEercise his choice"

Bhile this Court a$rees ith the Court of #ppealsQ detailed

enumeration of differences !eteen the respective trademar%s of the

to coffee products) this Court cannot a$ree that totality test is the







one applica!le in this case" Rather) this Court !elieves that the

dominancy test is more suita!le to this case in li$ht of its peculiar

factual milieu"

/oreover) the totality or holistic test is contrary to the elementary

postulate of the la on trademar%s and unfair competition that

confusin$ similarity is to !e determined on the !asis of visual) aural)

connotative comparisons and overall impressions en$endered !y the

mar%s in controversy as they are encountered in the realities of the

mar%etplace"4 The totality or holistic test only relies on visual

comparison !eteen to trademar%s hereas the dominancy test

relies not only on the visual !ut also on the aural and connotative

comparisons and overall impressions !eteen the to trademar%s"

For this reason) this Court a$rees ith the 0PTTT hen it applied the

test of dominancy and held that7

From the evidence at hand) it is sufficiently esta!lished that

the ord /#ST.R is the dominant feature of opposerQs

mar%" The ord /#ST.R is printed across the middle

portion of the la!el in !old letters almost tice the si2e of the

printed ord RO#ST" Further) the ord /#ST.R has alays

!een $iven emphasis in the TV and radio commercials and

other advertisements made in promotin$ the product" This

can !e $leaned from the fact that Ro!ert &aors%i and #tty"

Ric Puno &r"") the personalities en$a$ed to promote the

product) are $iven the titles /aster of the ame and /aster

of the Tal% Sho) respectively" In due time) !ecause of these

advertisin$ schemes the mind of the !uyin$ pu!lic had cometo learn to associate the ord /#ST.R ith the opposerQs

$oods"

E E E" It is the o!servation of this Office that much of the

dominance hich the ord /#ST.R has acuired throu$h

OpposerQs advertisin$ schemes is carried over hen the

same is incorporated into respondent-applicantQs trademar%

F#VOR /#ST.R" Thus) hen one loo%s at the la!el

!earin$ the trademar% F#VOR /#ST.R <.Eh" ;= oneQs

attention is easily attracted to the ord /#ST.R) rather than

to the dissimilarities that eEist" Therefore) the possi!ility of

confusion as to the $oods hich !ear the competin$ mar%s

or as to the ori$ins thereof is not farfetched" E E E" ;

In addition) the ord 1/#ST.R1 is neither a $eneric nor a descriptive

term" #s such) said term can not !e invalidated as a trademar% and)

therefore) may !e le$ally protected" eneric terms( are those hich

constitute 1the common descriptive name of an article or su!stance)1

or comprise the 1$enus of hich the particular product is a species)1

or are 1commonly used as the name or description of a %ind of

$oods)1 or 1imply reference to every mem!er of a $enus and the

eEclusion of individuatin$ characters)1 or 1refer to the !asic nature of

the ares or services provided rather than to the more idiosyncratic

characteristics of a particular product)1 and are not le$ally

protecta!le" On the other hand) a term is descriptive> and therefore

invalid as a trademar% if) as understood in its normal and naturalsense) it 1forthith conveys the characteristics) functions) ualities or

in$redients of a product to one ho has never seen it and does not

%no hat it is)1 or 1if it forthith conveys an immediate idea of the

in$redients) ualities or characteristics of the $oods)1 or if it clearly

denotes hat $oods or services are provided in such a ay that the

consumer does not have to eEercise poers of perception or

ima$ination"

Rather) the term 1/#ST.R1 is a su$$estive term !rou$ht a!out !y

the advertisin$ scheme of Nestle" Su$$estive terms+ are those

hich) in the phraseolo$y of one court) reuire 1ima$ination) thou$htand perception to reach a conclusion as to the nature of the $oods"1

Such terms) 1hich su!tly connote somethin$ a!out the product)1 are

eli$i!le for protection in the a!sence of secondary meanin$" Bhile

su$$estive mar%s are capa!le of sheddin$ 1some li$ht1 upon certain

characteristics of the $oods or services in dispute) they nevertheless

involve 1an element of incon$ruity)1 1fi$urativeness)1 or 1 ima$inative

effort on the part of the o!server"1















This is evident from the advertisin$ scheme adopted !y Nestle in

promotin$ its coffee products" In this case) Nestle has) over time)

promoted its products as 1coffee perfection orthy of masters li%e

Ro!ert &aors%i and Ric Puno &r"1

In associatin$ its coffee products ith the term 1/#ST.R1 and

there!y impressin$ them ith the attri!utes of said term) Nestle

advertised its products thus7

Ro!ert &aors%i" ivin$ e$end" # true hard court hero" Fast

on his feet" Sure in every shot he ma%es" # master strate$ist"

In one ord) unmatched"

/#ST.R RO#ST" .ually unmatched" Rich and deeply

satisfyin$" /ade from a uniue com!ination of the !est

coffee !eans - #ra!ica for superior taste and aroma)

Ro!usta for stren$th and !ody" # masterpiece only

N.SC#F.) the orldQs coffee masters) can create"

/#ST.R RO#ST" Coffee perfection orthy of masters li%e

Ro!ert &aors%i"A

In the art of conversation) Ric Puno &r" is master" Bitty" Bell-

informed" Confident"

In the art of coffee-ma%in$) nothin$ euals /aster Roast) the

coffee masterpiece from Nescafe) the orldQs coffee

masters" # uniue com!ination of the !est coffee !eans - #ra!ica for superior taste and aroma) Ro!usta for stren$th

and !ody" Truly distinctive and rich in flavor"

/aster Roast" Coffee perfection orthy of masters li%e Ric Puno &r"*

The term 1/#ST.R1) therefore) has acuired a certain connotation

to mean the coffee products /#ST.R RO#ST and /#ST.R 0.ND

produced !y Nestle" #s such) the use !y CFC of the term 1/#ST.R1

in the trademar% for its coffee product F#VOR /#ST.R is li%ely to

cause confusion or mista%e or even to deceive the ordinary

purchasers"

In closin$) it may not !e amiss to uote the case of American Chice

Co. v. 'opps Che!in$ um, "nc ")4, to it7

Bhy it should have chosen a mar% that had lon$ !een

employed !y ?plaintiff@ and had !ecome %non to the trade

instead of adoptin$ some other means of identifyin$ its

$oods is hard to see unless there as a deli!erate purpose

to o!tain some advanta$e from the trade that ?plaintiff@ had

!uilt up" Indeed) it is $enerally true that) as soon as e see

that a second comer in a mar%et has) for no reason that he

can assi$n) pla$iari2ed the 1ma%e-up1 of an earlier comer)

e need no moreH " " " ?B@e feel !ound to compel him to

eEercise his in$enuity in uarters further afield"

B.R.FOR.) in vie of the fore$oin$) the decision of the Court of

#ppeals in C#-"R" SP No" ;',' is R.V.RS.D and S.T #SID.

and the decision of the 0ureau of Patents) Trademar%s and

Technolo$y Transfer in Inter Partes Cases Nos" 4,, and 4, is

R.INST#T.D" SO ORD.R.D"

eneric terms are those hich constitute the common descriptive

name of an article or su!stance)U or comprise the $enus of hich

the particular product is a species)U or are commonly used as the

name or description of a %ind of $oods)U or imply reference to every

mem!er of a $enus and the eEclusion of individuatin$ characters)U or

refer to the !asic nature of the ares or services provided rather

than to the more idiosyncratic characteristics of a particular product)U

and are not le$ally protecta!le" On the other hand) a term is

descriptive and therefore invalid as a trademar% if) as understood in

its normal and natural sense) it forthith conveys the characteristics)

functions) ualities or in$redients of a product to one ho has never

seen it and does not %no hat it is)U or if it forthith conveys an

immediate idea of the in$redients) ualities or characteristics of the

$oods)U or if it clearly denotes hat $oods or services are provided in











such a ay that the consumer does not have to eEercise poers of

perception or ima$ination"

M'o&%6' v 6 b3 m% 3& D#CISIN

%AR&I', J .+

!)e C%e

This is a petition for revie ?'@ of the Decision dated > Novem!er '*** of the Court of #ppeals?@ findin$ respondent "C" 0i$ /a%0ur$er) Inc" not lia!le for trademar% infrin$ement and unfair competition and orderin$ petitioners to pay respondents P')*,,),,,in dama$es) and of its Resolution dated '' &uly ,,, denyin$reconsideration" The Court of #ppeals Decision reversed the (Septem!er '**; Decision?4@ of the Re$ional Trial Court of /a%ati)0ranch '4+) findin$ respondent "C" 0i$ /a% 0ur$er) Inc" lia!le for

trademar% infrin$ement and unfair competition"

!)e "%(

Petitioner /cDonalds Corporation </cDonalds= is acorporation or$ani2ed under the las of Delaare) 6nitedStates" /cDonalds operates) b% itse# or throu$h its franchisees) a$lo!al chain of fast-food restaurants" /cDonalds ?;@ ons a family of mar%s?(@ includin$ the 0i$ /ac mar% for its dou!le-dec%er ham!ur$er

sandich"?>@ /cDonalds re$istered this trademar% ith the 6nitedStates Trademar% Re$istry on '> Octo!er '*+*"?+@ 0ased on thisome Re$istration) /cDonalds applied for the re$istration o# thesame mar% in the )rincipa Re$ister of the then Philippine 0ureau of Patents) Trademar%s and Technolo$y <P0PTT=) no! the IntellectualProperty Office <IPO=" )endin$ approval of its application)

/cDonalds introduced its 0i$ /ac ham!ur$er sandiches in thePhilippine mar%et in Septem!er '*A'" On 'A &uly '*A() the P0PTTalloed re$istration o# the 0i$ /ac mar% in the )rincipa Re$ister !ased on its ome Re$istration in the 6nited States"

i%e its other mar%s) /cDonalds displays the 0i$ /ac mar%

in items?A@ and paraphernalia?*@ in its restaurants) and in its outdoor and indoor si$na$es" From '*A to '**,) /cDonalds spent P',"(million in advertisement for 0i$ /ac ham!ur$er sandiches alone" ?',@

Petitioner /ceor$e Food Industries <petitioner /ceor$e=)

a domestic corporation) is /cDonalds Philippine franchisee"?''@

Respondent "C" 0i$ /a% 0ur$er) Inc" <respondent

corporation= is a domestic corporation hich operates fast-foodoutlets and snac% vans in /etro /anila and near!y provinces"?'@ Respondent corporations menu includes ham!ur$er sandichesand other food items"?'4@ Respondents Francis 0" Dy) .dna #" Dy)Rene 0" Dy) Billiam 0" Dy) &esus #ycardo) #raceli #ycardo) andrace uerto <private respondents= are the incorporators)stoc%holders and directors of respondent corporation"?';@

On ' Octo!er '*AA) respondent corporation applied ith theP0PTT for the re$istration o# the 0i$ /a% mar% for its ham!ur$er

sandiches" /cDonalds opposed respondent corporationsapplication on the $round that 0i$ /a% as a colora!le imitation of its re$istered 0i$ /ac mar% for the same food products" /cDonaldsalso informed respondent Francis Dy <respondent Dy=) the chairmanof the 0oard of Directors of respondent corporation) of its eEclusiveri$ht to the 0i$ /ac mar% and reuested him to desist from usin$ the0i$ /ac mar% or an% similar mar%"

avin$ received no reply from respondent Dy) petitioners on> &une '**, sued respondents in the Re$ional Trial Court of /a%ati)

http://sc.judiciary.gov.ph/jurisprudence/2004/aug2004/143993.htm#_ftn1
































0ranch '4+ <RTC=) for trademar% infrin$ement and unfair competition" In its Order of '' &uly '**,) the RTC issued atemporary restrainin$ order <TRO= a$ainst respondents en9oinin$them from usin$ the 0i$ /a% mar% in the operation o# their !usinessin the National Capital Re$ion"?'(@ On '> #u$ust '**,) the RTCissued a rit of preliminary in9unction replacin$ the TRO"?'>@

In their #nser) respondents admitted that they have !een usin$ thename 0i$ /a% 0ur$er for their fast-food !usiness" Respondentsclaimed) hoever) that /cDonalds does not have an eEclusive ri$htto the 0i$ /ac mar% or to an% other similar mar%" Respondents pointout that the Isaiyas roup of Corporations <Isaiyas roup= re$isteredthe same mar% for ham!ur$er sandiches ith the P0PTT on 4'/arch '*+*" One Rodolfo Topacio <Topacio= similarly re$istered thesame mar% on ; &une '*A4) prior to /cDonalds re$istration on 'A&uly '*A(" Aternative% ) respondents claimed that they are not lia!lefor trademar% infrin$ement or for unfair competition) as the 0i$ /a%mar% they sou$ht to re$ister does not constitute a colora!le imitation

of the 0i$ /ac mar%" Respondents asserted that they did notfraudulently pass off their ham!ur$er sandiches as those of petitioners 0i$ /ac ham!ur$ers"?'+@ Respondents sou$ht dama$es intheir counterclaim" In their Reply) petitioners denied respondents claim that /cDonaldsis not the eEclusive oner of the 0i$ /ac mar%" Petitioners assertedthat hile the Isaiyas roup and Topacio did re$ister the 0i$ /acmar% ahead of /cDonalds) the Isaiyas roup did so only in theSupplemental Re$ister of the P0PTT and such re$istration does notprovide an% protection" /cDonalds disclosed that ithad acuired Topacios ri$hts to his re$istration in a Deed of

#ssi$nment dated 'A /ay '*A'"?'A@

!)e !r3%6 Co2r( R263&

On ( Septem!er '**;) the RTC rendered 9ud$ment <RTC Decision=findin$ respondent corporation lia!le for trademar% infrin$ement andunfair competition"9o!ever ) the RTC dismissed the complaint

a$ainst private respondents and the counterclaim a$ainst petitionersfor lac% of merit and insufficiency of evidence" The RTC held7

6ndenia!ly) the mar% 0?i$@ /?ac@ is a

re$istered trademar% for plaintiff /cDonalds) and assuch) i t is entit led ?to@ protection a$ainst

infrin$ement"

EEEE'here exist some distinctions !eteen the names0?i$@ /?ac@ and 0?i$@ /?a%@ as appearin$ in therespective si$na$es) rappers and containers of thefood products of the parties"0ut infrin$ement$oes !eyond the physical features of theuestioned name and the ori$inal name" There arestill other factors to !e considered" EEEESi$nificantly)the contendin$ parties are !oth in the !usiness of fast-food chains and restaurants" #n avera$e

person ho is hun$ry and ants to eat a ham!ur$er sandich may not !e discriminatin$ enou$h to loo%for a /cDonalds restaurant and !uy a 0?i$@ /?ac@ham!ur$er" Once he sees a stall sellin$ ham!ur$er sandich) in all li%elihood) he ill dip into his poc%etand order a 0?i$@ /?a%@ ham!ur$er sandich" Plaintiff /cDonalds fast-food chainhas attained ide popularity and acceptance !y theconsumin$ pu!lic so much so that its air-conditionedfood outlets and restaurants ill perhaps not !emista%en !y many to !e the same as defendantcorporations mo!ile snac% vans ocated alon$ !usy

streets or hi$hays" 0ut the thin$ is that hat is!ein$ sold !y both contendin$ parties is a food itema ham!ur$er sandich hich is for immediateconsumption) so that a !uyer may easily !econfused or deceived into thin%in$ that the 0?i$@/?a%@ ham!ur$er sandich he !ou$ht is a food-product of plaintiff /cDonalds) or a su!sidiary or allied outlet thereo# " Surely) defendant corporationhas its on secret in$redients to ma%e its ham!ur$er sandiches as palata!le and as tasty as the other













!rands in the mar%et) considerin$ the %eencompetition amon$ mushroomin$ ham!ur$er standsand multinational fast-food chains andrestaurants" 9ence) the trademar% 0?i$@ /?ac@has !een infrin$ed !y defendant corporation hen itused the name 0?i$@ /?a%@ in its si$na$es) rappers)

and containers in connection !ith its food !usiness"EEEE

Did the same acts of defendants in usin$ the name0?i$@ /?a%@ as a trademar% or tradename in their si$na$es) or in causin$ the name 0?i$@ /?a%@ to !eprinted on the rappers and containers of their foodproducts also constitute an act of unfair competitionunder Section * of the Trademar% a The anser is in the affirmative" EEEE

The EEE provision of the la concernin$ unfair competition is !roader and more inclusive than thela concernin$ the infrin$ement of trademar%) hichis of more imited ran$e) !ut ithin its narroer ran$e reco$ni2es a more eEclusive ri$ht derived!y the adoption and re$istration o# the trademar% !ythe person hose $oods or services are firstassociatedthere!ith" EEE ot!ithstandin$ thedistinction !eteen an action for trademar%infrin$ement and an action for unfair competition)hoever) the la eEtends su!stantially the samerelief to the in9ured party for both cases" <See

Sections 4 and * of Repu!lic #ct No" '>>= An% conduct may !e said to constitute unfair competition if the effect is to pass off on thepu!lic the $oods of one man as the $oods of another" The choice of 0?i$@ /?a%@ as tradename !ydefendant corporation is not merely for sentimentalreasons !ut as clearly made to ta%e advanta$e of the reputation) popularity and the esta!lished$oodill of plaintiff /cDonalds" For) as stated in

Section *) a person is $uilty of unfair competitionho in sellin$ his $oods sha $ive them the $eneralappearance) of $oods of another manufacturer or dealer) either as to the $oods themselves or in therappin$ of the pac%a$es in hich they arecontained) or the devices or ords thereon) or

in an% other feature of their appearance) hichould li%ely influence purchasers to !elieve that the$oods offered are those of a manufacturer or dealer other than the actua manufacturer or dealer"'hus) plaintiffs have esta!lished their validcause of action a$ainst the defendants for trademar%infrin$ement and unfair competition and for dama$es" ?'*@

The dispositive portion of the RTC Decision provides7

B.R.FOR.) 9ud$ment is rendered in

favor of plaintiffs /cDonalds Corporation and/ceor$e Food Industries) Inc" and a$ainstdefendant "C" 0i$ /a% 0ur$er) Inc") as follos7

'" The rit of preliminary in9unction issued

in this case on ?'> #u$ust '**,@ is madepermanentH

" Defendant "C" 0i$ /a% 0ur$er) Inc" is

ordered to pay plaintiffs actua dama$es in

the amount o# P;,,),,,",,) eEemplary dama$es inthe amount o# P',,),,,",,) and attorneys fees andeEpenses of liti$ation in the amount o# P',,),,,",,H

4" The complaint a$ainst defendants

Francis 0" Dy) .dna #" Dy) Rene 0" Dy) Biliam 0"Dy) &esus #ycardo) #raceli #ycardo and raceuerto) as !e as all counter-claims) are dismissed





for lac% of merit as !e as for insufficiency of evidence"?,@

Respondents appealed to the Court of #ppeals"

!)e R263& o ()e Co2r( o Ae%6

On > Novem!er '***) the Court of #ppeals rendered 9ud$ment<Court of #ppeals Decision= reversin$ the RTC Decision and orderin$/cDonalds to pay respondents P')>,,),,, as actua andcompensatory dama$es and P4,,),,, as moral dama$es" TheCourt of #ppeals held7

Plaintiffs-appellees in the instant case ould

li%e to impress on this Court that the use

o# defendants-appellants of its corporate name thehole "C" 0?i$@ /?a%@ 0?ur$er@) I?nc@" hich appearson their food pac%a$es) si$na$es andadvertisements is an infrin$ement of their trademar%0?i$@ /?ac@ hich they use to identify ?their@ dou!ledec%er sandich) sold in a Styrofoam !oE pac%a$in$material ith the /cDonalds lo$o of um!rella /stamped thereon) to$ether !ith the printed mar% inred !l?o@c% capital letters) the ords !ein$ separated!y a sin$e space" Specifically) plaintiffs-appelleesar$ue that defendants-appellants use of their corporate name is a colora!le imitation of their

trademar% 0i$ /ac" EEEE

To Our mind) hoever) this Court is fully convincedthat no colora!le imitation eEists" #s the definitiondictates) it is not su##icient that a similarity eEistsin both names) !ut thatmore important% ) the over-allpresentation) or in their essential) su!stantive anddistinctive parts is such as ould li%ely /IS.#D or

CONF6S. persons in the ordinary course of purchasin$ the $enuine article" # care#u comparisonof the ay the trademar% 0?i$@ /?ac@ is !ein$ used!y plaintiffs-appellees and corporate name "C" 0i$/a% 0ur$er) Inc"!y defendants-appellants) ouldreadily revea that no confusion could ta%e place) or

that the ordinary purchasers ould !e misled !yit" #s pointed out !y defendants-appellants) theplaintiffs-appellees trademar% is used to desi$nateonly one product) a dou!le dec%er sandich sold ina Styrofoam !oE ith the /cDonalds lo$o" 3n theother hand, hat the defendants-appellantscorporation is usin$ is not a trademar% for its foodproduct !ut a !usiness or corporate name" They usethe !usiness name "C" 0i$ /a% 0ur$er) Inc" in their restaurant !usiness hich serves diversified fooditems such as siopao) noodles) pi22a) andsandiches such as hotdo$) ham) fish !ur$er and

ham!ur$er" Second% ) defendants-appellantscorporate or !usiness name appearin$ in the foodpac%a$es and si$na$es are ritten in silhouette red-oran$e letters ith the ! and m in upper case letters"

#!ove the ords 0i$ /a% are the upper case letter "C"" 0elo the ords 0i$ /a% are the ords0ur$er) Inc" spelled out in upper caseletters" Furthermore) said corporate or !usinessname appearin$ in such food pac%a$es andsi$na$es is alays accompanied !y the companymascot) a youn$ chu!!y !oy named /a%y hoears a red T-shirt ith the upper case m

appearin$ therein and a !lue loer $arment" Fina%, the defendants-appellants foodpac%a$es are made of plastic material"

EEEE EEE ?I@t is readily apparent to the na%ed eye thatthere appears a vast difference in the appearance of the product and the manner that the tradename 0i$/a% is !ein$ used and presented to the pu!lic" #s





earlier noted) there are $larin$ dissimilarities!eteen plaintiffs-appellees trademar% anddefendants-appellants corporate name" Plaintiffs-appellees product carryin$ the trademar% 0?i$@ /?ac@is a dou!le dec%er sandich <depicted in the traymat containin$ photo$raphs of the various food

products EEE sold in a Styrofoam !oE ith the/cDonalds lo$o and trademar% in red) !l?o@c% capitalletters printed thereon EEE at a price hich is moreeEpensive than the defendants-appellantscompara!le food products" "n order to !uy a 0i$/ac) a customer needs to visit an air-conditioned/cDonalds restaurant usually ocated in a near!ycommercial center) advertised and identified !y itslo$o - the um!rella /) and its mascot Ronald/cDonald" # typical /cDonalds restaurant !oasts of a play$round for %ids) a second f loor toaccommodate additiona customers) a drive-thru to

allo customers ith cars to ma%e orders ithoutali$htin$ from their vehicles) the interiors of the!uildin$ are ell-li$hted) distinctly decorated andpainted ith pastel colors EEE" In !uyin$ a 0?i$@/?ac@) it is necessar% to specify it !y itstrademar%" 'hus) a customer needs to loo% for a/cDonalds and enter it first !efore he can find aham!ur$er sandich hich carry the mar% 0i$/ac" 3n the other hand, defendants-appellants selltheir $oods throu$h snac% vans EEEE

#nent the alle$ation that defendants-appellants are

$uilty of unfair competition) Be i1e!ise find thesame untena!le" 6nfair competition is defined as the empo%ment of deception or an% other means contrary to $ood faith!y hich a person sha pass off the $oodsmanufactured !y him or in hich he deals) or his!usiness) or service) for those of another ho hasalready esta!lished $ood ill for his similar $ood)!usiness or services) or an% acts calculated to

produce the same result <Sec. 50, Rep. Act o. /66,as amended =" To constitute unfair competition therefore itmust necessari% follo that there as malice andthat the entity concerned as in !ad faith"

In the case at !ar) Be find

no su##icient evidence adduced !y plaintiffs-appellees that defendants-appellants deli!eratelytried to pass off the $oods manufactured !y them for those of plaintiffs-appellees" The mere suspectedsimilarity in the sound of the defendants-appellantscorporate name ith the plaintiffs-appelleestrademar% is not su##icient evidence to concludeunfair competition" Defendants-appellants eEplainedthat the name /?a%@ in their corporate name asderived from both the first names of the mother and

father of defendant Francis Dy) hose names are/aEima and Kimsoy" Bith this eEplanation) it is up tothe plaintiffs-appellees to prove !ad faith on the part o# defendants-appellants" It is a settled rule that thela alays presumes $ood faith suchthat an% person ho see%s to !e aardeddama$es due to acts of another has the !urdenof provin$ that the atter acted in !ad faith or ith illmotive" ?'@

Petitioners sou$ht reconsideration of the Court of #ppeals Decision

!ut the appellate court denied their motion in its Resolution of '' &uly,,," 9ence) this petition for revie"

Petitioners raise the folloin$ $rounds for their petition7 I" T. CO6RT OF #PP.#S .RR.D IN FINDIN

T#T R.SPOND.NTS CORPOR#T. N#/."C" 0I /#K 06R.R) INC" IS NOT #






COOR#0. I/IT#TION OF T./CDON#DS TR#D./#RK 0I /#C) S6CCOOR#0. I/IT#TION 0.IN #N *L*&*' 3F TR#D./#RK INFRIN./.NT"

#" Respondents use the ords 0i$ /a%

as trademar% for their products and notmerely as their !usiness or corporatename"

0" #s a trademar%) respondents 0i$ /a%

is undenia!ly and unuestiona!ly similar to petitioners 0i$ /ac trademar% !asedon the dominancy test and the idemsonans test resultin$ ineEora!ly inconfusion on the part of the consumin$pu!lic"

I I" T. CO6RT OF #PP.#S .RR.D INR.F6SIN TO CONSID.R T. IN.R.NTSI/I#RIT5 0.TB..N T. /#RK 0I /#K

#ND T. BORD /#RK 0I /#C #S #N "2"CA'"3 OF R.SPOND.NTS INT.NTTO D.C.IV. OR D.FR#6D FOR )(R)3S*S3F *S'A7L"S9" 6NF#IR CO/P.TITION"?@

Petitioners pray that e set aside the Court of #ppeals Decision andreinstate the RTC Decision"

In their Comment to the petition) respondents uestion the

propriety of this petition as it alle$edly raises only uestions of fact"On the merits) respondents contend that the Court of #ppealscommitted no reversi!le error in findin$ them not lia!le for trademar%infrin$ement and unfair competition and in orderin$ petitioners to paydama$es"

!)e I2e

The issues are7

'" Procedurally) hether the uestions raised in this petition

are proper for a petition for revie under Rule ;(" " On the merits) <a= hether respondents used the ords

0i$ /a% not only as part of the corporate name "C" 0i$ /a% 0ur$er)

Inc" !ut also as a trademar% for their ham!ur$er products) and <!=hether respondent corporation is lia!le for trademar% infrin$ementand unfair competition"?4@

!)e Co2r( R263&

The petition has merit"

'n ()et)er t)e *+estions Rised in t)e &etition re&roper -or &etition -or Revie

# party intendin$ to appeal from a 9ud$ment of the Court of #ppealsmay file ith this Court a petition for revie under Section ' of Rule;( <Section '=?;@ raisin$ only uestions of la" # uestion of laeEists hen the dou!t or difference arises on hat the la is on acertain state of facts" There is a uestion of fact hen the dou!t or difference arises on the truth or falsity of the ae$ed facts" ?(@ ere) petitioners raise uestions of fact and la in assailin$ theCourt of #ppeals findin$s on respondent corporations non-lia!ility for trademar% infrin$ement and unfair competition" Ordinarily) the Court

can deny due course to such a petition" In vie) hoever) of thecontradictory findin$s of fact of the RTC and Court of #ppeals) theCourt opts to accept the petition) this !ein$ one of the reco$ni2edeEceptions to Section '"?>@ Be too% a similar course of action in Asi/reer0, In. v. %o+rt o- Appe2s ?+@ hich also involved a suit for trademar% infrin$ement and unfair competition in hich the trial courtand the Court of #ppeals arrived at conflictin$ findin$s"


















'n t)e Mnner Respondents sed /i4 M5 in t)eir /+siness

Petitioners contend that the Court of #ppeals erred in rulin$ that thecorporate name "C" 0i$ /a% 0ur$er) Inc" appears in the pac%a$in$for respondents ham!ur$er products and not the ords 0i$ /a% only" The contention has merit" The evidence presented durin$ the hearin$s on petitioners motion for the issuance of a rit of preliminary in9unction shos that the plasticrappin$s and plastic !a$s used !y respondents for their ham!ur$er sandiches !ore the ords 0i$ /a%" The other descriptive ords!ur$er and ',, pure !eef ere set in smaller type) alon$ ith thelocations of !ranches"?A@ Respondents cash invoices simply refer to

their ham!ur$er sandiches as 0i$ /a%"?*@

It is respondents snac%vans that carry the ords "C" 0i$ /a% 0ur$er) Inc"?4,@

It as only durin$ the trial that respondents presented in evidencethe plastic rappers and !a$s for their ham!ur$er sandiches reied on !y the Court of #ppeals"?4'@ Respondents plasticrappers and !a$s ere identical ith those petitioners presenteddurin$ the hearin$s for the in9unctive rit eEcept that the letters "C"and the ords 0ur$er) Inc" in respondents evidence ere addeda!ove and !elo the ords 0i$ /a%) respective% " Since petitionerscomplaint as !ased on facts eEistin$ !efore and durin$ thehearin$s on the in9unctive rit) the facts esta!lished durin$ thosehearin$s are the proper factual !ases for the disposition of the issues

raised in this petition"

'n t)e Iss+e o- Trder5 In-rin4eent

Section <Section = of Repu!lic #ct No" '>>) as amended <R#'>>=) the la applica!le to this case) ?4@ defines trademar%infrin$ement as follos7

"n#rin$ement, !hat constitutes" An% person ho?'@ sha use) ithout the consent of there$istrant) an% reproduction) counterfeit) copy or colora!le imitation of an% re$istered mar% or trade-name in connection !ith the sale) offerin$ for sale) or

advertisin$ of an% $oods) !usiness or services onor in connection !ith hich such use is li%ely tocause confusion or mista%e or to deceive purchasersor others as to the source or ori$in of such $oods or services) or identity of such !usinessH or ?@reproduce) counterfeit) copy) or colora!lyimitate an% such mar% or trade-name and apply suchreproduction) counterfeit) copy) or colora!le imitationto la!els) si$ns) prints) pac%a$es) rappers)receptacles or advertisements intended to !eused upon or in connection !ith such $oods)!usiness or services) sha !e iabe to a civil action

!y the re$istrant for an% or a o# theremediesherein provided"?44@

Petitioners !ase their cause of action under the first part of Section) i.e. respondents alle$edly used) ithout petitioners consent) acolora!le imitation of the 0i$ /ac mar% in advertisin$ and sellin$respondents ham!ur$er sandiches" This li%ely caused confusion inthe mind of the purchasin$ pu!lic on the source of the ham!ur$ers or the identity of the !usiness"

To estabish trademar% infrin$ement) the folloin$ elements

must !e shon7 <'= the validity of plaintiffs mar%H <= the plaintiffsonership of the mar%H and <4=the use o# the mar% or its colora!leimitation !y the ae$ed infrin$er results in li%elihood of confusion"?4;@ Of these) it is the eement o# li%elihood of confusion that is the$ravamen of trademar% infrin$ement"?4(@

'n t)e V2idit0 o- t)e /i4 MMr5 nd Mon2ds 'ners)ip o- s+) Mr5





















# mar% is valid if it is distinctive and thus not !arred fromre$istration under Section ;?4>@ of R# '>> <Section ;=" 9o!ever ) oncere$istered) not only the mar%s validity !ut also the re$istrantsonership of the mar% is prima #acie presumed"?4+@

Respondents contend that of the to ords in the 0i$ /acmar%) it is only the ord /ac that is valid !ecause the ord 0i$ is$eneric and descriptive <proscri!ed under Section ;?e@=) and thusincapa!le of eEclusive appropriation"?4A@

The contention has no merit" The 0i$ /ac mar%) hich should !etreated in its entirety and not dissected ord for ord) ?4*@ is neither $eneric nor descriptive" eneric mar%s are commonly used as thename or description of a 5ind o# $oods)?;,@ such as ite for !eer ?;'@ or Chocolate Fud$e for chocolate soda drin%"?;@Descriptive mar%s) onthe other hand) convey the characteristics) #unctions) ualities or in$redients of a product to one ho has never seen it or does not

%no it eEists)?;4@

such as #rthriticare for arthritis medication"?;;@

Onthe contrary) 0i$ /ac falls under the class o# fanciful or ar!itrarymar%s as it !ears no lo$ical relation to the actua characteristics of the product it represents"?;(@ As such) it is hi$hly distinctive and thusvalid" Si$nificantly) the trademar% ittle De!!ie for snac% ca%es asfound ar!itrary or fanciful"?;>@

The Court also finds that petitioners have duly esta!lished/cDonalds eEclusive onership of the 0i$ /ac mar%" #lthou$hTopacio and the Isaiyas roup re$istered the 0i$ /ac mar% ahead of /cDonalds) Topacio) as petitioners disclosed) had already assi$nedhis ri$hts to /cDonalds" The Isaiyas roup) on the other hand)re$istered its trademar% only in the Supplemental Re$ister" # mar%

hich is not re$istered in the )rincipa Re$ister) and thus notdistinctive) has no real protection"?;+@ Indeed) e have held thatre$istration in the Supplemental Re$ister is not even a prima#acie evidence of the validity of the re$istrants eEclusive ri$ht to usethe mar% on the $oods specified in the certificate"?;A@

'n T0pes o- %on-+sion Section covers to types of confusion arisin$ from the useo# similar or colora!le imitation mar%s) name% ) confusion of $oods

<product confusion= and confusion of !usiness <source or ori$inconfusion=" In 8ter2in4 &rod+ts Interntion2, Inorported v.9rben-bri5en /0er A5tien4ese22s)-t ) et 2.)?;*@ the Courtdistin$uished these to types of confusion) thus7

?Rudolf@ Callman notes to types of confusion" The

first is the confusion of $oods in hich event theordinarily prudent purchaser ould !e induced topurchase one product in the !elief that he aspurchasin$ the other" EEE The other is the confusionof !usiness7 ere thou$h the $oods of the partiesare different) the defendants product is such asmi$ht reasona!ly !e assumed to ori$inate ith theplaintiff) and the pu!lic ould then !e deceivedeither into that !elief or into the !elief that there issome connection !eteen the plaintiff and defendanthich) in #act ) does not eEist"

6nder #ct No" >>>)?(,@ the first trademar% la) infrin$ement aslimited to confusion of $oods only) hen the infrin$in$ mar% is usedon $oods of a similar %ind"?('@Thus) no relief as afforded to the partyhose re$istered mar% or its colora!le imitation is used on differentalthou$h related $oods" To remedy this situation) Con$ress enactedR# '>> on , &une '*;+" In definin$ trademar% infrin$ement)Section of R# '>> deleted the reuirement in uestion andeEpanded its scope to include such use of the mar% or its colora!leimitation that is li%ely to result in confusion on the source or ori$in of such $oods or services) or identity of such

!usiness"?(@

'hus) hile there is confusion of $oods hen theproducts are competin$) confusion of !usiness eEists hen theproducts are non-competin$ !ut related enou$h to produceconfusion of affiliation"?(4@

'n ()et)er %on-+sion o- :oods nd %on-+sion o- /+siness re App2ib2e














































Petitioners claim that respondents use of the 0i$ /a% mar% onrespondents ham!ur$ers results in confusion of $oods)particularly !ith respect to petitioners ham!ur$ers la!eled 0i$/ac" 'hus) petitioners ae$ed in their complaint7

'"'(" Defendants have unduly

pre9udiced and clearly infrin$ed upon the propertyri$hts of plaintiffs in the /cDonalds /ar%s)particularly the mar% 0?i$@ /?ac@"Defendantsunauthori2ed acts are li%ely) and calculated) toconfuse) mislead or deceive the pu!lic into !elievin$that the ro'2( %&' erv3e oere' b7'ee&'%&( B3 M% 0ur$er) and the !usiness it isen$a$ed in) are approved and sponsored !y) or affiliated ith) plaintiffs"?(;@ <.mphasis supplied=

Since respondents used the 0i$ /a% mar% on the same

$oods) i.e. ham!ur$er sandiches) that petitioners 0i$ /ac mar% isused) trademar% infrin$ement throu$h confusion of $oods is a proper issue in this case" Petitioners also claim that respondents use of the 0i$ /a% mar% inthe sale of ham!ur$ers) the same !usiness that petitioners areen$a$ed in) results in confusion of !usiness" ) etitioners ae$ed intheir complaint7

'"'," For some period o# time) and ithoutthe consent of plaintiff /cDonalds nor itslicenseeMfranchisee) plaintiff /ceor$e) and in clear

violation of plaintif fs eEclusive ri$ht touse andor appropriate the /cDonalds mar%s)defendant 0i$ /a% 0ur$er actin$ throu$h individualdefendants) has !een operatin$ 0i$ /a% 0ur$er) afast food restaurant !usiness dealin$ in the sale of ham!ur$er and cheese!ur$er sandiches) frenchfries and other food products) and has caused to !eprinted on the rapper of defendants food productsand incorporated in its si$na$es the name 0i$ /a%0ur$er) hich is confusin$ly similar to andor is a

colora!le imitation of the plaintiff /cDonalds mar%0?i$@ /?ac@) EEE" Dee&'%&( B3 M% B2rer )%()2 2&F2(67 re%(e' ()e 3mre3o& ()%( 3(b23&e 3 %rove' %&' o&ore' b7, or %363%(e' ;3(), 6%3&(3. EEEE

" As a conseuence o# the acts committed!y defendants) hich unduly pre9udice andinfrin$e upon the property ri$hts of plaintiffs/cDonalds and /ceor$e as the real oner andri$htful proprietor) and thelicenseeMfranchisee) respective% ) of the /cDonaldsmar%s) and hich are li%ely to have %2e'o&23o& or 'ee3ve' ()e 2b63 s to ()e (r2eo2re, o&or)3 or %363%(3o& o 'ee&'%&(oo' ro'2( %&' re(%2r%&( b23&e, plaintiffshave suffered and continue tosuffer actua dama$es in the #orm o# in9ury to their

!usiness reputation and $oodill) and of the dilutiono# the distinctive uality of the /cDonalds mar%s) in particuar ) the mar% 0?i$@ /?ac@"?((@ <.mphasissupplied=

Respondents admit that their business incudes sein$ hambur$er sand!iches, the same #ood product that petitioners se usin$ the 7i$ &ac mar1. 'hus) trademar% infrin$ement throu$h confusion of !usiness is also a proper issue in this case"

Respondents assert that their 0i$ /a% ham!ur$erscater main% to the lo-income $roup hile petitioners 0i$ /ac

ham!ur$ers cater to the middle and upper income $roups" .ven if this is true) the li%elihood of confusion of !usiness remains) since thelo-income $roup mi$ht !e led to !elieve that the 0i$ /a%ham!ur$ers are the lo-end ham!ur$ers mar%eted !ypetitioners" #fter all) petitioners have the eEclusive ri$ht to use the0i$ /ac mar%" 3n the other hand, respondents ould !enefit !yassociatin$ their lo-end ham!ur$ers) throu$h the use o# the 0i$/a% mar%) ith petitioners hi$h-end 0i$ /ac ham!ur$ers) leadin$ toli%elihood of confusion in the identity of !usiness"








Respondents further claim that petitioners use the 0i$ /acmar% only on petitioners dou!le-dec%er ham!ur$ers) hilerespondents use the 0i$ /a% mar% on ham!ur$ers and other products li%e siopao) noodles and pi22a" Respondents also point outthat petitioners sell their 0i$ /ac dou!le-dec%ers in a styrofoam !oEith the /cDonalds lo$o and trademar% in red) !loc% letters at a

price more eEpensive than the ham!ur$ers of respondents" Incontrast) respondents sell their 0i$ /a% ham!ur$ers in plasticrappers and plastic !a$s" Respondents further point out thatpetitioners restaurants are air-conditioned !uildin$s ith drive-thruservice) compared to respondents mo!ile vans"

These and other factors respondents cite cannot ne$ate the

undisputed fact that respondents use their 0i$ /a% mar% onham!ur$ers) the same food product that petitioners sell ith the useo# their re$istered mar% 0i$ /ac" Bhether a ham!ur$er is sin$le)dou!le or triple-dec%er) and hether rapped in plastic or styrofoam)it remains the same ham!ur$er food product" .ven respondents use

of the 0i$ /a% mar% on non-ham!ur$er food products cannot eEcusetheir infrin$ement of petitioners re$istered mar%) otherise re$isteredmar%s ill lose their protection under the la"

The re$istered trademar% oner may use his mar% on thesame or similar products) in different se$ments of the mar%et) and atdifferent price levels dependin$ on variations of the products for specific se$ments of the mar%et" The Court has reco$ni2ed that there$istered trademar% oner en9oys protection in product and mar%etareas that are the &orm%6 o(e&(3%6 e%&3o& o )3b23&e. 'hus) the Court has declared7

/odern la reco$ni2es that the protection to

hich the oner of a trademar% is entitled is notlimited to $uardin$ his $oods or !usinessfrom actua mar%et competition ith identical or similar products of the parties) !ut eEtends to allcases in hich the use !y a 9unior appropriator of atrade-mar% or trade-name is 63e67 (o 6e%' (o %o&23o& o o2re, % ;)ere roe(3ve2r)%er ;o26' be m36e' 3&(o ()3&3& ()%(()e om6%3&3& %r(7 )% e(e&'e' )3 b23&e3&(o ()e 3e6' <see ';A #R (> et seH (4 #m &ur"

(+>= or is in an% ay connected ith the activities of the infrin$erH or ;)e& 3( ore(%66 ()e &orm%6o(e&(3%6 e%&3o& o )3 b23&e <v" ';A #R)++) A;H ( #m" &ur" (+>) (++="?(>@ <.mphasissupplied=

'n ()et)er Respondents se o- t)e /i4 M5 Mr5 Res+2ts in Li5e2i)ood o- %on-+sion

In determinin$ li%elihood of confusion) 9urisprudence has developedto tests) the dominancy test and the holistic test" ?(+@ The dominancytest focuses on the similarity of the prevaent features of thecompetin$ trademar%s that mi$ht cause confusion" In contrast) theholistic test reuires the court to consider the entirety of the mar%s asapplied to the products) includin$ the la!els and pac%a$in$)

in determinin$ confusin$ similarity" The Court of #ppeals) in findin$ that there is no li%elihood of

confusion that could arise in the use o# respondents 0i$ /a% mar%on ham!ur$ers) relied on the holistic test" 'hus) the Court of #ppealsruled that it is not su##icient that a similarity eEists in both name<s=)!ut that more important% ) the over22 ree&(%(3o&) or in their essential) su!stantive and distinctive parts is such as ould li%ely/IS.#D or CONF6S. persons in the ordinary course of purchasin$ the $enuine article" The holistic test considers the tomar%s in their entirety) as they appear on the $oods ith their la!elsand pac%a$in$" It is not enou$h to consider their ords and

compare the spellin$ and pronunciation o# the ords"

?(A@

Respondents no! vi$orously ar$ue that the Court of #ppeals

application of the holistic test to this case is correct andin accord ith prevailin$ 9urisprudence"

This Court) hoever) has relied on the dominancy test rather thanthe holistic test" The dominancy test considers the dominant featuresin the competin$ mar%s indeterminin$ hether they are confusin$lysimilar" 6nder the dominancy test) courts $ive $reater ei$ht to the











similarity of the appearance of the product arisin$ fromthe adoptiono# the dominant features of the re$istered mar%)disre$ardin$ minor differences"?(*@ Courts ill consider more the auraland visual impressions created !y the mar%s in the pu!licmind) $ivin$ little ei$ht to factors li%e prices) uality) sales outletsand mar%et se$ments"

'hus) in the '*(; case of %o Tion4 8 v. iretor o-

&tents)?>,@ the Court ruled7

EEE It has !een consistently held that theuestion of infrin$ement of a trademar% is to!e determined !y the test of dominancy" Similarity insi2e) form and color) hile relevant) is notconclusive" I ()e ome(3& (r%'em%r o&(%3&()e m%3& or ee&(3%6 or 'om3&%&( e%(2re o %&o()er, %&' o&23o& %&' 'ee(3o& 3 63e67 (ore26(, 3&r3&eme&( (%e 6%e" Duplication or

imitation is not necessar% H nor is it necessar% thatthe infrin$in$ la!el should su$$est an effort toimitate" <" eilman 0rein$ Co" vs" Independent0rein$ Co") '*' F") ;A*) ;*() citin$ .a$le Bhiteead Co" vs" Pflu$h <CC= 'A, Fed" (+*=" Theuestion at issue in cases o# infrin$ement of trademar%s is hether the use o# the mar%s involvedould !e li%ely to cause confusion or mista%es in themind of the pu!lic or deceive purchasers" <#u!urnRu!!er Corporation vs" onover Ru!!er Co") ',+ F"d (AAH EEE= <.mphasis supplied"=

The Court reiterated the dominancy test in Li ;o v.iretor o- &tents)?>'@ &)i2. N+t Ind+str0, In. v. 8tndrd /rndsIn.)?>@ %onverse R+bber %orportion v. nivers2 R+bber &rod+ts, In.)?>4@ and Asi /reer0, In. v. %o+rt o- Appe2s"?>;@ Inthe ,,' case of 8oiete es &rod+its Nest2, 8.A. v. %o+rt o-

Appe2s)?>(@ the Court eEplicitly re9ected the holistic test in this ise7 ?T@he (o(%63(7 or )o63(3 (e( 3 o&(r%r7 (o ()ee6eme&(%r7 o(26%(e o ()e 6%; o& (r%'em%r

%&' 2&%3r ome(3(3o& that confusin$ similarity isto !e determined on the basis o# visual) aural)connotative comparisonsand overa impressions e&e&'ere' b7 ()e m%r3& o&(rover7 as they are encountered in therealities of the mar%etplace"<.mphasis supplied=

The test of dominancy is no eEplicitly incorporated into lain Section '(("' of the Intellectual Property Code hich definesinfrin$ement as the colora!le imitation o# a re$istered mar% EEE or a 'om3&%&( e%(2re thereo# "

#pplyin$ the dominancy test) the Court finds thatrespondents use of the 0i$ /a% mar% results in li%elihood of confusion" First) 0i$ /a% sounds exact% the same as 0i$/ac" Second) the first ord in 0i$ /a% is exact% the same as thefirst ord in 0i$ /ac" Third) the first to letters in /a% are the same

as the first to letters in /ac" Fourth) the last letter in /a% hile a %sounds the same as c hen the ord /a% is pronounced" Fifth) inFilipino) the letter % replaces c in spellin$) thus Caloocan is spelledKaloo%an"

In short) aurally the to mar%s are the same) ith the first

ord of both mar%s phonetically the same) and the second ordof both mar%s also phonetically the same" Visually) the to mar%shave both to ords and siE letters) ith the first ord of both mar%shavin$ the same letters and the second ord havin$ the same firstto letters" In spellin$) considerin$ the Filipino lan$ua$e) even thelast letters of both mar%s are the same"

%2er20, respondents )ve dopted in /i4 M5 not on20 t)e doinnt b+t 2so 2ost 22 t)e -et+res o- /i4 M " #ppliedto the same food product of ham!ur$ers) the to mar%s ill li%elyresult in confusion in the pu!lic mind"

The Court has ta%en into account the %2r%6 ee( of the ords andletters contained in the mar%s in determinin$ the issue o# confusin$similarity" 'hus) in Mrve< %oeri2 %o., In. v. &etr ;pi =%o., et 2.)?>>@ the Court held7






















The folloin$ random list of

confusin$ly 3m36%r o2&' in the matter of trademar%s) culled from Nims) 6nfair Competitionand Trade /ar%s) '*;+) Vol" ') ill reinforce our vie that S#ONP#S and IONP#S are confusin$ly

similar in sound7 old Dust and old DropH &ant2enand &ass-SeaH Silver Flash and Supper FlashHCascarete and Cel!oriteH Celluloid and CelloniteHChartreuse and CharseursH CuteE and CuticleanHe!e and /e9eH KoteE and FemeteEH 8uso and oooo" eon #mdur) in his !oo% Trade-/ar% a andPractice) pp" ;'*-;') cities) as comin$ !ithin thepurvie of the idem sonans rule) 5usea and 6-C-#)Steinay Pianos and Stein!er$ Pianos) and Seven-6p and emon-6p" In Co Tion$ vs" Director of Patents) this Court uneuivocally said that Celduraand Cordura are confusin$ly similar in soundH this

Court held in Sapolin Co" vs" 0almaceda) >+ Phil"+*( that the name usolin is an infrin$ement of thetrademar% Sapolin) as the sound of the to names isalmost the same" <.mphasis supplied=

Certain% ) 0i$ /ac and 0i$ /a% for ham!ur$ers create even $reater confusion) not only aurally !ut also visually"

Indeed) a person cannot distin$uish 0i$ /ac from 0i$ /a%!y their sound" Bhen one hears a 0i$ /ac or 0i$ /a% ham!ur$er advertisement over the radio) one ould not %no hether the /acor /a% ends ith a c or a %"

Petitioners a$$ressive promotion of the 0i$ /ac mar%) as !orne !ytheir advertisement expenses) has !uilt $oodill and reputation for such mar% ma%in$ it one of the easily reco$ni2a!le mar%s in themar%et today" This increases the li%elihood that consumers illmista%enly associate petitioners ham!ur$ers and !usiness iththose of respondents" R espondents ina!ility to eEplain su##icient% ho and hy they cameto choose 0i$ /a% for their ham!ur$er sandiches indicates their intent to imitate petitioners 0i$ /ac mar%" Contrary to the Court of

#ppeals findin$) respondents claim that their 0i$ /a% mar% asinspired !y the first names of respondent Dys mother </aEima= andfather <Kimsoy= is not credi!le" #s petitioners ell noted7

?R@espondents) particularly Respondent /r" FrancisDy) could have arrived at a more creative choice for

a corporate name !y usin$ the names of his parents)especially since he as alle$edly driven !ysentimental reasons" For one) he could have put hisfathers name ahead of his mothers) as is usuallydone in this patriarchal society) and derived lettersfrom said names in that order" Or) he could haveta%en an eual number o# letters <i"e") to= fromeach name) as is the more usual thin$ done" Surely)the more plausi!le reason !ehind Respondentschoice of the ord /?a%@) especially hen ta%en incon9unction ith the ord 0?i$@) as their intent tota%e advanta$e of Petitioners EEE 0?i$@ /?ac@

trademar%) ith their ae$ed sentiment-focusedeEplanation merely thou$ht of as aconvenient) abeit unavailin$) eEcuse or defense for such an unfair choice of name"?>+@

#!sent proof that respondents adoption o# the 0i$ /a% mar%as due to honest mista%e or as fortuitous)?>A@ the inescapa!leconclusion is that respondents adopted the 0i$ /a% mar% to ride onthe coattails of the more esta!lished 0i$ /ac mar%" ?>*@ This savesrespondents much of the eEpense in advertisin$ to create mar%etreco$nition of their mar% and ham!ur$ers"?+,@

Thus) e hold that confusion is li%ely to result in the pu!licmind" Be sustain petitioners claim of trademar% infrin$ement" 'n t)e L5 o- &roo- o-

At+2 %on-+sion

Petitioners failure to present proof of actua confusion does notne$ate their claim of trademar% infrin$ement" #s noted in Aerin













(ire = %b2e %o. v. iretor o- &tents)?+'@ Section reuires theless strin$ent standard of 63e63)oo' of confusion only" Whie proof of actua confusion is the !est evidence of infrin$ement) its a!senceis inconseuential"?+@

'n t)e Iss+e o- n-ir %opetition Section * <Section *= ?+4@ of R# '>> defines unfair competition) thus7EEEE

An% person ho ill employ deception or an% other means contrary to $ood faith !y hich he sha passoff the $oods manufactured !y him or in hich hedeals) or his !usiness) or services for those of theone havin$ esta!lished such $oodill) or ho sha commit an% acts calculated to producesaid result) sha !e $uilty of unfair competition)

and sha !e su!9ect to an action there#or ""n particuar ) and ithout in an% ay limitin$ thescope of unfair competition) ()e o66o;3& s)22 be'eeme' 236(7 o 2&%3r ome(3(3o&7<a= An0 ero&, ;)o 3& e663& )3oo' s)22 3ve ()em ()e e&er%6 %e%r%&e o oo' o %&o()er m%&2%(2rer or 'e%6er,e3()er s to ()e oo' ()eme6ve or in therappin$ of the pac%a$es in hich they arecontained) or ()e 'ev3e or ;or' ()ereo&) or in an% feature of their appearance) hich ould !eli%ely to influence purchasers to !elieve that the

$oods offered are those of a manufacturer or dealer) other than the actua manufacturer or dealer)or ho otherise clothes the $oods ith suchappearance as sha deceive the pu!lic and defraudanother of his le$itimate trade) or an% su!seuentvendor of such $oods or an% a$ent of an% vendor en$a$ed in sellin$ such $oods ith a li%e purposeH<!= An% person ho !y an% artifice) or device) or ho empo%s an% other means calculated to inducethe false !elief that such person is offerin$ the

services of another ho has identified such servicesin the mind of the pu!licH or <c= An% person ho sha ma%e an% falsestatement in the course o# trade or ho sha commit an% other act contrary to $oodfaith of a nature calculated to discredit the $oods)

!usiness or services of another" <.mphasis supplied=

The essential eements o# an action for unfair competitionare <'= confusin$ similarity in the $eneral appearance of the $oods)and <= intent to deceive the pu!lic and defraud a competitor" ?+;@ Theconfusin$ similarity may or may not result from similarity in themar%s) !ut may result from other eEternal factors in the pac%a$in$ or presentation o# the $oods" The intent to deceive and defraud may !einferred from the similarity of the appearance of the $oods as offeredfor sale to the pu!lic"?+(@ Actua fraudulent intent need not !e shon"?+>@

6nfair competition is !roader than trademar% infrin$ement

and includes passin$ off $oods ith or ithout trademar%infrin$ement" Trademar% infrin$ement is a form of unfair competition"?++@ Trademar% infrin$ement constitutes unfair competition hen thereis not merely li%elihood of confusion) !ut also actua or pro!a!ledeception on the pu!lic !ecause of the $eneral appearance of the$oods" There can !e trademar% infrin$ement ithout unfair competition as hen the infrin$er discloses on the la!els containin$the mar% that he manufactures the $oods) thus preventin$ the pu!licfrom !ein$ deceived that the $oods ori$inate from the trademar%oner "?+A@

To support their claim of unfair competition) petitioners alle$e

that respondents fraudulently passed off their ham!ur$ers as 0i$/ac ham!ur$ers" Petitioners add that respondents fraudulent intentcan !e inferred from the similarity of the mar%s in uestion"?+*@

Passin$ off <or palmin$ off= ta%es place here the defendant)

!y imitative devices on the $eneral appearance of the $oods)misleads prospective purchasers into !uyin$ his merchandise under the impression that they are !uyin$ that of his competitors" ?A,@ 'hus)the defendant $ives his $oods the $eneral appearance of the $oods
























of his competitor ith the intention of deceivin$ the pu!lic that the$oods are those of his competitor"

The RTC descri!ed the respective mar%s and the $oods of

petitioners and respondents in this ise7

The mar% 0?i$@ /?ac@ is used !y plaintiff /cDonalds to identify its dou!le dec%er ham!ur$er sandich" The pac%a$in$ material is a styrofoam!oE ith the /cDonalds lo$o and trademar% in redith !loc% capital letters printed on it" #ll letters of the 0?i$@ /?ac@ mar% are also in red and !loc% capitalletters" 3n the other hand, defendants 0?i$@ /?a%@script print is in oran$e ith only the letter 0 and /!ein$ capitali2ed and the pac%a$in$ materialis plastic rapper" EEEE Further) plaintiffs lo$o andmascot are the um!rella / and Ronald/cDonalds) respective% ) compared to the mascot of

defendant Corporation hich is a chu!!y !oy called/ac%y displayed or printed !eteen the ords 0i$and /a%"?A'@ <.mphasis supplied=

Respondents point to these dissimilarities as proof that they did not$ive their ham!ur$ers the $eneral appearance of petitioners 0i$ /acham!ur$ers"

The dissimilarities in the pac%a$in$ are minor compared tothe (%r 3m36%r3(3e 3& ()e ;or' that $ive respondents 0i$ /a%ham!ur$ers the $eneral appearance of petitioners 0i$ /acham!ur$ers" Section *<a= eEpressly provides that the similarity in

the $eneral appearance of the $oods may !e in the devicesor ;or' used on the rappin$s" Respondents have applied on their plastic rappers and !a$s almost the %me ;or' that petitionersuse on their styrofoam !oE" Bhat attracts the attention of the !uyin$pu!lic are the ords 0i$ /a% hich are almost the same) aurally andvisually) as the ords 0i$ /ac" The dissimilarities in the material andother devices are insi$nificant compared to the $larin$ similarity inthe ords used in the rappin$s"

Section *<a= also provides that the defendant $ives his$oods the $eneral appearance of $oods of another manufacturer" Respondents $oods are ham!ur$ers hich are alsothe $oods of petitioners" If respondents sold e$$ sandichesonly instead o# ham!ur$er sandiches) their use of the 0i$ /a%mar% ould not $ive their $oods the $eneral appearance of

petitioners 0i$ /ac ham!ur$ers" In such case) there is onlytrademar% infrin$ement !ut no unfair competition" 9o!ever ) sincerespondents chose to apply the 0i$ /a% mar% on ham!ur$ers) 9ustli%e petitioners use of the 0i$ /ac mar% on ham!ur$ers) respondentshave obvious% clothed their $oods ith the $eneral appearance of petitioners $oods"

/oreover) there is no notice to the pu!lic that the 0i$ /a%

ham!ur$ers are products of "C" 0i$ /a% 0ur$er) Inc" Respondentsintroduced durin$ the trial plastic rappers and !a$s ith the ords"C" 0i$ /a% 0ur$er) Inc" to inform the pu!lic of the name of theseller of the ham!ur$ers" 9o!ever ) petitioners introduced durin$ the

in9unctive hearin$s plastic rappers and !a$s ith the 0i$ /a%mar% ;3()o2( the name "C" 0i$ /a% 0ur$er) Inc" Respondents!elated presentation of plastic rappers and !a$s !earin$ the nameof "C" 0i$ /a% 0ur$er) Inc" as the seller of the ham!ur$ers is anafter-thou$ht desi$ned to eEculpate them from their unfair !usinessconduct" #s earlier stated) e cannot consider respondents evidencesince petitioners complaint as !ased on facts eEistin$ !efore anddurin$ the in9unctive hearin$s"

'hus) there is actua% no notice to the pu!lic that the 0i$

/a% ham!ur$ers are products of "C" 0i$ /a% 0ur$er) Inc" and notthose of petitioners ho have the eEclusive ri$ht to the 0i$ /ac

mar%" This clearly shos respondents intent to deceive thepu!lic" ad respondents placed a notice on their plastic rappersand !a$s that the ham!ur$ers are sold !y "C" 0i$ /a% 0ur$er) Inc")then they could validly claim that they did not intend to deceive thepu!lic" In such case) there is only trademar% infrin$ement !ut nounfair competition"?A@ Respondents) hoever) did not $ive suchnotice" Be hold that as found !y the RTC) respondent corporation islia!le for unfair competition"









T)e Reedies Avi2b2e to &etitioners

6nder Section 4?A4@ <Section 4= in relation to Section * of R# '>>)a plaintiff ho successfully maintains trademar% infrin$ement and

unfair competition claims is entitled to in9unctive and monetary

reliefs" ere) the RTC did not err in issuin$ the in9unctive rit of '> #u$ust '**, <made permanent in its Decision of ( Septem!er '**;=and in orderin$ the payment of P;,,),,, actua dama$es in favor of petitioners" The in9unctive rit is indispensa!le to prevent further acts

of infrin$ement !y respondent corporation" #lso, the amount of actual dama$es is a reasona!le percenta$e <''"*= of respondentcorporations $ross sales for three <'*AA-'*A* and '**'= of the siE

years <'*A;-'**,= respondents have used the 0i$ /a% mar%"?A;@

The RTC also did not err in aardin$ eEemplary dama$es !y

ay of correction for the pu!lic $ood ?A(@ in vie! o# the findin$ of unfair competition here intent to deceive the pu!lic is essential" The

aard of attorneys fees and eEpenses of liti$ation is also in order "?A>@

?H#R#"R#) e GRAN! the instant petition" Be S#!

ASID# the Decision dated > Novem!er '*** of the Court of #ppeals and its Resolution dated '' &uly ,,, and R#INS!A!# theDecision dated ( Septem!er '**; of the Re$ional Trial Court of /a%ati) 0ranch '4+) findin$ respondent "C" 0i$ /a% 0ur$er) Inc"lia!le for trademar% infrin$ement and unfair competition"

S RD#R#D"

Petitioner /cDonald:s Corporation <1/cDonald:s1= is a 6S

corporation that operates a $lo!al chain of fast-food restaurants) ithPetitioner /ceor$e Food Industries <1/ceor$e1=) as the Philippinefranchisee"

/cDonald:s ons the 10i$ /ac1 mar% for its 1dou!le-dec%erham!ur$er sandich"1 ith the 6S Trademar% Re$istry on '>Octo!er '*+*"

0ased on this ome Re$istration) /cDonald:s applied for there$istration of the same mar% in the Principal Re$ister of the then

Philippine 0ureau of Patents) Trademar%s and Technolo$y <1P0PTT1=<no IPO=" On 'A &uly '*A() the P0PTT alloed re$istration of the10i$ /ac"1

Respondent "C" 0i$ /a% 0ur$er) Inc" is a domestic corporationhich operates fast-food outlets and snac% vans in /etro /anila and

near!y provinces" Respondent corporation:s menu includesham!ur$er sandiches and other food items"

On ' Octo!er '*AA) respondent corporation applied ith theP0PTT for the re$istration of the 10i$ /a%1 mar% for its ham!ur$ersandiches) hich as opposed !y /cDonald:s" /cDonald:s alsoinformed C 0i$ /a% chairman of its eEclusive ri$ht to the 10i$ /ac1mar% and reuested him to desist from usin$ the 10i$ /ac1 mar% orany similar mar%"

avin$ received no reply) petitioners sued "C" 0i$ /a% 0ur$er) Inc"and its directors !efore /a%ati RTC 0ranch '4+ <1RTC1=) for

trademar% infrin$ement and unfair competition"

RTC rendered a Decision findin$ respondent corporation lia!le fortrademar% infrin$ement and unfair competition" C# reversed RTC:sdecision on appeal"

1S! ISSU#7BMN respondent corporation is lia!le for trademar%infrin$ement and unfair competition"

R263&+ eSection of Repu!lic #ct No" '>>) as amended) defines trademar%infrin$ement as follos7

Infrin$ement) hat constitutes" - #ny person ho ?'@ shall use)ithout the consent of the re$istrant) any reproduction) counterfeit)copy or colora!le imitation of any re$istered mar% or trade-name inconnection ith the sale) offerin$ for sale) or advertisin$ of any$oods) !usiness or services on or in connection ith hich such useis li%ely to cause confusion or mista%e or to deceive purchasers orothers as to the source or ori$in of such $oods or services) or identityof such !usinessH or ?@ reproduce) counterfeit) copy) or colora!lyimitate any such mar% or trade-name and apply such reproduction)












counterfeit) copy) or colora!le imitation to la!els) si$ns) prints)pac%a$es) rappers) receptacles or advertisements intended to !eused upon or in connection ith such $oods) !usiness or services)shall !e lia!le to a civil action !y the re$istrant for any or all of theremedies herein provided"

To esta!lish trademar% infrin$ement) the folloin$ elements must !e

shon7 <'= the validity of plaintiff:s mar%H <= the plaintiff:s onershipof the mar%H and <4= the use of the mar% or its colora!le imitation !ythe alle$ed infrin$er results in 1li%elihood of confusion"1 Of these) it isthe element of li%elihood of confusion that is the $ravamen oftrademar% infrin$ement"

/st eement8

# mar% is valid if it is distinctive and not merely $eneric anddescriptive"

The 10i$ /ac1 mar%) hich should !e treated in its entirety and not

dissected ord for ord) is neither $eneric nor descriptive" enericmar%s are commonly used as the name or description of a %ind of$oods) such as 1ite1 for !eer" Descriptive mar%s) on the other hand)convey the characteristics) functions) ualities or in$redients of aproduct to one ho has never seen it or does not %no it eEists) suchas 1#rthriticare1 for arthritis medication" On the contrary) 10i$ /ac1falls under the class of fanciful or ar!itrary mar%s as it !ears nolo$ical relation to the actual characteristics of the product itrepresents" #s such) it is hi$hly distinctive and thus valid"

5nd eement8

Petitioners have duly esta!lished /cDonald:s eEclusive onership of the 10i$ /ac1 mar%" Prior valid re$istrants of the said mar% hadalready assi$ned his ri$hts to /cDonald:s"

4rd eement8

Section covers to types of confusion arisin$ from the use ofsimilar or colora!le imitation mar%s) namely) confusion of $oods<confusion in hich the ordinarily prudent purchaser ould !einduced to purchase one product in the !elief that he as purchasin$

the other= and confusion of !usiness <thou$h the $oods of the partiesare different) the defendant:s product is such as mi$ht reasona!ly !eassumed to ori$inate ith the plaintiff) and the pu!lic ould then !edeceived either into that !elief or into the !elief that there is someconnection !eteen the plaintiff and defendant hich) in fact) doesnot eEist="

There is confusion of $oods in this case since respondents used the10i$ /a%1 mar% on the same $oods) i"e" ham!ur$er sandiches) thatpetitioners: 10i$ /ac1 mar% is used"

There is also confusion of !usiness due to Respondents: use of the10i$ /a%1 mar% in the sale of ham!ur$ers) the same !usiness thatpetitioners are en$a$ed in) also results in confusion of !usiness" There$istered trademar% oner may use his mar% on the same or similar products) in different se$ments of the mar%et) and at different pricelevels dependin$ on variations of the products for specific se$mentsof the mar%et" The re$istered trademar% oner en9oys protection in

product and mar%et areas that are the normal potential eEpansion ofhis !usiness"

Furthermore) In determinin$ li%elihood of confusion) the SC hasrelied on the dominancy test <similarity of the prevalent features ofthe competin$ trademar%s that mi$ht cause confusion= over theholistic test <consideration of the entirety of the mar%s as applied tothe products) includin$ the la!els and pac%a$in$="

#pplyin$ the dominancy test) Respondents: use of the 10i$ /a%1mar% results in li%elihood of confusion" #urally the to mar%s are thesame) ith the first ord of !oth mar%s phonetically the same) and

the second ord of !oth mar%s also phonetically the same" Visually)the to mar%s have !oth to ords and siE letters) ith the first ordof !oth mar%s havin$ the same letters and the second ord havin$the same first to letters"

astly) since Section only reuires the less strin$ent standard of1li%elihood of confusion)1 Petitioners: failure to present proof of actualconfusion does not ne$ate their claim of trademar% infrin$ement"

ND ISSU#+ BMN Respondents committed 6nfair Competition



R263&+ e.Section * <1Section *1=+4 of R# '>> defines unfair competition)thus7

#ny person ho ill employ deception or any other means contrary

to $ood faith !y hich he shall pass off the $oods manufactured !yhim or in hich he deals) or his !usiness) or services for those of theone havin$ esta!lished such $oodill) or ho shall commit any actscalculated to produce said result) shall !e $uilty of unfair competition)and shall !e su!9ect to an action therefor"

The essential elements of an action for unfair competition are <'=

confusin$ similarity in the $eneral appearance of the $oods) and <=

intent to deceive the pu!lic and defraud a competitor"

In the case at !ar) Respondents have applied on their plastic

rappers and !a$s almost the same ords that petitioners use on

their styrofoam !oE" Further) Respondents: $oods are ham!ur$ershich are also the $oods of petitioners" /oreover) there is actually

no notice to the pu!lic that the 10i$ /a%1 ham!ur$ers are products of

1"C" 0i$ /a% 0ur$er) Inc"1 This clearly shos respondents: intent to

deceive the pu!lic

G.R. No. 10189=. M%r) 5, 199.

5C.6/ OF T. PIIPPIN.S) INC") petitioner) vs" CO6RT OF

#PP.#S) 5C.6/ OF #P#RRI) 5C.6/ OF C#0##N)

5C.6/ OF C#/##NI6#N) INC") 5C.6/ OF #O) INC")

5C.6/ OF T6#O) INC") 06I 5C.6/) C.NTR# 5C.6/ OFC#T#ND6#N.S) 5C.6/ OF SO6T.RN PIIPPIN.S)

5C.6/ OF .#ST.RN /IND#N#O) INC" and B.ST.RN

P#N#SIN#N 5C.6/) INC") respondents"

Luisum!in$) Torres 3 .van$elista a Offices and #m!rosio Padilla

for petitioner"

#ntonio /" Nuyles and Purun$an) Chato) Chato) Tarriela 3 Tan a

Offices for respondents"

Froilan Sio!al for Bestern Pan$asinan yceum"

S5#06S

'" CORPOR#TION #BH CORPOR#T. N#/.SH R.ISTR#TION

OF PROPOS.D N#/. BIC IS ID.NTIC# OR CONF6SIN5

SI/I#R TO T#T OF #N5 .JISTIN CORPOR#TION)

PROI0IT.DH CONF6SION #ND D.C.PTION .FF.CTIV.5

PR.C6D.D 05 T. #PP.NDIN OF .OR#PIC N#/.S TO

T. BORD 15C.6/1" The #rticles of Incorporation of a

corporation must) amon$ other thin$s) set out the name of the

corporation" Section 'A of the Corporation Code esta!lishes a

restrictive rule insofar as corporate names are concerned7 1Section

'A" Corporate name" No corporate name may !e alloed !y the

Securities an .Echan$e Commission if the proposed name isidentical or deceptively or confusin$ly similar to that of any eEistin$

corporation or to any other name already protected !y la or is

patently deceptive) confusin$ or contrary to eEistin$ las" Bhen a

chan$e in the corporate name is approved) the Commission shall

issue an amended certificate of incorporation under the amended

name"1 The policy underlyin$ the prohi!ition in Section 'A a$ainst

the re$istration of a corporate name hich is 1identical or deceptively

or confusin$ly similar1 to that of any eEistin$ corporation or hich is

1patently deceptive1 or 1patently confusin$1 or 1contrary to eEistin$

las)1 is the avoidance of fraud upon the pu!lic hich ould have

occasion to deal ith the entity concerned) the evasion of le$alo!li$ations and duties) and the reduction of difficulties of

administration and supervision over corporations" Be do not

consider that the corporate names of private respondent institutions

are 1identical ith) or deceptively or confusin$ly similar1 to that of the

petitioner institution" True enou$h) the corporate names of private

respondent entities all carry the ord 1yceum1 !ut confusion and

deception are effectively precluded !y the appendin$ of $eo$raphic

names to the ord 1yceum"1 Thus) e do not !elieve that the



1yceum of #parri1 can !e mista%en !y the $eneral pu!lic for the

yceum of the Philippines) or that the 1yceum of Camalaniu$an1

ould !e confused ith the yceum of the Philippines"

" ID"H ID"H DOCTRIN. OF S.COND#R5 /.#NINH 6S. OF

BORD 15C.6/)1 NOT #TT.ND.D BIT .JC6SIVIT5" It is

claimed) hoever) !y petitioner that the ord 1yceum1 has acuireda secondary meanin$ in relation to petitioner ith the result that

ord) althou$h ori$inally a $eneric) has !ecome appropria!le !y

petitioner to the eEclusion of other institutions li%e private

respondents herein" The doctrine of secondary meanin$ ori$inated in

the field of trademar% la" Its application has) hoever) !een

eEtended to corporate names sine the ri$ht to use a corporate name

to the eEclusion of others is !ased upon the same principle hich

underlies the ri$ht to use a particular trademar% or tradename" In

Philippine Nut Industry) Inc" v" Standard 0rands) Inc") the doctrine of

secondary meanin$ as ela!orated in the folloin$ terms7 1 " " " a

ord or phrase ori$inally incapa!le of eEclusive appropriation ithreference to an article on the mar%et) !ecause $eo$raphically or

otherise descriptive) mi$ht nevertheless have !een used so lon$

and so eEclusively !y one producer ith reference to his article that)

in that trade and to that !ranch of the purchasin$ pu!lic) the ord or

phrase has come to mean that the article as his product"1 The

uestion hich arises) therefore) is hether or not the use !y

petitioner of 1yceum1 in its corporate name has !een for such len$th

of time and ith such eEclusivity as to have !ecome associated or

identified ith the petitioner institution in the mind of the $eneral

pu!lic <or at least that portion of the $eneral pu!lic hich has to do

ith schools=" The Court of #ppeals reco$ni2ed this issue andansered it in the ne$ative7 16nder the doctrine of secondary

meanin$) a ord or phrase ori$inally incapa!le of eEclusive

appropriation ith reference to an article in the mar%et) !ecause

$eo$raphical or otherise descriptive mi$ht nevertheless have !een

used so lon$ and so eEclusively !y one producer ith reference to

this article that) in that trade and to that $roup of the purchasin$

pu!lic) the ord or phrase has come to mean that the article as his

produce <#na #n$ vs" Tori!io Teodoro) +; Phil" (>=" This

circumstance has !een referred to as the distinctiveness into hich

the name or phrase has evolved throu$h the su!stantial and

eEclusive use of the same for a considera!le period of time" " " " No

evidence as ever presented in the hearin$ !efore the Commission

hich sufficiently proved that the ord :yceum: has indeed acuired

secondary meanin$ in favor of the appellant" If there as any of this

%ind) the same tend to prove only that the appellant had !een usin$the disputed ord for a lon$ period of time" " " " In other ords) hile

the appellant may have proved that it had !een usin$ the ord

:yceum: for a lon$ period of time) this fact alone did not amount to

mean that the said ord had acuired secondary meanin$ in its favor

!ecause the appellant failed to prove that it had !een usin$ the same

ord all !y itself to the eEclusion of others" /ore so) there as no

evidence presented to prove that confusion ill surely arise if the

same ord ere to !e used !y other educational institutions"

Conseuently) the alle$ations of the appellant in its first to assi$ned

errors must necessarily fail"1 Be a$ree ith the Court of #ppeals"

The num!er alone of the private respondents in the case at !arsu$$ests stron$ly that petitioner:s use of the ord 1yceum1 has not

!een attended ith the eEclusivity essential for applica!ility of the

doctrine of secondary meanin$" Petitioner:s use of the ord

1yceum1 as not eEclusive !ut as in truth shared ith the Bestern

Pan$asinan yceum and a little later ith other private respondent

institutions hich re$istered ith the S.C usin$ 1yceum1 as part of

their corporation names" There may ell !e other schools usin$

yceum or iceo in their names) !ut not re$istered ith the S.C

!ecause they have not adopted the corporate form of or$ani2ation"

4" ID"H ID"H /6ST 0. .V#6#T.D IN T.IR .NTIR.T5 TOD.T.R/IN. B.T.R T.5 #R. CONF6SIN5 OR

D.C.PTIV.5 SI/I#R TO #NOT.R CORPOR#T. .NTIT5:S

N#/." petitioner institution is not entitled to a le$ally enforcea!le

eEclusive ri$ht to use the ord 1yceum1 in its corporate name and

that other institutions may use 1yceum1 as part of their corporate

names" To determine hether a $iven corporate name is 1identical1

or 1confusin$ly or deceptively similar1 ith another entity:s corporate

name) it is not enou$h to ascertain the presence of 1yceum1 or



1iceo1 in !oth names" One must evaluate corporate names in their

entirety and hen the name of petitioner is 9uEtaposed ith the

names of private respondents) they are not reasona!ly re$arded as

1identical1 or 1confusin$ly or deceptively similar1 ith each other"

D . C I S I O N

F.ICI#NO) & p7

Petitioner is an educational institution duly re$istered ith the

Securities and .Echan$e Commission <1S.C1=" Bhen it first

re$istered ith the S.C on ' Septem!er '*(,) it used the

corporate name yceum of the Philippines) Inc" and has used that

name ever since"

On ; Fe!ruary '*A;) petitioner instituted proceedin$s !efore the

S.C to compel the private respondents) hich are also educational

institutions) to delete the ord 1yceum1 from their corporate names

and permanently to en9oin them from usin$ 1yceum1 as part of their

respective names"

Some of the private respondents actively participated in the

proceedin$s !efore the S.C" These are the folloin$) the dates of

their ori$inal S.C re$istration !ein$ set out !elo opposite their

respective names7

Bestern Pan$asinan yceum + Octo!er '*(,

yceum of Ca!a$an 4' Octo!er '*>

yceum of allo) Inc" > /arch '*+

yceum of #parri A /arch '*+

yceum of Tuao) Inc" A /arch '*+

yceum of Camalaniu$an A /arch '*+

The folloin$ private respondents ere declared in default for failure

to file an anser despite service of summons7

0uhi yceumH

Central yceum of CatanduanesH

yceum of .astern /indanao) Inc"H and

yceum of Southern Philippines

Petitioner:s ori$inal complaint !efore the S.C had included three <4=

other entities7

'" The yceum of /alacanayH

" The yceum of /ar!elH and

4" The yceum of #raullo

The complaint as later ithdran insofar as concerned the yceum

of /alacanay and the yceum of /ar!el) for failure to serve

summons upon these to <= entities" The case a$ainst the iceum

of #raullo as dismissed hen that school motu proprio chan$e its

corporate name to 1Pamantasan n$ #raullo"1

The !ac%$round of the case at !ar needs some recountin$"

Petitioner had sometime !efore commenced in the S.C a

proceedin$ <S.C-Case No" ';'= a$ainst the yceum of 0a$uio) Inc"

to reuire it to chan$e its corporate name and to adopt another name

not 1similar ?to@ or identical1 ith that of petitioner" In an Order dated

, #pril '*++) #ssociate Commissioner &ulio Sulit held that the

corporate name of petitioner and that of the yceum of 0a$uio) Inc"

ere su!stantially identical !ecause of the presence of a 1dominant1



ord) i"e") 1yceum)1 the name of the $eo$raphical location of the

campus !ein$ the only ord hich distin$uished one from the other

corporate name" The S.C also noted that petitioner had re$istered

as a corporation ahead of the yceum of 0a$uio) Inc" in point of time)

' and ordered the latter to chan$e its name to another name 1not

similar or identical ?ith@1 the names of previously re$istered entities"

The yceum of 0a$uio) Inc" assailed the Order of the S.C !efore the

Supreme Court in a case doc%eted as "R" No" -;>(*(" In a /inute

Resolution dated '; Septem!er '*++) the Court denied the Petition

for Revie for lac% of merit" .ntry of 9ud$ment in that case as made

on ' Octo!er '*++"

#rmed ith the Resolution of this Court in "R" No" -;>(*()

petitioner then rote all the educational institutions it could find usin$

the ord 1yceum1 as part of their corporate name) and advised

them to discontinue such use of 1yceum"1 Bhen) ith the passa$e

of time) it !ecame clear that this recourse had failed) petitionerinstituted !efore the S.C S.C-Case No" (+* to enforce hat

petitioner claims as its proprietary ri$ht to the ord 1yceum"1 The

S.C hearin$ officer rendered a decision sustainin$ petitioner:s claim

to an eEclusive ri$ht to use the ord 1yceum"1 The hearin$ officer

relied upon the S.C rulin$ in the yceum of 0a$uio) Inc" case <S.C-

Case No" ';'= and held that the ord 1yceum1 as capa!le of

appropriation and that petitioner had acuired an enforcea!le

eEclusive ri$ht to the use of that ord"

On appeal) hoever) !y private respondents to the S.C .n 0anc)

the decision of the hearin$ officer as reversed and set aside" TheS.C .n 0anc did not consider the ord 1yceum1 to have !ecome

so identified ith petitioner as to render use thereof !y other

institutions as productive of confusion a!out the identity of the

schools concerned in the mind of the $eneral pu!lic" 6nli%e its

hearin$ officer) the S.C .n 0anc held that the attachin$ of

$eo$raphical names to the ord 1yceum1 served sufficiently to

distin$uish the schools from one another) especially in vie of the

fact that the campuses of petitioner and those of the private

respondents ere physically uite remote from each other" 4

Petitioner then ent on appeal to the Court of #ppeals" In its

Decision dated A &une '**') hoever) the Court of #ppeals

affirmed the uestioned Orders of the S.C .n 0anc" ; Petitioner

filed a motion for reconsideration) ithout success"

0efore this Court) petitioner asserts that the Court of #ppeals

committed the folloin$ errors7

'" The Court of #ppeals erred in holdin$ that the Resolution of the

Supreme Court in "R" No" -;>(*( did not constitute stare decisis

as to apply to this case and in not holdin$ that said Resolution !ound

su!seuent determinations on the ri$ht to eEclusive use of the ord

yceum"

" The Court of #ppeals erred in holdin$ that respondent Bestern

Pan$asinan yceum) Inc" as incorporated earlier than petitioner"

4" The Court of #ppeals erred in holdin$ that the ord yceum has

not acuired a secondary meanin$ in favor of petitioner"

;" The Court of #ppeals erred in holdin$ that yceum as a $eneric

ord cannot !e appropriated !y the petitioner to the eEclusion of

others" (

Be ill consider all the fore$oin$ ascri!ed errors) thou$h not

necessarily seriatim" Be !e$in !y notin$ that the Resolution of the

Court in "R" No" -;>(*( does not) of course) constitute res

ad9udicata in respect of the case at !ar) since there is no identity of

parties" Neither is stare decisis pertinent) if only !ecause the S.C .n

0anc itself has re-eEamined #ssociate Commissioner Sulit:s rulin$ in

the yceum of 0a$uio case" The /inute Resolution of the Court in

"R" No" -;>(*( as not a reasoned adoption of the Sulit rulin$"



The #rticles of Incorporation of a corporation must) amon$ other

thin$s) set out the name of the corporation" > Section 'A of the

Corporation Code esta!lishes a restrictive rule insofar as corporate

names are concerned7

1S.CTION 'A" Corporate name" No corporate name may !e

alloed !y the Securities an .Echan$e Commission if the proposedname is identical or deceptively or confusin$ly similar to that of any

eEistin$ corporation or to any other name already protected !y la or

is patently deceptive) confusin$ or contrary to eEistin$ las" Bhen a

chan$e in the corporate name is approved) the Commission shall

issue an amended certificate of incorporation under the amended

name"1 <.mphasis supplied=

The policy underlyin$ the prohi!ition in Section 'A a$ainst the

re$istration of a corporate name hich is 1identical or deceptively or

confusin$ly similar1 to that of any eEistin$ corporation or hich is

1patently deceptive1 or 1patently confusin$1 or 1contrary to eEistin$las)1 is the avoidance of f raud upon the pu!lic hich ould have

occasion to deal ith the entity concerned) the evasion of le$al

o!li$ations and duties) and the reduction of difficulties of

administration and supervision over corporations" +

Be do not consider that the corporate names of private respondent

institutions are 1identical ith) or deceptively or confusin$ly similar1

to that of the petitioner institution" True enou$h) the corporate names

of private respondent entities all carry the ord 1yceum1 !ut

confusion and deception are effectively precluded !y the appendin$

of $eo$raphic names to the ord 1yceum"1 Thus) e do not !elievethat the 1yceum of #parri1 can !e mista%en !y the $eneral pu!lic for

the yceum of the Philippines) or that the 1yceum of Camalaniu$an1

ould !e confused ith the yceum of the Philippines"

.tymolo$ically) the ord 1yceum1 is the atin ord for the ree%

ly%eion hich in turn referred to a locality on the river Ilissius in

ancient #thens 1comprisin$ an enclosure dedicated to #pollo and

adorned ith fountains and !uildin$s erected !y Pisistratus) Pericles

and ycur$us freuented !y the youth for eEercise and !y the

philosopher #ristotle and his folloers for teachin$"1 A In time) the

ord 1yceum1 !ecame associated ith schools and other

institutions providin$ pu!lic lectures and concerts and pu!lic

discussions" Thus today) the ord 1yceum1 $enerally refers to a

school or an institution of learnin$" Bhile the atin ord 1lyceum1 has

!een incorporated into the .n$lish lan$ua$e) the ord is also foundin Spanish <liceo= and in French <lycee=" #s the Court of #ppeals

noted in its Decision) Roman Catholic schools freuently use the

termH e"$") 1iceo de /anila)1 1iceo de 0aleno1 <in 0aleno)

/as!ate=) 1iceo de /as!ate)1 1iceo de #l!ay"1 * 1yceum1 is in fact

as $eneric in character as the ord 1university"1 In the name of the

petitioner) 1yceum1 appears to !e a su!stitute for 1universityH1 in

other places) hoever) 1yceum)1 or 1iceo1 or 1ycee1 freuently

denotes a secondary school or a colle$e" It may !e <thou$h this is a

uestion of fact hich e need not resolve= that the use of the ord

1yceum1 may not yet !e as idespread as the use of 1university)1

!ut it is clear that a not inconsidera!le num!er of educationalinstitutions have adopted 1yceum1 or 1iceo1 as part of their

corporate names" Since 1yceum1 or 1iceo1 denotes a school or

institution of learnin$) it is not unnatural to use this ord to desi$nate

an entity hich is or$ani2ed and operatin$ as an educational

institution"

It is claimed) hoever) !y petitioner that the ord 1yceum1 has

acuired a secondary meanin$ in relation to petitioner ith the result

that that ord) althou$h ori$inally a $eneric) has !ecome

appropria!le !y petitioner to the eEclusion of other institutions li%e

private respondents herein"

The doctrine of secondary meanin$ ori$inated in the field of

trademar% la" Its application has) hoever) !een eEtended to

corporate names sine the ri$ht to use a corporate name to the

eEclusion of others is !ased upon the same principle hich underlies

the ri$ht to use a particular trademar% or tradename" ', In Philippine

Nut Industry) Inc" v" Standard 0rands) Inc") '' the doctrine of

secondary meanin$ as ela!orated in the folloin$ terms7



1 " " " a ord or phrase ori$inally incapa!le of eEclusive appropriation

ith reference to an article on the mar%et) !ecause $eo$raphically or

otherise descriptive) mi$ht nevertheless have !een used so lon$

and so eEclusively !y one producer ith reference to his article that)

in that trade and to that !ranch of the purchasin$ pu!lic) the ord or

phrase has come to mean that the article as his product"1 '

The uestion hich arises) therefore) is hether or not the use !y

petitioner of 1yceum1 in its corporate name has !een for such len$th

of time and ith such eEclusivity as to have !ecome associated or

identified ith the petitioner institution in the mind of the $eneral

pu!lic <or at least that portion of the $eneral pu!lic hich has to do

ith schools=" The Court of #ppeals reco$ni2ed this issue and

ansered it in the ne$ative7

16nder the doctrine of secondary meanin$) a ord or phrase

ori$inally incapa!le of eEclusive appropriation ith reference to an

article in the mar%et) !ecause $eo$raphical or otherise descriptivemi$ht nevertheless have !een used so lon$ and so eEclusively !y

one producer ith reference to this article that) in that trade and to

that $roup of the purchasin$ pu!lic) the ord or phrase has come to

mean that the article as his produce <#na #n$ vs" Tori!io Teodoro)

+; Phil" (>=" This circumstance has !een referred to as the

distinctiveness into hich the name or phrase has evolved throu$h

the su!stantial and eEclusive use of the same for a considera!le

period of time" Conseuently) the same doctrine or principle cannot

!e made to apply here the evidence did not prove that the !usiness

<of the plaintiff= has continued for so lon$ a time that it has !ecome of

conseuence and acuired a $ood ill of considera!le value suchthat its articles and produce have acuired a ell-%non reputation)

and confusion ill result !y the use of the disputed name <!y the

defendant= <#n$ Si en$ vs" Bellin$ton Department Store) Inc") *

Phil" ;;A="

Bith the fore$oin$ as a yardstic%) ?e@ !elieve the appellant failed to

satisfy the aforementioned reuisites" No evidence as ever

presented in the hearin$ !efore the Commission hich sufficiently

proved that the ord :yceum: has indeed acuired secondary

meanin$ in favor of the appellant" If there as any of this %ind) the

same tend to prove only that the appellant had !een usin$ the

disputed ord for a lon$ period of time" Nevertheless) its <appellant=

eEclusive use of the ord <yceum= as never esta!lished or proven

as in fact the evidence tend to convey that the cross-claimant as

already usin$ the ord :yceum: seventeen <'+= years prior to thedate the appellant started usin$ the same ord in its corporate

name" Furthermore) educational institutions of the Roman Catholic

Church had !een usin$ the same or similar ord li%e :iceo de

/anila): :iceo de 0aleno: <in 0aleno) /as!ate=) :iceo de /as!ate):

:iceo de #l!ay: lon$ !efore appellant started usin$ the ord

:yceum:" The appellant also failed to prove that the ord :yceum:

has !ecome so identified ith its educational institution that

confusion ill surely arise in the minds of the pu!lic if the same ord

ere to !e used !y other educational institutions"

In other ords) hile the appellant may have proved that it had !eenusin$ the ord :yceum: for a lon$ period of time) this fact alone did

not amount to mean that the said ord had acuired secondary

meanin$ in its favor !ecause the appellant failed to prove that it had

!een usin$ the same ord all !y itself to the eEclusion of others"

/ore so) there as no evidence presented to prove that confusion

ill surely arise if the same ord ere to !e used !y other

educational institutions" Conseuently) the alle$ations of the

appellant in its first to assi$ned errors must necessarily fail"1 '4

<6nderscorin$ partly in the ori$inal and partly supplied=

Be a$ree ith the Court of #ppeals" The num!er alone of the privaterespondents in the case at !ar su$$ests stron$ly that petitioner:s use

of the ord 1yceum1 has not !een attended ith the eEclusivity

essential for applica!ility of the doctrine of secondary meanin$" It

may !e noted also that at least one of the private respondents) i"e")

the Bestern Pan$asinan yceum) Inc") used the term 1yceum1

seventeen <'+= years !efore the petitioner re$istered its on

corporate name ith the S.C and !e$an usin$ the ord 1yceum"1 It

follos that if any institution had acuired an eEclusive ri$ht to the



ord 1yceum)1 that institution ould have !een the Bestern

Pan$asinan yceum) Inc" rather than the petitioner institution"

In this connection) petitioner ar$ues that !ecause the Bestern

Pan$asinan yceum) Inc" failed to reconstruct its records !efore the

S.C in accordance ith the provisions of R"#" No" >) hich records

had !een destroyed durin$ Borld Bar II) Bestern Pan$asinanyceum should !e deemed to have lost all ri$hts it may have

acuired !y virtue of its past re$istration" It mi$ht !e noted that the

Bestern Pan$asinan yceum) Inc" re$istered ith the S.C soon

after petitioner had filed its on re$istration on ' Septem!er '*(,"

Bhether or not Bestern Pan$asinan yceum) Inc" must !e deemed

to have lost its ri$hts under its ori$inal '*44 re$istration) appears to

us to !e uite secondary in importanceH e refer to this earlier

re$istration simply to underscore the fact that petitioner:s use of the

ord 1yceum1 as neither the first use of that term in the

Philippines nor an eEclusive use thereof" Petitioner:s use of the ord

1yceum1 as not eEclusive !ut as in truth shared ith the BesternPan$asinan yceum and a little later ith other private respondent

institutions hich re$istered ith the S.C usin$ 1yceum1 as part of

their corporation names" There may ell !e other schools usin$

yceum or iceo in their names) !ut not re$istered ith the S.C

!ecause they have not adopted the corporate form of or$ani2ation"

Be conclude and so hold that petitioner institution is not entitled to a

le$ally enforcea!le eEclusive ri$ht to use the ord 1yceum1 in its

corporate name and that other institutions may use 1yceum1 as part

of their corporate names" To determine hether a $iven corporate

name is 1identical1 or 1confusin$ly or deceptively similar1 ithanother entity:s corporate name) it is not enou$h to ascertain the

presence of 1yceum1 or 1iceo1 in !oth names" One must evaluate

corporate names in their entirety and hen the name of petitioner is

9uEtaposed ith the names of private respondents) they are not

reasona!ly re$arded as 1identical1 or 1confusin$ly or deceptively

similar1 ith each other"

B.R.FOR.) the petitioner havin$ failed to sho any reversi!le

error on the part of the pu!lic respondent Court of #ppeals) the

Petition for Revie is D.NI.D for lac% of merit) and the Decision of

the Court of #ppeals dated A &une '**' is here!y #FFIR/.D" No

pronouncement as to costs"

SO ORD.R.D"



ANA $. ANG, petitioner)

vs"

!RIBI !#DR, respondent"

Cirio Lim #or petitioner.

&arcia ). Lichauco and &anue &. &ejia #or respondent.

*A#!A, J.$

Petitioner has appealed to this Court !y certiorari to reverse the

9ud$ment of the Court of #ppeals reversin$ that of the Court of First

Instance of /anila and directin$ the Director of Commerce to cancel

the re$istration of the trade-mar% 1#n$ Ti!ay1 in favor of said

petitioner) and perpetually en9oinin$ the latter from usin$ said trade-

mar% on $oods manufactured and sold !y her"

Respondent Tori!io Teodoro) at first in partnership ith &uan Katindi$

and later as sole proprietor) has continuously used 1#n$ Ti!ay)1 !oth

as a trade-mar% and as a trade-name) in the manufacture and sale of

slippers) shoes) and indoor !ase!alls since '*'," e formallyre$istered it as trade-mar% on Septem!er *) '*'() and as trade-

name on &anuary 4) '*44" The $roth of his !usiness is a thrillin$

epic of Filipino industry and !usiness capacity" Startin$ in an o!scure

shop in '*', ith a modest capital of P', !ut ith tireless industry

and unlimited perseverance) Tori!io Teodoro) then an un%non

youn$ man ma%in$ slippers ith his on hands !ut no a prominent

!usiness ma$nate and manufacturer ith a lar$e factory operated

ith modern machinery !y a $reat num!er of employees) has

steadily $ron ith his !usiness to hich he has dedicated the !est

years of his life and hich he has eEpanded to such proportions that

his $ross sales from '*'A to '*4A a$$re$ated PA)+A+),(">(" issales in '*4+ amounted to P')**)4;4"', and in '*4A)

P')'44)'>("++" is eEpenses for advertisement from '*'* to '*4A

a$$re$ated P',)>;'"(>"

Petitioner <defendant !elo= re$istered the same trade-mar% 1#n$

Ti!ay1 for pants and shirts on #pril '') '*4) and esta!lished a

factory for the manufacture of said articles in the year '*4+" In the

folloin$ year <'*4A= her $ross sales amounted to P;)>A",*"

Neither the decision of the trial court nor that of the Court of #ppeals

shos ho much petitioner has spent or advertisement" 0ut

respondent in his !rief says that petitioner 1as una!le to prove thatshe had spent a sin$le centavo advertisin$ 1#n$ Ti!ay1 shirts and

pants prior to '*4A" In that year she advertised the factory hich she

had 9ust !uilt and it as hen this as !rou$ht to the attention of the

appellee that he consulted his attorneys and eventually !rou$ht the

present suit"1

The trial court <&ud$e Luirico #!eto= presidin$ a!solved the

defendant from the complaint) ith costs a$ainst the plaintiff) on the



$rounds that the to trademar%s are dissimilar and are used on

different and non-competin$ $oodsH that there had !een no eEclusive

use of the trade-mar% !y the plaintiffH and that there had !een no

fraud in the use of the said trade-mar% !y the defendant !ecause the

$oods on hich it is used are essentially different from those of the

plaintiff" The second division of the Court of #ppeals) composed of

&ustices 0en$son) Padilla) ope2 Vito) Tuason) and #leE Reyes) ith&ustice Padilla as ponente) reversed that 9ud$ment) holdin$ that !y

uninterrupted an eEclusive use since '*' in the manufacture of

slippers and shoes) respondent:s trade-mar% has acuired a

secondary meanin$H that the $oods or articles on hich the to

trade-mar%s are used are similar or !elon$ to the same classH and

that the use !y petitioner of said trade-mar% constitutes a violation of

sections 4 and + of #ct No" >>>" The defendant Director of

Commerce did not appeal from the decision of the Court of #ppeals"

First " Counsel for the petitioner) in a ell-ritten !rief) ma%es a

frontal sled$e-hammer attac% on the validity of respondent:s trade-mar% 1#n$ Ti!ay"1 e contends that the phrase 1#n$ Ti!ay1 as

employed !y the respondent on the articles manufactured !y him is a

descriptive term !ecause) 1freely translate in .n$lish)1 it means

1stron$) dura!le) lastin$"1 e invo%es section of #ct No" >>>) hich

provides that ords or devices hich related only to the name)

uality) or description of the merchandise cannot !e the su!9ect of a

trade-mar%" e cites amon$ others the case of 7axter vs. Duazua <(

Phil") '>=) hich involved the trade-mar% 1#$ua de Kanan$a1 used

on toilet ater) and in hich this Court held that the ord 1Kanan$a)1

hich is the name of a ell-%non Philippine tree or its floer) could

not !e appropriated as a trade-mar% any more than could the ords

1su$ar)1 1to!acco)1 or 1coffee"1 On the other hand) counsel for the

respondent) in an eually ell-prepared and eEhaustive !rief)

contend that the ords 1#n$ Ti!ay1 are not descriptive !ut merely

su$$estive and may properly !e re$arded as fanciful or ar!itrary in

the le$al sense" The cite several cases in hich similar ords have

!een sustained as valid trade-mar%s) such as 1oleproof1 for

hosiery) ' 1ideal for tooth !rushes) and 1Fashion%nit1 for nec%ties and

seaters" 4

Be find it necessary to $o into the etymolo$y and meanin$ of the

Ta$alo$ ords 1#n$ Ti!ay1 to determine hether they are a

descriptive term) i"e") hether they relate to the uality or description

of the merchandise to hich respondent has applied them as a

trade-mar%" The ord 1an$1 is a definite article meanin$ 1the1 in

.n$lish" It is also used as an adver!) a contraction of the ord

1anon$1 <hat or ho=" For instance) instead of sayin$) 1#non$$anda1 <1o !eautiful1=) e ordinarily say) 1#n$ $anda1 'iba% is a

root ord from hich are derived the ver!ma$patiba% <to stren$htenH

the nouns pa$1amatiba% <stren$th) dura!ility=) 1atiba%an <proof)

support) stren$th=)1atiba%-tiba%an <superior stren$th=H and the

ad9ectives mati!ay <stron$) dura!le) lastin$=) napa1atiba% <very

stron$=)1asintiba% or ma$1asintiba% <as stron$ as) or of eual

stren$th=" The phrase 1#n$ Ti!ay1 is an eEclamation denotin$

administration of stren$th or dura!ility" For instance) one ho tries

hard !ut fails to !rea% an o!9ect eEclaims) 1#n$ ti!ay1 <o stron$1=

It may also !e used in a sentence thus) 1 An$ tiba% n$ sapatos mo1

<o dura!le your shoes are1= The phrase 1an$ tiba% 1 is never usedad9ectively to define or descri!e an o!9ect" One does not say) 1an$

tiba% sapatos1 or 1sapatos an$ tiba% 1 is never used ad9ectively to

define or descri!e an o!9ect" One does not say) 1 an$ tiba% sapatos1

or 1sapatos an$ tiba% 1 to mean 1dura!le shoes)1 !ut 1matiba% na

sapatos1 or 1sapatos na matiba% "1

From all of this e deduce that 1#n$ Ti!ay1 is not a descriptive term

ithin the meanin$ of the Trade-/ar% a !ut rather a fanciful or

coined phrase hich may properly and le$ally !e appropriated as a

trade-mar% or trade-name" In this connection e do not fail to note

that hen the petitioner herself too% the trou!le and eEpense of

securin$ the re$istration of these same ords as a trademar% of her

products she or her attorney as ell as the Director of Commerce

as undou!tedly convinced that said ords <#n$ Ti!ay= ere not a

descriptive term and hence could !e le$ally used and validly

re$istered as a trade-mar%" It seems stultifyin$ and puerile for her

no to contend otherise) su$$estive of the story of sour $rapes"

Counsel for the petitioner says that the function of a trade-mar% is to

point distinctively) either !y its on meanin$ or !y association) to the



ori$in or onership of the ares to hich it is applied" That is correct)

and e find that 1#n$ Ti!ay)1 as used !y the respondent to desi$nate

his ares) had eEactly performed that function for tenty-to years

!efore the petitioner adopted it as a trade-mar% in her on !usiness"

#n$ Ti!ay shoes and slippers are) !y association) %non throu$hout

the Philippines as products of the #n$ Ti!ay factory oned and

operated !y the respondent Tori!io Teodoro"

Second " In her second assi$nment of error petitioner contends that

the Court of #ppeals erred in holdin$ that the ords 1#n$ Ti!ay1 had

acuired a secondary meanin$" In vie of the conclusion e have

reached upon the first assi$nment of error) it is unnecessary to apply

here the doctrine of 1secondary meanin$1 in trade-mar% parlance"

This doctrine is to the effect that a ord or phrase ori$inally

incapa!le of eEclusive appropriation ith reference to an article of

the mar%et) !ecause $eo$raphically or otherise descriptive) mi$ht

nevertheless have !een used so lon$ and so eEclusively !y one

producer ith reference to his article that) in that trade and to that!ranch of the purchasin$ pu!lic) the ord or phrase has come to

mean that the article as his product" <" 3 C" /erriam Co" vs"

Salfield) '*A F") 4>*) 4+4"= Be have said that the phrase 1#n$ Ti!ay)1

!ein$ neither $eo$raphic nor descriptive) as ori$inally capa!le of

eEclusive appropriation as a trade-mar%" 0ut ere it not so) the

application of the doctrine of secondary meanin$ made !y the Court

of #ppeals could nevertheless !e fully sustained !ecause) in any

event) !y respondent:s lon$ and eEclusive use of said phrase ith

reference to his products and his !usiness) it has acuired a

proprietary connotation" <anders) Frary) and Clar% vs" 6niversal

Cooler Corporation) A( F" ?d@) ;>"=

'hird " Petitioner:s third assi$nment of error is) that the Court of

#ppeals erred in holdin$ that pants and shirts are $oods similar to

shoes and slippers ithin the meanin$ of sections 4 and + of #ct No"

>>>" She also contends under her fourth assi$nment of error <hich

e deem convenient to pass upon to$ether ith the third= that there

can neither !e infrin$ement of trade-mar% under section 4 nor unfair

competition under section + throu$h her use of the ords 1#n$Ti!ay1 in connection ith pants and shirts) !ecause those articles do

not !elon$ to the same class of merchandise as shoes and slippers"

The uestion raised !y petitioner involve the scope and application

of sections 4)+) '') '4) and , of the Trade-/ar% a <#ct No" >>>"=

Section 4 provides that 1any person entitled to the eEclusive use of a

trade-mar% to desi$nate the ori$in or onership of $oods he has

made or deals in) may recover dama$es in a civil actions from any

person ho has sold $oods of a similar %ind) !earin$ such trade-

mar% " " " The complainin$ party " " " may have a preliminary

in9unction) " " " and such in9unction upon final hearin$) if thecomplainant:s property in the trade-mar% and the defendant:s

violation thereof shall !e fully esta!lished) shall !e made perpetual)

and this in9unction shall !e part of the 9ud$ment for dama$es to !e

rendered in the same cause"1 Section + provides that any person

ho) in sellin$ his $oods) shall $ive them the $eneral appearance of

the $oods of another either in the rappin$ of the pac%a$es) or in the

devices or ords thereon) or in any other feature of their

appearance) hich ould !e li%ely to influence purchasers to !elieve

that the $oods offered are those of the complainant) shall !e $uilty of

unfair competition) and shall !e lia!le to an action for dama$es and

to an in9unction) as in the cases of trade-mar% infrin$ement under

section 4" Section '' reuires the applicant for re$istration of a trade-

mar% to state) amon$ others) 1the $enera cass o# merchandise to

hich the trade-mar% claimed has !een appropriated"1 Section '4

provides that no alle$ed trade-mar% or trade name shall !e

re$istered hich is identical ith a re$istered or %non trade-mar%

oned !y another and appropriate to the same cass o#

merchandise) or hich to nearly resem!les another person:s laful

trade-mar% or trade-name as to !e li%ely to cause confusion or



mista%e in the mind of the pu!lic) or to deceive purchasers" #nd

section authori2es the Director of Commerce to esta!lish casses

o# merchandise for the purpose of the re$istration of trade-mar%s and

to determine the particular description of articles included in each

classH it also provides that 1an application for re$istration of a trade-

mar% shall !e re$istered only for one cass o# artices and only for the

particular description of articles mentioned in said application"1

Be have underlined the %ey ords used in the statute7 1$oods of a

similar %in)1 1$eneral class of merchandise)1 1same class of

merchandise)1 1classes of merchandise)1 and 1class of articles)1

!ecause it is upon their implications that the result of the case

hin$es" These phrases) hich refer to the same thin$) have the same

meanin$ as the phrase 1merchandise of the same descriptive

properties1 used in the statutes and 9urisprudence of other

9urisdictions"

The !urden of petitioner:s ar$ument is that under sections '' and ,the re$istration !y respondent of the trade-mar% 1#n$ Ti!ay1 for

shoes and slippers is no safe-$uard a$ainst its !ein$ used !y

petitioner for pants and shirts !ecause the latter do not !elon$ to the

same class of merchandise or articles as the formerH that she cannot

!e held $uilty of infrin$ement of trade-mar% under section 4 !ecause

respondent:s mar% is not a valid trade-mar%) nor has it acuired a

secondary meanin$H that pants and shirts do not possess the same

descriptive properties as shoes and slippersH that neither can she !e

held $uilty of unfair competition under section + !ecause the use !y

her of the trade-mar% 1#n$ Ti!ay1 upon pants and shirts is not li%ely

to mislead the $eneral pu!lic as to their ori$in or onershipH and thatthere is no shoin$ that she in unfairly or fraudulently usin$ that

mar% 1#n$ Ti!ay1 a$ainst the respondent" If e ere interpretin$ the

statute for the first time and in the first decade of the tentieth

century) hen it as enacted) and ere to construe it strictly and

literally) e mi$ht uphold petitioner:s contentions" 0ut la and

9urisprudence must %eep a!reast ith the pro$ress of man%ind) and

the courts must !reathe life into the statutes if they are to serve their

purpose" Our Trade-mar% a) enacted nearly forty years a$o) has

$ron in its implications and practical application) li%e a constitution)

in virtue of the life continually !reathed into it" It is not of merely local

applicationH it has its counterpart in other 9urisdictions of the civili2ed

orld from hose 9urisprudence it has also received vitali2in$

nourishment" Be have to apply this la as it has $ron and not as it

as !orn" Its $roth or development a!reast ith that of sister

statutes and 9urisprudence in other 9urisdictions is reflected in thefolloin$ o!servation of a ell-%non author7

This fundamental chan$e in attitude first manifested itself in

the year '*'(-'*'+" 6ntil a!out then) the courts had

proceeded on the theory that the same trade-mar%) used on

un-li%e $oods) could not cause confusion in trade and that)

therefore) there could !e no o!9ection to the use and

re$istration of a ell-%non mar% !y a third party for a

different class of $oods" Since '*'> hoever) a $roin$

sentiment !e$an to arise that in the selection of a famous

mar% !y a third party) there as $enerally the hiddenintention to 1have a free ride1 on the trade-mar% oner:s

reputation and $ood ill" <Deren!er$) Trade-/ar% Protection

3 6nfair Tradin$) '*4> edition) p" ;,*"=

In the present state of development of the la on Trade-/ar%s)

6nfair Competition) and 6nfair Tradin$) the test employed !y the

courts to determine hether noncompetin$ $oods are or are not of

the same class is confusion as to the ori$in of the $oods of the

second user" #lthou$h to noncompetin$ articles may !e classified

under to different classes !y the Patent Office !ecause they are

deemed not to possess the same descriptive properties) they ould)nevertheless) !e held !y the courts to !elon$ to the same class if the

simultaneous use on them of identical or closely similar trade-mar%s

ould !e li%ely to cause confusion as to the ori$in) or personal

source) of the second user:s $oods" They ould !e considered as

not fallin$ under the same class only if they are so dissimilar or so

forei$n to each other as to ma%e it unli%ely that the purchaser ould

thin% the first user made the second user:s $oods"



Such construction of the la is induced !y co$ent reasons of euity

and fair dealin$" The courts have come to reali2e that there can !e

unfair competition or unfair tradin$ even if the $oods are non-

competin$) and that such unfair tradin$ can cause in9ury or dama$e

to the first user of a $iven trade-mar%) first) !y prevention of the

natural eEpansion of his !usiness and) second) !y havin$ his

!usiness reputation confused ith and put at the mercy of thesecond user" Then noncompetitive products are sold under the same

mar%) the $radual hittlin$ aay or dispersion of the identity and

hold upon the pu!lic mind of the mar% created !y its first user)

inevita!ly results" The ori$inal oner is entitled to the preservation of

the valua!le lin% !eteen him and the pu!lic that has !een created

!y his in$enuity and the merit of his ares or services" .Eperience

has demonstrated that hen a ell-%non trade-mar% is adopted !y

another even for a totally different class of $oods) it is done to $et the

!enefit of the reputation and advertisements of the ori$inator of said

mar%) to convey to the pu!lic a false impression of some supposed

connection !eteen the manufacturer of the article sold under theori$inal mar% and the ne articles !ein$ tendered to the pu!lic under

the same or similar mar%" #s trade has developed and commercial

chan$es have come a!out) the la of unfair competition has

eEpanded to %eep pace ith the times and the element of strict

competition in itself has ceased to !e the determinin$ factor" The

oner of a trade-mar% or trade-name has a property ri$ht in hich he

is entitled to protection) since there is dama$e to him from confusion

of reputation or $oodill in the mind of the pu!lic as ell as from

confusion of $oods" The modern trend is to $ive emphasis to the

unfairness of the acts and to classify and treat the issue as a fraud"

# fe of the numerous cases in hich the fore$oin$ doctrines have

!een laid don in one form or another ill no !e cited7 <'=

In 'eodoro +aa! $ +he vs. Leve 7rothers Compan% <"R" No"

;>A'+=) decided !y this Court on #pril 'A) '*;') the respondent

company <plaintiff !elo= as $ranted in9unctive relief a$ainst the

use !y the petitioner of the trade-mar% 1uE1 and 1ife!uoy1 for hair

pomade) they havin$ !een ori$inally used !y the respondent for

soapH The Court held in effect that althou$h said articles are

noncompetitive) they are similar or !elon$ to the same class" <=

In Lincon &otor Co. vs. Lincon Automobie Co. <;; F" ?d@) A'=) the

manufacturer of the ell-%non incoln automo!ile as $ranted

in9unctive relief a$ainst the use of the ord 1incoln1 !y another

company as part of its firm name" <4= The case of Aunt ;emima &is

Co. vs. Ri$ne% : Co. <;+ F") ;,+=) involved the trade-mar% 1#unt

&emima)1 ori$inally used on flour) hich the defendant attempted touse on syrup) and there the court held that the $oods) thou$h

different) are so related as to fall ithin the mischief hich euity

should prevent" <;= In 'i##an% : Co., vs. 'i##an% )roductions, "nc. <>;

N"5"S") ;(*H 4 Trade-mar% Reporter) 'A4=) the plaintiff) a 9eelry

concern) as $ranted in9unctive relief a$ainst the defendant) a

manufacturer of motion pictures) from usin$ the name 1Tiffany"1

Other famous cases cited on the mar$in) herein the courts $ranted

in9unctive relief) involved the folloin$ trade-mar%s or trade-names7

1Koda%)1 for cameras and photo$raphic supplies) a$ainst its use for

!icycles" ; 1Penslar)1 for medicines and toilet articles) a$ainst its use

for ci$arsH

(

1Rolls-Royce)1 for automo!iles" a$ainst its use for radiotu!esH > 1Vo$ue)1 as the name of a ma$a2ine) a$ainst its use for

hatsH + 1KoteE)1 for sanitary nap%ins) a$ainst the use of 1RoteE1 for

va$inal syrin$esH A 1Sun-/aid)1 for raisins) a$ainst its use for

flourH * 15ale)1 for loc%s and %eys) a$ainst its use for electric

flashli$htsH ', and 1Baterman)1 for fountain pens) a$ainst its use for

ra2or !lades" ''a!phi.net

#$ainst this array of famous cases) the industry of counsel for the

petitioner has ena!led him to cite on this point only the folloin$

cases7 <'= &oha!1 &i1 )roducts vs. enera 2istieries

Corporation <*( F" ?d@) 44;=) herein the court held that $in and

canned mil% and cream do not !elon$ to the same classH <= Fa!cett

)ubications, "nc. vs. )opuar &echanics Co. <A, F" ?d@) '*;=)

herein the court held that the ords 1Popular /echanics1 used as

the title of a ma$a2ine and duly re$istered as a trade-mar% ere not

infrin$ed !y defendant:s use of the ords 1/odern /echanics and

Inventions1 on a competitive ma$a2ine) !ecause the ord

1mechanics1 is merely a descriptive nameH and <4= 3x#ord 7oo1 Co.

vs. Coe$e *ntrance 7oo1 Co" <*A F" ?d@) >AA=) herein the plaintiff



unsuccessfully attempted to en9oin the defendant from usin$ the

ord 1Visuali2ed1 in connection ith history !oo%s) the court holdin$

that said ord is merely descriptive" These cases cites and relied

upon !y petitioner are o!viously of no decisive application to the

case at !ar"

Be thin% reasona!le men may not disa$ree that shoes and shirts arenot as unrelated as fountain pens and ra2or !lades) for instance" The

mere relation or association of the articles is not controllin$" #s may

readily !e noted from hat e have heretofore said) the proprietary

connotation that a trade-mar% or trade-name has acuired is of more

paramount consideration" The Court of #ppeals found in this case

that !y uninterrupted and eEclusive use since '*', of respondent:s

re$istered trade-mar% on slippers and shoes manufactured !y him) it

has come to indicate the ori$in and onership of said $oods" It is

certainly not farfetched to surmise that the selection !y petitioner of

the same trade-mar% for pants and shirts as motivated !y a desire

to $et a free ride on the reputation and sellin$ poer it has acuiredat the hands of the respondent" #s o!served in another case) ' the

field from hich a person may select a trade-mar% is practically

unlimited) and hence there is no eEcuse for impin$in$ upon or even

closely approachin$ the mar% of a !usiness rival" In the unlimited

field of choice) hat could have !een petitioner:s purpose in

selectin$ 1#n$ Ti!ay1 if not for its fame

astly) in her fifth assi$nment of error petitioner seems to ma%e a

frantic effort to retain the use of the mar% 1#n$ Ti!ay"1 er counsel

su$$ests that instead of en9oinin$ her from usin$ it) she may !e

reuired to state in her la!els affiEed to her products the inscription71Not manufactured !y Tori!io Teodoro"1 Be thin% such practice ould

!e unethical and unorthy of a reputa!le !usinessman" To the

su$$estion of petitioner) respondent may say) not ithout 9ustice

thou$h ith a tin$e of !itterness7 1Bhy offer a perpetual apolo$y or

eEplanation as to the ori$in of your products in order to use my trade-

mar% instead of creatin$ one of your on1 On our part may e add)

ithout meanin$ to !e harsh) that a self-respectin$ person does not

remain in the shelter of another !ut !uilds one of his on"

The 9ud$ment of the Court of #ppeals is affirmed) ith costs a$ainst

the petitioner in the three instances" So ordered"

intelectual property law

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