[G.R. No. 115758. March 19, 2002.]

ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS LABORATORY, petitioner, vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL MERCHANDISING and COMPANY, and ANG TIAM CHAY, respondents.

Padilla Jimenez Kintanar & Asuncion Law Offices for petitioner.

Roberto C. Bermejo for private respondents.

SYNOPSIS

Petitioner Kho filed a complaint for injunction and damages against the respondents, alleging that she has copyright and patent rights on Chin Chun Su cream products, but the respondent advertised and sold petitioner's cream products under brand name Chin Chun Sun, in similar containers that petitioner uses, thereby misleading the public. The trial court granted a writ of preliminary injunction. Pending appeal, the trial court rendered a final decision ruling that petitioner does not have trademark rights on the name and container of the beauty cream product. The CA nullified the writ of preliminary injunction issued and denied petitioner's motion for reconsideration.

On appeal, petitioner claimed that the CA erred in not dismissing the petition for certiorari for non-compliance with the rule on forum shopping. Petitioner also claimed that the CA unduly delayed the resolution of her motion for reconsideration.

The Supreme Court affirmed the CA decision and held: that a preliminary injunction order cannot be issued for the reason that petitioner has not proven that she has a clear right over the subject trade name and its container to the exclusion of others, not having proven that she has a registered trademark thereto or she used it before anyone else did. The name and container of a beauty cream product are proper subject of a trademark, not of petitioner's copyright and patent registration thereof. Thus, she has no right to the exclusive use of the same for the reason that they are not appropriate subject of the said intellectual rights. The Supreme Court also held that petitioner should have filed a comment on, not a motion to dismiss, the petition for certiorari before the Court of Appeal; and that non-observance of the period for deciding cases or their incidents did not render the CA judgment ineffective or void. DACTSa

SYLLABUS

2. COMMERCIAL LAW; INTELLECTUAL PROPERTY LAW; SUBJECTS OF TRADEMARK, COPYRIGHT AND PATENTS, DISTINGUISHED; NAME AND CONTAINER OF A BEAUTY CREAM PRODUCT ARE PROPER SUBJECTS OF A TRADEMARK. — Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable.

D E C I S I O N

DE LEON, JR., J p:

Before us is a petition for review on certiorari of the Decision 1 dated May 24, 1993 of the Court of Appeals setting aside and declaring as null and void the Orders 2 dated February 10, 1992 and March 19, 1992 of the Regional Trial Court, Branch 90, of Quezon City granting the issuance of a writ of preliminary injunction.

The facts of the case are as follows:

On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and damages with a prayer for the issuance of a writ of preliminary injunction, docketed as Civil Case No. Q-91-10926, against the respondents Summerville General Merchandising and Company (Summerville, for brevity) and Ang Tiam Chay.

 

The petitioner's complaint alleges that petitioner, doing business under the name and style of KEC Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su and Oval Facial Cream Container/Case, as shown by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that she also has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated cream after purchasing the same from Quintin Cheng, the registered owner thereof in the Supplemental Register of the Philippine Patent Office on February 7, 1980 under Registration Certificate No. 4529; that respondent Summerville advertised and sold petitioner's cream products under the brand name Chin Chun Su, in similar containers that petitioner uses, thereby misleading the public, and resulting in the decline in the petitioner's business sales and income; and, that the respondents should be enjoined from allegedly infringing on the copyrights and patents of the petitioner.

The respondents, on the other hand, alleged as their defense that Summerville is the exclusive and authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi Factory of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other appropriate governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of the patent registration certificate, to distribute and market Chin Chun Su products in the Philippines had already been terminated by the said Taiwanese Manufacturing Company.

After due hearing on the application for preliminary injunction, the trial court granted the same in an Order dated February 10, 1992, the dispositive portion of which reads:

ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under the style of KEC Cosmetic Laboratory, for preliminary injunction, is hereby granted. Consequentially, plaintiff is required to file with the Court a bond executed to defendants in the amount of five hundred thousand pesos (P500,000.00) to the effect that plaintiff will pay to defendants all damages which defendants may sustain by reason of the injunction if the Court should finally decide that plaintiff is not entitled thereto.

SO ORDERED. 3

The respondents moved for reconsideration but their motion for reconsideration was denied by the trial court in an Order dated March 19, 1992. 4

On April 24, 1992, the respondents filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 27803, praying for the nullification of the said writ of preliminary injunction issued by the trial court. After the respondents filed their reply and almost a month after petitioner submitted her comment, or on August 14, 1992, the latter moved to dismiss the petition for violation of Supreme Court Circular No. 28-91, a circular prohibiting forum shopping. According to the petitioner, the respondents did not state the docket number of the civil case in the caption of their petition and, more significantly, they did not include therein a certificate of non-forum shopping. The respondents opposed the petition and submitted to the appellate court a certificate of non-forum shopping for their petition.

On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No. 27803 ruling in favor of the respondents, the dispositive portion of which reads:

WHEREFORE, the petition is hereby given due course and the orders of respondent court dated February 10, 1992 and March 19, 1992 granting the writ of preliminary injunction and denying petitioners' motion for reconsideration are hereby set aside and declared null and void. Respondent court is directed to forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the issue raised by the parties on the merits.

SO ORDERED. 5

In granting the petition, the appellate court ruled that:

The registration of the trademark or brandname "Chin Chun Su" by KEC with the supplemental register of the Bureau of Patents, Trademarks and Technology Transfer cannot be equated with registration in the principal register, which is duly protected by the Trademark Law.

xxx xxx xxx

As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:

"Registration in the Supplemental Register, therefore, serves as notice that the registrant is using or has appropriated the trademark. By the very fact that the trademark cannot as yet be on guard and there are certain defects, some obstacles which the use must still overcome before he can claim legal ownership of the mark or ask the courts to vindicate his claims of an exclusive right to the use of the same. It would be deceptive for a party with nothing more than a registration in the Supplemental Register to posture before courts of justice as if the registration is in the Principal Register.

The reliance of the private respondent on the last sentence of the Patent office action on application Serial No. 30954 that 'registrants is presumed to be the owner of the mark until after the registration is declared cancelled' is, therefore, misplaced and grounded on shaky foundation. The supposed presumption not only runs counter to the precept embodied in Rule 124 of the Revised Rules of Practice before the Philippine Patent Office in Trademark Cases but considering all the facts ventilated before us in the four interrelated petitions involving the petitioner and the respondent, it is devoid of factual basis. As even in cases where presumption and precept may factually be reconciled, we have held that the presumption is rebuttable, not conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30, 1958, Unreported). One may be declared an unfair competitor even if his competing trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil 928; La Yebana Co. v. Chua Seco & Co., 14 Phil 534)." 6

The petitioner filed a motion for reconsideration. This she followed with several motions to declare respondents in contempt of court for publishing advertisements notifying the public of the promulgation of the assailed decision of the appellate court and stating that genuine Chin Chun Su products could be obtained only from Summerville General Merchandising and Co.

In the meantime, the trial court went on to hear petitioner's complaint for final injunction and damages. On October 22, 1993, the trial court rendered a Decision 7 barring the petitioner from using the trademark Chin Chun Su and upholding the right of the respondents to use the same, but recognizing the copyright of the petitioner over the oval shaped container of her beauty cream. The trial court did not award damages and costs to any of the parties but to their respective counsels were awarded Seventy-Five Thousand Pesos (P75,000.00) each as attorney's fees. The petitioner duly appealed the said decision to the Court of Appeals.

On June 3, 1994, the Court of Appeals promulgated a Resolution 8 denying the petitioner's motions for reconsideration and for contempt of court in CA-G.R. SP No. 27803.

Hence, this petition anchored on the following assignment of errors:

I

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON PETITIONER'S MOTION TO DISMISS.

II

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN REFUSING TO PROMPTLY RESOLVE PETITIONER'S MOTION FOR RECONSIDERATION.

III

IN DELAYING THE RESOLUTION OF PETITIONER'S MOTION FOR RECONSIDERATION, THE HONORABLE COURT OF APPEALS DENIED PETITIONER'S RIGHT TO SEEK TIMELY APPELLATE RELIEF AND VIOLATED PETITIONER'S RIGHT TO DUE PROCESS.

IV

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS IN CONTEMPT. 9

The petitioner faults the appellate court for not dismissing the petition on the ground of violation of Supreme Court Circular No. 28-91. Also, the petitioner contends that the appellate court violated Section 6, Rule 9 of the Revised Internal Rules of the Court of Appeals when it failed to rule on her motion for reconsideration within ninety (90) days from the time it is submitted for resolution. The appellate court ruled only after the lapse of three hundred fifty-four (354) days, or on June 3, 1994. In delaying the resolution thereof, the appellate court denied the petitioner's right to seek the timely appellate relief. Finally, petitioner describes as arbitrary the denial of her motions for contempt of court against the respondents.

We rule in favor of the respondents.

Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the grounds for the issuance of a writ of preliminary injunction is a proof that the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, either for a limited period or perpetually. Thus, a preliminary injunction order may be granted only when the application for the issuance of the same shows facts entitling the applicant to the relief demanded. 10 This is the reason why we have ruled that it must be shown that the invasion of the right sought to be protected is material and substantial, that the right of complainant is clear and unmistakable, and, that there is an urgent and paramount necessity for the writ to prevent serious damage. 11

In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order on the ground that she is entitled to the use of the trademark on Chin Chun Su and its container based on her copyright and patent over the same. We first find it appropriate to rule on whether the copyright and patent over the name and container of a beauty cream product would entitle the registrant to the use and ownership over the same to the exclusion of others.

 

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. 12 In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. 13 Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. 14 Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable. 15

Petitioner has no right to support her claim for the exclusive use of the subject trade name and its container. The name and container of a beauty cream product are proper subjects of a trademark inasmuch as the same falls squarely within its definition. In order to be entitled to exclusively use the same in the sale of the beauty cream product, the user must sufficiently prove that she registered or used it before anybody else did. The petitioner's copyright and patent registration of the name and container would not guarantee her the right to the exclusive use of the same for the reason that they are not appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction order cannot be issued for the reason that the petitioner has not proven that she has a clear right over the said name and container to the exclusion of others, not having proven that she has registered a trademark thereto or used the same before anyone did.

We cannot likewise overlook the decision of the trial court in the case for final injunction and damages. The dispositive portion of said decision held that the petitioner does not have trademark rights on the name and container of the beauty cream product. The said decision on the merits of the trial court rendered the issuance of the writ of a preliminary injunction moot and academic notwithstanding the fact that the same has been appealed in the Court of Appeals. This is supported by our ruling in La Vista Association, Inc. v. Court of Appeals, 16 to wit:

Considering that preliminary injunction is a provisional remedy which may be granted at any time after the commencement of the action and before judgment when it is established that the plaintiff is entitled to the relief demanded and only when his complaint shows facts entitling such reliefs . . . and it appearing that the trial

court had already granted the issuance of a final injunction in favor of petitioner in its decision rendered after trial on the merits . . . the Court resolved to Dismiss the instant petition having been rendered moot and academic. An injunction issued by the trial court after it has already made a clear pronouncement as to the plaintiff's right thereto, that is, after the same issue has been decided on the merits, the trial court having appreciated the evidence presented, is proper, notwithstanding the fact that the decision rendered is not yet final . . . . Being an ancillary remedy, the proceedings for preliminary injunction cannot stand separately or proceed independently of the decision rendered on the merit of the main case for injunction. The merit of the main case having been already determined in favor of the applicant, the preliminary determination of its non-existence ceases to have any force and effect. (emphasis supplied)

La Vista categorically pronounced that the issuance of a final injunction renders any question on the preliminary injunctive order moot and academic despite the fact that the decision granting a final injunction is pending appeal. Conversely, a decision denying the applicant-plaintiff's right to a final injunction, although appealed, renders moot and academic any objection to the prior dissolution of a writ of preliminary injunction.

The petitioner argues that the appellate court erred in not dismissing the petition for certiorari for non-compliance with the rule on forum shopping. We disagree. First, the petitioner improperly raised the technical objection of non-compliance with Supreme Court Circular No. 28-91 by filing a motion to dismiss the petition for certiorari filed in the appellate court. This is prohibited by Section 6, Rule 66 of the Revised Rules of Civil Procedure which provides that "(I)n petitions for certiorari before the Supreme Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. Before giving due course thereto, the court may require the respondents to file their comment to, and not a motion to dismiss, the petition . . . (emphasis supplied)." Secondly, the issue was raised one month after petitioner had filed her answer/comment and after private respondent had replied thereto. Under Section 1, Rule 16 of the Revised Rules of Civil Procedure, a motion to dismiss shall be filed within the time for but before filing the answer to the complaint or pleading asserting a claim. She therefore could no longer submit a motion to dismiss nor raise defenses and objections not included in the answer/comment she had earlier tendered. Thirdly, substantial justice and equity require this Court not to revive a dissolved writ of injunction in favor of a party without any legal right thereto merely on a technical infirmity. The granting of an injunctive writ based on a technical ground rather than compliance with the requisites for the issuance of the same is contrary to the primary objective of legal procedure which is to serve as a means to dispense justice to the deserving party.

The petitioner likewise contends that the appellate court unduly delayed the resolution of her motion for reconsideration. But we find that petitioner contributed to this delay when she filed successive contentious motions in the same proceeding, the last of which was on October 27, 1993, necessitating counter-manifestations from private respondents with the last one being filed on November 9, 1993. Nonetheless, it is well-settled that non-observance of the period for deciding cases or their incidents does not render such judgments ineffective or void. 17 With respect to the purported damages she suffered due to the alleged delay in resolving her motion for reconsideration, we find that the said issue has likewise been rendered moot and academic by our ruling that she has no right over the trademark and, consequently, to the issuance of a writ of preliminary injunction.

Finally, we rule that the Court of Appeals correctly denied the petitioner's several motions for contempt of court. There is nothing contemptuous about the advertisements complained of which, as regards the proceedings in CA-G.R. SP No. 27803 merely announced in plain and straightforward language the promulgation of the assailed Decision of the appellate court. Moreover, pursuant to Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the said decision nullifying the injunctive writ was immediately executory.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated May 24, 1993 and June 3, 1994, respectively, are hereby AFFIRMED. With costs against the petitioner. HcaDTE

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

[G.R. No. 114508. November 19, 1999.]

PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF PATENTS and the BARBIZON CORPORATION, respondents.

Teresita Gandionco Oledan for petitioner.

Castillo Laman Tan Pantaleon & San Jose for respondents.

SYNOPSIS

On June 15, 1970, Lolita Escobar filed an application with the Bureau of Patents for the registration of the trademark "Barbizon" docketed as Inter Partes No. 686. Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of New York, U.S.A. filed an opposition thereto based on Sections 4 (d) and 8 of the Trademark law by claiming that the mark BARBIZON of the applicant is confusingly similar to the trademark BARBIZON which opposer owns and has not abandoned. On June 18, 1978, the Director of Patents rendered judgment dismissing the opposition and giving due course to Escobar's application. The decision became final, and Escobar was issued a certificate of registration. Later, Escobar assigned all her rights and interests over the trademark to petitioner Pribhdas J. Mirpuri. In 1979, the Bureau of Patents cancelled Escobar's certificate of registration for failure to file with the Bureau of Patents the Affidavit of Use of the Trademark as required under Section 12 of the Philippine Trademark Law. Mirpuri reapplied for the registration of the cancelled trademark of Barbizon docketed as Inter Partes No. 2049. Again, private respondent filed an opposition by citing mainly the protection of trademark under Article 6BIS is of the Convention of Paris and stating that opposer's goods bearing the trademark BARBIZON have been used in many countries including the Philippines for at least 40 years and has enjoyed international reputation and good will for their quality and to allow such registration will also violate Article 189 of the Revised Penal Code. Subsequently, the Director of Patents rendered a decision declaring private respondent's opposition barred by res judicata and giving due course to petitioner's reapplication for registration. On appeal, the Court of Appeals reversed the decision of the Director of Patents. HSCATc

In this petition, it is noted that the oppositions in the first and second cases are based on different laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d) on confusing similarity of trademarks and Section 8 on the requisite damage to file an opposition to a petition for registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law. Causes of action which are distinct and independent from each other, although arising out of the same contract, transaction, or state of facts, may be sued on separately, recovery on one being no bar to subsequent actions on others. The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action operative as res judicata, such as where the two actions are based on different statutes. Res judicata, therefore, does not apply to the instant case and respondent Court of Appeals did not err in so ruling.

Petition was DENIED.

SYLLABUS

1. MERCANTILE LAW; TRADEMARK LAW; TRADEMARK; DEFINED. — A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others." This definition has been simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark", as "any visible sign capable of distinguishing goods."

2. ID.; ID.; ID.; FUNCTIONS. — In Philippine jurisprudence, the function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article of his

product. Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) they advertise the articles they symbolize.

3. ID.; ID.; SYMBOLS; USED TO IDENTIFY OWNERSHIP OR ORIGIN OF ARTICLES. — Symbols have been used to identify the ownership or origin of articles for several centuries. As early as 5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe show bison with symbols on their flanks. Archaeological discoveries of ancient Greek and Roman inscriptions on sculptural works, paintings, vases, precious stones, glass works, bricks, etc. reveal some features which are thought to be marks or symbols. These marks were affixed by the creator or marker of the article, or by public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the settlement of accounts, between an entrepreneur and his workmen.

4. ID.; ID.; COMPULSORY USE OF IDENTIFYING MARKS IN TRADES; PURPOSE. — In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth century England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on bread, bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. Every guild had its own mark and every master belonging to it had a special mark of his own. The marks were not trademarks but police marks compulsorily imposed by the sovereign to let the public know that the goods were not "foreign" goods smuggled into an area where the guild had a monopoly, as well as to aid in tracing defective work or poor craftsmanship to the artisan. For a similar reason, merchants also used merchants' marks. Merchants dealt in goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon recovery after shipwreck or piracy.

5. ID.; ID.; TRADEMARK; GIVES THE CUSTOMER AN INDEX OR GUARANTEE OF QUALITY. — With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to create or continue monopoly but to give the customer an index or guarantee of quality. It was in the late 18th century when the industrial revolution gave rise to mass production and distribution of consumer goods that the mark became an important instrumentality of trade and commerce. By this time, trademarks did not merely identify the goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further purchases by the consuming public.

6. ID.; ID.; ID.; SYMBOLIZES GOODWILL AND BUSINESS REPUTATION OF THE OWNER OF THE PRODUCT. — Eventually, they came to symbolize the goodwill and business reputation of the owner of the product and became a property right protected by law. The common law developed the doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from getting another's business or injuring his reputation by unfair means, and, from defrauding the public." Subsequently, England and the United States enacted national legislation on trademarks as part of the law regulating unfair trade. It became the right of the trademark owner to exclude others from the use of his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury. At the same time, the trademark served as a warning against the imitation or faking of products to prevent the imposition of fraud upon the public. HESCcA

7. ID.; ID.; ID.; MOST EFFECTIVE AGENT FOR THE ACTUAL CREATION AND PROTECTION OF GOODWILL. — Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the goods. The mark has become the "silent salesman," the conduit through which direct contact between the trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it has become a more convincing selling point than even the quality of the article to which it refers. In the last half century, the unparalleled growth of industry and the rapid development of communications technology have enabled trademarks, tradenames and other distinctive signs of a product to penetrate regions where the owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of

actual market penetration; it extends to zones where the marked article has been fixed in the public mind through advertising.

11. MERCANTILE LAW; PARIS CONVENTION; ELUCIDATED. — The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris Convention, is multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial designs, trademarks, service marks, trade names and indications of source or appellations of origin; and at the same time aims to repress unfair competition. The Convention is essentially a compact among various countries which, as members of the Union, have pledged to accord to citizens of the other member countries trademark and other rights comparable to those accorded their own citizens by their domestic laws for an effective protection against unfair competition. In short, foreign nationals are to be given the same treatment in each of the member countries as that country makes available to its own citizens. Nationals of the various member nations are thus assured of a certain minimum of international protection of their industrial property.

12. ID.; ID.; PHILIPPINES IS A SIGNATORY. — The Convention was first signed by eleven countries in Paris on March 20, 1883. It underwent several revisions — at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in 1958, and at Stockholm in 1967. Both the Philippines and the United States of America, herein private respondent's country, are signatories to the Convention. The United States acceded on May 30, 1887 while the Philippines, through its Senate, concurred on May 10, 1965. The Philippines' adhesion became effective on September 27, 1965, and from this date, the country obligated itself to honor and enforce the provisions of the Convention.

13. ID.; ID.; ARTICLE 6BIS; GOVERNS PROTECTION OF WELL-KNOWN TRADEMARKS. — This Article governs protection of well-known trademarks. Under the first paragraph, each country of the Union bound itself to undertake to refuse or cancel the registration, and prohibit the use of a trademark which is a reproduction, imitation or translation, or any essential part of which trademark constitutes a reproduction, liable to create confusion, of a mark considered by the competent authority of the country where protection is sought, to be well-known in the country as being already the mark of a person entitled to the benefits of the Convention, and used for identical or similar goods. TIEHSA

14. ID.; ID.; ID.; DOES NOT REQUIRE LEGISLATIVE ENACTMENT TO GIVE EFFECT IN MEMBER COUNTRY. — It is a self-executing provision and does not require legislative enactment to give it effect in the member country. It may be applied directly by the tribunals and officials of each member country by the mere publication or proclamation of the Convention, after its ratification according to the public law of each state and the order for its execution.

15. ID.; ID.; ID.; POWER TO DETERMINE WHETHER A TRADEMARK IS WELL-KNOWN LIES IN COMPETENT AUTHORITY OF COUNTRY OF REGISTRATION OR USE. — The essential requirement under Article 6bis, is that the trademark to be protected must be "well-known" in the country where protection is sought. The power to determine whether a trademark is well-known lies in the "competent authority of the country of registration or use." This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before a court.

16. ID.; ID.; VILLAFUERTE MEMORANDUM; ELUCIDATED. — In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all pending applications for Philippine registration of signature and other world-famous trademarks by applicants other than their original owners or users. The Minister enumerated several internationally-known trademarks and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates of registration.

17. ID.; ID.; ONGPIN MEMORANDUM; LAID DOWN GUIDELINES FOR DIRECTOR OF PATENTS TO OBSERVE IN DETERMINING WHETHER A TRADEMARK IS ENTITLED TO PROTECTION. — In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-known trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse

application for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications for registration of world-famous trademarks by persons other than their original owners were to be rejected forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade and Industry for the effective protection of consumers and the application of swift solutions to problems in trade and industry.

18. ID.; ID.; MINISTER OF TRADE AND INDUSTRY IS THE COMPETENT AUTHORITY TO DETERMINE WHETHER A TRADEMARK IS WELL-KNOWN IN THIS COUNTRY. — Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark case of La Chemise Lacoste, S.A. v. Fernandez. This court ruled therein that under the provisions of Article 6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine whether a trademark is well-known in this country.

22. MERCANTILE LAW; TRADEMARK LAW; TRADEMARK; DEALS WITH PSYCHOLOGICAL FUNCTION OF SYMBOLS. — Trademarks deal with the psychological function of symbols and the effect of these symbols on the public at large. Trademarks play a significant role in communication, commerce and trade, and serve valuable and interrelated business functions, both nationally and internationally. For this reason, all agreements concerning industrial property, like those on trademarks and tradenames, are intimately connected with economic development.

23. ID.; INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES; INDUSTRIAL PROPERTY; ENCOURAGES INVESTMENTS IN NEW IDEAS AND INVENTIONS. — Industrial property encourages investments in new ideas and inventions and stimulates creative efforts for the satisfaction of human needs. They speed up transfer of technology and industrialization, and thereby bring about social and economic progress. These advantages have been acknowledged by the Philippine government itself.

24. ID.; ID.; STRENGTHENS THE INTELLECTUAL AND INDUSTRIAL PROPERTY SYSTEM IN THE COUNTRY. — The Intellectual Property Code of the Philippines declares that "an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign investments, and ensures market access for our products." The Intellectual Property Code took effect on January 1, 1998 and by its express provision, repealed the Trademark Law, the Patent Law, Articles 188 and 189 of the Revised Penal Code, the Decree on Intellectual Property, and the Decree on Compulsory Reprinting of Foreign Textbooks. The Code was enacted to strengthen the intellectual and industrial property system in the Philippines as mandated by the country's accession to the Agreement Establishing the World Trade Organization (WTO).

25. ID.; WORLD TRADE ORGANIZATION; ELUCIDATED. — The WTO is a common institutional framework for the conduct of trade relations among its members in matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement. The WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS. Members to this Agreement "desire to reduce distortions and impediments to international trade, taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade." To fulfill these objectives, the members have agreed to adhere to minimum standards of protection set by several Conventions. These Conventions are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the International Convention for the Protection of Performers, Procedures of Phonograms and Broadcasting Organizations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention (1967), as revised in Stockholm on July 14, 1967.

26. ID.; ID.; TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS AGREEMENT; ELUCIDATED. — A major

proportion of international trade depends on the protection of intellectual property rights. Since the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a considerable adverse impact on domestic and international trade revenues. The TRIPs Agreement seeks to grant adequate protection of intellectual property rights by creating a favorable economic environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about economic, cultural and technological independence.

27. ID.; ID.; PROPELLED THE WORLD TOWARDS TRADE LIBERALIZATION AND ECONOMIC GLOBALIZATION. — The Philippines and the United States of America have acceded to the WTO Agreement. This Agreement has revolutionized international business and economic relations among states, and has propelled the world towards trade liberalization and economic globalization. Protectionism and isolationism belong to the past. Trade is no longer confined to a bilateral system. There is now "a new era of global economic cooperation, reflecting the widespread desire to operate in a fairer and mote open multilateral trading system." Conformably, the State must reaffirm its commitment to the global community and take part in evolving a new international economic order at the dawn of the new millennium. AaCTcI

D E C I S I O N

PUNO, J p:

The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the Philippines bound itself to honor and enforce in this country. As to whether or not the treaty affords protection to a foreign corporation against a Philippine applicant for the registration of a similar trademark is the principal issue in this case. cdphil

On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed an application with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieres and ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the firm name "L & BM Commercial" since March 3, 1970.

Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of New York, U.S.A., opposed the application. It claimed that:

"The mark BARBIZON of respondent-applicant is confusingly similar to the trademark BARBIZON which opposer owns and has not abandoned.

That opposer will be damaged by the registration of the mark BARBIZON and its business reputation and goodwill will suffer great and irreparable injury.

That the respondent-applicant's use of the said mark BARBIZON which resembles the trademark used and owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, as amended." 1

This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the pleadings, the parties submitted the case for decision. LexLib

On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition and giving due course to Escobar's application, thus:

"WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No. 19010 for the registration of the trademark BARBIZON, of respondent Lolita R. Escobar, is given due course.

IT IS SO ORDERED." 2

This decision became final and on September 11, 1974, Lolita Escobar was issued a certificate of registration for the trademark "Barbizon." The trademark was "for use in "brassieres and lady's underwear garments like panties." 3

Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas J. Mirpuri who, under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's "Barbizon" products.

In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of the trademark required under Section 12 of Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure, the Bureau of Patents cancelled Escobar's certificate of registration.

On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner and this application was opposed by private respondent. The case was docketed as Inter Partes Case No. 2049 (IPC No. 2049).

In its opposition, private respondent alleged that:

"(a) The Opposer has adopted the trademark BARBIZON (word), sometime in June 1933 and has then used it on various kinds of wearing apparel. On August 14, 1934, Opposer obtained from the United States Patent Office a more recent registration of the said mark under Certificate of Registration No. 316, 161. On March 1, 1949, Opposer obtained from the United States Patent Office a more recent registration for the said trademark under Certificate of Registration No. 507, 214, a copy of which is herewith attached as Annex 'A.' Said Certificate of Registration covers the following goods — wearing apparel: robes, pajamas, lingerie, nightgowns and slips;

(b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON and Bee design and used the said mark in various kinds of wearing apparel. On March 15, 1977, Opposer secured from the United States Patent Office a registration of the said mark under Certificate of Registration No. 1,061,277, a copy of which is herein enclosed as Annex 'B.' The said Certificate of Registration covers the following goods: robes, pajamas, lingerie, nightgowns and slips;

(c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON and a Representation of a Woman and thereafter used the said trademark on various kinds of wearing apparel. Opposer obtained from the United States Patent Office registration of the said mark on April 5, 1983 under Certificate of Registration No. 1,233,666 for the following goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy of the said certificate of registration is herewith enclosed as Annex 'C.'

(d) All the above registrations are subsisting and in force and Opposer has not abandoned the use of the said trademarks. In fact, Opposer, through a wholly-owned Philippine subsidiary, the Philippine Lingerie Corporation, has been manufacturing the goods covered by said registrations and selling them to various countries, thereby earning valuable foreign exchange for the country. As a result of respondent-applicant's misappropriation of Opposer's BARBIZON trademark, Philippine Lingerie Corporation is prevented from selling its goods in the local market, to the damage and prejudice of Opposer and its wholly-owned subsidiary. LLpr

(e) The Opposer's goods bearing the trademark BARBIZON have been used in many countries, including the Philippines, for at least 40 years and has enjoyed international reputation and good will for their quality. To protect its registrations in countries where the goods covered by the registrations are being sold, Opposer has procured the registration of the trademark BARBIZON in the following countries: Australia, Austria, Abu Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia, Denmark, Ecuador, France, West Germany, Greece, Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco, Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador, South Africa, Zambia, Egypt, and Iran, among others;

 

(f) To enhance its international reputation for quality goods and to further promote goodwill over its name, marks and products, Opposer has extensively advertised its products, trademarks and name in various publications which are circulated in the United States and many countries around the world, including the Philippines;

(g) The trademark BARBIZON was fraudulently registered in the Philippines by one Lolita R. Escobar under Registration No. 21920, issued on September 11, 1974, in violation of Article 189 (3) of the Revised Penal Code and Section 4 (d) of the Trademark Law. Herein respondent applicant acquired by assignment the 'rights' to the said mark previously registered by Lolita Escobar, hence respondent-applicant's title is vitiated by the same fraud and

criminal act. Besides, Certificate of Registration No. 21920 has been cancelled for failure of either Lolita Escobar or herein respondent-applicant, to seasonably file the statutory affidavit of use. By applying for a re-registration of the mark BARBIZON subject of this opposition, respondent-applicant seeks to perpetuate the fraud and criminal act committed by Lolita Escobar.

(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and Representation of a Woman trademarks qualify as well-known trademarks entitled to protection under Article 6bis of the Convention of Paris for the Protection of Industrial Property and further amplified by the Memorandum of the Minister of Trade to the Honorable Director of Patents dated October 25, 1983 [sic], 4 Executive Order No. 913 dated October 7, 1963 and the Memorandum of the Minister of Trade and Industry to the Honorable Director of Patents dated October 25, 1983.

(i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON trademark and constitutes the dominant part of Opposer's two other marks namely, BARBIZON and Bee design and BARBIZON and a Representation of a Woman. The continued use by respondent-applicant of Opposer's trademark BARBIZON on goods belonging to Class 25 constitutes a clear case of commercial and criminal piracy and if allowed registration will violate not only the Trademark Law but also Article 189 of the Revised Penal Code and the commitment of the Philippines to an international treaty." 5

Replying to private respondent's opposition, petitioner raised the defense of res judicata.

On March 2, 1982, Escobar assigned to petitioner the use of the business name "Barbizon International." Petitioner registered the name with the Department of Trade and Industry (DTI) for which a certificate of registration was issued in 1987.

Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition for cancellation of petitioner's business name.

On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate of registration, and declared private respondent the owner and prior user of the business name "Barbizon International." Thus:

"WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and prior user of the business name "BARBIZON INTERNATIONAL" under Certificate of Registration No. 87-09000 dated March 10, 1987 and issued in the name of respondent, is [sic] hereby ordered revoked and cancelled. . . . ." 6

Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director of Patents. On June 18, 1992, the Director rendered a decision declaring private respondent's opposition barred by res judicata and giving due course to petitioner's application for registration, to wit:

"WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby DECLARED BARRED by res judicata and is hereby DISMISSED. Accordingly, Application Serial No. 45011 for trademark BARBIZON filed by Pribhdas J. Mirpuri is GIVEN DUE COURSE.

SO ORDERED." 7

Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP No. 28415. On April 30, 1993, the Court of Appeals reversed the Director of Patents finding that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further proceedings, viz: cdrep

"WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of Patents in Inter Partes Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded to the Bureau of Patents for further proceedings, in accordance with this pronouncement. No costs." 8

In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its decision. 9 Hence, this recourse.

Before us, petitioner raises the following issues:

"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C HEREOF, CONSTITUTED RES

JUDICATA IN SO FAR AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS CONCERNED;

2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY APPLIED THE PRINCIPLE OF RES JUDICATA IN DISMISSING PRIVATE RESPONDENT BARBIZON'S OPPOSITION TO PETITIONER'S APPLICATION FOR REGISTRATION FOR THE TRADEMARK BARBIZON, WHICH HAS SINCE RIPENED TO CERTIFICATE OF REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;

3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE MERITS' REQUIRED A 'HEARING WHERE BOTH PARTIES ARE SUPPOSED TO ADDUCE EVIDENCE' AND WHETHER THE JOINT SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR RESPECTIVE PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS WITHIN THE MEANING OF 'JUDGMENT ON THE MERITS' AS ONE OF THE REQUISITES TO CONSTITUTE RES JUDICATA;

4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND INDUSTRY CANCELLING PETITIONER'S FIRM NAME 'BARBIZON INTERNATIONAL' AND WHICH DECISION IS STILL PENDING RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS THE RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION AND THE TRADEMARK LAW (R.A. 166) WHICH IS WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DIRECTOR OF PATENTS." 10

Before ruling on the issues of the case, there is need for a brief background on the function and historical development of trademarks and trademark law.

A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others." 11 This definition has been simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as "any visible sign capable of distinguishing goods." 12 In Philippine jurisprudence, the function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product. 13 cdphil

Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) they advertise the articles they symbolize. 14

Symbols have been used to identify the ownership or origin of articles for several centuries. 15 As early as 5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe show bison with symbols on their flanks. 16 Archaeological discoveries of ancient Greek and Roman inscriptions on sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some features which are thought to be marks or symbols. These marks were affixed by the creator or maker of the article, or by public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the settlement of accounts between an entrepreneur and his workmen. 17

In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth century England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on bread, bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. 18 Every guild had its own mark and every master belonging to it had a special mark of his own. The marks were not trademarks but police marks compulsorily imposed by the sovereign to let the public know that the goods were not "foreign" goods smuggled into an area where the guild had a monopoly, as well as to aid in tracing defective work or poor craftsmanship to the artisan. 19 For a similar reason,

merchants also used merchants' marks. Merchants dealt in goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon recovery after shipwreck or piracy. 20

With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to create or continue monopoly but to give the customer an index or guarantee of quality. 21 It was in the late 18th century when the industrial revolution gave rise to mass production and distribution of consumer goods that the mark became an important instrumentality of trade and commerce. 22 By this time, trademarks did not merely identify the goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further purchases by the consuming public. 23 Eventually, they came to symbolize the goodwill and business reputation of the owner of the product and became a property right protected by law. 24 The common law developed the doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from getting another's business or injuring his reputation by unfair means, and, from defrauding the public." 25 Subsequently, England and the United States enacted national legislation on trademarks as part of the law regulating unfair trade. 26 It became the right of the trademark owner to exclude others from the use of his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury. At the same time, the trademark served as a warning against the imitation or faking of products to prevent the imposition of fraud upon the public. 27

 

Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the goods. 28 The mark has become the "silent salesman," the conduit through which direct contact between the trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it has become a more convincing selling point than even the quality of the article to which it refers. 29 In the last half century, the unparalleled growth of industry and the rapid development of communications technology have enabled trademarks, tradenames and other distinctive signs of a product to penetrate regions where the owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of actual market penetration; it extends to zones where the marked article has been fixed in the public mind through advertising. 30 Whether in the print, broadcast or electronic communications medium, particularly on the Internet, 31 advertising has paved the way for growth and expansion of the product by creating and earning a reputation that crosses over borders, virtually turning the whole world into one vast marketplace. prcd

This is the mise-en-scene of the present controversy. Petitioner brings this action claiming that "Barbizon" products have been sold in the Philippines since 1970. Petitioner developed this market by working long hours and spending considerable sums of money on advertisements and promotion of the trademark and its products. Now, almost thirty years later, private respondent, a foreign corporation, "swaggers into the country like a conquering hero," usurps the trademark and invades petitioner's market. 32 Justice and fairness dictate that private respondent be prevented from appropriating what is not its own. Legally, at the same time, private respondent is barred from questioning petitioner's ownership of the trademark because of res judicata. 33

Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment. 34 In res judicata, the judgment in the first action is considered conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein. 35 Res judicata is an absolute bar to a subsequent action for the same cause; and its requisites are: (a) the former judgment or order must be final; (b) the judgment or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and parties; (d) there must be between the first and second actions, identity of parties, of subject matter and of causes of action. 36

The Solicitor General, on behalf of respondent Director of Patents, has joined cause with petitioner. Both claim that all the four

elements of res judicata have been complied with: that the judgment in IPC No. 686 was final and was rendered by the Director of Patents who had jurisdiction over the subject matter and parties; that the judgment in IPC No. 686 was on the merits; and that the lack of a hearing was immaterial because substantial issues were raised by the parties and passed upon by the Director of Patents. 37

The decision in IPC No. 686 reads as follows:

"xxx xxx xxx.

Neither party took testimony nor adduced documentary evidence. They submitted the case for decision based on the pleadings which, together with the pertinent records, have all been carefully considered.

Accordingly, the only issue for my disposition is whether or not the herein opposer would probably be damaged by the registration of the trademark BARBIZON sought by the respondent-applicant on the ground that it so resembles the trademark BARBIZON allegedly used and owned by the former to be 'likely to cause confusion, mistake or to deceive purchasers.'

On record, there can be no doubt that respondent-applicant's sought-to-be-registered trademark BARBIZON is similar, in fact obviously identical, to opposer's alleged trademark BARBIZON, in spelling and pronunciation. The only appreciable but very negligible difference lies in their respective appearances or manner of presentation. Respondent-applicant's trademark is in bold letters (set against a black background), while that of the opposer is offered in stylish script letters.

It is opposer's assertion that its trademark BARBIZON has been used in trade or commerce in the Philippines prior to the date of application for the registration of the identical mark BARBIZON by the respondent-applicant. However, the allegation of facts in opposer's verified notice of opposition is devoid of such material information. In fact, a reading of the text of said verified opposition reveals an apparent, if not deliberate, omission of the date (or year) when opposer's alleged trademark BARBIZON was first used in trade in the Philippines (see par. No. 1, p. 2, Verified Notice of Opposition, Rec.). Thus, it cannot here and now be ascertained whether opposer's alleged use of the trademark BARBIZON could be prior to the use of the identical mark by the herein respondent-applicant, since the opposer attempted neither to substantiate its claim of use in local commerce with any proof or evidence. Instead, the opposer submitted the case for decision based merely on the pleadings.

On the other hand, respondent-applicant asserted in her amended application for registration that she first used the trademark BARBIZON for brassiere (or 'brasseire') and ladies underwear garments and panties as early as March 3, 1970. Be that as it may, there being no testimony taken as to said date of first use, respondent-applicant will be limited to the filing date, June 15, 1970, of her application as the date of first use (Rule 173, Rules of Practice in Trademark Cases).

From the foregoing, I conclude that the opposer has not made out a case of probable damage by the registration of the respondent-applicant's mark BARBIZON.

WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No. 19010, for the registration of the trademark BARBIZON of respondent Lolita R. Escobar, is given due course." 38 LLjur

The decision in IPC No. 686 was a judgment on the merits and it was error for the Court of Appeals to rule that it was not. A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections. 39 It is not necessary that a trial should have been conducted. If the court's judgment is general, and not based on any technical defect or objection, and the parties had a full legal opportunity to be heard on their respective claims and contentions, it is on the merits although there was no actual hearing or arguments on the facts of the case. 40 In the case at bar, the Director of Patents did not dismiss private respondent's opposition on a sheer technicality. Although no hearing was conducted, both parties filed their respective pleadings and were given opportunity to present evidence. They, however, waived their right to do so and submitted the case for decision based on their pleadings. The lack of evidence did not deter the Director of Patents from ruling on the case, particularly

on the issue of prior use, which goes into the very substance of the relief sought by the parties. Since private respondent failed to prove prior use of its trademark, Escobar's claim of first use was upheld.

The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General allege that IPC No. 686 and IPC No. 2049 also comply with the fourth requisite of res judicata, i.e., they involve the same parties and the same subject matter, and have identical causes of action.

Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same subject matter. Petitioner herein is the assignee of Escobar while private respondent is the same American corporation in the first case. The subject matter of both cases is the trademark "Barbizon." Private respondent counter-argues, however, that the two cases do not have identical causes of action. New causes of action were allegedly introduced in IPC No. 2049, such as the prior use and registration of the trademark in the United States and other countries worldwide, prior use in the Philippines, and the fraudulent registration of the mark in violation of Article 189 of the Revised Penal Code. Private respondent also cited protection of the trademark under the Convention of Paris for the Protection of Industrial Property, specifically Article 6bis thereof, and the implementation of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director of Patents, as well as Executive Order (E.O.) No. 913.

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris Convention, is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial designs, trademarks, service marks, trade names and indications of source or appellations of origin, and at the same time aims to repress unfair competition. 41 The Convention is essentially a compact among various countries which, as members of the Union, have pledged to accord to citizens of the other member countries trademark and other rights comparable to those accorded their own citizens by their domestic laws for an effective protection against unfair competition. 42 In short, foreign nationals are to be given the same treatment in each of the member countries as that country makes available to its own citizens. 43 Nationals of the various member nations are thus assured of a certain minimum of international protection of their industrial property. 44

 

The Convention was first signed by eleven countries in Paris on March 20, 1883. 45 It underwent several revisions — at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in 1958, 46 and at Stockholm in 1967. Both the Philippines and the United States of America, herein private respondent's country, are signatories to the Convention. The United States acceded on May 30, 1887 while the Philippines, through its Senate, concurred on May 10, 1965. 47 The Philippines' adhesion became effective on September 27, 1965, 48and from this date, the country obligated itself to honor and enforce the provisions of the Convention. 49 Cdpr

In the case at bar, private respondent anchors its cause of action on the first paragraph of Article 6bis of the Paris Convention which reads as follows:

"Article 6bis

(1) The countries of the Union undertake, either administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well-known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.

(2) A period of at least five years from the date of registration shall be allowed for seeking the cancellation of such a mark. The countries of the Union may provide for a period within which the prohibition of use must be sought.

(3) No time limit shall be fixed for seeking the cancellation or the prohibition of the use of marks registered or used in bad faith." 50

This Article governs protection of well-known trademarks. Under the first paragraph, each country of the Union bound itself to undertake to refuse or cancel the registration, and prohibit the use of a trademark which is a reproduction, imitation or translation, or any essential part of which trademark constitutes a reproduction, liable to create confusion, of a mark considered by the competent authority of the country where protection is sought, to be well-known in the country as being already the mark of a person entitled to the benefits of the Convention, and used for identical or similar goods.

Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952. 51 It is a self-executing provision and does not require legislative enactment to give it effect in the member country. 52 It may be applied directly by the tribunals and officials of each member country by the mere publication or proclamation of the Convention, after its ratification according to the public law of each state and the order for its execution. 53

The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" in the country where protection is sought. The power to determine whether a trademark is well-known lies in the "competent authority of the country of registration or use." This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before a court. 54

Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the Ministry of Trade issued a Memorandum to the Director of Patents. The Minister ordered the Director that:

"Pursuant to the Paris Convention for the Protection of Industrial Property to which the Philippines is a signatory, you are hereby directed to reject all pending applications for Philippine registration of signature and other world-famous trademarks by applicants other than its original owners or users.

The conflicting claims over internationally known trademarks involve such name brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.

It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the trademarks' foreign or local owners or original users.

You are also required to submit to the undersigned a progress report on the matter.

For immediate compliance." 55

Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another Memorandum to the Director of Patents, viz: LLjur

"Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rule-making and adjudicatory powers of the Minister of Trade and Industry and provides inter alia, that 'such rule-making and adjudicatory powers should be revitalized in order that the Minister of Trade and Industry can . . . apply more swift and effective solutions and remedies to old and new problems . . . such as infringement of internationally-known tradenames and trademarks . . .' and in view of the decision of the Intermediate Appellate Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359 (17) June 1983] 56 which affirms the validity of the MEMORANDUM of then Minister Luis R. Villafuerte dated 20 November 1980 confirming our obligations under the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is a signatory, you are hereby directed to implement measures necessary to effect compliance with our obligations under said Convention in general, and, more specifically, to honor our commitment under Section 6bis 57 thereof, as follows:

1. Whether the trademark under consideration is well-known in the Philippines or is a mark already belonging to a person entitled to the benefits of the CONVENTION, this should be established, pursuant to Philippine Patent Office procedures in inter partes and

ex parte cases, according to any of the following criteria or any combination thereof:

(a) a declaration by the Minister of Trade and Industry that the trademark being considered is already well-known in the Philippines such that permission for its use by other than its original owner will constitute a reproduction, imitation, translation or other infringement;

(b) that the trademark is used in commerce internationally, supported by proof that goods bearing the trademark are sold on an international scale, advertisements, the establishment of factories, sales offices, distributorships, and the like, in different countries, including volume or other measure of international trade and commerce;

(c) that the trademark is duly registered in the industrial property office(s) of another country or countries, taking into consideration the date of such registration;

(d) that the trademark has long been established and obtained goodwill and international consumer recognition as belonging to one owner or source;

(e) that the trademark actually belongs to a party claiming ownership and has the right to registration under the provisions of the aforestated PARIS CONVENTION.

2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service marks, logos, signs, emblems, insignia or other similar devices used for identification and recognition by consumers.

3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person, natural or corporate, who is a citizen of a country signatory to the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY.

4. The Philippine Patent Office shall give due course to the Opposition in cases already or hereafter filed against the registration of trademarks entitled to protection of Section 6bis of said PARIS CONVENTION as outlined above, by remanding applications filed by one not entitled to such protection for final disallowance by the Examination Division.

5. All pending applications for Philippine registration of signature and other world-famous trademarks filed by applicants other than their original owners or users shall be rejected forthwith. Where such applicants have already obtained registration contrary to the abovementioned PARIS CONVENTION and/or Philippine Law, they shall be directed to surrender their Certificates of Registration to the Philippine Patent Office for immediate cancellation proceedings.

xxx xxx xxx." 58

In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all pending applications for Philippine registration of signature and other world-famous trademarks by applicants other than their original owners or users. The Minister enumerated several internationally-known trademarks and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates of registration. cdrep

In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-known trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications for registration of world-famous trademarks by persons other than their original owners were to be rejected forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade and Industry for the effective protection of consumers and the application of swift solutions to problems in trade and industry. 59

 

Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark case of La Chemise Lacoste, S.A. v. Fernandez. 60 This court ruled therein that under the provisions of Article 6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine whether a trademark is well-known in this country. 61

The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption of the Paris Convention in 1965. In the case at bar, the first inter partes case, IPC No. 686, was filed in 1970, before the Villafuerte Memorandum but five (5) years after the effectivity of the Paris Convention. Article 6bis was already in effect five years before the first case was instituted. Private respondent, however, did not cite the protection of Article 6bis, neither did it mention the Paris Convention at all. It was only in 1981 when IPC No. 2049 was instituted that the Paris Convention and the Villafuerte Memorandum, and, during the pendency of the case, the 1983 Ongpin Memorandum were invoked by private respondent.

The Solicitor General argues that the issue of whether the protection of Article 6bis of the Convention and the two Memoranda is barred by res judicata has already been answered in Wolverine Worldwide, Inc. v. Court of Appeals. 62 In this case, petitioner Wolverine, a foreign corporation, filed with the Philippine Patent Office a petition for cancellation of the registration certificate of private respondent, a Filipino citizen, for the trademark "Hush Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationally-known trademark in the United States and other countries, and cited protection under the Paris Convention and the Ongpin Memorandum. The petition was dismissed by the Patent Office on the ground of res judicata. It was found that in 1973 petitioner's predecessor-in-interest filed two petitions for cancellation of the same trademark against respondent's predecessor-in-interest. The Patent Office dismissed the petitions, ordered the cancellation of registration of petitioner's trademark, and gave due course to respondent's application for registration. This decision was sustained by the Court of Appeals, which decision was not elevated to us and became final and executory. 63

Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the Trademark Law, its subsequent petition was based on a new cause of action, i.e., the Ongpin Memorandum and E.O. No. 913 issued in 1983, after finality of the previous decision. We held that the said Memorandum and E.O. did not grant a new cause of action because it did "not amend the Trademark Law," . . . "nor did it indicate a new policy with respect to the registration in the Philippines of world-famous trademarks." 64 This conclusion was based on the finding that Wolverine's two previous petitions and subsequent petition dealt with the same issue of ownership of the trademark. 65 In other words, since the first and second cases involved the same issue of ownership, then the first case was a bar to the second case. cdrep

In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in IPC No. 686. Private respondent's opposition therein was merely anchored on:

(a) "confusing similarity" of its trademark with that of Escobar's;

(b) that the registration of Escobar's similar trademark will cause damage to private respondent's business reputation and goodwill; and

(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a mark previously used in the Philippines which act is penalized under Section 4 (d) of the Trademark Law.

In IPC No. 2049, private respondent's opposition set forth several issues summarized as follows:

(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its products such as robes, pajamas, lingerie, nightgowns and slips;

(b) that the trademark "BARBIZON" was registered with the United States Patent Office in 1934 and 1949; and that variations of the same trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the representation of a woman were also registered with the U.S. Patent Office in 1961 and 1976; cdll

(c) that these marks have been in use in the Philippines and in many countries all over the world for over forty years. "Barbizon"

products have been advertised in international publications and the marks registered in 36 countries worldwide;

(d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was based on fraud; and this fraudulent registration was cancelled in 1979, stripping Escobar of whatsoever right she had to the said mark;

(e) Private respondent's trademark is entitled to protection as a well-known mark under Article 6bis of the Paris Convention, Executive Order No. 913, and the two Memoranda dated November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director of Patents;

(f) Escobar's trademark is identical to private respondent's and its use on the same class of goods as the latter's amounts to a violation of the Trademark Law and Article 189 of the Revised Penal Code. Cdpr

IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the trademark in the United States and other countries, and the international recognition and reputation of the trademark established by extensive use and advertisement of private respondent's products for over forty years here and abroad. These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of prior use may have been raised in IPC No. 686 but this claim was limited to prior use in the Philippines only. Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol "Barbizon," 66 as the first and registered user of the mark attached to its products which have been sold and advertised worldwide for a considerable number of years prior to petitioner's first application for registration of her trademark in the Philippines. Indeed, these are substantial allegations that raised new issues and necessarily gave private respondent a new cause of action. Res judicata does not apply to rights, claims or demands, although growing out of the same subject matter, which constitute separate or distinct causes of action and were not put in issue in the former action. 67

Respondent corporation also introduced in the second case a fact that did not exist at the time the first case was filed and terminated. The cancellation of petitioner's certificate of registration for failure to file the affidavit of use arose only after IPC No. 686. It did not and could not have occurred in the first case, and this gave respondent another cause to oppose the second application. Res judicata extends only to facts and conditions as they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the facts so determined. 68 When new facts or conditions intervene before the second suit, furnishing a new basis for the claims and defenses of the parties, the issues are no longer the same, and the former judgment cannot be pleaded as a bar to the subsequent action. 69

It is also noted that the oppositions in the first and second cases are based on different laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d) 70 on confusing similarity of trademarks and Section 8 71 on the requisite damage to file an opposition to a petition for registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law. 72Causes of action which are distinct and independent from each other, although arising out of the same contract, transaction, or state of facts, may be sued on separately, recovery on one being no bar to subsequent actions on others. 73 The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action operative as res judicata, such as where the two actions are based on different statutes. 74 Res judicata therefore does not apply to the instant case and respondent Court of Appeals did not err in so ruling. LLphil

Intellectual and industrial property rights cases are not simple property cases. Trademarks deal with the psychological function of symbols and the effect of these symbols on the public at large. 75 Trademarks play a significant role in communication, commerce and trade, and serve valuable and interrelated business functions, both nationally and internationally. For this reason, all agreements concerning industrial property, like those on trademarks and tradenames, are intimately connected with economic development. 76 Industrial property encourages investments in new ideas and inventions and stimulates creative efforts for the satisfaction of human needs. They speed up transfer of technology and industrialization, and thereby bring about social and economic

progress. 77 These advantages have been acknowledged by the Philippine government itself. The Intellectual Property Code of the Philippines declares that "an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign investments, and ensures market access for our products." 78 The Intellectual Property Code took effect on January 1, 1998 and by its express provision, 79 repealed the Trademark Law, 80 the Patent Law, 81 Articles 188 and 189 of the Revised Penal Code, the Decree on Intellectual Property, 82 and the Decree on Compulsory Reprinting of Foreign Textbooks. 83 The Code was enacted to strengthen the intellectual and industrial property system in the Philippines as mandated by the country's accession to the Agreement Establishing the World Trade Organization (WTO). 84

 

The WTO is a common institutional framework for the conduct of trade relations among its members in matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement. 85 The WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPs. 86 Members to this Agreement "desire to reduce distortions and impediments to international trade, taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade." To fulfill these objectives, the members have agreed to adhere to minimum standards of protection set by several Conventions. 87 These Conventions are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention (1967), as revised in Stockholm on July 14, 1967. 88

A major proportion of international trade depends on the protection of intellectual property rights. 89 Since the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a considerable adverse impact on domestic and international trade revenues. 90 The TRIPs Agreement seeks to grant adequate protection of intellectual property rights by creating a favorable economic environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about economic, cultural and technological independence. 91

The Philippines and the United States of America have acceded to the WTO Agreement. This Agreement has revolutionized international business and economic relations among states, and has propelled the world towards trade liberalization and economic globalization. 92 Protectionism and isolationism belong to the past. Trade is no longer confined to a bilateral system. There is now "a new era of global economic cooperation, reflecting the widespread desire to operate in a fairer and more open multilateral trading system." 93 Conformably, the State must reaffirm its commitment to the global community and take part in evolving a new international economic order at the dawn of the new millennium. cdrep

IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 28415 are affirmed.

SO ORDERED.

Davide, Jr., C.J., Kapunan, Pardo and Ynares-Santiago, JJ., concur.

537 F.2d 4

189 U.S.P.Q. 759, 189 U.S.P.Q. 769

ABERCROMBIE & FITCH COMPANY, Plaintiff-Appellant,v.HUNTING WORLD, INCORPORATED, Defendant-Appellee.

No. 21, Docket 74-2540.

United States Court of Appeals,Second Circuit.

Argued Sept. 18, 1975.Decided Jan. 16, 1976.Opinion on Limited Rehearing Feb. 26, 1976.

Richard H. Wels, New York City (Moss, Wels & Marcus, New York City, of counsel), for defendant-appellee.

Roy C. Hopgood, New York City (Paul H. Blaustein, and Hopgood, Calimafde, Kalil, Blaustein & Lieberman, New York City, of counsel), for plaintiff-appellant.

Before FRIENDLY, TIMBERS and GURFEIN, Circuit Judges.

FRIENDLY, Circuit Judge:

1

This action in the District Court for the Southern District of New York by Abercrombie & Fitch Company (A&F), owner of well-known stores at Madison Avenue and 45th Street in New York City and seven places in other states.1 against Hunting World, Incorporated (HW), operator of a competing store on East 53rd Street, is for infringement of some of A&F's registered trademarks using the word 'Safari'. It has had a long and, for A&F, an unhappy history. On this appeal from a judgment which not only dismissed the complaint but canceled all of A&F's 'Safari' registrations, including several that were not in suit, we relieve A&F of some of its unhappiness but not of all.

I.

2

The complaint, filed in January, 1970, after describing the general nature of A&F's business, reflecting its motto, "The Greatest Sporting Goods Store in the World," alleged as follows: For many years A&F has used the mark 'Safari' on articles "exclusively offered and sold by it." Since 1936 it has used the mark on a variety of men's and women's outer garments. Its United States trademark registrations include:

3

Trademark Number Issued Goods

Safari 358,781 7/26/38 Men's and Women's outer

garments, including hats.

Safari Mills2 125,531 5/20/19 Cotton Piece goods.

Safari 652,098 9/24/57 Men's and Women's outer

garments, including shoes.

Safari 703,279 8/23/60 Woven cloth, sporting goods,

apparel, etc.

4

A&F has spent large sums of money in advertising and promoting products identified with its mark 'Safari' and in policing its right in the mark, including the successful conduct of trademark infringement suits. HW, the complaint continued, has engaged in the retail marketing of sporting apparel including hats and shoes, some identified by use of 'Safari' alone or by expressions such as 'Minisafari' and 'Safariland'. Continuation of HW's acts would confuse and deceive the public and impair "the distinct and unique quality of the plaintiff's trademark." A&F sought an injunction against infringement and an accounting for damages and profits.

5

HW filed an answer and counterclaim. This alleged, inter alia, that "the word 'safari' is an ordinary, common, descriptive, geographic, and generic word" which "is commonly used and understood by the public to mean and refer to a journey or expedition, especially for hunting or exploring in East Africa, and to the hunters, guides, men, animals, and equipment forming such an expedition" and is not subject to exclusive appropriation as a trademark. HW sought cancellation of all of A&F's registrations using the word 'Safari' on the ground that A&F had fraudulently failed to disclose the true nature of the term to the Patent Office.

6

HW having moved for summary judgment, Judge Lasker granted this only in part, 327 F.Supp. 657 (S.D.N.Y.1971). He held, 327 F.Supp. at 662, that:Although "safari" is a generic word, a genuine issue of fact exists as to whether the plaintiff has created a secondary meaning in its use of the word "identifying the source" and showing that "purchasers are moved to buy it because of its source."

7

On the other hand, he concluded that A&F had no right to prevent HW from using the word 'Safari' to describe its business as distinguished from use in the sale of a particular product3 a conclusion we do not understand to be disputed; that HW had not infringed A&F's registered mark using the word 'Safari' under its brand name on a "classical safari hat" or in advertising this as "The Hat for Safari" since such use was purely descriptive, 327 F.Supp. at 664; that HW had also not infringed by using the term 'Minisafari' as a name for its narrower brimmed safari hats, and that HW was entitled to use the word 'Safariland' as the description of an area within its shop and as the name of a corporation engaged in the wholesale distribution of products imported from East Africa by an affiliate, Lee Expeditions, Ltd., and in the "Safariland News," a newsletter issued by HW and Lee Expeditions, 327 F.Supp. at 664-65. With respect to shoes he concluded that both parties had used the word 'Safari' in a fanciful rather than a descriptive sense and hence that plaintiff might have a valid infringement claim it it could establish a secondary meaning, 327 F.Supp. at 665.

8

On A&F's appeal this court reversed and remanded for trial, 461 F.2d 1040 (2 Cir. 1972). Most of Judge Thomsen's opinion for the court concerned the issue of appealability, as did most of Judge Timbers' concurring opinion and all of Judge Feinberg's dissent. Intimating no opinion on the ultimate merits, this court concluded "that genuine issues of fact exist which made it improper to enter a summary judgment finally denying even in part the injunctive relief sought by plaintiff." Id. at 1042.

9

Judge Ryan, before whom the action was tried on remand, ruled broadly in HW's favor. He found there was frequent use of the word 'Safari' in connection with wearing apparel, that A&F's policing efforts thus had evidently been unsuccessful, and that A&F had itself used the term in a descriptive sense not covered by its registration, e. g., in urging customers to make a "Christmas Gift Safari" to the A&F store. After referring to statements by Judge Lasker that 'Safari' was a "weak" mark, 327 F.Supp. at 663, the judge found the mark to be invalid. 'Safari,' the court held, "is merely descriptive and does not serve to distinguish plaintiff's goods as listed on the registration from anybody else's"; while such terms are afforded protection by the Lanham Act if they come to identify the company merchandising the product, rather than the product itself, A&F had failed to establish that this had become the situation with respect to 'Safari'.4 The opinion did not discuss A&F's assertion that some of its marks had become incontestable under § 15 of the Lanham Act, 15 U.S.C. § 1065. The court entered a judgment which dismissed the complaint and canceled not only the four registered trademarks in suit but all A&F's other registered 'Safari' trademarks.5 A&F has appealed.II.

10

It will be useful at the outset to restate some basic principles of trademark law, which, although they should be familiar, tend to become lost in a welter of adjectives.

11

The cases, and in some instances the Lanham Act, identify four different categories of terms with respect to trademark protection. Arrayed in an ascending order which roughly reflects their eligibility to trademark status and the degree of protection accorded, these classes are (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. The lines of demarcation, however, are not always bright. Moreover, the difficulties are compounded because a term that is in one category for a particular product may be in quite a different one for another,6 because a term may shift from one category to another in light of differences in usage through time,7 because a term may have one meaning to one group of users and a different one to others,8 and because the same term may be put to different uses with respect to a single product.9 In

various ways, all of these complications are involved in the instant case.

12

A generic term is one that refers, or has come to be understood as referring, to the genus of which the particular product is a species. At common law neither those terms which were generic nor those which were merely descriptive could become valid trademarks, see Delaware & Hudson Canal Co. v. Clark, 80 U.S. (13 Wall.) 311, 323, 20 L.Ed. 581 (1872) ("Nor can a generic name, or a name merely descriptive of an article or its qualities, ingredients, or characteristics, be employed as a trademark and the exclusive use of it be entitled to legal protection"). The same was true under the Trademark Act of 1905, Standard Paint Co. v. Trinidad Asphalt Mfg. Co.,220 U.S. 446, 31 S.Ct. 456, 55 L.Ed. 536 (1911), except for marks which had been the subject of exclusive use for ten years prior to its enactment, 33 Stat. 726.10 While, as we shall see, p. ---- infra, the Lanham Act makes an important exception with respect to those merely descriptive terms which have acquired secondary meaning, see § 2(f), 15 U.S.C. § 1052(f), it offers no such exception for generic marks. The Act provides for the cancellation of a registered mark if at any time it "becomes the common descriptive name of an article or substance," § 14(c). This means that even proof of secondary meaning, by virtue of which some "merely descriptive" marks may be registered, cannot transform a generic term into a subject for trademark. As explained in J. Kohnstam, Ltd. v. Louis Marx and Company, 280 F.2d 437, 440, 47 CCPA 1080 (1960), no matter how much money and effort the user of a generic term has poured into promoting the sale of its merchandise and what success it has achieved in securing public identification, it cannot deprive competing manufacturers of the product of the right to call an article by its name. See, accord, Application of Preformed Line Products Co., 323 F.2d 1007, 51 CCPA 775 (1963); Weiss Noodle Co. v. Golden Cracknel and Specialty Co., 290 F.2d 845, 48 CCPA 1004 (1961); Application of Searle & Co., 360 F.2d 650, 53 CCPA 1192 (1966). We have recently had occasion to apply this doctrine of the impossibility of achieving trademark protection for a generic term, CES Publishing Corp. v. St. Regis Publications, Inc., 531 F.2d 11 (1975). The pervasiveness of the principle is illustrated by a series of well known cases holding that when a suggestive or fanciful term has become generic as a result of a manufacturer's own advertising efforts, trademark protection will be denied save for those markets where the term still has not become generic and a secondary meaning has been shown to continue. Bayer Co. v. United Drug Co., 272 F. 505 (2 Cir. 1921) (L. Hand, D. J. ); DuPont Cellophane Co. v. Waxed Products Co., 85 F.2d 75 (2 Cir.) (A. N. Hand, C. J. ), cert. denied, 299 U.S. 601, 57 S.Ct. 194, 81 L.Ed. 443 (1936); King-Seeley Thermos Co. v. Aladdin Industries, 1958).

13

Cir. 1963). A term may thus be generic in one market and descriptive or suggestive or fanciful in another.

14

The term which is descriptive but not generic11 stands on a better basis. Although § 2(e) of the Lanham Act, 15 U.S.C. § 1052, forbids the registration of a mark which, when applied to the goods of the applicant, is "merely descriptive," § 2(f) removes a considerable part of the sting by providing that "except as expressly excluded in paragraphs (a)-(d) of this section, nothing in this chapter shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant's goods in commerce" and that the Commissioner may accept, as prima facie evidence that the mark has become distinctive, proof of substantially exclusive and continuous use of the mark applied to the applicant's goods for five years preceding the application. As indicated in the cases cited in the discussion of the unregistrability of generic terms, "common descriptive name," as used in §§ 14(c) and 15(4), refers to generic terms applied to products and not to terms that are "merely descriptive." In the former case any claim to an exclusive right must be denied since this in effect would confer a monopoly not only of the mark but of the product by rendering a competitor unable effectively to name what it was endeavoring to sell. In the latter case the law strikes the balance, with respect to registration, between the hardships to a competitor in hampering the use of an appropriate word and those to the owner who, having invested money and energy to endow a word with the good will adhering to his enterprise, would be deprived of the fruits of his efforts.

15

The category of "suggestive" marks was spawned by the felt need to accord protection to marks that were neither exactly descriptive on the one hand nor truly fanciful on the other a need that was particularly acute because of the bar in the Trademark Act of 1905, 33 Stat. 724, 726, (with an exceedingly limited exception noted above) on the registration of merely descriptive marks regardless of proof of secondary meaning. See Orange Crush Co. v. California Crushed Fruit Co., 54 U.S.App.D.C. 313, 297 F. 892 (1924). Having created the category the courts have had great difficulty in defining it. Judge Learned Hand made the not very helpful statement:

16

It is quite impossible to get any rule out of the cases beyond this: That the validity of the mark ends where suggestion ends and description begins.

17

Franklin Knitting Mills, Inc. v. Fashionit Sweater Mills, Inc., 297 F. 247, 248 (2 Cir. 1923), aff'd per curiam, 4 F.2d 1018 (2 Cir. 1925) a statement amply confirmed by comparing the list of terms held suggestive with those held merely descriptive in 3 Callmann, Unfair Competition, Trademarks and Monopolies § 71.2 (3d ed.). Another court has observed, somewhat more usefully, that:

18

A term is suggestive if it requires imagination, thought and perception to reach a conclusion as to the nature of goods. A term is descriptive if it forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the goods.

19

Stix Products, Inc. v. United Merchants & Manufacturers Inc., 295 F.Supp. 479, 488 (S.D.N.Y.1968) a formulation deriving from General Shoe Corp. v. Rosen, 111 F.2d 95, 98 (4 Cir. 1940). Also useful is the approach taken by this court in Aluminum Fabricating Co. of Pittsburgh v. Season-All Window Corp., 259 F.2d 314 (2 Cir. 1958), that the reason for restricting the protection accorded descriptive terms, namely the undesirability of preventing an entrant from using a descriptive term for his product, is much less forceful when the trademark is a suggestive word since, as Judge Lumbard wrote, 259 F.2d at 317:

20

The English language has a wealth of synonyms and related words with which to describe the qualities which manufacturers may wish to claim for their products and the ingenuity of the public relations profession supplies new words and slogans as they are needed.

21

If a term is suggestive, it is entitled to registration without proof of secondary meaning. Moreover, as held in the Season-All case, the decision of the Patent Office to register a mark without requiring proof of secondary meaning affords a rebuttable presumption that the mark is suggestive or arbitrary or fanciful rather than merely descriptive.

22

It need hardly be added that fanciful or arbitrary terms12 enjoy all the rights accorded to suggestive terms as marks without the need of debating whether the term is "merely descriptive" and with ease of establishing infringement.

23

In the light of these principles we must proceed to a decision of this case.

III.

24

We turn first to an analysis of A&F's trademarks to determine the scope of protection to which they are entitled. We have reached the following conclusions: (1) applied to specific types of clothing 'safari' has become a generic term and 'minisafari' may be used for a smaller brim hat; (2) 'safari' has not, however, become a generic term for boots or shoes; it is either "suggestive" or "merely descriptive" and is a valid trademark even if " merely descriptive" since it has become incontestable under the Lanham Act; but (3) in

light of the justified finding below that 'Camel Safari,' 'Hippo Safari' and 'Safari Chukka' were devoted by HW to a purely descriptive use on its boots, HW has a defense against a charge of infringement with respect to these on the basis of "fair use." We now discuss how we have reached these conclusions.

25

It is common ground that A&F could not apply 'Safari' as a trademark for an expedition into the African wilderness. This would be a clear example of the use of 'Safari' as a generic term. What is perhaps less obvious is that a word may have more than one generic use. The word 'Safari' has become part of a family of generic terms which, although deriving no doubt from the original use of the word and reminiscent of its milieu, have come to be understood not as having to do with hunting in Africa, but as terms within the language referring to contemporary American fashion apparel. These terms name the components of the safari outfit well-known to the clothing industry and its customers: the 'Safari hat', a broad flat-brimmed hat with a single, large band; the 'Safari jacket', a belted bush jacket with patch pockets and a buttoned shoulder loop; when the jacket is accompanied by pants, the combination is called the 'Safari suit'. Typically these items are khaki-colored.

26

This outfit, and its components, were doubtless what Judge Ryan had in mind when he found that "the word 'safari' in connection with wearing apparel is widely used by the general public and people in the trade." The record abundantly supports the conclusion that many stores have advertised these items despite A&F's attempts to police its mark. In contrast, a search of the voluminous exhibits fails to disclose a single example of the use of 'Safari', by anyone other than A&F and HW, on merchandise for which A&F has registered 'Safari' except for the safari outfit and its components as described above.

27

What has been thus far established suffices to support the dismissal of the complaint with respect to many of the uses of 'Safari' by HW. Describing a publication as a "Safariland Newsletter", containing bulletins as to safari activity in Africa, was clearly a generic use which is nonenjoinable, see CES Publishing Co. v. St. Regis Publications, Inc., supra. A&F also was not entitled to an injunction against HW's use of the word in advertising goods of the kind included in the safari outfit as described above. And if HW may advertise a hat of the kind worn on safaris as a safari hat, it may also advertise a similar hat with a smaller brim as a minisafari. Although the issue may be somewhat closer, the principle against giving trademark protection to a generic term also sustains the denial of an injunction against HW's use of 'Safariland' as a name of a portion of its store devoted at least in part to the sale of clothing as to which the term 'Safari' has become generic.

28

A&F stands on stronger ground with respect to HW's use of 'Camel Safari', 'Hippo Safari' and Chukka 'Safari' as names for boots imported from Africa. As already indicated, there is no evidence that 'Safari' has become a generic term for boots. Since, as will appear, A&F's registration of 'Safari' for use on its shoes has become incontestable, it is immaterial (save for HW's contention of fraud which is later rejected) whether A&F's use of 'Safari' for boots was suggestive or "merely descriptive."

29

HW contends, however, that even if 'Safari' is a valid trademark for boots, it is entitled to the defense of "fair use" within § 33(b)(4) of the Lanham Act, 15 U.S.C. § 1115(b)(4). That section offers such a defense even as against marks that have become incontestable when the term charged to be an infringement is not used as a trademark "and is used fairly and in good faith only to describe to users the goods and services of such party, or their geographic origin."

30

Here, Lee Expeditions, Ltd., the parent company of HW, has been primarily engaged in arranging safaris to Africa since 1959; Robert Lee, the president of both companies, is the author of a book published in 1959 entitled "Safari Today The Modern Safari Handbook" and has, since 1961, booked persons on safaris as well as purchased safari clothing in Africa for resale in America.

These facts suffice to establish, absent a contrary showing, that defendant's use of 'Safari' with respect to boots was made in the context of hunting and traveling expeditions and not as an attempt to garner A&F's good will. The district court here found the HW's use of 'Camel Safari', 'Hippo Safari', and 'Safari Chukka' as names for various boots imported from Africa constituted "a purely descriptive use to apprise the public of the type of product by referring to its origin and use." The court properly followed the course sanctioned by this court in Venetianaire Corp. of America v. A&P Import Co., 429 F.2d 1079, 1081-82 (1970), by focusing on the "use of words, not on their nature or meaning in the abstract" (emphasis in original). When a plaintiff has chosen a mark with some descriptive qualities, he cannot altogether exclude some kinds of competing uses even when the mark is properly on the register, see 3 Callmann, supra, § 85.1; Kiki Undies Corp. v. Alexander's Dep't Stores, Inc., 390 F.2d 604 (2 Cir. 1968); contrast Kiki Undies Corp. v. Promenade Hosiery Mills, Inc., 411 F.2d 1097 (2 Cir. 1969), cert. dismissed, 396 U.S. 1054, 90 S.Ct. 707, 24 L.Ed.2d 698 (1970). We do not have here a situation similar to those in Venetianaire, supra, and Feathercombs, Inc. v. Solo Products Corp., 306 F.2d 251 (2 Cir. 1962), in both of which we rejected "fair use" defenses, wherein an assertedly descriptive use was found to have been in a trademark sense. It is significant that HW did not use 'Safari' alone on its shoes, as it would doubtless have done if confusion had been intended.

31

We thus hold that the district court was correct in dismissing the complaint.

IV.

32

We find much greater difficulty in the court's broad invalidation of A&F's trademark registrations. Section 37 of the Lanham Act, 15 U.S.C. § 1119, provides authority for the court to cancel those registrations of any party to an action involving a registered mark.13 The cases cited above, p. ----, establish that when a term becomes the generic name of the product to which it is applied, grounds for cancellation exist. The relevant registrations of that sort are Nos. 358,781 and 703,279. Although No. 358,751 dates back to July 20, 1938, and No. 703,279 was registered on August 23, 1960, and an affidavit under § 15(3), 15 U.S.C. § 1065(3), was filed on October 13, 1965, cancellation may be decreed at any time if the registered mark has become "the common descriptive name of an article or substance," § 14(c), see also § 15(4), 15 U.S.C. §§ 1064(c) and 1065(4). The whole of Registration No. 358,781 thus was properly canceled. With respect to Registration No. 703,279 only a part has become generic14 and cancellation on that ground should be correspondingly limited.15 Such partial cancellation, specifically recognized by § 37, accords with the rationale by which a court is authorized to cancel a registration, viz, to "rectify" the register by conforming it to court judgments which often must be framed in something less than an all-or-nothing way.

33

There remain eight other registrations and those terms not pared from No. 703,279. Three of these registrations, Nos. 652,098, 768,332 and 770,336, and the non-generic portions of No. 703,279 appear to have become incontestable by virtue of the filing of affidavits under § 15(3), of five years continuous use.16 There is nothing to suggest that the uses included in these registrations, except the uses described above with respect to 703,279 are the common descriptive names of either current fashion styles or African expeditions. The generic term for A&F's 'safari cloth Bermuda shorts', for example, is 'Bermuda shorts', not 'safari'; indeed one would suppose this garment to be almost ideally unsuited for the forest or the jungle and there is no evidence that it has entered into the family for which 'Safari' has become a generic adjective. The same analysis holds for luggage, portable grills, and the rest of the suburban paraphernalia, from swimtrunks and raincoats to belts and scarves, included in these registrations. HW alleged that these registrations were procured by fraud, a claim which, if successful, would deny incontestability to A&F's marks, see § 14(c), 15 U.S.C. § 1064(c). But these allegations seem to have meant no more than that HW believed the terms to be merely descriptive and hence unregistrable, and that the Patent Office must have been duped into registering them in the first place without proof of secondary meaning. However, we regard these terms as suggestive rather than "merely descriptive." Moreover, even if they were the latter, assuming that the person filing the applications made the required allegation that "no other person,

firm, corporation, or association, to the best of his knowledge and belief, has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as might be calculated to deceive," see § 1(a)(1), 15 U.S.C. § 1051(a)(1), there is nothing to show that such statements were knowingly false when made. Cf. Bart Schwartz Int'l Textiles, Ltd. v. F.T.C., 289 F.2d 665, 48 CCPA 933 (1961); National Trailways Bus System v. Trailway Van Lines, Inc., 269 F.Supp. 352 (E.D.N.Y.1965). The scheme of the Lanham Act forbids a denial of incontestability to a "merely descriptive" mark which would otherwise have become incontestable under § 14 on the basis of a mere allegation of fraud in obtaining registration, without supporting proof.

34

We hold also that the registrations which have not become incontestable should not have been canceled. 'Safari' as applied to ice chests, axes, tents and smoking tobacco does not describe such items. Rather it is a way of conveying to affluent patrons of A&F a romantic notion of high style, coupled with an attractive foreign allusion. As such, these uses fit what was said many years ago in upholding 'Ideal' as a mark for hair brushes:

35

The word "Ideal" has no application to hair brushes, except as we arbitrarily apply it, and the word is in no sense indicative or descriptive of the qualities or characteristics or merits of the brush except that it meets the very highest ideal, mental conception, of what a hair brush should be.

36

Hughes v. Alfred H. Smith Co., 205 F. 302, 309 (S.D.N.Y.), aff'd. per curiam, 209 F. 37 (2 Cir. 1913). It is even wider of the mark to say that 'Safari Mills' "describes" cotton piece goods. Such uses fit into the category of suggestive marks. We need not now decide how valuable they may prove to be; it suffices here that they should not have been canceled.

37

In sum, we conclude that cancellation should have been directed only with respect to No. 358,781 and portions of No. 703,279 and the New York registration. With respect to the remaining registrations A&F will have the benefits accorded by § 7(b) that registration shall be "prima facie evidence of the validity of the registration . . . and of (the) registrant's exclusive right to use the mark in commerce," 15 U.S.C. § 1057(b). This means "not only that the burden of going forward is upon the contestant of the registration but that there is a strong presumption of validity so that the party claiming invalidity has the burden of proof (and) must put something more into the scales than the registrant." Aluminum Fabricating Co. of Pittsburgh v. Season-All Window Corp., 259 F.2d 314, 316 (2 Cir. 1958). In the case of registrations that have become incontestable A&F will have the further benefit accorded by § 33(a), 15 U.S.C. § 1115(a), subject to the limitations contained therein and in § 33(b), 15 U.S.C. § 1115(b). Whether all this will suffice for a victory will depend on the facts in each case.

38

So much of the judgment as dismissed the complaint is affirmed; so much of the judgment as directed cancellation of the registrations is affirmed in part and reversed in part, and the cause is remanded for the entry of a new judgment consistent with this opinion. No costs.

PER CURIAM:

On Petition of Appellant for Rehearing

39

By petition for rehearing plaintiff-appellant, Abercrombie & Fitch Company (A& F), requested us to alter our opinion filed January 16, 1976, in two respects: one was that footnote 14, p. ----, describing the scope of cancellation of Trademark Registration No. 703,279, be modified by omitting the word "shirts". The other was that we should not uphold the "fair use" defense, pp. ---- - ----, as to Hippo Safari and Camel Safari shoes. We called upon defendant-appellee Hunting World, Inc. (HW) to answer.

40

We agree with A&F that footnote 14 was in error in indicating that Safari had become generic with respect to shirts. Since the mark has become incontestable, it is of no moment, on the issue of cancellation, that, as HW urges, the mark may now be "merely descriptive," pp. ---- - ----. HW's answer adduces nothing to show that Safari has become the "common descriptive name" for this type of shirt; indeed, HW admits never having advertised its own shirts as such. While HW asserts that "the record is clear that the upper garment of the safari suit is referred to interchangeably as a safari bush jacket and as a safari shirt," the cited pages do not bear this out.

41

On the other hand we see no force in A&F's criticisms of the portion of our opinion relating to the fair use defense with respect to Hippo Safari and Camel Safari shoes sufficient to lead us to change the views previously expressed or, indeed, to require further discussion.

42

The petition for rehearing is granted to the extent of striking the word "shirts" from fn. 14 on p. ---- and is otherwise denied.

[G.R. No. 48226. December 14, 1942.]

ANA L. ANG, petitioner, vs. TORIBIO TEODORO, respondent.

Cirilo Lim for petitioner.

Marcial P. Lichauco and Manuel M. Mejia for respondent.

SYLLABUS

1. TRADE-MARKS AND TRADE-NAMES; ACT NO. 666. — Respondent has continuously used "Ang Tibay," both as a trade-mark and as a trade- name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910. He formally registered it as a trade-mark on September 29, 1915, and as a trade-name on January 3, 1933. Petitioner registered the same trade-mark "Ang Tibay" for pants and shirts on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937. Held: That petitioner's registration of the trade-mark "Ang Tibay" should be cancelled, and that she should be perpetually enjoined from using said trade-mark on goods manufactured and sold by her.

2. ID; ID.; TERM "ANG TIBAY," NOT BEING GEOGRAPHIC OR DESCRIPTIVE, IS CAPABLE OF EXCLUSIVE APPROPRIATION AS A TRADE-MARK. — An inquiry into the etymology and meaning of the Tagalog words "Ang Tibay," made in the decision, shows that the phrase is never used adjectively to define or describe an object. It is, therefore, not a descriptive term within the meaning of the Trade-mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as a trade-mark or trade-name. Hence, it was originally capable of exclusive appropriation as a trade-mark by the respondent.

3. ID.; ID.; ID.; FUNCTION OF A TRADE-MARK; DOCTRINE OF "SECONDARY MEANING." — The function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. "Ang Tibay," as used by the respondent to designate his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in her own business. "Ang Tibay" shoes and slippers are, by association, known throughout the Philippines as products of the "Ang Tibay" factory owned and operated by the respondent. Even if "Ang Tibay," therefore, were not capable of exclusive appropriation as a trade-mark, the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in any event, by respondent's long and exclusive use of said phrase with reference to his products and his business, it has acquired a proprietary connotation. This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.

4. ID.; ID.; ID.; ID.; TEST OF WHETHER NONCOMPETING GOODS ARE OR ARE NOT OF THE SAME CLASS. — In the present stage of development of the law on trade-marks, unfair competition, and unfair trading, the test employed by the courts to

determine whether noncompeting goods are or are not of the same class is confusion as to the origin of the goods of the second user. Although two noncompeting articles may be classified under two different classes by the Patent Office because they are deemed not to possess the same descriptive properties, they would nevertheless be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade- marks would be likely to cause confusion as to the origin, or personal source, of the second user's goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the first user made the second user's goods. Such construction of the law is induced by cogent reasons of equity and fair dealing discussed in the decision.

5. ID.; ID.; ID.; ID.; ID. — Tested by the foregoing rule, and in the light of other considerations set out in greater detail in the decision, Held: That pants and shirts are goods similar to shoes and slippers within the meaning of sections 3, 7, 11, 13, and 20 of the Trade-mark Law (Act No. 666).

D E C I S I O N

OZAETA, J p:

Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals reversing that of the Court of First Instance of Manila and directing the Director of Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining the latter from using said trade-mark on goods manufactured and sold by her.

Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor, has continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910. He formally registered it as a trade-mark on September 29, 1915, and as a trade-name on January 3, 1933. The growth of his business is a thrilling epic of Filipino industry and business capacity. Starting in an obscure shop in 1910 with a modest capital of P210 but with tireless industry and unlimited perseverance, Toribio Teodoro, then an unknown young man making slippers with his own hands but now a prominent business magnate and manufacturer with a large factory operated with modern machinery by a great number of employees, has steadily grown with his business to which he has dedicated the best years of his life and which he has expanded to such proportions that his gross sales from 1918 to 1938 aggregated P8,787,025.65. His sales in 1937 amounted to P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement from 1919 to 1938 aggregated P210,641.56.

Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937. In the following year (1938) her gross sales amounted to P422,682.09. Neither the decision of the trial court nor that of the Court of Appeals shows how much petitioner has spent for advertisement. But respondent in his brief says that petitioner "was unable to prove that she had spent a single centavo advertising 'Ang Tibay' shirts and pants prior to 1938. In that year she advertised the factory which she had just built and it was when this was brought to the attention of the appellee that he consulted his attorneys and eventually brought the present suit."

The trial court (Judge Quirico Abeto presiding) absolved the defendant from the complaint, with costs against the plaintiff, on the grounds that the two trade-marks are dissimilar and are used on different and non-competing goods; that there had been no exclusive use of the trade-mark by the plaintiff; and that there had been no fraud in the use of the said trade-mark by the defendant because the goods on which it is used are essentially different from those of the plaintiff. The second division of the Court of Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and Alex Reyes, with Justice Padilla as ponente, reversed that judgment, holding that by uninterrupted and exclusive use since 1910 in the manufacture of slippers and shoes, respondent's trade-mark has acquired a secondary meaning; that the goods or articles on which the two trade-marks are used are similar or belong to the same class; and that the use by petitioner of said trade-mark constitutes a violation of sections 3 and 7 of Act No. 666. The defendant Director of Commerce did not appeal from the decision of the Court of Appeals.

First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the validity of respondent's trade- mark "Ang Tibay." He contends that the phrase "Ang Tibay" as employed by the respondent on the articles manufactured by him is a descriptive term because, "freely translated in English," it means "strong, durable lasting." He invokes section 2 of Act No. 666, which provides that words or devices which relate only to the name, quality, or description of the merchandise cannot be the subject of a trade-mark. He cites among others the case of Baxter vs. Zuazua (5 Phil., 160), which involved the trade-mark "Agua de Kananga" used on toilet water, and in which this Court held that the word "Kananga," which is the name of a well-known Philippine tree or its flower, could not be appropriated as a trade-mark any more than could the words "sugar," "tobacco," or "coffee." On the other hand, counsel for the respondent, in an equally well-prepared and exhaustive brief, contend that the words "Ang Tibay" are not descriptive but merely suggestive and may properly be regarded as fanciful or arbitrary in the legal sense. They cite several cases in which similar words have been sustained as valid trade-marks such as "Holeproof" for hosiery, 1 "Ideal" for tooth brushes, 2 and "Fashionknit" for neckties and sweaters. 3

We find it necessary to go into the etymology and meaning of the Tagalog words "Ang Tibay" to determine whether they are a descriptive term, i. e., whether they relate to the quality or description of the merchandise to which respondent has applied them as a trade-mark. The word "ang" is a definite article meaning "the" in English. It is also used as an adverb, a contraction of the word "anong" (what or how). For instance, instead of saying, "Anong ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root word from which are derived the verb magpatibay (to strengthen); the nouns pagkamatibay (strength, durability), katibayan (proof, support, strength), katibay-tibayan (superior strength); and the adjectives matibay (strong, durable, lasting), napakatibay (very strong), kasintibay or magkasintibay (as strong as, or of equal strength). The phrase "Ang Tibay" is an exclamation denoting admiration of strength or durability. For instance, one who tries hard but fails to break an object exclaims "Ang tibay!" ("How strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos mo!" ("How durable your shoes are!") The phrase "ang tibay" is never used adjectively to define or describe an object. One does not say, "ang tibay sapatos" or "sapatos ang tibay" to mean "durable shoes," but "matibay na sapatos" or "sapatos na matibay."

 

From all of this we deduce that "Ang Tibay" is not a descriptive term within the meaning of the Trade-Mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as a trade-mark or trade-name. In this connection we do not fail to note that when the petitioner herself took the trouble and expense of securing the registration of these same words as a trademark of her products she or her attorney as well as the Director of Commerce was undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence could be legally used and validly registered as a trade-mark. It seems stultifying and puerile for her now to contend otherwise, suggestive of the story of sour grapes. Counsel for the petitioner says that the function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. That is correct, and we find that "Ang Tibay," as used by the respondent to designate his wares, had exactly performed that function for twenty- two years before the petitioner adopted it as a trade-mark in her own business. Ang Tibay shoes and slippers are, by association, known throughout the Philippines as products of the Ang Tibay factory owned and operated by the respondent Toribio Teodoro.

Second. In her second assignment of error petitioner contends that the Court of Appeals erred in holding that the words "Ang Tibay" had acquired a secondary meaning. In view of the conclusion we have reached upon the first assignment of error, it is unnecessary to apply here the doctrine of "secondary meaning" in trade-mark parlance. This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product. (G. & C. Merriam Co. vs. Saalfield, 198 F., 369, 373.) We have said that the phrase "Ang Tibay," being neither geographic nor descriptive, was originally capable of exclusive appropriation as a trade-mark. But

were it not so, the application of the doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained because, in any event, by respondent's long and exclusive use of said phrase with reference to his products and his business, it has acquired a proprietary connotation. (Landers, Frary, and Clark vs. Universal Cooler Corporation, 85 F. [2d], 46.)

Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants and shirts are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666. She also contends under her fourth assignment of error (which we deem convenient to pass upon together with the third) that there can neither be infringement of trade-mark under section 3 nor unfair competition under section 7 through her use of the words "Ang Tibay" in connection with pants and shirts, because those articles do not belong to the same class of merchandise as shoes and slippers.

The question raised by petitioner involve the scope and application of sections 3, 7, 11, 13, and 20 of the Trade-Mark Law (Act No. 666). Section 3 provides that "any person entitled to the exclusive use of a trade-mark to designate the origin or ownership of goods he has made or deals in, may recover damages in a civil action from any person who has sold goods of a similar kind, bearing such trade-mark . . . The complaining party . . . may have a preliminary injunction, . . . and such injunction upon final hearing, if the complainant's property in the trade-mark and the defendant's violation thereof shall be fully established, shall be made perpetual, and this injunction shall be part of the judgment for damages to be rendered in the same cause." Section 7 provides that any person who, in selling his goods, shall give them the general appearance of the goods of another either in the wrapping of the packages, or in the devices or. words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of the complainant, shall be guilty of unfair competition, and shall be liable to an action for damages and to an injunction, as in the cases of trade-mark infringement under section 3. Section 11 requires the applicant for registration of a trade-mark to state, among others, "the general class of merchandise to which the trade-mark claimed has been appropriated." Section 13 provides that no alleged trade-mark or trade-name shall be registered which is identical with a registered or known trade-mark owned by another and appropriate to the same class of merchandise, or which so nearly resembles another person's lawful trade-mark or trade-name as to be likely to cause confusion or mistake in the mind of the public, or to deceive purchasers. And section 20 authorizes the Director of Commerce to establish classes of merchandise for the purpose of the registration of trade-marks and to determine the particular description of articles included in each class; it also provides that "an application for registration of a trade-mark shall be registered only for one class of articles and only for the particular description of articles mentioned in said application."

We have underlined the key words used in the statute: "goods of a similar kind," "general class of merchandise," "same class of merchandise," "classes of merchandise," and "class of articles," because it is upon their implications that the result of the case hinges. These phrases, which refer to the same thing, have the same meaning as the phrase "merchandise of the same descriptive properties" used in the statutes and jurisprudence of other jurisdictions.

The burden of petitioner's argument is that under sections 11 and 20 the registration by respondent of the trade-mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by petitioner for pants and shirts because the latter do not belong to the same class of merchandise or articles as the former; that she cannot be held guilty of infringement of trade-mark under section 3 because respondent's mark is not a valid trade-mark, nor has it acquired a secondary meaning; that pants and shirts do not possess the same descriptive properties as shoes and slippers; that neither can she be held guilty of unfair competition under section 7 because the use by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to mislead the general public as to their origin or ownership; and that there is no showing that she is unfairly or fraudulently using the mark "Ang Tibay" against the respondent. If we were interpreting the statute for the first time and in the first decade of the twentieth century, when it was enacted, and were to construe it strictly and literally, we might uphold petitioner's contentions. But law and jurisprudence must keep abreast with the progress of mankind, and the courts must breathe life into the statutes if they are to serve their purpose. Our Trade-mark Law, enacted nearly forty years ago, has grown in its

implications and practical application, like a constitution, in virtue of the life continually breathed into it. It is not of merely local application; it has its counterpart in other jurisdictions of the civilized world from whose jurisprudence it has also received vitalizing nourishment. We have to apply this law as it has grown and not as it was born. Its growth or development abreast with that of sister statutes and jurisprudence in other jurisdictions is reflected in the following observation of a well-known author:

"This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then, the courts had proceeded on the theory that the same trade-mark, used on unlike goods, could not cause confusion in trade and that, therefore, there could be no objection to the use and registration of a well-known mark by a third party for a different class of goods. Since 1916 however, a growing sentiment began to arise that in the selection of a famous mark by a third party, there was generally the hidden intention to 'have a free ride' on the trade-mark owner's reputation and good will." (Derenberg, Trade-Mark Protection & Unfair Trading, 1936 edition, p. 409.)

In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair Trading, the test employed by the courts to determine whether noncompeting goods are or are not of the same class is confusion as to the origin of the goods of the second user. Although two noncompeting articles may be classified under two different classes by the Patent Office because they are deemed not to possess the same descriptive properties, they would, nevertheless, be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause confusion as to the origin, or personal source, of the second user's goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the first user made the second user's goods.

Such construction of the law is induced by cogent reasons of equity and fair dealing. The courts have come to realize that there can be unfair competition or unfair trading even if the goods are noncompeting, and that such unfair trading can cause injury or damage to the first user of a given trade-mark, first, by prevention of the natural expansion of his business and, second, by having his business reputation confused with and put at the mercy of the second user. When noncompetitive products are sold under the same mark, the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark created by its first user, inevitably results. The original owner is entitled to the preservation of the valuable link between him and the public that has been created by his ingenuity and the merit of his wares or services. Experience has demonstrated that when a well-known trade-mark is adopted by another even for a totally different class of goods, it is done to get the benefit of the reputation and advertisements of the originator of said mark, to convey to the public a false impression of some supposed connection between the manufacturer of the article sold under the original mark and the new articles being tendered to the public under the same or similar mark. As trade has developed and commercial changes have come about, the law of unfair competition has expanded to keep pace with the times and the element of strict competition in itself has ceased to be the determining factor. The owner of a trade-mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from confusion of reputation or goodwill in the mind of the public as well as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to classify and treat the issue as a fraud.

 

A few of the numerous cases in which the foregoing doctrines have been laid down in one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe vs. Lever Brothers Company (G. R. No. 46817), decided by this Court on April 18, 1941, the respondent company (plaintiff below) was granted injunctive relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy" for hair pomade, they having been originally used by the respondent for soap; the Court held in effect that although said articles are noncompetitive, they are similar or belong to the same class. (2) In Lincoln Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of the well-known Lincoln automobile was granted injunctive relief against the use of the word "Lincoln" by another company as part of its firm name. (3) The case of Aunt Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark "Aunt Jemima," originally used on flour, which the defendant

attempted to use on syrup, and there the court held that the goods, though different, are so related as to fall within the mischief which equity should prevent. (4) In Tiffany & Co. vs. Tiffany Productions, Inc. (264 N. Y. S., 459; 23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern, was granted injunctive relief against the defendant, a manufacturer of motion pictures, from using the name "Tiffany." Other famous cases cited on the margin, wherein the courts granted injunctive relief, involved the following trade-marks or trade-names. "Kodak," for cameras and photographic supplies, against its use for bicycles; 1 "Penslar," for medicines and toilet articles, against its use for cigars; 2 "Rolls- Royce," for automobiles, against its use for radio tubes; 3 "Vogue," as the name of a magazine, against its use for hats; 4 "Kotex," for sanitary napkins, against the use of "Rotex" for vaginal syringes; 5 "Sun-Maid," for raisins, against its use for flour; 6 "Yale," for locks and keys, against its use for electric flashlights; 1 and "Waterman," for fountain pens, against its use for razor blades. 2

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite on this point only the following cases: (1) Mohawk Milk Products vs. General Distilleries Corporation (95 F. [2d], 334), wherein the court held that gin and canned milk and cream do not belong to the same class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d], 194), wherein the court held that the words "Popular Mechanics" used as the title of a magazine and duly registered as a trade-mark were not infringed by defendant's use of the words "Modern Mechanics and Inventions" on a competitive magazine, because the word "mechanics" is merely a descriptive name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d], 688), wherein the plaintiff unsuccessfully attempted to enjoin the defendant from using the word "Visualized" in connection with history books, the court holding that said word is merely descriptive. These cases cited and relied upon by petitioner are obviously of no decisive application to the case at bar.

We think reasonable men may not disagree that shoes and shirts are not as unrelated as fountain pens and razor blades, for instance. The mere relation or association of the articles is not controlling. As may readily be noted from what we have heretofore said, the proprietary connotation that a trade-mark or trade-name has acquired is of more paramount consideration. The Court of Appeals found in this case that by uninterrupted and exclusive use since 1910 of respondent's registered trade-mark on slippers and shoes manufactured by him, it has come to indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and selling power it has acquired at the hands of the respondent. As observed in another case, 3 the field from which a person may select a trade-mark is practically unlimited, and hence there is no excuse for impinging upon or even closely approaching the mark of a business rival. In the unlimited field of choice, what could have been petitioner's purpose in selecting "Ang Tibay" if not for its fame?

Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain the use of the mark "Ang Tibay." Her counsel suggests that instead of enjoining her from using it, she may be required to state in her labels affixed to her products the inscription: "Not manufactured by Toribio Teodoro." We think such practice would be unethical and unworthy of a reputable businessman. To the suggestion of petitioner, respondent may say, not without justice though with a tinge of bitterness: "Why offer a perpetual apology or explanation as to the origin of your products in order to use my trade-mark instead of creating one of your own?" On our part may we add, without meaning to be harsh, that a self-respecting person does not remain in the shelter of another but builds one of his own.

The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the three instances. So ordered.

Yulo, C.J., Moran, Paras, and Bocobo, JJ., concur.

[G.R. No. L-3952. December 29, 1953.]

MASSO HERMANOS, S. A., petitioner, vs. DIRECTOR OF PATENTS, respondent.

McClure, Salas & Gonzales, for petitioner.

Assistant Solicitor General Guillermo E. Torres and Solicitor Meliton G. Soliman, for respondent.

SYLLABUS

1. TRADEMARKS; WORD DESCRIPTIVE OF MERCHANDISE, NOT REGISTRABLE; "COSMOPOLITE", NOT DESCRIPTIVE. — A dealer in shoes cannot register as trademark "Leather Shoes" because that would be descriptive (section 13, Act No. 666) and it would be unjust to deprive other dealers shoes of the right to use the same words with reference to their merchandise. But the word "Cosmopolite" does not give the name, quality, or description of the canned fish for which it is used. It does not even describe the place of origin, for it does not indicate the country or place where the canned fish was manufactured.

D E C I S I O N

JUGO, J p:

Masso Hermanos, S. A., is the registered owner under Act No. 666 of the trademark composed of the word "Cosmopolite" used on canned fish. Said trademark was first registered and the certificate of registration No. 1881 issued therefor on March 16, 1917, by the Director of the Philippine Library and Museum for a period of thirty years, under the provisions of Act No. 666. A renewal of the certificate of registration was applied for and issued on June 6, 1947 by the Director of the Bureau of Commerce also under the provisions of said Act.

On June 14, 1948, the petitioner, Masso Hermanos, applied to the Director of Patents for a new certificate of registration of said trademark under the provisions of section 41(a) of Republic Act No. 166.

A trademark examiner of the Patents Office denied the petition on the ground that the word "Cosmopolite", as a trademark for canned fish is descriptive of said goods and, therefore, could not have been legally registered as a trademark under the provisions of Act No. 666, and, consequently, is not entitled to registration under section 41(a) of Republic Act No. 166. The petitioner appealed from said ruling to the Director of Patents on the ground that the examining officer was not authorized to re-examine certificates which were originally issued under Act No. 666 and surrendered for re-registration under section 41 (a) of Republic Act No. 166. The Director of Patents affirmed the ruling of the trademark examiner; hence, the present petition for certiorari was filed in this court.

Section 41 of Republic Act No. 166 reads as follows:

"Reservation in favor of prior registration — Owners of marks or trade-names registered under the provisions of the laws in force prior hereto, the registrations of which are still subsisting under the said laws, are hereby granted the right;

(a) Within one year after the taking effect of this Act to surrender their certificates of registration and procure the issuance of new certificates in which event they shall be entitled to the benefits and subject to the provisions of this act; or

(b) Within one year before the expiration of the period for which the certificate of registration was issued or renewed the registrant may renew the registration upon filing an application therefore, as provided in section fifteen, Chapter III hereof. If said application is granted, a renewal certificate shall be issued by the Director in accordance with the provisions of this Act."

It is clear that the renewal of the registration under section 41 of Republic Act No. 166 is subject to the following requirements:

(1) The trademark must have been registered under the old laws:

(2) The registration must be subsisting under said laws; and

(3) The certificate issued under the old laws must have been surrendered to the Patents Office within one year from the time Republic Act No. 166 went into effect, which was on June 20, 1947.

There is no question that the above requirements Nos. (1) and (3) have been complied with by the petitioner.

The question is whether the condition required under No. (2) exists in favor of the petitioner.

The respondent Director of Patents contends that the original registration of the trademark under Act No. 666 was "null and void

ab initio" because the word "Cosmopolite" is descriptive and, therefore, the registration thereunder is not subsisting.

Is the word "Cosmopolite" descriptive? Section 13 of Act No. 666 provides that — ". . . But no alleged trademark . . . shall be registered which is merely the name, quality or description of the merchandise upon which it is to be used . . . In an application for registration, the Director of the Bureau of Commerce shall decide the presumptive lawfulness of claim to the alleged trademark."

The word "Cosmopolite" does not give the name, quality, or description of the canned fish for which it is used. It does not even describe the place of origin, for it does not indicate the country or place where the canned fish was manufactured. It is a very general term which does not give the kind or quality of the goods. For example, a dealer in shoes cannot register a trademark "Leather Shoes" because that would be descriptive and it would be unjust to deprive other dealers in leather shoes of the right to use the same words with reference to their merchandise.

The court is, therefore, of the opinion that the registration of the trademark "Cosmopolite' under Act No. 666 was valid and is subsisting. The Director of Patents should not for light and unsubstantial reasons reverse the ruling of the former officer in charge of trademark registrations, which has been accepted and in force since 1917 up to the present. 1 In view of the foregoing, the ruling of the respondent Director of Patents is set aside and he is ordered to issue to the petitioner a new certificate of registration of the trademark in exchange for the old one No. 1881 surrendered to him on June 18, 1948. Without pronouncement as to costs. So ordered.

Paras, C. J., Pablo, Bengzon, Padilla, Tuason, Reyes, Bautista Angelo and Labrador, JJ., concur.

[G.R. No. L-14377. December 29, 1960.]

THE EAST PACIFIC MERCHANDISING CORPORATION, petitioner, vs. THE DIRECTOR OF PATENTS and LUIS P. PELLICER, respondents.

Antonio M. Sikat and Pacifico Ma. Castro for petitioner.

Alberto de Joya for respondent.

SYLLABUS

1.PATENTS; TRADEMARKS AND TRADENAMES; DECISION OF DIRECTOR OF PATENTS ORDERING PUBLICATION NOT FINAL; DISMISSAL OF APPLICATION AFTER PUBLICATION. — Decisions of the Director of Patents ordering publication is merely provisional and not final; and the Director, after the second stage where the public is given opportunity to oppose, may still dismiss the application for registration.

2.ID; ID.; REGISTERABILITY OF TRADEMARK DEEMED RAISED IN OPPOSITION. — The argument that it was error for the Director of Patents to have ruled on the registerability of the trade-mark in question, when what was only submitted and heard for his resolution was petitioner's motion to dismiss the opposition is without merit, because the opposition did put in issue the registerability of the composite trademark applied for. Moreover, denial on grounds based on law, can be made even before order of publication.

3.ID.; ID.; TRADEMARK REGISTERABILITY WITHOUT PENAL ASPECT; EX POST FACTO PROHIBITION INAPPLICABLE. — Petitioner's argument that for the Director of Patents to deny registration of his trademark under Republic Act 166 would violate the rule against ex post facto laws, for, when the trademark in question was sold to petitioner's predecessor, it was already registered, is without merit, because the question of trademark registerability being without any penal aspect, the prohibition against ex post facto legislation evidently does not apply.

4.REINSTATEMENT OF OPPOSITION "MOTU PROPRIO"; DEFEAT IN PREVIOUS INJUNCTION CASE AS NO BAR TO OPPOSITION; RIGHT OF DIRECTOR TO PASS ON REGISTERABILITY REGARDLESS OF PARTY' S ESTOPPEL. — Director may reinstate opposition motu proprio, with or without a valid motion for reconsideration; defeat in a previous case where registerability of a trademark was not in issue does not constitute an estoppel as to bar defeated party from opposing the registration of said trademark; regardless of party's estoppel, Director may inquire into the registerability of a trademark.

5.REGISTERABILITY OF TRADEMARK; DESCRIPTIVE OR DECEPTIVELY MISDESCRIPTIVE WORDS OR PHRASES. — Words and phrases in common use and which merely indicate the character, kind, quality and composition of the thing, may not be appropriated by anyone to his exclusive use; nor those which are deceptively misdescriptive of the product.

D E C I S I O N

REYES, J. B. L., J p:

Petition for review of the resolution of the respondent Director of Patents, dated June 24, 1958, insofar as he denied the petitioner's application for registration of a trademark; and of the order of the same respondent dated July 21, 1958, denying petitioner's motion for reconsideration and, at the same time, reinstating respondent Luis P. Pellicer's opposition to the registration.

The records disclose that on June 14, 1947, Marcelo T. Pua filed with the Office of the Director of Commerce an application for the registration under Act 666 of the composite trademark consisting of the word "Verbena" and the representation of a Spanish lady, more particularly described as follows:

"Against a blue background is the bust figure of a Spanish Señorita dressed in a typically pink dancer's attire with her upper arms partly covered with a Spanish shawl of green and white. The figure appears with black well groomed hair adorned by red roses. The figure also appears to be wearing two green earrings. At the left of this figure is shown a balcony decked with plants and flowers characteristics of Spanish houses." (p. 10, Records)

The applicant further alleged that the trade-mark applied for has continuously been used by him in commerce since August 15,1947 on such merchandise as lotion, face powder, hair pomade, brilliantine, and other allied products.

On or about November 4, 1953, Pua assigned his rights to the trade-mark in question, as well as to the pending application for the registration thereof, to the herein petitioner, East Pacific Merchandising Corporation. The latter renewed the application under the new trade-mark law (R.A. 166) at the Patents Office on November 8, 1957.

The usual proceedings that follow after the filing of applications for registration were had in the office of the respondent Director of Patents. On March 5, 1957, an examiner of the Patents Office submitted a report to the Director, recommending the allowance of the application, and the latter, acting on the said report, approved petitioner's application for publication in the Official Gazette.

On May 23, 1957, Luis P. Pellicer filed an opposition to the application on the following grounds: (a) that the picture of a lady is common in trade and the name "Verbena" is the generic name of a flower and, therefore, neither may be exclusively appropriated or registered by the applicant; (b) the applicant should not be allowed to bar from employing this term those who use the genuine verbena essence in the manufacture of their products; and (c) the applicant in the adoption and use of said trade-mark is deceiving the public. In support of his allegation that he would be damaged by the registration of the trade-mark applied for, Pellicer attached to the opposition certain labels bearing the trade-mark "Lupel Verbena", which trade- mark, oppositor avers, was registered in his favor under Certificate of Registration No. 5851, issued by the Patents Office on April 27, 1957, and actually being used by him in commerce to identify his hair pomade.

Petitioner moved to dismiss the opposition, averring, among other things, (a) that the oppositor, respondent Pellicer herein, was ordered by the Court of Appeals in CA-G.R. No. 10698 (Luis P. Pellicer vs. Marcelo T. Pua) to refrain from using the trade-mark "Verbena" in any form in connection with his business; and (b) that its own mark had already acquired a secondary significance as a trade-mark.

After due hearing on the motion to dismiss the opposition, with both parties submitting evidence in support of their respective contentions, the Director of Patents promulgated the appealed resolution of June 24,1958, wherein said Director opined that the term "Verbena" is "generically descriptive or misdescriptive of the products, namely, lotion, face powder, hair pomade and brilliantine, while the representation of a Spanish lady is not only deceptively misdescriptive of the source or origin, but also common in trade," and, consequently, denied their registration. In dismissing respondent Pellicer's opposition, the respondent director ruled that,

since the question of who has the exclusive right to the use of the trade-mark in question has already been finally adjudicated by the courts 1 in favor of Marcelo T. Pua, the herein petitioner's predecessor-in- interest, as against Luis P. Pellicer, the latter is now barred from perfecting any opposition to the application.

Upon motions for reconsideration filed by both parties, the Director of Patents issued an order, dated July 21,1958, reiterating his denial of the registration applied for by petitioner Merchandising Corporation, but, on the other hand, reinstating Pellicer's opposition upon the ground that a closer study of the court decisions and resolutions already referred to revealed that the same did not actually pass upon the validity of the word "Verbena" as a registerable trade-mark.

Hence, this petition for review by the East Pacific Merchandising Corporation.

Petitioner's first proposition relates to a procedural point. It urges that once the publication of the application for registration is approved by the Director of Patents, it becomes his ministerial duty to issue the Corresponding certificate of registration upon payment of the required fees. This same contention has already been resolved by this Court in the case of Ong Ai Gui vs. the Director of Patents, 96 Phil., 673; 51 Off. Gaz., No. 4, 1848, wherein, among other things, we said:

". . . It will be noted that there are two steps in the proceedings for the approval of an application for registration, the first is that conducted in the Office of the Director and taking place prior to publication, and the second, that conducted after publication, in which the public is given the opportunity to contest the application. In the first, the application is referred to an examiner, who, after study and investigation makes a report and recommendation to the Director who, upon finding that applicant is entitled to registration, orders publication of the application. (Sec. 7, Rep. Act No. 166) If he finds that applicant is not entitled to registration, he may then and there dismiss the application. In the second, opportunity is offered the public or any interested party to come in and object to the petition. (Sec. 8, id.), giving proofs and reasons for the objection, applicant being given opportunity also to submit proofs or arguments in support of the application. (Sec. 9, id.) It is the decision of the Director, given after this hearing, of opportunity to every interested party to be heard, that finally terminates the proceedings and in which the registration is finally approved or disapproved. Thereafter, notice of the issuance of the certificate of registration is published. (Sec. 10, id.)

It is evident that the decision of the Director after the first step, ordering publication, can not have any finality. Of what use is the second step in the proceedings, if the Director is bound by his first decision, giving course to the publication? His first decision is merely provisional, in the sense that the application appears to be meritorious and is entitled to be given course leading to the more formal and important second step of hearing and trial, where the public and interested parties are allowed to take part."

 

Like the petitioner here, Ong Ai Gui questioned in the case cited the propriety of the denial of his application for registration, notwithstanding the previous order of publication and the dismissal of the opposition by the Director of Patents. We did not find any legal inconsistency in the said actions of the Director; and the same conclusion is, warranted in this case.

Petitioner, however, argues that it was error for the Director of Patents to have ruled on the registerability of the trade-mark in question, when what was only submitted and heard for his resolution was petitioner's motion to dismiss the opposition of Pellicer. The premise is not accurate. The opposition did put in issue the registerability of the composite trade-mark applied for, thus:

"(a)The picture of a lady is common in trade and the name 'Verbena' is the generic name of a flower and therefore both cannot be exclusively appropriated or registered by the applicant; (b) the applicant should not be allowed to prevent others from using this term who uses the genuine verbena essence in the manufacture of his products; and (c) the applicant in the adoption and use of said trade- mark deceiving the public."

and petitioner East Pacific Merchandising Corporation impliedly met this issue in its motion to dismiss, with the allegation that "the word mark 'Verbena' has already attained a secondary meaning."

When the incident was heard in due course, the parties were expected, and were given the opportunity, to submit arguments and present evidence to sustain their respective contentions. The transcript of stenographic notes taken during the hearing reveals that the parties actually made use of that opportunity (see p. 13, et seq., t.s.n., hearing of September 11, 1957). Consequently, when the Director of Patents also resolved the question of whether or not the trade-mark applied for was registerable, he cannot be charged with having gone beyond the matters then before him for resolution.

Moreover, the respondent Director based his denial of the registration upon the provisions of Republic Act No. 166 (Sec. 4), on the theory that the questioned trademark is generically descriptive or misdescriptive of the products, and that the representation of a Spanish lady is not only deceptively misdescriptive of the source or origin (the goods covered being produced in the Islands and not in Spain), but likewise common in trade. There seems to be little doubt but that the questioned resolution of the Director could have well been made upon those grounds even prior to the order of publication in view of the statements found in the application and in the supporting documents thereto attached (see Section 7 of Republic Act No. 166). That the Director instead caused the dismissal of the application only after its due publication is not, in our opinion, a procedural error that is reversible on appeal. Neither did such publication divest the Director of the prerogative to dismiss the application.

The petitioner next questions the legality of the order of the respondent Director of Patents, reinstating Pellicer's opposition. Petitioner argues that there was no valid motion for reconsideration filed by respondent Pellicer as a basis for the reinstatement; that petitioner was deprived of its right to file an answer to the opposition; and, finally, that the fundamental principle of estoppel was erroneously disregarded by the Director.

There is clearly no merit on petitioner's first ground. The Director of Patents could have reinstated Pellicer's opposition even motu proprio, with or without a valid motion for reconsideration, provided, of course, the same was done by him in due time or while he still had jurisdiction over the case (and the contrary has not been shown in this case). Granting, therefore, that the motion for reconsideration filed by Pellicer was, as petitioner had put it, "a mere scrap of paper", such fact does not, by itself alone, invalidate the order which was otherwise regularly issued.

Also without merit is the petitioner's contention that it should have been allowed by the respondent director to answer the opposition when it was reinstated. It does not appear that the petitioner had reasons other than those alleged by it in the rejected application and motion of reconsideration of July 30, 1958; nor that petitioner asked for an opportunity to reply Pellicer's opposition after the same was reinstated.

As its third ground, petitioner urges that respondent Pellicer is now in estoppel to claim any damage on account of the registration prayed for (a condition precedent before one may validly file an opposition), or deny the validity of the trade-mark in question. In support of this contention, petitioner calls our attention to the decision of the Court of Appeals in CA G.R. No. 10698-R, promulgated May 30, 1965 (entitled Luis P. Pellicer vs. Marcelo Pua), which affirmed that of the Court of First Instance of Manila (Civil Case No. 6262), dismissing plaintiff Luis P. Pellicer's "complaint" 2 to enjoin Marcelo T. Pua, his representatives or assigns —

". . . from manufacturing and selling, or causing to be manufactured or sold, articles and products with 'Verbena' and/or 'Povil' labels and from manufacturing, using and selling, or causing to be manufactured, used or sold, jars and bottles closely resembling his patented jars and bottles; to seek the payment of damages by the defendant to the plaintiff as a result of the acts done by the said defendant sought to be restrained by the said plaintiff; and to order the defendant to surrender to the court all articles and products used, or intended to be used, by the said defendant in violation of plaintiff's trademark and patent rights, so that the Court may order the destruction of said articles and products, in accordance with law."

Perusal of the decisions relied upon by petitioner reveals that Pellicer had sought to enjoin Marcelo Pua (petitioner's predecessor in interest) from using the "Verbena" trademark on the ground that Pua's purchase thereof from the Alien Property Administrator had been declared void in a prior suit to which Pua was not a party;

naturally, the Court of Appeals refused to issue the injunction because it felt that the validity of Pua's acquisition "must first be overcome in a proper action where he is accorded full opportunity to defend it". Neither the registerability of the "Verbena" trademark, nor the possible confusion with respondent Pellicer's own "Lupel Verbena" trademark, was in issue in the preceding litigation; wherefore, the decision of the Court of Appeals does not work an estoppel on respondent Pellicer, barring him from contesting the registration of petitioner's trademark.

At any rate, even if Pellicer were so estopped, the Director of Patents would not be foreclosed thereby from inquiring into the registerability of the trademark applied for, since he can do so whether or not there is opposition by private parties (sec 7, R.A. 166).

Petitioner urges that it was entitled to the registration for the reason that —

"firstly, that the composite trademark 'Verbena' and the figure of a lady, considered as a whole, is not generic in nature or descriptive or deceptively misdescriptive of the products to which it is associated; secondly, that the trademark has acquired a secondary meaning before the public; and, thirdly, that appropriation of the trademark having occurred under the former law (Commonwealth Act 666), the right thereto cannot be taken away under the subsequent law."

The term "Verbena" being descriptive of a whole genus of garden plants with fragrant flowers (Verbenaceae) its use in connection with cosmetic products, wherein fragrance is of substantial import, evokes the idea that the products are perfumed with the extract of verbena flowers, or of some oil of similar aroma; and, regardless of other connotations of the word, the use of the term can not be denied to other traders using such extract or oils in their own products. It follows that the Director of Patents correctly held the term to be non-registerable in the sense that petitioner company would be entitled to appropriate its use to the exclusion of others legitimately entitled, such as oppositor Pellicer. The denial of registration is further strengthened by the Director's express findings that petitioner does ,not use verbena essences in his products.

In a leading case, Caswell vs. Davis, 17 Am. Rep. 233 241, 242, the court, on a similar issue, said:

"There is no principle more firmly settled in the law of trademarks, than that words or phrases which have been in common use and which indicate the character, kind, quality and composition of the thing, may not be appropriated by any one to his exclusive use. In the exclusive use of them the law will not protect. . . . Nor does it matter that the form of the words or phrases adopted also indicate the origin and maker of the article. The combination of words must express only the latter. It is the result of all the decisions, that known words and phrases indicative of quality and composition are the common property of all mankind. They may not be appropriated by one to mark an article of his manufacture, when they may be used truthfully by another to inform the public of the ingredients which make up an article made by him. Even when the sole purpose of the one who first uses them is to form of them a trademark for himself expressing only of origin with himself, if they do in fact show forth the quality and composition of the article sold by him, he may not be protected in the exclusive use of them. Still less, then, when joined to the fact that they do thus show forth the quality and composition, there is a purpose that they should do so. It is a right which everyone has, and from the exercise of which he may not be debarred, to make an article of the same ingredients, of the same composition and of as good quality as that made by ,another, when that other has no exclusive privilege of manufacture conferred by law. Having this right to make, he has also the right to indicate the ingredients; the composition and quality of that which he has made, by any usual words or phrases apt therefor. Hence, when he adopts usual phrases which do no more than this, he but takes from a stock common to all mankind, and does not infringe upon any exclusive right of another, who has, before that, used the same, or like words or phrases. . . ." (cited with approval in 52 Am. Jur., Sec. 58, pp. 544-545)

 

The result would not change even if the Director erred in ruling that the figure of a lady, as previously described, is likewise not registerable as a trademark. The figure, it may be granted, was drawn on arbitrary and whimsical lines and styled in a peculiarly distinctive manner; but that fact will not qualify the word "Verbena"

for registration, since the combination of the two marks would still be inadequate to guard against the misleading effects that flow from the use of the term by petitioner.

The claim that the petitioner is entitled to registration because the term "Verbena" has already acquired a secondary significance is without merit. The provisions of law (Rep. Act No. 166, sec. 4) require that the trademark applied for must have "become distinctive of the applicant's goods", and that a prima facie proof of this fact exists when the applicant has been in the "substantially exclusive and continuous use thereof as a mark or tradename . . . for the five years next preceding the date of the filing of the application for its registration". Here it appears not only that applicant and his assignor (Pua) only began use of the alleged mark in the year 1947, the same year when the application was filed; but that such trademarks as "Verbena Povil" and "Lupel Verbena" had long been in use by respondent Pellicer on his own cosmetic products, and that, as a matter of fact, he is the holder of a certificate of registration from the Patents Office for the trademark "Lupel Verbena". Said facts preclude us from concluding that the trademark in question has become distinctive of applicant's goods within the meaning of the law.

Finally, petitioner corporation argues that for the Director of Patents to deny registration of his trademark under Republic Act 166 would violate the rule against ex post facto laws, because when the trademark was sold to its predecessor Marcelo Pua, it was already registered. The question of trademark registerability being without any penal aspect, the prohibition against ex post facto legislation evidently does not apply. But considering the argument as one against infringement of vested rights (which is what petitioner probably meant), it should be recalled that Pua applied in 1947 for a new registration under the old law (Act 666) while petitioner corporation reiterated the application in 1957 under Republic Act No. 166. Neither applied for a renewal of registration under section 41 of the new Act, nor did petitioner surrender the original certificate of registration of the trademark for revalidation as the Act requires. This conduct of petitioner shows that either the trademark had not been validly registered under the old trademark law, or else that such registration, if any, had already expired when the new application was filed. The Director of Patents, therefore, did not err in deciding the application as a new one under the new trademark law, Republic Act No. 166.

Conformably to the foregoing, unless the petitioner makes a disclaimer of the word "Verbena", the application should be held as properly denied by the Director of Patents. The orders reinstating respondent Pellicer's opposition are affirmed.

The case is ordered remanded to the Director of Patents for further proceedings in accordance with this opinion. Without special pronouncement as to costs.

Bengzon, Bautista Angelo, Labrador, Concepción, Gutiérrez David, Paredes and Dizon, JJ., concur.

[G.R. No. L-26676. July 30, 1982.]

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

Ponce Enrile, Siguion Reyna, Montecillo & Belo and Associates for petitioner.

Primitivo C. Bucasas for respondents.

SYNOPSIS

Private respondent filed with the Philippine Patent Office an application for registration of the trademark "CAMIA" for his product, ham, which falls under Class 47 (Foods and Ingredients of Food). Petitioner opposed the application claiming that it first used said trademark on his products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds, some of which are likewise classified under Class 47. The Director of Patents allowed the registration of the trademark "CAMIA" in favor of private respondent finding that `the goods of the parties are not of a character which purchasers would be likely to attribute to a common origin.' Hence, this petition.

The Supreme Court held that the businesses of the parties are non-competitive and their products so unrelated that the use of identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner.

Petition dismissed and decision of the Director of Patents affirmed in toto.

SYLLABUS

1. COMMERCIAL LAW; TRADEMARK LAW; RESTRICTED RIGHT OF A PERSON TO A TRADEMARK; REGISTRATION OF TRADEMARK WHICH RESEMBLES ONE ALREADY REGISTERED ALLOWED WHERE NO CONFUSION WILL ARISE. — A rudimentary precept in trademark protection is that "the right to a trademark is a limited one, in the sense that others may use the same mark on unrelated goods (Sec. 221, Nims, Unfair Competition and Trade Mark, Vol. 1, p. 657). Thus, as pronounced by the United States Supreme Court in the case of American Foundries v. Robertson (269 US 372, 381, 70 L ed 317,46 Sct. 160), "the mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on articles of a different description." Such restricted right over a trademark is likewise reflected in our Trademark Law. Under Section 4(d) of the law, registration of a trademark which so resembles another already registered or in use should be denied, where to allow such registration could likely result in confusion, mistake or deception to the consumers. Conversely, where no confusion is likely to arise, registration of a similar or even identical mark may be allowed.

2. ID.; ID.; CHARACTERISTICS OF A TRADEMARK. — A trademark is designed to identify the user. But it should be so distinctive and sufficiently original as to enable those who come into contact with it to recognize instantly the identity of the user. "It must be affirmative and definite, significant and distinctive, capable to indicate origin" (Sparklets Corp. v. Walter Kidde Sales Co., 104 F. 2d 396, 398, C. C. P. A.).

3. ID.; ID.; ID.; APPROPRIATION OR IMITATION OF TRADEMARK "CAMIA" CANNOT INJURE PETITIONER IN CASE AT BAR FOR BEING A GENERIC AND COMMON TERM. — The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white flowers. Being a generic and common term, its appropriation as a trademark, albeit in a fanciful manner in that it bears no relation to the product it identifies, is valid. However, the degree of exclusiveness to each user is closely restricted (Sec. 203, Nims, Unfair Competition and Trademarks, Vol. 1, p. 555). It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not identify petitioner as the manufacturer or producer of the goods upon which said mark is used, as contra-distinguished to trademarks derived from coined words such as "Rolex," "Kodak" or Kotex." It has been held that "if a mark is so commonplace that it cannot be readily distinguished from others, then it is apparent that it cannot identify a particular business; and he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived." (Maniton Springs Mineral Water Co. vs. Schueler, 239 Fed. 593, 597, C. C. A. 8th, 1917.)

4. ID.; ID.; WHERE BUSINESSES OF PARTIES IN CASE AT BAR ARE NON-COMPETITIVE AND THEIR PRODUCTS UNRELATED, THE USE OF IDENTICAL TRADEMARKS ON PRODUCTS UNDER THE SAME CLASSIFICATION CANNOT CONFUSE CONSUMERS AS TO THEIR SOURCE. — While respondent's product, ham, and some of the products of petitioner are classified under Class 47 (Food and Ingredients of Food), this alone cannot serve as the decisive factor in the resolution of whether or not they are related goods. Emphasis should be on the similarity of the products involved and on the arbitrary classification or general description of their properties or characteristics. The particular goods of the parties are so unrelated that consumers would not in any probability mistake one as the source or origin of the product of the other. In addition, the goods of petitioners are basically derived from vegetable oil and animal fats, while the product of respondent is processed from pig's legs. A consumer would not reasonably assume that petitioner has so diversified its business as to include the product of respondent. Thus, the businesses of the parties are non-competitive and their products so unrelated that the use of identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner.

D E C I S I O N

ESCOLIN, J p:

The sole issue raised in this petition for review of the decision of the Director of Patents is whether or not the product of respondent Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same

trademark "CAMIA'' on said goods would likely result in confusion as to their source or origin.

The trademark "CAMIA" was first used in the Philippines by petitioner on its products in 1922. In 1949, petitioner caused the registration of said trademark with the Philippine Patent Office under certificates of registration Nos. 1352-S and 1353-S, both issued on May 3, 1949. Certificate of Registration No. 1352-S covers vegetable and animal fats, particularly lard, butter and cooking oil, all classified under Class 47 (Foods and Ingredients of Food) of the Rules of Practice of the Patent Office, while certificate of registration No. 1353-S applies to abrasive detergents, polishing materials and soap of all kinds (Class 4). cdphil

On November 25, 1960, respondent Ng Sam, a Chinese citizen residing in Iloilo City, filed an application with the Philippine Patent Office for registration of the identical trademark "CAMIA" for his product, ham, which likewise falls under Class 47. Alleged date of first use of the trademark by respondent was on February 10, 1959.

After due publication of the application, petitioner filed an opposition, in accordance with Section 8 of Republic Act No. 166, otherwise known as the Trademark Law, as amended. Basis of petitioner's opposition was Section 4(d) of said law, which provides as unregistrable:

"a mark which consists of or comprises a mark or tradename which so resembles a mark or tradename registered in the Philippines or a mark or tradename previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business services of the applicant, to cause confusion or mistake or to deceive purchasers."

The parties submitted the case for decision without presenting any evidence; thereafter the Director of Patents rendered a decision allowing registration of the trademark "CAMIA" in favor of Ng Sam.

Petitioner moved for a reconsideration, but the same was denied.

Hence, this petition.

A rudimentary precept in trademark protection is that "the right to a trademark is a limited one, in the sense that others may use the same mark on unrelated goods." 1 Thus, as pronounced by the United States Supreme Court in the case of American Foundries vs. Robertson 2 , "the mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on articles of a different description." prcd

Such restricted right over a trademark is likewise reflected in our Trademark Law. Under Section 4(d) of the law, registration of a trademark which so resembles another already registered or in use should be denied, where to allow such registration could likely result in confusion, mistake or deception to the consumers. Conversely, where no confusion is likely to arise, as in this case, registration of a similar or even identical mark may be allowed.

The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white flowers. Some people call the "CAMIA" the "white ginger plant" because of its tuberous roots, while children refer to it as the butterfly flower because of its shape. Being a generic and common term, its appropriation as a trademark, albeit in a fanciful manner in that it bears no relation to the product it identifies, is valid. However, the degree of exclusiveness accorded to each user is closely restricted. 3

The records of this case disclose that the term "CAMIA" has been registered as a trademark not only by petitioner but by two (2) other concerns, as follows:

1. CAMIA.

Application No. 280

Registration No. SR-320

Date Registered — May 26, 1960

Owner — Everbright Development Company

Business Address — 310 M. H. del Pilar

Grace Park, Caloocan City

Class 4 — Thread and Yarn.

2. CAMIA and Representation.

Application No. 538

Date Filed — August 10, 1945

Date Registered — April 20, 1946

Owner — F.E. Zuellig, Inc.

Business Address — 55 Rosario St., Manila

Class 43 — Particular Good on which mark

is used: Textiles, Embroideries laces, etc.

A trademark is designed to identify the user. But it should be so distinctive and sufficiently original as to enable those who come into contact with it to recognize instantly the identity of the user. "It must be affirmative and definite, significant and distinctive, capable to indicate origin." 4

 

It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not identify petitioner as the manufacturer or producer of the goods upon which said mark is used, as contra-distinguished to trademarks derived from coined words such as "Rolex", "Kodak" or "Kotex". It has been held that "if a mark is so commonplace that it cannot be readily distinguished from others, then it is apparent that it cannot identify a particular business; and he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived." 5 cdtai

The trademark "CAMIA" is used by petitioner on a wide range of products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds. Respondent desires to use the same on his product, ham. While ham and some of the products of petitioner are classified under Class 47 (Foods and Ingredients of Food), this alone cannot serve as the decisive factor in the resolution of whether or not they are related goods. Emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. Cdpr

In his decision, the Director of Patents enumerated the factors that set respondent's product apart from the goods of petitioner. He opined and We quote:

"I have taken into account such factors as probable purchaser attitude and habits, marketing activities, retail outlets, and commercial impression likely to be conveyed by the trademarks if used in conjunction with the respective goods of the parties. I believe that ham on one hand, and lard, butter, oil, and soap on the other are products that would not move in the same manner through the same channels of trade. They pertain to unrelated fields of manufacture, might be distributed and marketed under dissimilar conditions, and are displayed separately even though they frequently may be sold through the same retail food establishments. Opposer's products are ordinary day-to-day household items whereas ham is not necessarily so. Thus, the goods of the parties are not of a character which purchasers would be likely to attribute to a common origin." (p. 23, Rollo).

The observation and conclusion of the Director of Patents are correct. The particular goods of the parties are so unrelated that consumers would not in any probability mistake one as the source or origin of the product of the other. "Ham" is not a daily food fare for the average consumer. One purchasing ham would exercise a more cautious inspection of what he buys on account of its price. Seldom, if ever, is the purchase of said food product delegated to household helps, except perhaps to those who, like the cooks, are expected to know their business. Besides, there can be no likelihood for the consumer of respondent's ham to confuse its source as anyone but respondent. The facsimile of the label attached by him on his product, his business name "SAM'S HAM AND BACON FACTORY" written in bold white letters against a reddish orange background 6 , is certain to catch the eye of the class of consumers to which he caters.

In addition, the goods of petitioners are basically derived from vegetable oil and animal fats, while the product of respondent is processed from pig's legs. A consumer would not reasonably assume that petitioner has so diversified its business as to include the product of respondent.

Mr. Runolf Callman, in Section 80.3, VOL. I, p. 1121 of his book, Unfair Competition and Trade Marks, declares:

"While confusion of goods can only be evident where the litigants are actually in competition, confusion of business may arise between non-competitive interests as well. This is true whether or not the trademarks are registered. Sec. 16 of the Trademark Act, in referring to `merchandise of substantially the same descriptive properties, embraces competitive and non-competitive trademark infringement but it is not so extensive as to be applicable to cases where the public would not reasonably expect the plaintiff to make or sell the same class of goods as those made or sold by the defendant." (Emphasis supplied).

In fine, We hold that the business of the parties are non-competitive and their products so unrelated that the use of identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner.

WHEREFORE, the instant petition is hereby dismissed and the decision of the Director of Patents in Inter Partes Case No. 231 affirmed in toto. Costs against petitioner.

SO ORDERED.

Barredo, Aquino, Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur.

Separate Opinions

DE CASTRO, J., dissenting:

I vote to grant the petition of the Philippine Refining Co. Inc. As the registered owner and prior user of the trademark, "CAMIA" on a wide variety of products such as lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds, the respondent's ham which comes under the same classification of "Food and Ingredients of Foods" under which petitioner has registered its trademark, if given the same trademark, "CAMIA," is likely to confuse the public that the source of the ham is the petitioner. If the respondent's ham is of poor quality, petitioner's business may thus be affected adversely as a result, while from the standpoint of the purchasers, some measure of deception may take effect upon them. Thus, the use of the same trademark on the ham would likely result in confusion as to the source or origin thereof, to the damage or detriment of the petitioner. The purpose of the law will be served better by not allowing the registration of the trademark "CAMIA" for respondent's ham, with such a limitless number of other words respondent may choose from, as trademark for his product.

[G.R. No. L-27906. January 8, 1987.]

CONVERSE RUBBER CORPORATION, petitioner, vs. UNIVERSAL RUBBER PRODUCTS, INC. and TIBURCIO S. EVALLE, DIRECTOR OF PATENTS, respondents.

Paredes, Poblador, Nazareno, Azada & Tomacruz for petitioner.

R E S O L U T I O N

FERNAN, J p:

The undisputed facts of the case are as follows:

Respondent Universal Rubber Products, Inc. filed an application with the Philippine Patent office for registration of the trademark "UNIVERSAL CONVERSE AND DEVICE" used on rubber shoes and rubber slippers.

Petitioner Converse Rubber Corporation filed its opposition to the application for registration on grounds that:

a] The trademark sought to be registered is confusingly similar to the word "CONVERSE" which is part of petitioner's corporate name "CONVERSE RUBBER CORPORATION" as to likely deceive purchasers of products on which it is to be used to an extent that said products may be mistaken by the unwary public to be manufactured by the petitioner; and,

b] The registration of respondent's trademark will cause great and irreparable injury to the business reputation and goodwill of petitioner in the Philippines and would cause damage to said petitioner within the meaning of Section 8, R.A. No. 166, as amended.

Thereafter, respondent filed its answer and at the pre-trial, the parties submitted the following partial stipulation of facts:

"1] The petitioner's corporate name is 'CONVERSE RUBBER CORPORATION' and has been in existence since July 31, 1946; it is duly organized under the laws of Massachusetts, USA and doing business at 392 Pearl St., Malden, County of Middlesex, Massachusetts;

2] Petitioner is not licensed to do business in the Philippines and it is not doing business on its own in the Philippines; and,

3] Petitioner manufacturers rubber shoes and uses thereon the trademarks 'CHUCK TAYLOR' and 'ALL STAR AND DEVICE'. 1

At the trial, petitioner's lone witness, Mrs. Carmen B. Pacquing, a duly licensed private merchant with stores at the Sta. Mesa Market and in Davao City, testified that she had been selling CONVERSE rubber shoes in the local market since 1956 and that sales of petitioner's rubber shoes in her stores averaged twelve to twenty pairs a month purchased mostly by basketball players of local private educational institutions like Ateneo, La Salle and San Beda.

Mrs. Pacquing, further stated that she knew petitioner's rubber shoes came from the United States "because it says there in the trademark Converse Chuck Taylor with star red or blue and is a round figure and made in U.S.A" 2 In the invoices issued by her store, the rubber shoes were described as "Converse Chuck Taylor", 3 "Converse All Star," 4 "All Star Converse Chuck Taylor, " 5 or "Converse Shoes Chuck Taylor." 6 She also affirmed that she had no business connection with the petitioner.

Respondent, on the other hand, presented as its lone witness the secretary of said corporation who testified that respondent has been selling on wholesale basis "Universal Converse" sandals since 1962 and "Universal Converse" rubber shoes since 1963. Invoices were submitted as evidence of such sales. The witness also testified that she had no idea why respondent chose "Universal Converse" as a trademark and that she was unaware of the name "Converse" prior to her corporation's sale of "Universal Converse" rubber shoes and rubber sandals.

Eventually, the Director of Patents dismissed the opposition of the petitioner and gave due course to respondent's application. His decision reads in part:

". . . the only question for determination is whether or not the applicant's partial appropriation of the Opposer's [petitioner'] corporate name is of such character that in this particular case, it is calculated to deceive or confuse the public to the injury of the corporation to which the name belongs . . .

. . . I cannot find anything that will prevent registration of the word 'UNIVERSAL CONVERSE' in favor of the respondent. In arriving at this conclusion, I am guided by the fact that the opposer failed to present proof that the single word "CONVERSE' in its corporate name has become so identified with the corporation that whenever used, it designates to the mind of the public that particular corporation.

The proofs herein are sales made by a single witness who had never dealt with the petitioner . . . the entry of Opposer's [petitioner's] goods in the Philippines were not only effected in a very insignificant quantity but without the opposer [petitioner] having a direct or indirect hand in the transaction so as to be made the basis for trademark pre-emption. cdphil

Opposer's proof of its corporate personality cannot establish the use of the word 'CONVERSE' in any sense, as it is already stipulated that it is not licensed to do business in the Philippines, and is not doing business of its own in the Philippines. If so, it will be futile for it to establish that 'CONVERSE' as part of its corporate name identifies its rubber shoes. Besides, it was also stipulated that opposer [petitioner], in manufacturing rubber shoes uses thereon the trademark 'CHUCK TAYLOR' and 'ALL STAR and DEVICE' and none other.

Furthermore, inasmuch as the Opposer never presented any label herein, or specimen of its shoes, whereon the label may be seen, notwithstanding its witness' testimony touching upon her identification of the rubber shoes sold in her stores, no determination can be made as to whether the word 'CONVERSE' appears thereon.

. . . the record is wanting in proof to establish likelihood of confusion so as to cause probable damage to the Opposer." 7

Its motion for reconsideration having been denied by the respondent Director of Patents, petitioner instituted the instant petition for review.

As correctly phrased by public respondent Director of Patents, the basic issue presented for our consideration is whether or not the respondent's partial appropriation of petitioner's corporate name is of such character that it is calculated to deceive or confuse the public to the injury of the petitioner to which the name belongs.

"A trade name is any individual name or surname, firm name, device or word used by manufacturers, industrialists, merchants and others to identify their businesses, vocations or occupations." 8 "As the trade name refers to the business and its goodwill . . . the trademark refers to the goods." 9 The ownership of a trademark or tradename is a property right which the owner is entitled to protect "since there is damage to him from confusion or reputation or goodwill in the mind of the public as well as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to classify and treat the issue as fraud." 10

From a cursory appreciation of the petitioner's corporate name "CONVERSE RUBBER CORPORATION,' it is evident that the word "CONVERSE" is the dominant word which identifies petitioner from other corporations engaged in similar business. Respondent, in the stipulation of facts, admitted petitioner's existence since 1946 as a duly organized foreign corporation engaged in the manufacture of rubber shoes. This admission necessarily betrays its knowledge of the reputation and business of petitioner even before it applied for registration of the trademark in question. Knowing, therefore, that the word "CONVERSE" belongs to and is being used by petitioner, and is in fact the dominant word in petitioner's corporate name, respondent has no right to appropriate the same for use on its products which are similar to those being produced by petitioner.

"A corporation is entitled to the cancellation of a mark that is confusingly similar to its corporate name." 11 "Appropriation by another of the dominant part of a corporate name is an infringement." 12

Respondent's witness had no idea why respondent chose "UNIVERSAL CONVERSE" as trademark and the record discloses no reasonable explanation for respondent's use of the word "CONVERSE" in its trademark. Such unexplained use by respondent of the dominant word of petitioner's corporate name lends itself open to the suspicion of fraudulent motive to trade upon petitioner's reputation, thus:

"A boundless choice of words, phrases and symbols is available to one who wishes a trademark sufficient unto itself to distinguish his product from those of others. When, however, there is no reasonable explanation for the defendant's choice of such a mark though the field for his selection was so broad, the inference is inevitable that it was chosen deliberately to deceive." 13

The testimony of petitioner's witness, who is a legitimate trader as well as the invoices evidencing sales of petitioner's products in the Philippines, give credence to petitioner's claim that it has earned a business reputation and goodwill in this country. The sales invoices submitted by petitioner's lone witness show that it is the word "CONVERSE" that mainly identifies petitioner's products, i.e. "CONVERSE CHUCK TAYLOR," 14 "CONVERSE ALL STAR," 15 "ALL STAR CONVERSE CHUCK TAYLOR," 16 or "CONVERSE SHOES CHUCK and TAYLOR." 17 Thus, contrary to the determination of the respondent Director of Patents, the word "CONVERSE" has grown to be identified with petitioner's products, and in this sense, has acquired a second meaning within the context of trademark and tradename laws.

Furthermore, said sales invoices provide the best proof that there were actual sales of petitioner's products in the country and that there was actual use for a protracted period of petitioner's trademark or part thereof through these sales. "The most convincing proof of use of a mark in commerce is testimony of such witnesses as customers, or the orders of buyers during a certain period." 18 Petitioner's witness, having affirmed her lack of business connections with petitioner, has testified as such customer, supporting strongly petitioner's move for trademark pre-emption.

 

The sales of 12 to 20 pairs a month of petitioner's rubber shoes cannot be considered insignificant, considering that they appear to

be of high expensive quality, which not too many basketball players can afford to buy. Any sale made by a legitimate trader from his store is a commercial act establishing trademark rights since such sales are made in due course of business to the general public, not only to limited individuals. It is a matter of public knowledge that all brands of goods filter into the market, indiscriminately sold by jobbers, dealers and merchants not necessarily with the knowledge or consent of the manufacturer. Such actual sale of goods in the local market establishes trademark use which serves as the basis for any action aimed at trademark pre-emption. It is a corollary logical deduction that while Converse Rubber Corporation is not licensed to do business in the country and is not actually doing business here, it does not mean that its goods are not being sold here or that it has not earned a reputation or goodwill as regards its products. The Director of Patents was, therefore, remiss in ruling that the proofs of sales presented "was made by a single witness who had never dealt with nor had never known opposer [petitioner] . . . without Opposer having a direct or indirect hand in the transaction to be the basis of trademark pre-emption."

Another factor why respondent's application should be denied is the confusing similarity between its trademark "UNIVERSAL CONVERSE AND DEVICE" and petitioner's corporate name and/or its trademarks "CHUCK TAYLOR" and "ALL STAR DEVICE" which could confuse the purchasing public to the prejudice of petitioner. cdll

The trademark of respondent "UNIVERSAL CONVERSE and DEVICE" is imprinted in a circular manner on the side of its rubber shoes. In the same manner, the trademark of petitioner which reads "CONVERSE CHUCK TAYLOR" is imprinted on a circular base attached to the side of its rubber shoes.

The determinative factor in ascertaining whether or not marks are confusingly similar to each other "is not whether the challenged mark would actually cause commission or deception of the purchasers but whether the use of such mark would likely cause confusion or mistake on the part of the buying public. It would be sufficient, for purposes of the law, that the similarity between the two labels is such that there is a possibility or likelihood of the purchaser of the older brand mistaking the new brand for it." 19 Even if not all the details just mentioned were identical, with the general appearance alone of the two products, any ordinary, or even perhaps even [sic] a not too perceptive and discriminating customer could be deceived . . ." 20

When the law speaks of "purchaser," the reference is to ordinary average purchasers. 21 "It is not necessary in either case that the resemblance be sufficient to deceive experts, dealers, or other persons specially familiar with the trademark or goods involved." 22

The similarity in the general appearance of respondent's trademark and that of petitioner would evidently create a likelihood of confusion among the purchasing public. But even assuming, arguendo, that the trademark sought to be registered by respondent is distinctively dissimilar from those of the petitioner, the likelihood of confusion would still subsists, not on the purchaser's perception of the goods but on the origins thereof. By appropriating the word "CONVERSE," respondent's products are likely to be mistaken as having been produced by petitioner. "The risk of damage is not limited to a possible confusion of goods but also includes confusion of reputation if the public could reasonably assume that the goods of the parties originated from the same source. 23

It is unfortunate that respondent Director of Patents has concluded that since the petitioner is not licensed to do business in the country and is actually not doing business on its own in the Philippines, it has no name to protect in the forum and thus, it is futile for it to establish that "CONVERSE" as part of its corporate name identifies its rubber shoes. That a foreign corporation has a right to maintain an action in the forum even if it is not licensed to do business and is not actually doing business on its own therein has been enunciated many times by this Court. In La Chemise Lacoste, S.A. vs. Fernandez, 129 SCRA 373, this Court, reiterating Western Equipment and Supply Co. vs. Reyes, 51 Phil. 115, stated that: LibLex

". . . a foreign corporation which has never done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its corporate and tradename, has a legal right to maintain an action in the

Philippines to restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign corporation.

"We further held:

xxx xxx xxx

"'That company is not here seeking to enforce any legal or control rights arising from, or growing out of, any business which it has transacted in the Philippine Islands. The sole purpose of the action:

"'Is to protect its reputation, its corporate name, its goodwill, whenever that reputation, corporate name or goodwill have, through the natural development of its trade, established themselves.' And it contends that its rights to the use of its corporate and trade name:

"'Is a property right, a right in rem, which it may assert and protect against all the world, in any of the courts of the world — even in jurisdictions where it does not transact business — just the same as it may protect its tangible property, real or personal against trespass, or conversion. Citing sec. 10, Nims on Unfair Competition and Trademarks and cases cited; secs. 21-22, Hopkins on Trademarks, Trade Names and Unfair Competition and cases cited.' That point is sustained by the authorities, and is well stated in Hanover Star Mining Co. vs. Allen and Wheeler Co. [208 Fed., 513], in which the syllabus says:

"'Since it is the trade and not the mark that is to be protected, a trademark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and identified by the use of the mark.'"

The ruling in the aforecited case is in consonance with the Convention of the Union of Paris for the Protection of Industrial Property to which the Philippines became a party on September 27, 1965. Article 8 thereof provides that "a trade name [corporate name] shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of the trademark." [emphasis supplied]

The object of the Convention is to accord a national of a member nation extensive protection "against infringement and other types of unfair competition" [Vanitary Fair Mills, Inc. vs. T. Eaton Co., 234 F. 2d 633]

The mandate of the aforementioned Convention finds implementation in Sec. 37 of RA No. 166, otherwise known as the Trademark Law: Cdpr

"Sec. 37. Rights of Foreign Registrants-Persons who are nationals of, domiciled in, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or tradenames on the repression of unfair competition to which the Philippines may be a party, shall be entitled to the benefits and subject to the provisions of this Act . . .

"Tradenames of persons described in the first paragraph of this section shall be protected without the obligation of filing or registration whether or not they form parts of marks." [emphasis supplied.]

WHEREFORE, the decision of the Director of Patents is hereby set aside and a new one entered denying Respondent Universal Rubber Products, Inc.'s application for registration of the trademark "UNIVERSAL CONVERSE AND DEVICE" on its rubber shoes and slippers.

SO ORDERED.

Feria, Alampay, Gutierrez, Jr., and Paras, JJ ., concur.

[G.R. No. 100098. December 29, 1995.]

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

Julio C. Contreras for petitioner.

Sycip, Salazar, Hernandez & Gatmaitan for private respondent.

SYLLABUS

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

2. ID.; ID.; ID.; COLORABLE IMITATION, CONSTRUED. — The essential element of infringement is colorable imitation. This term has been defined as "such a close or ingenious imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other." "Colorable imitation does not mean such similitude as amounts to identity. Nor does it require that all the details be literally copied. Colorable imitation refers to such similarity in form, content, words, sound, meaning, special arrangement, or general appearance of the trademark or tradename with that of the other mark or tradename in their over-all presentation or in their essential, substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article."

3. ID.; ID.; ID.; ID.; TEST IN THE DETERMINATION. — In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests — the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals, 224 SCRA 437 (1993), and other cases and the Holistic Test developed in Del Monte Corporation v. Court of Appeals, 181 SCRA 410 (1990), and its proponent cases. As its title implies, the test of dominancy focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception and thus constitutes infringement. On the other side of the spectrum, the holistic test mandates that the entirety of the marks in question must be considered in determining confusing similarity.

4. ID.; ID.; REQUISITES FOR THE ACQUISITION OF OWNERSHIP OVER TRADEMARK. — Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166). In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 27 SCRA 1214 (1969), we declared: . . . "It would seem quite clear that adoption alone of a trademark would not give exclusive right thereto. Such right "grows out of their actual use." Adoption is not use. One may make advertisements, issue circulars, give out price lists on certain goods; but these alone would not give exclusive right of use. For trademark is a creation of use. The underlying reason for all these is that purchasers have come to understand the mark as indicating the origin of the wares. Flowing from this is the trader's right to protection in the trade he has built up and the goodwill he has accumulated from use of the trademark. Registration of a trademark, of course, has value: it is an administrative act declaratory of a preexisting right. Registration does not, however, perfect a trademark right." The credibility placed on a certificate of registration of one's trademark, or its weight as evidence of validity, ownership and exclusive use, is qualified. A registration certificate serves merely as prima facie evidence. It is not conclusive but can and may be rebutted by controverting evidence. cCTIaS

5. ID.; ID.; DETERMINATION OF PRIOR USER OF TRADEMARK; FINDINGS OF FACTS BY THE DIRECTOR OF PATENTS, CONCLUSIVE UPON THE SUPREME COURT. —

The determination as to who is the prior user of the trademark is a question of fact and it is this Court's working principle not to disturb the findings of the Director of Patents on this issue in the absence of any showing of grave abuse of discretion. The findings of facts of the Director of Patents are conclusive upon the Supreme Court provided they are supported by substantial evidence.

6. ID.; ID.; NATURE OF SUPPLEMENTAL REGISTER. — Registrations in the supplemental register do not enjoy a similar privilege. A supplemental register was created precisely for the registration of marks which are not registrable on the principal register due to some defects. ScaCEH

D E C I S I O N

KAPUNAN, J p:

In this petition for review on certiorari under Rule 45 of the Revised Rules of Court, Emerald Garment Manufacturing Corporation seeks to annul the decision of the Court of Appeals dated 29 November 1990 in CA-G.R. SP No. 15266 declaring petitioner's trademark to be confusingly similar to that of private respondent and the resolution dated 17 May 1991 denying petitioner's motion for reconsideration.

The record reveals the following antecedent facts:

On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign corporation organized under the laws of Delaware, U.S.A., filed with the Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054 (Supplemental Register) for the trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27 October 1980 in the name of petitioner Emerald Garment Manufacturing Corporation, a domestic corporation organized and existing under Philippine laws. The petition was docketed as Inter Partes Case No. 1558. 1

Private respondent, invoking Sec. 37 of R.A. No. 166 (Trademark Law) and Art. VIII of the Paris Convention for the Protection of Industrial Property, averred that petitioner's trademark "so closely resembled its own trademark, 'LEE' as previously registered and used in the Philippines, and not abandoned, as to be likely, when applied to or used in connection with petitioner's goods, to cause confusion, mistake and deception on the part of the purchasing public as to the origin of the goods." 2

In its answer dated 23 March 1982, petitioner contended that its trademark was entirely and unmistakably different from that of private respondent and that its certificate of registration was legally and validly granted. 3

On 20 February 1984, petitioner caused the publication of its application for registration of the trademark "STYLISTIC MR. LEE" in the Principal Register." 4

On 27 July 1984, private respondent filed a notice of opposition to petitioner's application for registration also on grounds that petitioner's trademark was confusingly similar to its "LEE" trademark. 5 The case was docketed as Inter Partes Case No. 1860.

On 21 June 1985, the Director of Patents, on motion filed by private respondent dated 15 May 1985, issued an order consolidating Inter Partes Cases Nos. 1558 and 1860 on grounds that a common question of law was involved. 6

On 19 July 1988, the Director of Patents rendered a decision granting private respondent's petition for cancellation and opposition to registration.

The Director of Patents found private respondent to be the prior registrant of the trademark "LEE" in the Philippines and that it had been using said mark in the Philippines. 7

Moreover, the Director of Patents, using the test of dominancy, declared that petitioner's trademark was confusingly similar to private respondent's mark because "it is the word 'Lee' which draws the attention of the buyer and leads him to conclude that the goods originated from the same manufacturer. It is undeniably the dominant feature of the mark." 8

On 3 August 1988, petitioner appealed to the Court of Appeals and on 8 August 1988, it filed with the BPTTT a Motion to Stay Execution of the 19 July 1988 decision of the Director of Patents

on grounds that the same would cause it great and irreparable damage and injury. Private respondent submitted its opposition on 22 August 1988. 9

On 23 September 1988, the BPTTT issued Resolution No. 88-33 granting petitioner's motion to stay execution subject to the following terms and conditions:

1. That under this resolution, Respondent-Registrant is authorized only to dispose of its current stock using the mark "STYLISTIC MR. LEE";

2. That Respondent-Registrant is strictly prohibited from further production, regardless of mode and source, of the mark in question (STYLISTIC MR. LEE) in addition to its current stock;

3. That this relief Order shall automatically cease upon resolution of the Appeal by the Court of Appeals and, if the Respondent's appeal loses, all goods bearing the mark "STYLISTIC MR. LEE" shall be removed from the market, otherwise such goods shall be seized in accordance with the law.

 

SO ORDERED. 10

On 29 November 1990, the Court of Appeals promulgated its decision affirming the decision of the Director of Patents dated 19 July 1988 in all respects. 11

In said decision the Court of Appeals expounded, thus:

xxx xxx xxx.

Whether or not a trademark causes confusion and is likely to deceive the public is a question of fact which is to be resolved by applying the "test of dominancy", meaning, if the competing trademark contains the main or essential or dominant features of another by reason of which confusion and deception are likely to result, then infringement takes place; that duplication or imitation is not necessary, a similarity in the dominant features of the trademark would be sufficient.

The word "LEE" is the most prominent and distinctive feature of the appellant's trademark and all of the appellee's "LEE" trademarks. It is the mark which draws the attention of the buyer and leads him to conclude that the goods originated from the same manufacturer. While it is true that there are other words such as "STYLISTIC", printed in the appellant's label, such word is printed in such small letters over the word "LEE" that it is not conspicuous enough to draw the attention of ordinary buyers whereas the word "LEE" is printed across the label in big, bold letters and of the same color, style, type and size of lettering as that of the trademark of the appellee. The alleged difference is too insubstantial to be noticeable. Even granting arguendo that the word "STYLISTIC" is conspicuous enough to draw attention, the goods may easily be mistaken for just another variation or line of garments under the appellee's "LEE" trademarks in view of the fact that the appellee has registered trademarks which use other words in addition to the principal mark "LEE" such as "LEE RIDERS", "LEESURES" and "LEE LEENS". The likelihood of confusion is further made more probable by the fact that both parties are engaged in the same line of business. It is well to reiterate that the determinative factor in ascertaining whether or not the marks are confusingly similar to each other is not whether the challenged mark would actually cause confusion or deception of the purchasers but whether the use of such mark would likely cause confusion or mistake on the part of the buying public.

xxx xxx xxx.

The appellee has sufficiently established its right to prior use and registration of the trademark "LEE" in the Philippines and is thus entitled to protection from any infringement upon the same. It is thus axiomatic that one who has identified a peculiar symbol or mark with his goods thereby acquires a property right in such symbol or mark, and if another infringes the trademark, he thereby invokes this property right.

The merchandise or goods being sold by the parties are not that expensive as alleged to be by the appellant and are quite ordinary commodities purchased by the average person and at times, by the ignorant and the unlettered. Ordinary purchasers will not as a rule examine the small letterings printed on the label but will simply be guided by the presence of the striking mark "LEE". Whatever difference there may be will pale in insignificance in the face of an

evident similarity in the dominant features and overall appearance of the labels of the parties. 12

xxx xxx xxx.

On 19 December 1990, petitioner filed a motion for reconsideration of the above-mentioned decision of the Court of Appeals.

Private respondent opposed said motion on 8 January 1991 on grounds that it involved an impermissible change of theory on appeal. Petitioner allegedly raised entirely new and unrelated arguments and defenses not previously raised in the proceedings below such as laches and a claim that private respondent appropriated the style and appearance of petitioner's trademark when it registered its "LEE" mark under Registration No. 44220. 13

On 17 May 1991, the Court of Appeals issued a resolution rejecting petitioner's motion for reconsideration and ruled thus:

xxx xxx xxx.

A defense not raised in the trial court cannot be raised on appeal for the first time. An issue raised for the first time on appeal and not raised timely in the proceedings in the lower court is barred by estoppel.

The object of requiring the parties to present all questions and issues to the lower court before they can be presented to this Court is to have the lower court rule upon them, so that this Court on appeal may determine whether or not such ruling was erroneous. The purpose is also in furtherance of justice to require the party to first present the question he contends for in the lower court so that the other party may not be taken by surprise and may present evidence to properly meet the issues raised.

Moreover, for a question to be raised on appeal, the same must also be within the issues raised by the parties in their pleadings. Consequently, when a party deliberately adopts a certain theory, and the case is tried and decided based upon such theory presented in the court below, he will not be permitted to change his theory on appeal. To permit him to do so would be unfair to the adverse party. A question raised for the first time on appeal, there having opportunity to raise them in the court of origin constitutes a change of theory which is not permissible on appeal.

In the instant case, appellant's main defense pleaded in its answer dated March 23, 1982 was that there was "no confusing similarity between the competing trademark involved. On appeal, the appellant raised a single issue, to wit:

The only issue involved in this case is whether or not respondent-registrant's trademark "STYLISTIC MR. LEE" is confusingly similar with the petitioner's trademarks "LEE or LEE RIDERS, LEE-LEENS and LEE-SURES."

Appellant's main argument in this motion for reconsideration on the other hand is that the appellee is estopped by laches from asserting its right to its trademark. Appellant claims although belatedly that appellee went to court with "unclean hands" by changing the appearance of its trademark to make it identical to the appellant's trademark.

Neither defenses were raised by the appellant in the proceedings before the Bureau of Patents. Appellant cannot raise them now for the first time on appeal, let alone on a mere motion for reconsideration of the decision of this Court dismissing the appellant's appeal.

While there may be instances and situations justifying relaxation of this rule, the circumstance of the instant case, equity would be better served by applying the settled rule it appearing that appellant has not given any reason at all as to why the defenses raised in its motion for reconsideration was not invoked earlier. 14

xxx xxx xxx.

Twice rebuffed, petitioner presents its case before this Court on the following assignment of errors:

I. THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE RESPONDENT CAUSED THE ISSUANCE OF A FOURTH "LEE" TRADEMARK IMITATING THAT OF THE PETITIONER'S ON MAY 5, 1989 OR MORE THAN EIGHT MONTHS AFTER THE BUREAU OF PATENT'S DECISION DATED JULY 19, 1988.

II. THE COURT OF APPEALS ERRED IN RULING THAT THE DEFENSE OF ESTOPPEL BY LACHES MUST BE RAISED IN THE PROCEEDINGS BEFORE THE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER.

III. THE COURT OF APPEALS ERRED WHEN IT CONSIDERED PRIVATE RESPONDENT'S PRIOR REGISTRATION OF ITS TRADEMARK AND DISREGARDED THE FACT THAT PRIVATE RESPONDENT HAD FAILED TO PROVE COMMERCIAL USE THEREOF BEFORE FILING OF APPLICATION FOR REGISTRATION. 15

In addition, petitioner reiterates the issues it raised in the Court of Appeals:

I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER OR NOT PETITIONER'S TRADEMARK STYLISTIC MR. LEE, IS CONFUSINGLY SIMILAR WITH THE PRIVATE RESPONDENT'S TRADEMARK LEE OR LEE-RIDER, LEE-LEENS AND LEE-SURES.

II. PETITIONER'S EVIDENCES ARE CLEAR AND SUFFICIENT TO SHOW THAT IT IS THE PRIOR USER AND ITS TRADEMARK IS DIFFERENT FROM THAT OF THE PRIVATE RESPONDENT.

III. PETITIONER'S TRADEMARK IS ENTIRELY DIFFERENT FROM THE PRIVATE RESPONDENT'S AND THE REGISTRATION OF ITS TRADEMARK IS PRIMA FACIE EVIDENCE OF GOOD FAITH.

IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK CANNOT BE CONFUSED WITH PRIVATE RESPONDENT'S LEE TRADEMARK. 16

Petitioner contends that private respondent is estopped from instituting an action for infringement before the BPTTT under the equitable principle of laches pursuant to Sec. 9-A of R.A. No. 166, otherwise known as the Law on Trade-marks, Trade-names and Unfair Competition:

SEC. 9-A. Equitable principles to govern proceedings. — In opposition proceedings and in all other inter partes proceedings in the patent office under this act, equitable principles of laches, estoppel, and acquiescence, where applicable, may be considered and applied.

Petitioner alleges that it has been using its trademark "STYLISTIC MR. LEE" since 1 May 1975, yet, it was only on 18 September 1981 that private respondent filed a petition for cancellation of petitioner's certificate of registration for the said trademark. Similarly, private respondent's notice of opposition to petitioner's application for registration in the principal register was belatedly filed on 27 July 1984. 17

Private respondent counters by maintaining that petitioner was barred from raising new issues on appeal, the only contention in the proceedings below being the presence or absence of confusing similarity between the two trademarks in question. 18

We reject petitioner's contention.

Petitioner's trademark is registered in the supplemental register. The Trademark Law (R.A. No. 166) provides that "marks and tradenames for the supplemental register shall not be published for or be subject to opposition, but shall be published on registration in the Official Gazette." 19 The reckoning point, therefore, should not be 1 May 1975, the date of alleged use by petitioner of its assailed trademark but 27 October 1980, 20 the date the certificate of registration SR No. 5054 was published in the Official Gazette and issued to petitioner.

 

It was only on the date of publication and issuance of the registration certificate that private respondent may be considered "officially" put on notice that petitioner has appropriated or is using said mark, which, after all, is the function and purpose of registration in the supplemental register. 21 The record is bereft of evidence that private respondent was aware of petitioner's trademark before the date of said publication and issuance. Hence, when private respondent instituted cancellation proceedings on 18 September 1981, less than a year had passed.

Corollarily, private respondent could hardly be accused of inexcusable delay in filing its notice of opposition to petitioner's application for registration in the principal register since said

application was published only on 20 February 1984. 22 From the time of publication to the time of filing the opposition on 27 July 1984 barely five (5) months had elapsed. To be barred from bringing suit on grounds of estoppel and laches, the delay must be lengthy. 23

More crucial is the issue of confusing similarity between the two trademarks. Petitioner vehemently contends that its trademark "STYLISTIC MR. LEE" is entirely different from and not confusingly similar to private respondent's "LEE" trademark.

Private respondent maintains otherwise. It asserts that petitioner's trademark tends to mislead and confuse the public and thus constitutes an infringement of its own mark, since the dominant feature therein is the word "LEE."

The pertinent provision of R.A. No. 166 (Trademark Law) states thus:

SEC. 22. Infringement, what constitutes. — Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided.

Practical application, however, of the aforesaid provision is easier said than done. In the history of trademark cases in the Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another, no set rules can be deduced. Each case must be decided on its own merits.

In Esso Standard Eastern, Inc. v. Court of Appeals, 24 we held:

. . . But likelihood of confusion is a relative concept; to be determined only according to the particular, and sometimes peculiar, circumstances of each case. It is unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.: "In trademark cases, even more than in other litigation, precedent must be studied in the light of the facts of the particular case."

xxx xxx xxx.

Likewise, it has been observed that:

In determining whether a particular name or mark is a "colorable imitation" of another, no all-embracing rule seems possible in view of the great number of factors which must necessarily be considered in resolving this question of fact, such as the class of product or business to which the article belongs; the product's quality, quantity, or size, including its wrapper or container; the dominant color, style, size, form, meaning of letters, words, designs and emblems used; the nature of the package, wrapper or container; the character of the product's purchasers; location of the business; the likelihood of deception or the mark or name's tendency to confuse; etc. 25

Proceeding to the task at hand, the essential element of infringement is colorable imitation. This term has been defined as "such a close or ingenious imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other." 26

Colorable imitation does not mean such similitude as amounts to identity. Nor does it require that all the details be literally copied. Colorable imitation refers to such similarity in form, content, words, sound, meaning, special arrangement, or general appearance of the trademark or tradename with that of the other mark or tradename in their over-all presentation or in their essential, substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article. 27

In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests — the Dominancy Test applied in

Asia Brewery, Inc. v. Court of Appeals 28 and other cases 29 and the Holistic Test developed in Del Monte Corporation v. Court of Appeals 30 and its proponent cases. 31

As its title implies, the test of dominancy focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception and thus constitutes infringement.

xxx xxx xxx.

. . . If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. v. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC), 180 Fed. 579]. The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .) 32

xxx xxx xxx.

On the other side of the spectrum, the holistic test mandates that the entirety of the marks in question must be considered in determining confusing similarity.

xxx xxx xxx.

In determining whether the trademarks are confusingly similar, a comparison of the words is not the only determinant factor. The trademarks in their entirety as they appear in their respective labels or hang tags must also be considered in relation to the goods to which they are attached. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other. 33

xxx xxx xxx.

Applying the foregoing tenets to the present controversy and taking into account the factual circumstances of this case, we considered the trademarks involved as a whole and rule that petitioner's "STYLISTIC MR. LEE" is not confusingly similar to private respondent's "LEE" trademark.

Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although on its label the word "LEE" is prominent, the trademark should be considered as a whole and not piecemeal. The dissimilarities between the two marks become conspicuous, noticeable and substantial enough to matter especially in the light of the following variables that must be factored in.

First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your ordinary household items like catsup, soy sauce or soap which are of minimal cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception, then, is less likely. In Del Monte Corporation v. Court of Appeals, 34 we noted that:

. . . Among these, what essentially determines the attitudes of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise as much care as one who buys an expensive watch. As a general rule, an ordinary buyer does not exercise as much prudence in buying an article for which he pays a few centavos as he does in purchasing a more valuable thing. Expensive and valuable items are normally bought only after deliberate, comparative and analytical investigation. But mass products, low priced articles in wide use, and matters of everyday purchase requiring frequent replacement are bought by the casual consumer without great care. . . .

Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is, therefore, more or less knowledgeable and familiar with his preference and will not easily be distracted.

Finally, in line with the foregoing discussions, more credit should be given to the "ordinary purchaser." Cast in this particular controversy, the ordinary purchaser is not the "completely unwary

consumer" but is the "ordinarily intelligent buyer" considering the type of product involved.

The definition laid down in Dy Buncio v. Tan Tiao Bok 35 is better suited to the present case. There, the "ordinary purchaser" was defined as one "accustomed to buy, and therefore to some extent familiar with, the goods in question. The test of fraudulent simulation is to be found in the likelihood of the deception of some persons in some measure acquainted with an established design and desirous of purchasing the commodity with which that design has been associated. The test is not found in the deception, or the possibility of deception, of the person who knows nothing about the design which has been counterfeited, and who must be indifferent between that and the other. The simulation, in order to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase."

 

There is no cause for the Court of Appeal's apprehension that petitioner's products might be mistaken as "another variation or line of garments under private respondent's 'LEE' trademark". 36 As one would readily observe, private respondent's variation follows a standard format "LEERIDERS," "LEESURES" and "LEELEENS." It is, therefore, improbable that the public would immediately and naturally conclude that petitioner's "STYLISTIC MR. LEE" is but another variation under private respondent's "LEE" mark.

As we have previously intimated the issue of confusing similarity between trademarks is resolved by considering the distinct characteristics of each case. In the present controversy, taking into account these unique factors, we conclude that the similarities in the trademarks in question are not sufficient as to likely cause deception and confusion tantamount to infringement

Another way of resolving the conflict is to consider the marks involved from the point of view of what marks are registrable pursuant to Sec. 4 of R.A. No. 166, particularly paragraph 4(e):

CHAPTER II-A. — The Principal Register

(Inserted by Sec. 2, Rep. Act No. 638.)

SEC. 4. Registration of trade-marks, trade-names and service-marks on the principal register. — There is hereby established a register of trade-marks, trade-names and service-marks which shall be known as the principal register. The owner of a trade-mark, trade-name or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same on the principal register, unless it:

xxx xxx xxx.

(e) Consists of a mark or trade-name which, when applied to or used in connection with the goods, business or services of the applicant is merely descriptive or deceptively misdescriptive of them, or when applied to or used in connection with the goods, business or services of the applicant is primarily geographically descriptive or deceptively misdescriptive of them, or is primarily merely a surname; (Italics ours.)

xxx xxx xxx.

"LEE" is primarily a surname. Private respondent cannot, therefore, acquire exclusive ownership over and singular use of said term.

. . . It has been held that a personal name or surname may not be monopolized as a trademark or tradename as against others of the same name or surname. For in the absence of contract, fraud, or estoppel, any man may use his name or surname in all legitimate ways. Thus, "Wellington" is a surname, and its first user has no cause of action against the junior user of "Wellington" as it is incapable of exclusive appropriation. 37

In addition to the foregoing, we are constrained to agree with petitioner's contention that private respondent failed to prove prior actual commercial use of its "LEE" trademark in the Philippines before filing its application for registration with the BPTTT and hence, has not acquired ownership over said mark.

Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of ownership over a trademark

pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166) which explicitly provides that:

CHAPTER II. Registration of Marks and Trade-names.

SEC. 2. What are registrable. — Trade-marks, trade-names, and service marks owned by persons, corporations, partnerships or associations domiciled in the Philippines and by persons, corporations, partnerships, or associations domiciled in any foreign country may be registered in accordance with the provisions of this act: Provided, That said trade-marks, trade-names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed: And Provided, further, That the country of which the applicant for registration is a citizen grants by law substantially similar privileges to citizens of the Philippines, and such fact is officially certified, with a certified true copy of the foreign law translated into the English language, by the government of the foreign country to the Government of the Republic of the Philippines. (As amended.) (Italics ours.)

SEC. 2-A. Ownership of trade-marks, trade-names and service-marks; how acquired. — Anyone who lawfully produces or deals in merchandise of any kind or who engages in lawful business, or who renders any lawful service in commerce, by actual use hereof in manufacture or trade, in business and in the service rendered; may appropriate to his exclusive use a trade-mark, a trade-name, or a service-mark not so appropriated by another, to distinguish his merchandise, business or services from others. The ownership or possession of trade-mark, trade-name, service-mark, heretofore or hereafter appropriated, as in this section provided, shall be recognized and protected in the same manner and to the same extent as are other property rights to the law. (As amended.) (Italics ours.)

The provisions of the 1965 Paris Convention for the Protection of Industrial Property 38 relied upon by private respondent and Sec. 21-A of the Trademark Law (R.A. No. 166) 39 were sufficiently expounded upon and qualified in the recent case of Philip Morris, Inc. v. Court of Appeals: 40

xxx xxx xxx

Following universal acquiescence and comity, our municipal law on trademarks regarding the requirement of actual use in the Philippines must subordinate an international agreement inasmuch as the apparent clash is being decided by a municipal tribunal (Mortisen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions, 93; Paras, International Law and World Organization, 1971 Ed., p. 20). Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, not superior, to national legislative enactments.

xxx xxx xxx.

In other words, (a foreign corporation) may have the capacity to sue for infringement irrespective of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the question of whether they have an exclusive right over their symbol as to justify issuance of the controversial writ will depend on actual use of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to do business in the Philippines files a complaint for infringement, the entity need not be actually using its trademark in commerce in the Philippines. Such a foreign corporation may have the personality to file a suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market.

xxx xxx xxx.

Undisputably, private respondent is the senior registrant, having obtained several registration certificates for its various trademarks "LEE," "LEE RIDERS," and "LEESURES" in both the supplemental and principal registers, as early as 1969 to 1973. 41 However, registration alone will not suffice. In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 42 we declared:

xxx xxx xxx.

A rule widely accepted and firmly entrenched because it has come down through the years is that actual use in commerce or business is a prerequisite in the acquisition of the right of ownership over a trademark.

xxx xxx xxx.

It would seem quite clear that adoption alone of a trademark would not give exclusive right thereto. Such right "grows out of their actual use." Adoption is not use. One may make advertisements, issue circulars, give out price lists on certain goods; but these alone would not give exclusive right of use. For trademark is a creation of use. The underlying reason for all these is that purchasers have come to understand the mark as indicating the origin of the wares. Flowing from this is the trader's right to protection in the trade he has built up and the goodwill he has accumulated from use of the trademark. Registration of a trademark, of course, has value: it is an administrative act declaratory of a pre-existing right. Registration does not, however, perfect a trademark right. (Italics ours.)

xxx xxx xxx.

To augment its arguments that it was, not only the prior registrant, but also the prior user, private respondent invokes Sec. 20 of the Trademark Law, thus:

SEC. 20. Certificate of registration prima facie evidence of validity. — A certificate of registration of a mark or tradename shall be a prima facie evidence of the validity of the registration, the registrant's ownership of the mark or trade-name, and of the registrant's exclusive right to use the same in connection with the goods, business or services specified in the certificate, subject to any conditions and limitations stated therein.

The credibility placed on a certificate of registration of one's trademark, or its weight as evidence of validity, ownership and exclusive use, is qualified. A registration certificate serves merely as prima facie evidence. It is not conclusive but can and may be rebutted by controverting evidence.

Moreover, the aforequoted provision applies only to registrations in the principal register. 43 Registrations in the supplemental register do not enjoy a similar privilege. A supplemental register was created precisely for the registration of marks which are not registrable on the principal register due to some defects. 44

The determination as to who is the prior user of the trademark is a question of fact and it is this Court's working principle not to disturb the findings of the Director of Patents on this issue in the absence of any showing of grave abuse of discretion. The findings of facts of the Director of Patents are conclusive upon the Supreme Court provided they are supported by substantial evidence. 45

 

In the case at bench, however, we reverse the findings of the Director of Patents and the Court of Appeals. After a meticulous study of the records, we observe that the Director of Patents and the Court of Appeals relied mainly on the registration certificates as proof of use by private respondent of the trademark "LEE" which, as we have previously discussed are not sufficient. We cannot give credence to private respondent's claim that its "LEE" mark first reached the Philippines in the 1960's through local sales by the Post Exchanges of the U.S. Military Bases in the Philippines 46 based as it was solely on the self-serving statements of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private respondent. 47 Similarly, we give little weight to the numerous vouchers representing various advertising expenses in the Philippines for "LEE" products. 48 It is well to note that these expenses were incurred only in 1981 and 1982 by LEE (Phils.), Inc. after it entered into a licensing agreement with private respondent on 11 May 1981. 49

On the other hand, petitioner has sufficiently shown that it has been in the business of selling jeans and other garments adopting its "STYLISTIC MR. LEE" trademark since 1975 as evidenced by appropriate sales invoices to various stores and retailers. 50

Our rulings in Pagasa Industrial Corp. v. Court of Appeals 51 and Converse Rubber Corp. v. Universal Rubber Products, Inc., 52 respectively, are instructive:

The Trademark Law is very clear. It requires actual commercial use of the mark prior to its registration. There is no dispute that

respondent corporation was the first registrant, yet it failed to fully substantiate its claim that it used in trade or business in the Philippines the subject mark; it did not present proof to invest it with exclusive, continuous adoption of the trademark which should consist among others, of considerable sales since its first use. The invoices submitted by respondent which were dated way back in 1957 show that the zippers sent to the Philippines were to be used as "samples" and "of no commercial value." The evidence for respondent must be clear, definite and free from inconsistencies. "Samples" are not for sale and therefore, the fact of exporting them to the Philippines cannot be considered to be equivalent to the "use" contemplated by law. Respondent did not expect income from such "samples." There were no receipts to establish sale, and no proof were presented to show that they were subsequently sold in the Philippines.

xxx xxx xxx.

The sales invoices provide the best proof that there were actual sales of petitioner's product in the country and that there was actual use for a protracted period of petitioner's trademark or part thereof through these sales.

For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioner's use of its own mark and for failure to establish confusing similarity between said trademarks, private respondent's action for infringement must necessarily fail.

WHEREFORE, premises considered, the questioned decision and resolution are hereby REVERSED and SET ASIDE.

SO ORDERED.

Bellosillo and Hermosisima, Jr., JJ., concur.

Davide, Jr., J., I vote to deny the petition there being no showing of an exception to inclusiveness of findings of BPTTT and of CA.

Padilla, J., I dissent. I vote to deny the petition; I agree with BPTTT and the CA that petitioner's trademark "STYLISTIC MR. LEE" is confusingly similar to private respondent's earlier registered trademarks "LEE" or "LEE RIDER, LEE-LEENS and LEE-SURES" such that the trademark "STYLISTIC MR. LEE" is an infringement of the earlier registered trademarks.

[G.R. No. 112012. April 4, 2001.]

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

D E C I S I O N

YNARES-SANTIAGO, J p:

This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R. SP No. 24101, 1 reversing and setting aside the decision of the Bureau of Patents, Trademarks and Technology Transfer (BPTTT), 2 which denied private respondent's application for registration of the trademark, FLAVOR MASTER.

On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an application for the registration of the trademark "FLAVOR MASTER" for instant coffee, under Serial No. 52994. The application, as a matter of due course, was published in the July 18, 1988 issue of the BPTTT's Official Gazette.

Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered under Swiss laws and domiciled in Switzerland, filed an unverified Notice of Opposition, 3 claiming that the trademark of private respondent's product is "confusingly similar to its trademarks for coffee and coffee extracts, to wit: MASTER ROAST and MASTER BLEND."

Likewise, a verified Notice of Opposition was filed by Nestle Philippines, Inc., a Philippine corporation and a licensee of Societe Des Produits Nestle S.A., against CFC's application for registration of the trademark FLAVOR MASTER. 4 Nestle claimed that the use, if any, by CFC of the trademark FLAVOR MASTER and its registration would likely cause confusion in the trade; or deceive purchasers and would falsely suggest to the purchasing public a connection in the business of Nestle, as the dominant word present in the three (3) trademarks is "MASTER"; or that the goods of CFC might be mistaken as having originated from the latter.

In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is not confusingly similar with the former's trademarks, MASTER ROAST and MASTER BLEND, alleging that, "except for the word MASTER (which cannot be exclusively appropriated by any person for being a descriptive or generic name), the other words that are used respectively with said word in the three trademarks are very different from each other — in meaning, spelling, pronunciation, and sound". CFC further argued that its trademark, FLAVOR MASTER, "is clearly very different from any of Nestle's alleged trademarks MASTER ROAST and MASTER-BLEND, especially when the marks are viewed in their entirety, by considering their pictorial representations, color schemes and the letters of their respective labels."

In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFC's application for registration. 5 CFC elevated the matter to the Court of Appeals, where it was docketed as CA-G.R. SP No. 24101.

The Court of Appeals defined the issue thus: "Does appellant CFC's trade dress bear a striking resemblance with appellee's trademarks as to create in the purchasing public's mind the mistaken impression that both coffee products come from one and the same source?" aEHADT

As stated above, the Court of Appeals, in the assailed decision dated September 23, 1993, reversed Decision No. 90-47 of the BPTTT and ordered the Director of Patents to approve CFC's application. The Court of Appeals ruled:

Were We to take even a lackadaisical glance at the overall appearance of the contending marks, the physical discrepancies between appellant CFC's and appellee's respective logos are so ostensible that the casual purchaser cannot likely mistake one for the other. Appellant CFC's label (Exhibit "4") is predominantly a blend of dark and lighter shade of orange where the words "FLAVOR MASTER", "FLAVOR" appearing on top of "MASTER", shaded in mocha with thin white inner and outer sidings per letter and identically lettered except for the slightly protruding bottom curve of the letter "S" adjoining the bottom tip of the letter "A" in the word "MASTER", are printed across the top of a simmering red coffee cup. Underneath "FLAVOR MASTER" appears "Premium Instant Coffee" printed in white, slim and slanted letters. Appellees' "MASTER ROAST" label (Exhibit "7"), however, is almost double the width of appellant CFC's. At the top is printed in brown color the word "NESCAFE" against a white backdrop. Occupying the center is a square-shaped configuration shaded with dark brown and picturing a heap of coffee beans, where the word "MASTER" is inscribed in the middle. "MASTER" in appellees' label is printed in taller capital letters, with the letter "M" further capitalized. The letters are shaded with red and bounded with thin gold-colored inner and outer sidings. Just above the word "MASTER" is a red window like portrait of what appears to be a coffee shrub clad in gold. Below the "MASTER" appears the word "ROAST" impressed in smaller, white print. And further below are the inscriptions in white: "A selection of prime Arabica and Robusta coffee." With regard to appellees' "MASTER BLEND" label (Exhibit "6") of which only a xeroxed copy is submitted, the letters are bolder and taller as compared to appellant CFC's and the word "MASTER" appears on top of the word "BLEND" and below it are the words "100% pure instant coffee" printed in small letters.

From the foregoing description, while the contending marks depict the same product, the glaring dissimilarities in their presentation far outweigh and dispel any aspect of similitude. To borrow the words of the Supreme Court in American Cyanamid Co. v. Director of Patents (76 SCRA 568), appellant CFC's and appellees' labels are entirely different in size, background, colors, contents and pictorial arrangement; in short, the general appearances of the labels bearing the respective trademarks are so distinct from each other that appellees cannot assert that the dominant features, if any, of its trademarks were used or appropriated in appellant CFC's own. The distinctions are so well-defined so as to foreclose any probability or likelihood of confusion or deception on the part of the normally intelligent buyer when he or she encounters both coffee products at the grocery shelf. The answer therefore to the query is a clear-cut No. 6

Petitioners are now before this Court on the following assignment of errors:

1. RESPONDENT COURT GRAVELY ERRED IN REVERSING AND SETTING ASIDE THE DECISION (NO. 90-47) OF THE DIRECTOR OF THE BUREAU OF PATENTS, TRADEMARKS

AND TECHNOLOGY TRANSFER (BPTTT) DATED DECEMBER 27, 1990.

2. RESPONDENT COURT ERRED IN FINDING THAT APPELLANT CFC'S TRADE DRESS IS BEYOND THE SCOPE OF THE PROSCRIPTION LAID DOWN BY JURISPRUDENCE AND THE TRADEMARK LAW.

3. RESPONDENT COURT ERRED IN HOLDING THAT THE TOTALITY RULE, RATHER THAN THE TEST OF DOMINANCY, APPLIES TO THE CASE.

4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY RULE APPLIED IN THE CASES OF BRISTOL MYERS V. DIRECTOR OF PATENTS, ET AL. (17 SCRA 128), MEAD JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76 SCRA 568).

The petition is impressed with merit.

A trademark has been generally defined as "any word, name, symbol or device adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured and sold by others." 7

A manufacturer's trademark is entitled to protection. As Mr. Justice Frankfurter observed in the case of Mishawaka Mfg. Co. v. Kresge Co.: 8

The protection of trade-marks is the law's recognition of the psychological function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, due aim is the same — to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress.

Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended, which was in force at the time, provides thus:

Registration of trade-marks, trade-names and service-marks on the principal register. — There is hereby established a register of trade-marks, trade-names and service marks which shall be known as the principal register. The owner of a trade-mark, trade-name or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same on the principal register, unless it:

xxx xxx xxx

(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name registered in the Philippines or a mark or trade-name previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business or services of the applicant, to cause confusion or mistake or to deceive purchasers;

xxx xxx xxx

(Emphasis supplied)

The law prescribes a more stringent standard in that there should not only be confusing similarity but that it should not likely cause confusion or mistake or deceive purchasers.

Hence, the question in this case is whether there is a likelihood that the trademark FLAVOR MASTER may cause confusion or mistake or may deceive purchasers that said product is the same or is manufactured by the same company. In other words, the issue is whether the trademark FLAVOR MASTER is a colorable imitation of the trademarks MASTER ROAST and MASTER BLEND.

Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other. 9 In determining if

colorable imitation exists, jurisprudence has developed two kinds of tests — the Dominancy Test and the Holistic Test. 10 The test of dominancy focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception and thus constitute infringement. On the other side of the spectrum, the holistic test mandates that the entirety of the marks in question must be considered in determining confusing similarity. 11

 

In the case at bar, the Court of Appeals held that:

The determination of whether two trademarks are indeed confusingly similar must be taken from the viewpoint of the ordinary purchasers who are, in general, undiscerningly rash in buying the more common and less expensive household products like coffee, and are therefore less inclined to closely examine specific details of similarities and dissimilarities between competing products. The Supreme Court in Del Monte Corporation v. CA, 181 SCRA 410, held that:

"The question is not whether the two articles are distinguishable by their labels when set side by side but whether the general confusion made by the article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in his confounding it with the original. As observed in several cases, the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods, is the touchstone."

From this perspective, the test of similarity is to consider the two marks in their entirety, as they appear in the respective labels, in relation to the goods to which they are attached (Bristol Myers Company v. Director of Patents, et al., 17 SCRA 128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7 SCRA 768). The mark must be considered as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually to any part of it (Del Monte Corp. v. CA, supra), as what appellees would want it to be when they essentially argue that much of the confusion springs from appellant CFC's use of the word "MASTER" which appellees claim to be the dominant feature of their own trademarks that captivates the prospective consumers. Be it further emphasized that the discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other (Mead Johnson & Co. v. NVJ Van Dorp, Ltd., supra). 12

The Court of Appeals applied some judicial precedents which are not on all fours with this case. It must be emphasized that in infringement or trademark cases in the Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another, no set rules can be deduced. Each case must be decided on its own merits. 13 In Esso Standard, Inc. v. Court of Appeals, 14 we ruled that the likelihood of confusion is a relative concept; to be determined only according to the particular, and sometimes peculiar, circumstances of each case. In trademark cases, even more than in any other litigation, precedent must be studied in light of the facts of the particular case. The wisdom of the likelihood of confusion test lies in its recognition that each trademark infringement case presents its own unique set of facts. Indeed, the complexities attendant to an accurate assessment of likelihood of confusion require that the entire panoply of elements constituting the relevant factual landscape be comprehensively examined. 15

The Court of Appeals' application of the case of Del Monte Corporation v. Court of Appeals 16 is, therefore, misplaced. In Del Monte, the issue was about the alleged similarity of Del Monte's logo with that of Sunshine Sauce Manufacturing Industries. Both corporations market the catsup product which is an inexpensive and common household item. DTIaHE

Since Del Monte alleged that Sunshine's logo was confusingly similar to or was a colorable imitation of the former's logo, there was a need to go into the details of the two logos as well as the shapes of the labels or marks, the brands printed on the labels, the words or lettering on the labels or marks and the shapes and colors of the labels or marks. The same criteria, however, cannot be applied in the instant petition as the facts and circumstances herein are peculiarly different from those in the Del Monte case.

In the same manner, the Court of Appeals erred in applying the totality rule as defined in the cases of Bristol Myers v. Director of Patents; 17 Mead Johnson & Co. v. NVJ Van Dorf Ltd.; 18 and American Cyanamid Co. v. Director of Patents. 19 The totality rule states that "the test is not simply to take their words and compare the spelling and pronunciation of said words. In determining whether two trademarks are confusingly similar, the two marks in their entirety as they appear in the respective labels must be considered in relation to the goods to which they are attached; the discerning eye of the observer must focus not only on the predominant words but also on the other features appearing on both labels." 20

As this Court has often declared, each case must be studied according to the peculiar circumstances of each case. That is the reason why in trademark cases, jurisprudential precedents should be applied only to a case if they are specifically in point.

In the above cases cited by the Court of Appeals to justify the application of the totality or holistic test to this instant case, the factual circumstances are substantially different. In the Bristol Myers case, this Court held that although both BIOFERIN and BUFFERIN are primarily used for the relief of pains such as headaches and colds, and their names are practically the same in spelling and pronunciation, both labels have strikingly different backgrounds and surroundings. In addition, one is dispensable only upon doctor's prescription, while the other may be purchased over-the-counter.

In the Mead Johnson case, the differences between ALACTA and ALASKA are glaring and striking to the eye. Also, ALACTA refers to "Pharmaceutical Preparations which Supply Nutritional Needs," falling under Class 6 of the official classification of Medicines and Pharmaceutical Preparations to be used as prescribed by physicians. On the other hand, ALASKA refers to "Foods and Ingredients of Foods" falling under Class 47, and does not require medical prescription.

In the American Cyanamid case, the word SULMET is distinguishable from the word SULMETINE, as the former is derived from a combination of the syllables "SUL" which is derived from sulfa and "MET" from methyl, both of which are chemical compounds present in the article manufactured by the contending parties. This Court held that the addition of the syllable "INE" in respondent's label is sufficient to distinguish respondent's product or trademark from that of petitioner. Also, both products are for medicinal veterinary use and the buyer will be more wary of the nature of the product he is buying. In any case, both products are not identical as SULMET's label indicates that it is used in a drinking water solution while that of SULMETINE indicates that they are tablets.

It cannot also be said that the products in the above cases can be bought off the shelf except, perhaps, for ALASKA. The said products are not the usual "common and inexpensive" household items which an "undiscerningly rash" buyer would unthinkingly buy.

In the case at bar, other than the fact that both Nestle's and CFC's products are inexpensive and common household items, the similarity ends there. What is being questioned here is the use by CFC of the trademark MASTER. In view of the difficulty of applying jurisprudential precedents to trademark cases due to the peculiarity of each case, judicial fora should not readily apply a certain test or standard just because of seeming similarities. As this Court has pointed above, there could be more telling differences than similarities as to make a jurisprudential precedent inapplicable.

Nestle points out that the dominancy test should have been applied to determine whether there is a confusing similarity between CFC's FLAVOR MASTER and Nestle's MASTER ROAST and MASTER BLEND.

We agree.

As the Court of Appeals itself has stated, "[t]he determination of whether two trademarks are indeed confusingly similar must be taken from the viewpoint of the ordinary purchasers who are, in general, undiscerningly rash in buying the more common and less expensive household products like coffee, and are therefore less inclined to closely examine specific details of similarities and dissimilarities between competing products." 21

The basis for the Court of Appeals' application of the totality or holistic test is the "ordinary purchaser" buying the product under

"normally prevalent conditions in trade" and the attention such products normally elicit from said ordinary purchaser. An ordinary purchaser or buyer does not usually make such scrutiny nor does he usually have the time to do so. The average shopper is usually in a hurry and does not inspect every product on the shelf as if he were browsing in a library. 22

The Court of Appeals held that the test to be applied should be the totality or holistic test reasoning, since what is of paramount consideration is the ordinary purchaser who is, in general, undiscerningly rash in buying the more common and less expensive household products like coffee, and is therefore less inclined to closely examine specific details of similarities and dissimilarities between competing products.

This Court cannot agree with the above reasoning. If the ordinary purchaser is "undiscerningly rash" in buying such common and inexpensive household products as instant coffee, and would therefore be "less inclined to closely examine specific details of similarities and dissimilarities" between the two competing products, then it would be less likely for the ordinary purchaser to notice that CFC's trademark FLAVOR MASTER carries the colors orange and mocha while that of Nestle's uses red and brown. The application of the totality or holistic test is improper since the ordinary purchaser would not be inclined to notice the specific features, similarities or dissimilarities, considering that the product is an inexpensive and common household item.

 

It must be emphasized that the products bearing the trademarks in question are "inexpensive and common" household items bought off the shelf by "undiscerningly rash" purchasers. As such, if the ordinary purchaser is "undiscerningly rash", then he would not have the time nor the inclination to make a keen and perceptive examination of the physical discrepancies in the trademarks of the products in order to exercise his choice.

While this Court agrees with the Court of Appeals' detailed enumeration of differences between the respective trademarks of the two coffee products, this Court cannot agree that totality test is the one applicable in this case. Rather, this Court believes that the dominancy test is more suitable to this case in light of its peculiar factual milieu.

Moreover, the totality or holistic test is contrary to the elementary postulate of the law on trademarks and unfair competition that confusing similarity is to be determined on the basis of visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace. 23 The totality or holistic test only relies on visual comparison between two trademarks whereas the dominancy test relies not only on the visual but also on the aural and connotative comparisons and overall impressions between the two trademarks.

For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and held that:

From the evidence at hand, it is sufficiently established that the word MASTER is the dominant feature of opposer's mark. The word MASTER is printed across the middle portion of the label in bold letters almost twice the size of the printed word ROAST. Further, the word MASTER has always been given emphasis in the TV and radio commercials and other advertisements made in promoting the product. This can be gleaned from the fact that Robert Jaworski and Atty. Ric Puno Jr., the personalities engaged to promote the product, are given the titles Master of the Game and Master of the Talk Show, respectively. In due time, because of these advertising schemes the mind of the buying public had come to learn to associate the word MASTER with the opposer's goods.

. . . It is the observation of this Office that much of the dominance which the word MASTER has acquired through Opposer's advertising schemes is carried over when the same is incorporated into respondent-applicant's trademark FLAVOR MASTER. Thus, when one looks at the label bearing the trademark FLAVOR MASTER (Exh. 4) one's attention is easily attracted to the word MASTER, rather than to the dissimilarities that exist. Therefore, the possibility of confusion as to the goods which bear the competing marks or as to the origins thereof is not farfetched. . . . 24

In addition, the word "MASTER" is neither a generic nor a descriptive term. As such, said term can not be invalidated as a trademark and, therefore, may be legally protected. Generic terms

25 are those which constitute "the common descriptive name of an article or substance," or comprise the "genus of which the particular product is a species," or are "commonly used as the name or description of a kind of goods," or "imply reference to every member of a genus and the exclusion of individuating characters," or "refer to the basic nature of the wares or services provided rather than to the more idiosyncratic characteristics of a particular product," and are not legally protectable. On the other hand, a term is descriptive 26 and therefore invalid as a trademark if, as understood in its normal and natural sense, it "forthwith conveys the characteristics, functions, qualities or ingredients of a product to one who has never seen it and does not know what it is," or "if it forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the goods," or if it clearly denotes what goods or services are provided in such a way that the consumer does not have to exercise powers of perception or imagination.

Rather, the term "MASTER" is a suggestive term brought about by the advertising scheme of Nestle. Suggestive terms 27 are those which, in the phraseology of one court, require "imagination, thought and perception to reach a conclusion as to the nature of the goods." Such terms, "which subtly connote something about the product," are eligible for protection in the absence of secondary meaning. While suggestive marks are capable of shedding "some light" upon certain characteristics of the goods or services in dispute, they nevertheless involve "an element of incongruity," "figurativeness," or " imaginative effort on the part of the observer." DHCcST

This is evident from the advertising scheme adopted by Nestle in promoting its coffee products. In this case, Nestle has, over time, promoted its products as "coffee perfection worthy of masters like Robert Jaworski and Ric Puno Jr."

In associating its coffee products with the term "MASTER" and thereby impressing them with the attributes of said term, Nestle advertised its products thus:

Robert Jaworski. Living Legend. A true hard court hero. Fast on his feet. Sure in every shot he makes. A master strategist. In one word, unmatched.

MASTER ROAST. Equally unmatched. Rich and deeply satisfying. Made from a unique combination of the best coffee beans — Arabica for superior taste and aroma, Robusta for strength and body. A masterpiece only NESCAFE, the world's coffee masters, can create.

MASTER ROAST. Coffee perfection worthy of masters like Robert Jaworski. 28

In the art of conversation, Ric Puno Jr. is master. Witty. Well-informed. Confident.

In the art of coffee-making, nothing equals Master Roast, the coffee masterpiece from Nescafe, the world's coffee masters. A unique combination of the best coffee beans — Arabica for superior taste and aroma, Robusta for strength and body. Truly distinctive and rich in flavor.

Master Roast. Coffee perfection worthy of masters like Ric Puno Jr. 29

The term "MASTER", therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by CFC of the term "MASTER" in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or mistake or even to deceive the ordinary purchasers.

In closing, it may not be amiss to quote the case of American Chicle Co. v. Topps Chewing Gum, Inc., 30 to wit:

Why it should have chosen a mark that had long been employed by [plaintiff] and had become known to the trade instead of adopting some other means of identifying its goods is hard to see unless there was a deliberate purpose to obtain some advantage from the trade that [plaintiff] had built up. Indeed, it is generally true that, as soon as we see that a second comer in a market has, for no reason that he can assign, plagiarized the "make-up" of an earlier comer, we need no more; [W]e feel bound to compel him to exercise his ingenuity in quarters further afield.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. SP NO. 24101 is REVERSED and SET

ASIDE and the decision of the Bureau of Patents, Trademarks and Technology Transfer in Inter Partes Cases Nos. 3200 and 3202 is REINSTATED.

SO ORDERED.

Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.

Puno, J., is on official leave.

[G.R. No. L-14761. January 28, 1961.]

ARCE SONS AND COMPANY, petitioner, vs. SELECTA BISCUIT COMPANY, INC, ET AL., respondents.

[G.R. No. 17981. January 28, 1961.]

ARCE SONS AND COMPANY, plaintiff-appellee, vs. SELECTA BISCUIT COMPANY, INC., defendant-appellant.

Manuel O. Chan and Ramon S. Ereneta for plaintiff-appellee.

E. Voltaire Garcia for defendant-appellant.

SYLLABUS

1. TRADEMARKS AND TRADE NAMES; SECONDARY MEANING OF BUSINESS NAME. — Although the word "SELECTA" may be an ordinary or common word in the sense that it may be used or employed by any one in promoting his business or enterprise, once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge or authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and business. In this sense, its use by another may lead to confusion in trade and cause damage to its business.

2. ID.; ID.; WHEN ITS USE BECOMES ENTITLED TO PROTECTION. — Petitioner used the word "SELECTA" as a trade-mark and as such the law gives it protection and guarantees its use to the exclusion of all others. It is in this sense that the law postulates that "The ownership or possession of a trade-mark, . . . shall be recognized and protected in the same manner and to the same extent, as are other property rights known to the law," thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act No. 166, as amended.)

3. ID.; ID.; ID.; WHEN REASON FOR USE OR SAME NAME BY ANOTHER NOT TENABLE. — The suggestion that the name "SELECTA" was chosen merely as a translation from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of its selection, for if the only purpose is to make an English translation of that word and not to compete with the business of petitioner, why choose the word "SELECTA", a Spanish word, and not "SELECTED", the English equivalent thereof, as was done by the other well-known enterprises ?

D E C I S I O N

BAUTISTA ANGELO, J p:

On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be used on its bakery products alleging that it is in actual use thereof for not less than two months before said date and that "no other person, partnership, corporation, or association . . . has the right to use said trade-mark in the Philippines, either in the identical form or in any such near resemblance thereto, as might be calculated to deceive." Its petition was referred to an examiner for study who found that the trade-mark sought to be registered resembles the word "SELECTA" used by Arce Sons and Company, hereinafter referred to as petitioner, in its milk and ice cream products so that its very use by respondent will cause confusion as to the origin of their respective goods. Consequently, he recommended that the application be refused. However, upon reconsideration, the Patent Office ordered the publication of the application - for purposes of opposition.

In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the mark "SELECTA" had been continuously used by petitioner in the manufacture and sale of its products, including cakes, bakery products, milk and ice cream,

from the time of its organization and even prior thereto by its predecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become identified with the name of petitioner and its business; (3) that petitioner had warned respondent not to use said mark because it was already being used by the former, but that the latter ignored said warning; (4) that respondent is using the word "SELECTA" as a trade-mark in bakery products in unfair competition with the products of petitioner thus resulting in confusion in trade; (5) that the mark to which the application of respondent refers has striking resemblance, both in appearance and meaning, to petitioner's mark as to be mistaken therefore by the public and cause respondent's goods to be sold as petitioner's; and (6) that actually a complaint has been filed by petitioner against respondent for unfair competition in the Court of First Instance of Manila asking for damages and for the issuance of a writ of injunction against respondent enjoining the latter from continuing with the use of said mark.

On September 28, 1958, the Court of First Instance of Manila rendered decision in the unfair competition case perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods manufactured and/or sold by it and ordering it to pay petitioner by way of damages all the profits it may have realized by the use of said name, plus the sum of P5,000.00 as attorney's fees and costs of suit. From this decision, respondent brought the matter on appeal to the Court of Appeals wherein the case was docketed as CA-G. R. No. 24017-R.

Inasmuch as the issues of facts in the case for unfair competition are substantially identical with those raised before the Patent Office, the parties, at the hearing thereof, agreed to submit the evidence they have introduced before the Court of First Instance of Manila to said office, and on the strength thereof, the Director of Patents, on December 7, 1958, rendered decision dismissing petitioner's opposition and stating that the registration of the trademark "SELECTA" in favor of applicant Selecta Biscuit Company, Inc., will not cause confusion or mistake nor will deceive the purchasers as to cause damage to petitioner. Hence, petitioner interposed the present petition for review.

On September 7, 1960, this Court issued a resolution of the following tenor:

"In G.R. No. L-14761 (Arce Sons and Company vs. Selecta Biscuit Company, Inc., et al.), considering that the issues raised and evidence presented in this appeal are the same as those involved and presented in Civil Case No. 32907, entitled Arce Sons and Company vs. Selecta Biscuit Company, Inc. of the Court of First Instance of Manila, presently pending appeal in the Court of Appeals, docketed as CA-G.R. No. 24017-R, the Court resolved to require the parties, or their counsel, to inform this Court why the appeal pending before the Court of Appeals should not be forwarded to this Court in order that the two cases may be considered and jointly decided, to avoid any conflicting decision, pursuant to the provisions of sections 17, paragraph 5, of the Judiciary Act of 1948 (Republic Act No. 296)."

And having both petitioner and respondent manifested in writing that they do not register any objection that the case they submitted on appeal to the Court of Appeals be certified to this Court so that it may be consolidated with the present case, the two cases are now before us for consolidated decision.

The case for petitioner is narrated in the decision of the court a quo as follows:

"In 1933, Ramon Arce, predecessor in interest of the plaintiff, started a milk business in Novaliches, Rizal, using the name 'SELECTA' as a trade name as well as a trade-mark. He began selling and distributing his products to different residences, restaurants and offices, in bottles on the caps of which were inscribed the words 'SELECTA FRESH MILK'. As his business prospered, he thought of expanding and, in fact, he expanded his business by establishing a store at Nos. 711-713 Lepanto Street. While there, he began to cater, in addition to milk, ice cream, sandwiches and other food products. As his catering and ice cream business prospered in a big way, he placed a big signboard in his establishment with the name 'SELECTA' inscribed thereon. The signboard was placed right in front of the said store. For the sake of efficiency, the Novaliches place was made the pasteurizing plant and its products were distributed through the Lepanto store. Special containers made of tin cans with the word 'SELECTA' written on their covers and 'embossed or blown' on the bottles themselves were used. Similarly, exclusive bottles for milk products were ordered from Getz Brothers with the word

'SELECTA' blown on them. The sandwiches which were sold and distributed were wrapped in carton boxes with covers bearing the name 'SELECTA'. To the ordinary cars being used for the delivery of his products to serve outside orders were added to a fleet of five (5) delivery trucks with the word 'SELECTA' prominently painted on them. Sales were made directly at the Lepanto store or by means of deliveries to specified addresses, restaurants and offices inside Manila and its suburbs and sometimes to customers in the provinces. As time passed, new products were produced for sale, such as cheese (cottage cheese) with special containers especially ordered from the Philippine Education Company with the name 'Selecta' written on their covers.

"The war that broke out on December 8, 1941, did not stop Ramon Arce from continuing with his business. After a brief interruption of about a month, that is, during the end of January, 1942, and early February, 1942, he resumed his business using the same trade-name and trade-mark, but this time, on a larger scale. He entered the restaurant business. Dairy products, ice cream, milk, sandwiches continued to be sold and distributed by him. However, Ramon Arce was again forced to discontinue the business on October, 1944, because time was beginning to be precarious. American planes started to bomb Manila and one of his sons Eulalio Arce, who was/is managing the business, was seized and jailed by the Japanese. Liberation came and immediately thereafter, Ramon Arce once more resumed his business, even more actively, by adding another store located at the corner of Lepanto and Azcarraga Streets. Continuing to use the name 'Selecta', he added bakery products to his line of business. With a firewood type of oven, about one-half the size of the courtroom, he made his own bread, cookies, pastries and assorted bakery products. Incidentally, Arce's bakery was transferred to Balintawak, Quezon City — another expansion of his business — where the bakery products are now being baked thru the use of firewood, electric and gas oven. These bakery products, like his other products, are being sold at the store itself and/or delivered to people ordering them in Manila and its suburbs, and even Baguio. Like the other products, special carton boxes in different sizes, according to the sizes of the bakery products, with the name 'Selecta' on top of the covers are provided for these bakery products. For the cakes, special boxes and labels reading 'Selecta Cakes for all occasions' are made. For the milk products, special bottle caps and bottles with the colored words 'Quality Always Selecta Fresh Milk, One Pint' inscribed and blown on the sides of the bottles — an innovation from the old bottles and caps used formerly. Similar, special boxes with the name 'Selecta' are provided for fried chicken sold to customers.

 

"Business being already well established, Ramon Arce decided to retire, so that his children can go on with the business. For this purpose, he transferred and leased to them all his rights, interests and participations in the business, including the use of the name 'Selecta' sometime in the year 1950, at a monthly rental of P10,000.00, later reduced to P6,500.00. He further wrote the Bureau of Commerce a letter dated February 10, 1950, requesting cancellation of the business name 'Selecta Restaurant' to give way to the registration of the name 'Selecta' and asked that the same be registered in the name of Arce Sons & Company, a co-partnership entered into by and among his children on February 10, 1950. Said co-partnership was organized, so its articles of co-partnership state, 'to conduct a first class restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy and bakery products; and to carry on such other legitimate business as may produce profit'; Arce Sons & Company has thus continued the lucrative business of their predecessor in interest. It is now, and has always been, engaged in the restaurant business, the sale of milk, and the production and sale of cakes, dairy products and bakery products. Arce Sons & Company are now making bakery products like bread rolls, pan de navarro, pan de sal, and other new types of cookies and biscuits of the round, hard and other types, providing therefor special boxes with the name 'Selecta'.

"Pursuing the policy of expansion adopted by their predecessor, Arce Sons & Company established another store — the now famous 'Selecta Dewey Boulevard', with seven (7) delivery trucks with the name 'Selecta' conspicuously painted on them, to serve, deliver and cater to customers in and outside of Manila."

The case for respondent, on the other hand, is expressed as follows:

"Defendant was organized and registered as a corporation under the name and style of Selecta Biscuit Company, Inc. on March 2, 1955 (Exhibit 2; Exhibit 2-A; t.s.n., p. 3, April 17, 1958) but which started operation as a biscuit factory on June 20, 1955 (t.s.n., p. 3, id). The name 'Selecta' was chosen by the organizers of defendant who are Chinese citizens as a translation of the Chinese word "Ching Suan' which means 'mapili' in Tagalog, and 'Selected' in English (t.s.n. p. 4, id.). Thereupon, the Articles of Incorporation of Selecta Biscuit Company, Inc. were registered with the Securities and Exchange Commission (t.s.n., p. 5, id), and at the same time registered as a business name with the Bureau of Commerce which issued certificate of registration No. 55594 (Exhibit 3; Exhibit 3-A). The same name Selecta Biscuit Company, Inc., was also subsequently registered with the Bureau of Internal Revenue which issued Registration Certificate No. 35764 (Exhibit 4, t.s.n., p. 6 Id.). Inquiries were also made with the Patent Office of the Philippines in connection with the registration of the name 'Selecta'; after an official of the Patent referred to index cards information was furnished to the effect that defendant could register the name 'Selecta' with the Bureau of Patents (t.s.n., p. 7 id.). Accordingly, the corresponding petition for registration of trade-mark was filed (Exh. 5, 5-A, Exhibit 5-B). Defendant actually operated its business factory on June 20, 1955, while the petition for registration of trade-mark 'Selecta' was filed with the Philippine Patent Office only on September 1, 1955, for the reason that the Patent Office informed the defendant that the name should first be used before registration (t.s.n., p. 8, id.). The factory of defendant is located at Tuason Avenue, Northern Hills, Malabon, Rizal, showing plainly on its wall facing the streets the name 'SELECTA BISCUIT COMPANY, INC.' (Exh. 6, 6-A, 6-B, t.s.n., p. 9, id.). It is significant to note that Eulalio Arce, Managing Partner of the plaintiff resided and resides near the defendant's factory, only around 150 meters away; in fact, Eulalio Arce used to pass in front of the factory of defendant while still under construction and up to the present time (t.s.n., pp. 9, 10, id.). Neither Eulalio Arce nor any other person in representation of the plaintiff complained to the defendant about the use of the name 'Selecta Biscuit' until the filing of the present complaint.

"There are other factories using 'Selecta' as trade-mark for biscuits (t.s.n., p. 12; Exh. 7, 7-A, 7-B; Exhibits 8, 8-A, 8-B; Exhibits 9, 9-A; 9-B); defendant in fact uses different kinds of trademarks (Exhibits 10, 10-A, to 10-W, t.s.n., p. 17).

"The biscuits, cookies, and crackers manufactured and sold by defendant are wrapped in cellophane pouches and placed inside tin can (Exh. 11; t.s.n. p. 19); the products of defendant are sold through the length and breadth of the Philippines through agents with more than 600 stores as customers buying on credit (t.s.n., pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958). Defendant employs more than one hundred (100) laborers and employees presently although it started with around seventy (70) employees and laborers (t.s.n., p. 24); its present capitalization fully paid for is Two Hundred Thirty Four Thousand Pesos (P234,000.00) additional capitalizations were duly authorized by the Securities and Exchange Commission (Exhs. 13, 13-A); there was no complaint whatsoever from plaintiff until plaintiff saw defendant's business growing bigger and bigger and flourishing (t.s.n., p. 21) when plaintiff filed its complaint.

"Defendant advertises its products through radio broadcasts and spot announcements (Exhs. 14, 14-A to 14-L; inclusive; Exhs. 15, 15-A, 15-B, 15-C; Exhs. 16, 16-A, 16-B to 16-E, inclusive; Exhs. 17, 17-A to 117-L, inclusive); the broadcasts scripts announced therein through the radio clearly show among others, that Selecta Biscuits are manufactured by Selecta Company, Inc. at Tuason Avenue, Northern Hills, Malabon, Rizal, with Telephone No. 2-13-27 (Exhs. 23-A, 23-B, 23-C, 23-D, 23-E, 23-F).

"Besides the signboard, Selecta Biscuit Company, Inc.' on the building itself, defendant has installed signboards along the highways to indicate the location of the factory of defendant (Exhs. 18, 18-A); delivery trucks of defendant are plainly carrying signboards Selecta Biscuit Company, Inc., Tuason Avenue, Northern Hills, Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19, 19-A, 19-B, 19-C, 19-D, 19-E, 19-F). Defendant is using modern machineries in its biscuits factory (Exhs. 20, 20-A, 20-B, 20-C, 20-D, 20-E). The defendant sells its products throughout the Philippines, including Luzon, Visayas, and Mindanao; its customers count, among others, 600 stores buying on credit; its stores buying on cash number around 50 (t.s.n., p. 10). Sales in Manila and suburbs are minimal (Exh. 12). Defendant is a wholesaler and not a retailer of biscuits, cookies, and crackers.

This is the nature of the operation of the business of the defendant."

At the outset one cannot but note that in the two cases appealed before us which involves the same parties and the same issues of fact and law, the court a quo and the Director of Patents have rendered contradictory decisions. While the former is of the opinion that the word "SELECTA" has been used by petitioner, or its predecessor-in-interest, as a trade-mark in the sale and distribution of its dairy and bakery products as early as 1933 to the extent that it has acquired a proprietary connotation so that to allow respondent to use it now as a trade-mark in its business would be a usurpation of petitioner's goodwill and an infringement of its property right, the Director of Patents entertained a contrary opinion. He believes that the word as used by petitioner functions only to point to the place of business or location of its restaurant while the same word as used by respondent points to the origin of the products it manufactures and sells and he predicates the distinction upon the fact that while the goods of petitioner are only served within its restaurant or sold only on special orders in the City of Manila, respondent's goods are ready- made and are for sale throughout the length and breadth of the country. He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade contrary to the finding of the court a quo. Which of these opinions is correct is the issue now for determination.

It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as 1933. He sold his milk products in bottles covered by caps on which the words "SELECTA FRESH MILK" were inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila, where he sold, in addition to his milk products, ice cream, sandwiches and other food products, placing right in of his establishment a signboard with the name "SELECTA" inscribed thereon. Special containers made of tin cans with the word "SELECTA" written on their covers were used for his products. Bottles with the same word embossed on their sides were used for his milk products. The sandwiches he sold and distributed were wrapped in carton boxes with covers bearing the same name. He used several cars and trucks for delivery purposes on the sides of which were written the same word. As new products were produced for sale, the same were placed in containers with the same name written on their covers. After the war, he added to his business such items as cakes, bread, cookies, pastries and assorted bakery products. Then his business was acquired by petitioner, a co-partnership organized by his sons, the purposes of which are "to conduct a first class restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy and bakery products; and to carry on such other legitimate business as may produce profit."

The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of the location of the restaurant where it manufactures and sells its products, but as a trade-mark to indicate the goods it offers for sale to the public. No other conclusion can be drawn. This is the very meaning or essence in which a trade-mark is used. This is not only in accordance with its general acceptance but with our law on the matter.

 

"'Trade-mark' or "trade-name', distinction being highly technical, is sign, device, or mark by which articles produced are dealt in by particular person or organization are distinguished or distinguishable from those produced or dealt in by others." (Church of God vs. Tomlinson Church of God, 247 SW 2d. 63, 64)

"A 'trade-mark' is a distinctive mark of authenticity through which the merchandise of a particular producer or manufacturer may be distinguished from that of others, and its sole function is to designate distinctively the origin of the products to which it is attached." (Reynolds & Reynolds Co. vs. Norick, et al., 114 F 2d, 278)

"The term 'trade-mark' includes any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguished them from those manufactured, sold or dealt in by others". (Section 38, Republic Act No. 166)

Verily, the word "SELECTA" has been chosen by petitioner and has been inscribed on all its products to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as a mark of authenticity that may distinguish them from the

products manufactured and sold by other merchants or businessmen. The Director of Patents, therefore, erred in holding that petitioner made use of that word merely as a trade-name and not as trade-mark within the meaning of the law. 1

The word "SELECTA", it is true, may be an ordinary or common word in the sense that it may be used or employed by any one in promoting his business or enterprise, but once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and business. 2 In this sense, its use by another may lead to confusion in trade and cause damage to its business. And this is the situation of petitioner when it used the word "SELECTA" as a trade-mark. In this sense, the law gives it protection and guarantees its use to the exclusion of all others (G. & C. Merrian Co. vs. Saalfield, 198 F. 369, 373). And it is also in this sense that the law postulates that "The ownership or possession of a trade-mark, . . . shall be recognized and protected in the same manner and to the same extent, as are other property rights known to the law," thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act No. 166, as amended).

The term "SELECTA" may be placed at par with the words "Ang Tibay" which this Court has considered not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a trade-mark. In that case, this Court found that respondent has consistently used the term "Ang Tibay", both as a trade-mark and a trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts so that it has performed during that period the function of a trade-mark to point distinctively, or by its own meaning or by association, to the origin or ownership of the wares to which it applies. And in holding that respondent was entitled to protection in the use of that trade-mark, this Court made the following comment:

"The function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. 'Ang Tibay,' as used by the respondent to designate his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in her own business. 'Ang Tibay' shoes and slippers are, by association, known throughout the Philippines as products of the 'Ang Tibay' factory owned and operated by the respondent. Even if 'Ang Tibay, therefore, were not capable of exclusive appropriation as a trade-mark, the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in any event, by respondent's long and exclusive use of said phrase with reference to his products and business, it has acquired a proprietary connotation. This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product." (Ang vs. Teodoro, supra.)

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

But respondent claims that it adopted the trade-mark "SELECTA" in good faith and not precisely to engage in unfair competition with petitioner. It tried to establish that respondent was organized as a corporation under the name of Selecta Biscuit Company, Inc. on March 2, 1955 and started operations as a biscuit factory on June 20, 1955; that the name "SELECTA" was chosen by the organizers of respondent who are Chinese citizens as a translation of the Chinese word "Ching Suan" which means "mapili" in Tagalog, and "Selected" in English; that, thereupon, it registered its articles of incorporation with the Securities and Exchange Commission and the name "SELECTA" as a business name with the Bureau of Commerce which issued to it Certificate of Registration No. 55594; and that it also registered the same trade-name with the Bureau of Internal Revenue and took steps to obtain a patent from the Patent Office by filing with it an application for the registration of said trade-name.

The suggestion that the name "SELECTA" was chosen by the organizers of respondent merely as a translation from a Chinese

word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of its selection, for if the only purpose is to make an English translation of that word and not to compete with the business of petitioner, why choose the word "SELECTA", a Spanish word, and not "Selected", the English equivalent thereof, as was done by other well- known enterprises? In the words of petitioner's counsel, "Why with all the words in the English dictionary and all the words in the Spanish dictionary and all the phrases that could be coined, should defendant- appellant (respondent) chose 'SELECTA' if its purpose was not and is not to fool the people and to damage plaintiff-appellee?". In this respect, we find appropriate the following comment of the trial court:

"Eventually, like the plaintiff, one is tempted to ask as to why with the richness in words of the English language and with the affluence of the Spanish vocabulary or, for that matter, of our own dialects, should the defendant choose the controverted word 'Selecta', which has already acquired a secondary meaning by virtue of plaintiff's prior and continued use of the same as a trademark or tradename for its products? The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was chosen for its bakery products by the organizers of said company from the Chinese Word 'Ching Suan' meaning 'mapili', which in English means 'Selected', and that they chose 'selecta', being the English translation, is, to say the least, very weak and untenable. Sy Hap himself admitted that he had known Eulalio Arce, the person managing plaintiff's business since 1954; that since he begun to reside at 10th Avenue, Grace Park, he had known the Selecta Restaurant on Azcarraga street; that at the time he established the defendant company, he knew that the word 'Selecta' was being employed in connection with the business of Eulalio Arce; that he had seen signboards of 'Selecta on Azcarraga Street and Dewey Boulevard and that he even had occasion to eat in one of the restaurants of the plaintiff. All of these circumstances tend to conspire in inducing one to doubt defendant's motive for using the same word 'Selecta' for its bakery products. To allow the defendant here to use the word 'Selecta' in spite of the fact that this word has already been adopted and exploited by Ramon Arce and by his family thru the organization of Arce Sons and Company, for the maintenance of its goodwill, for which said plaintiff and its predecessor have spent time, effort, and fortune, is to permit business pirates and buccaneers to appropriate for themselves and to their profit and advantage the trade names and trade marks of well established merchants with all their attendant goodwill and commercial benefit. Certainly, this cannot be allowed, and it becomes the duty of the court to protect the legitimate owners of said trade-names and trade- marks, for under the law, the same constitute one kind of property right entitled to the necessary legal protection."

Other points raised by respondent to show that the trial court erred in holding that the adoption by it of the word "SELECTA" is tantamount to unfair competition are: (1) that its products are biscuits, crackers. and cookies, wrapped in cellophane packages, placed in tin containers, and that its products may last a year without spoilage, while the ice cream, milk, cakes and other bakery products which petitioner manufactures last only for two or three days; (2) that the sale and distribution of petitioner's products are on retail basis, limited to the City of Manila and suburbs, and its place of business is localized at Azcarraga, corner Lepanto Street and at Dewey Boulevard, Manila, while that of respondent is on a wholesale basis, extending throughout the length and breadth of the Philippines; (3) that petitioner's signboard on its place of business reads, "SELECTA" and on its delivery trucks "Selecta, Quality Always, Restaurant and Caterer, Azcarraga, Dewey Boulevard, Balintawak and Telephone number" in contrast with respondent's signboard on its factory which reads "Selecta Biscuit Company, Inc., and on its delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-27; (4) that the business name of petitioner is different from the business name of respondent; (5) that petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in the amount of P234,000.00 out of the P500,000.00 authorized capital, and (6) that the use of the name "SELECTA" by respondent cannot lead to confusion in the business operation of the parties.

 

We have read carefully the reasons advanced in support of the points raised by counsel in an effort to make inroads into the findings of the court a quo on unfair competition, but we believe them to be insubstantial and untenable. They appear to be well answered and refuted by counsel for petitioner in his brief, which

refutation we do not need to repeat here. Suffice it to state that we agree with the authorities and reasons advanced therein which incidentally constitute the best support of the decision of the court a quo.

With regard to the claim that petitioner failed to present sufficient evidence on the contract of lease of the business from its predecessor-in-interest, we find that under the circumstances secondary evidence is admissible.

In view of the foregoing, we hold that the Director of Patents committed an error in dismissing the opposition of petitioner and in holding that the registration of the trade-mark "SELECTA" in favor of respondent will not cause damage to petitioner, and, consequently, we hereby reverse his decision.

Consistently with this finding, we hereby affirm the decision of the court a quo rendered in G.R. No. L-17981. No costs.

Paras, C.J., Bengzon, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, Paredes and Dizon., JJ., concur.

[G.R. No. L-18289. March 31, 1964.]

ANDRES ROMERO, petitioner, vs. MAIDEN FORM BRASSIERE CO., INC. and THE DIRECTOR OF PATENTS, respondents.

Alafriz Law Office for petitioner.

Ross, Selph & Carascoso for respondent Maiden Form Brassiere Co., Inc.

Solicitor General and Tiburcio S. Evalle for respondent Director of Patents.

SYLLABUS

1. TRADEMARKS; REGISTRABILITY; "ADAGIO" AS A MUSICAL TERM NOT A COMMON DESCRIPTIVE NAME FOR BRASSIERES. — The trademark "Adagio" is a musical term, which means slowly or in an easy manner, and when applied to brassieres is used in an arbitrary (fanciful) sense, not being a common descriptive name of a particular style of brassieres, and is therefore registrable.

2. ID.; ID.; LONG CONTINUOUS USE OF TRADEMARK DOES NOT RENDER IT DESCRIPTIVE OF A PRODUCT. — A company's long and continuous use of a trademark does not by itself render it more descriptive of the product.

3. ID.; ID.; USING TRADEMARK FOR ONE TYPE OF THE PRODUCT DOES NOT AFFECT ITS VALIDITY AS A TRADEMARK. — Where a product is usually of different types or styles and the manufacturer has used different trademarks for every type as shown by its labels, the mere fact that said manufacturer uses a trademark like "Adagio", for one type or style, does not affect the validity of such word as a trademark.

4. ID.; ABANDONMENT; TEMPORARY NON-USE OCCASIONED BY GOVERNMENT RESTRICTIONS NOT DEEMED ABANDONMENT. — Temporary non-use of a trademark occasioned by government restrictions, not being permanent, intentional and voluntary, does not affect the right to a trademark.

5. ID.; FOREIGN TRADEMARKS; MAY BE AVAILED OF IN THE PHILIPPINES IS A PARTY TO A TRADE MARK TREATY. — Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an international convention or treaty relating to trademarks, in which case the trademark sought to be registered need not be in use in the Philippines.

D E C I S I O N

BARRERA, J p:

From the decision of the Director of Patents (of January 17, 1961) dismissing his petition for cancellation of the registration of the trademark "Adagio" for brassieres manufactured by respondent Maiden Form Brassiere Co., Inc., petitioner Andres Romero, interposed this appeal.

On February 12, 1957, respondent company, a foreign corporation, filed with respondent Director of Patents an application for registration (pursuant to Republic Act No. 166) of the trademark 'Adagio" for the Brassieres manufactured by it. In its application, respondent company alleged that said trademark was first used by it in the United States on October 26, 1937, and in the Philippines

on August 31, 1946, that it had been continuously used by it in trade in, or with the Philippines for over 10 years: that said trademark "is on the date of this application, actually used by respondent company on the following goods, classified according to the official classification of goods (Rule 82) — Brassieres, Class 40"; and that said trademark is applied or affixed by respondent to the goods by placing thereon a woven label on which the trademark is shown.

Acting on said application, respondent Director, on August 13, 1957, approved for publication in the Official Gazette said trademark of respondent company, in accordance with Section 7 of Republic Act No. 166 (Trademark Law), having found, inter alia, that said trademark is "a fanciful and arbitrary use of a foreign word adopted by applicant as a trademark for its product; that it is neither a surname nor a geographical term, nor any that comes within the purview of Section 4 of Republic Act No. 166; and that the mark as used by respondent company convincingly shows that it identifies and distinguishes respondent company's goods from others."

On October 17, 1957, respondent Director issued to respondent company a certificate of registration of its trademark "Adagio".

On February 26, 1958, petitioner filed with respondent Director a petition for cancellation of said trademark, on the grounds that it is a common descriptive name of an article or substance on which the patent has expired; that its registration was obtained fraudulently or contrary to the provision of Section 4, Chapter II of Republic Act No. 166; and that the application for its registration was not filed in accordance with the provisions of Section 37, Chapter XI of the same Act. Petitioner also alleged that said trademark has not become distinctive of respondent company's goods or business; that it has been used by respondent company to classify the goods (the brassieres) manufactured by it, in the same manner as petitioner uses the same; that said trademark has been used by petitioner for almost 6 years, that it has become a common descriptive name; and that it is not registered in accordance with the requirements of Section 37 (a), Chapter XI of Republic Act No. 166.

Issues having been joined, the case was heard and, after hearing, respondent Director (on January 17, 1961) rendered the decision above adverted to.

Petitioner filed a motion for reconsideration of said decision, on the grounds that (1) it is contrary to the evidence, and (2) it is contrary to law. Said motion was denied by respondent Director by resolution of March 7, 1961.

Hence, this appeal.

Appellant claims that the trademark "Adagio" has become a common descriptive name of a particular style of brassiere and is, therefore, unregistrable. It is urged that said trademark had been used by local brassiere manufacturers since 1948, without objection on the part of respondent company.

This claim is without basis in fact. The evidence shows that the trademark "Adagio" is a musical term, which means slowly or in an easy manner, and was used as a trademark by the owners thereof (the Rosenthals of Maiden Form Co., New York) because they are musically inclined. Being a musical term, it is used in an arbitrary (fanciful) sense as a trademark for brassieres manufactured by respondent company. It also appears that respondent company has, likewise, adopted other musical terms such as "Etude" (Exh. W-2), "Chansonette" Exh. W-3), "Prelude" (Exh. W-4), "Over-ture" (Exh. W-6), and "Concerto" (Exh. V), to identify, as a trademark, the different styles or types of its brassieres. As respondent Director pointed out, "the fact that said mark is used also to designate a particular style of brassiere, does not affect its registrability as a trademark" (Kiekhaefer Corp. v. Willys-Overland Motors, Inc., 111 USPQ 105).

It is not true that respondent company did not object to the use of said trademark by petitioner and other local brassiere manufacturers. The records show that respondent company's agent, Mr. Schwarzt, warned the Valleson Department Store to desist from the sale of the "Adagio" Royal Form brassieres manufactured by petitioner (t.s.n., pp. 27-28, Oct. 7, 1958), and even placed an advertisement (Exhs. 3 & 4) in the local newspapers (Manila Daily) Bulletin, Manila Times, Fookien Times, and others) warning the public against unlawful use of said trademark (t.s.n., p. 15 Aug. 17, 1959). The advertisement (Exh. U) in the Manila Times made by respondent company on February 9,

1958, was brought to petitioner's attention (t.s.n, p. 24 Oct. 7, 1958), which must have prompted him to file this present petition for cancellation, on February 26, 1958.

On the other hand, respondent company's long and continuous use of the trademark "Adagio" has not rendered it merely descriptive of the product. In Winthrop Chemical Co. v. Blackman (268 NYC 653), it was held that widespread dissemination does not justify the defendants in the use of the trademark.

"Veronal has been widely sold in this country by the plaintiff; over 5,250,000 packages have been sold since 1919. This is a consequence of the long and continued use by the plaintiff of this trademark and is the result of its efforts to inform the profession and the public of its product. This widespread dissemination does not justify the defendants on the use of this trademark. If this argument were sound, then every time a plaintiff obtained the result of having the public purchase of its article, that fact of itself would destroy a trademark. Arbitrary trademarks cannot become generic in this way. Jacobs vs. Beecham, 221 U.S. 263, 31 S. Ct. 555, 55 L. Ed. 729; Coca- Cola Co. v. Koke Co. of America, 254 U.S. 143, 41 S. Ct. 113, 65 L. Ed. 189." (Emphasis supplied)

Appellant next contends that the trademark "Adagio" at the time it was registered (in the Philippines) on October 17, 1957, had long been used by respondent company, only "to designate a particular style or quality of brassiere and, therefore, is unregistrable as a trademark." In support of the contention, he alleges that the sentence "Maidenform bras are packaged for your quick shopping convenience. For other popular Maidenform styles write for free style booklet to: Maiden Form Brassiere Co., Inc., 200 Madison Avenue, New York 16, N.Y." printed on the package (Exh. W), shows that the trademark "Adagio" is used to designate a particular style or quality of brassiere. He also cites portions of testimonies of his witnesses Bautista and Barro, to the effect that said trademark refers to the style of brassieres sold in the stores of which they are salesmen.

This contention is untenable. Said sentence appearing on the package (Exh. W), standing alone, does not conclusively indicate that the trademark "Adagio" is merely a style of brassiere. The testimony of Mr. Schwartz, witness of respondent company, belies petitioner's claim:

"Q. There is a statement at the bottom of Exhibit W which reads, 'There is a Maidenform for every type of figure'. As you stated you are very familiar with these bras manufactured by Maidenform Brassier Company, what are these types of figures this Exhibit W refer to?

"A. This is a product sold primarily in the United States, they have cold climate there, and a style to suit the climate and we have different here. This kind of bra very seldom comes here. This type is very expensive and sold primarily in the United States. We do not sell it here; it is very expensive and import restrictions do not allow our dollar allocations for such sort."

 

As to the testimonies of Bautista and Barro, they are mere conclusions of said witnesses. Note that when Bautista was asked why he considered the trademark "Adagio" as a style, he replied that the brand "Adagio" is attached to distinguish the style. He stated as follows:

"Q. You said that those bras mentioned by you such as Adagio, Prelude, Alloette, are styles, will you please tell us the reason why you said that those are styles?

"A. You know this brand like Adagio, Alloette are just attached to the bras just to distinguish the style. It is not the main brand."

Barro, on the other hand, said that "Adagio" is a mark. She declared as follows:

"Q. You state that you used to sell brassieres in the store in which you work; when customers come to your store and ask for brassieres, what do they usually ask from you?

"A. Well, I tell you there are so many types and certain types of people asking for certain brassiere. There are people who ask for Royal Form, Adagio, and there are others who ask for Duchess Ideal Form, and so many kinds of marks."

Brassieres are usually of different types or styles, and appellee has used different trademarks for every type as shown by its labels,

Exhibits W-2 (Etude), W-3 (Chansonette), W-4 (Prelude), W-5 (Maidenette), and W-6 (Over-ture). The mere fact that appellee uses "Adagio" for one type or style, does not affect the validity of such word as a trademark. In the case of Kiekhaefer Corp., v. Willys-Overland Motors, 111 USPQ 105, it was held that the fact that the work "Hurricane" was used to designate only one model of automobile, did not affect the validity of that word as a trademark. In Minnesota Mining Co. v. Motloid Co., 74 USPQ 235, the applicant sought to register the letters "MM" in diagonal relationship within a circle. Applicant admitted that this mark was used only for its medium price and medium quality denture base materials. The Assistant Commissioner of Patents held:

"It clearly appears, however, that the mark serves to indicate origin of applicant's goods; and the fact that it is used on only one of several types or grades does not affect its registrability as a trademark."

Appellant also claims that respondent Director erred in registering the trademark in question, despite appellee's non-compliance with Section 37, paragraphs 1 and 4(a) of Republic Act No. 166.

This contention flows from a misconception of the application for the registration of trademark of respondent company. As we see it, respondent's application was filed under the provisions of Section 2 of Republic Act No. 166 as amended by Section 1 of Republic Act 865 which reads as follows:

"SEC. 2. What are registrable. — Trademarks, . . . owned by persons, corporations, partnerships or associations domiciled . . . in any foreign country may be registered in accordance with the provisions of this Act; Provided, That said trademarks, trade-names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registrations are filed: . . ."

Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an international convention or treaty relating to trademarks, in which case the trade-mark sought to be registered need not be in use in the Philippines. The applicability of Section 37 has been commented on by the Director of Patents, in this wise:

"Trademark rights in the Philippines, without actual use of the trademark, in this country can, of course, be created artificially by means of a treaty or convention with another country or countries. Section 37 of the present Philippine Trademark Law, Republic Act No. 166, (incorporated as Rule 82 in the Rules of Practice for Registration of Trademarks) envisions the eventual entrance of the Philippines into such convention or treaty. It is provided in said section that applications filed thereunder need not allege use in the Philippines of the trademark sought to be registered. The Philippines has, however, not yet entered into any such treaty or convention and, until she does, actual use in the Philippines of the trademark sought to be registered and allegation in the application of such fact, will be required in all applications for original or renewal registration submitted to the Philippine Patent Office". (Circular Release No. 8)

Appellant, likewise, contends that the registration of the trademark in question was fraudulent or contrary to Section 4 of Republic Act No. 166. There is no evidence to show that the registration of the trademark "Adagio" was obtained fraudulently by appellee. The evidence on record shows, on the other hand, that the trademark "Adagio" was first used exclusively in the Philippines by appellee in the year 1932. There, being no evidence of use of the mark by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped using it during the period of time that the Government imposed restrictions on importation of respondent's brassiere bearing the trademark, such temporary non-use did not affect the rights of appellee because it was occasioned by government restrictions and was not permanent, intentional, and voluntary.

"To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance of any trade-mark use of the mark in question" (Callman, Unfair Competition and Trademark, 2nd Ed., p. 1341).

The use of the trademark by other manufacturers did not indicate an intention on the part of appellee to abandon it.

"The instances of the use by others of the term 'Budweiser', cited by the defendant, fail, even when liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that name. 'To establish the defense of abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intent to abandon.' Saxlehner v. Eisener & Mendelson Co., 179 U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60)." (Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287 E. 245).

Appellant next argues that respondent Director erred in declaring illegal the appropriation in the Philippines of the trademark in question by appellant and, therefore, said appropriation did not affect appellee's right thereto and the subsequent registration thereof. Appellant urges that its appropriation of the trademark in question cannot be considered illegal under Philippine laws, because of non-compliance by appellee of Section 37 of Republic Act No. 166. But we have already shown that Section 37 is not the provision invoked by respondent because the Philippines is not as yet a party to any international convention or treaty relating to trademarks. The case of United Drug Co. v. Rectanus, 248, U.S. 90, 39 S. Ct. 48, 63 L. Ed. 141, cited by appellant, is not applicable to the present case, as the records show that appellee was the first user of the trademark in the Philippines, whereas appellant was the later user. Granting that appellant used the trademark at the time appellee stopped using it due to government restrictions on certain importations, such fact did not as heretofore stated, constitute abandonment of the trademark as to entitle anyone to its free use.

"Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to leave France was consistent with an intention to retain their right to use their old mark. Abandonment will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the same of liquor." (Nims, Unfair Competition and Trade-Marks, p. 1269)

IN VIEW OF ALL THE FOREGOING, we are of the opinion and so hold, that respondent Director of Patents did not err in dismissing the present petition for cancellation of the registered trademark of appellee company, and the decision appealed from is therefore hereby affirmed, with costs against the appellant. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes, Dizon, Regala and Makalintal, JJ., concur.

Concepcion, J., took no part.

[G.R. No. 120900. July 20, 2000.]

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

Saludo Agpalo Fernandez & Aquino for petitioner.

Juan G. Rañola, Jr. for private respondent.

SYNOPSIS

Petitioner Canon Kabushiki Kaisha seeks a review of the decision of the Court of Appeals (CA) and the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) which approved private respondent's application for registration of the mark CANON for sandals.

On appeal, the Supreme Court upheld the decision of the CA and the BPTTT ruling that the trademark "CANON" as used by petitioner for its paints, chemical products, toner and dyestuff, can be used by private respondent for its sandals because the products of these two parties are dissimilar; that petitioner failed to present evidence that it has also embarked in the production of footwear products; and that the evident disparity of the products of the parties in this case rendered unfounded the apprehension of petitioner that confusion of business or origin might occur if private respondent is allowed to use the mark CANON.

SYLLABUS

1. COMMERCIAL LAW; TRADEMARK LAW; USE OF A TRADEMARK FOR A PRODUCT DISSIMILAR TO THE PRODUCT OF TRADEMARK OWNER IS VALID; CASE AT BAR. — Ordinarily, the ownership of a trademark or tradename is a property right that the owner is entitled to protect as mandated by the Trademark Law. However, when a trademark is used by a

party for a product in which the other party does not deal, the use of the same trademark on the latter's product cannot be validly objected to. A review of the records shows that with the order of the BPTTT declaring private respondent in default for failure to file its answer, petitioner had every opportunity to present ex-parte all of its evidence to prove that its certificates of registration for the trademark CANON cover footwear. The certificates of registration for the trademark CANON in other countries and in the Philippines as presented by petitioner, clearly showed that said certificates of registration cover goods belonging to class 2 (paints, chemical products, toner, dyestuff). On this basis, the BPTTT correctly ruled that since the certificate of registration of petitioner for the trademark CANON covers class 2 (paints, chemical products, toner, dyestuff), private respondent can use the trademark CANON for its goods classified as class 25 (sandals). Clearly, there is a world of difference between the paints, chemical products, toner, and dyestuff of petitioner and the sandals of private respondent.

2. ID.; ID.; ID.; EXCLUSIVE RIGHT OF TRADEMARK OWNER TO USE TRADEMARK IS LIMITED TO GOODS COVERED BY ITS CERTIFICATE OF REGISTRATION; CASE AT BAR. — Petitioner counters that notwithstanding the dissimilarity of the products of the parties, the trademark owner is entitled to protection when the use of by the junior user "forestalls the normal expansion of his business." Petitioner's opposition to the registration of its trademark (CANON) by private respondent rests upon petitioner's insistence that it would be precluded from using the mark CANON for various kinds of footwear, when in fact it has earlier used said mark for said goods. Stretching this argument, petitioner claims that it is possible that the public could presume that petitioner would also produce a wide variety of footwear considering the diversity of its products marketed worldwide. We do not agree. Even in this instant petition, except for its bare assertions, petitioner failed to attach evidence that would convince this Court that petitioner has also embarked in the production of footwear products. . . . In Faberge, Incorporated vs. Intermediate Appellate Court, . . . We reiterated the principle that the certificate of registration confers upon the trademark owner the exclusive right to use its own symbol only to those goods specified in the certificate, subject to the conditions and limitations stated therein. Thus, the exclusive right of petitioner in this case to use the trademark CANON is limited to the products covered by its certificate of registration. AcICHD

3. ID.; ID.; ID.; ID.; CONFUSION OF BUSINESS OR ORIGIN NOT LIKELY DUE TO EVIDENT DISPARITY OF THE PRODUCTS OF THE PARTIES IN CASE AT BAR. — The likelihood of confusion of goods or business is a relative concept, to be determined only according to the particular, and sometimes peculiar, circumstances of each case. Indeed, in trademark law cases, even more than in other litigation, precedent must be studied in the light of the facts of the particular case. Contrary to petitioner's supposition, the facts of this case will show that the cases of Sta. Ana vs. Maliwat, Ang vs. Teodoro and Converse Rubber Corporation vs. Universal Rubber Products, Inc. are hardly in point. The just cited cases involved goods that were confusingly similar, if not identical, as in the case of Converse Rubber Corporation vs. Universal Rubber Products, Inc. Here, the products involved are so unrelated that the public will not be misled that there is the slightest nexus between petitioner and the goods of private respondent. In cases of confusion of business or origin, the question that usually arises is whether the respective goods or services of the senior user and the junior user are so related as to likely cause confusion of business or origin, and thereby render the trademark or tradenames confusing similar. . . . Undoubtedly, the paints, chemical products, toner and dyestuff of petitioner that carry the trademark CANON are unrelated to sandals, the product of private respondent.

D E C I S I O N

GONZAGA-REYES, J p:

Before us is a petition for review that seeks to set aside the Decision 1 dated February 21, 1995 of the Court of Appeals in CA-GR SP No. 30203, entitled "Canon Kabushiki Kaisha vs. NSR Rubber Corporation" and its Resolution dated June 27, 1995 denying the motion for reconsideration of herein petitioner Canon Kabushiki Kaisha (petitioner).

On January 15, 1985, private respondent NSR Rubber Corporation (private respondent) filed an application for registration of the mark CANON for sandals in the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT). A Verified Notice of Opposition was

filed by petitioner, a foreign corporation duly organized and existing under the laws of Japan, alleging that it will be damaged by the registration of the trademark CANON in the name of private respondent. The case was docketed as Inter Partes Case No. 3043.

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

Based on the records, the evidence presented by petitioner consisted of its certificates of registration for the mark CANON in various countries covering goods belonging to class 2 (paints, chemical products, toner, and dye stuff). Petitioner also submitted in evidence its Philippine Trademark Registration No. 39398, showing its ownership over the trademark CANON also under class 2.

On November 10, 1992, the BPTTT issued its decision dismissing the opposition of petitioner and giving due course to private respondent's application for the registration of the trademark CANON. On February 16, 1993 petitioner appealed the decision of the BPTTT with public respondent Court of Appeals that eventually affirmed the decision of BPTTT. Hence, this petition for review.

Petitioner anchors this instant petition on these grounds:

A) PETITIONER IS ENTITLED TO EXCLUSIVE USE OF THE MARK CANON BECAUSE IT IS ITS TRADEMARK AND IS USED ALSO FOR FOOTWEAR.

B) TO ALLOW PRIVATE RESPONDENT TO REGISTER CANON FOR FOOTWEAR IS TO PREVENT PETITIONER FROM USING CANON FOR VARIOUS KINDS OF FOOTWEAR, WHEN IN FACT, PETITIONER HAS EARLIER USED SAID MARK FOR SAID GOODS.

C) PETITIONER IS ALSO ENTITLED TO THE RIGHT TO EXCLUSIVELY USE CANON TO PREVENT CONFUSION OF BUSINESS.

D) PETITIONER IS ALSO ENTITLED TO THE EXCLUSIVE USE OF CANON BECAUSE IT FORMS PART OF ITS CORPORATE NAME, PROTECTED BY THE PARIS CONVENTION. 2

The BPTTT and the Court of Appeals share the opinion that the trademark "CANON" as used by petitioner for its paints, chemical products, toner, and dyestuff, can be used by private respondent for its sandals because the products of these two parties are dissimilar. Petitioner protests the appropriation of the mark CANON by private respondent on the ground that petitioner has used and continues to use the trademark CANON on its wide range of goods worldwide. Allegedly, the corporate name or tradename of petitioner is also used as its trademark on diverse goods including footwear and other related products like shoe polisher and polishing agents. To lend credence to its claim, petitioner points out that it has branched out in its business based on the various goods carrying its trademark CANON 3 , including footwear which petitioner contends covers sandals, the goods for which private respondent sought to register the mark CANON. For petitioner, the fact alone that its trademark CANON is carried by its other products like footwear, shoe polisher and polishing agents should have precluded the BPTTT from giving due course to the application of private respondent. SDEHIa

We find the arguments of petitioner to be unmeritorious. Ordinarily, the ownership of a trademark or tradename is a property right that the owner is entitled to protect 4 as mandated by the Trademark Law. 5 However, when a trademark is used by a party for a product in which the other party does not deal, the use of the same trademark on the latter's product cannot be validly objected to. 6

A review of the records shows that with the order of the BPTTT declaring private respondent in default for failure to file its answer, petitioner had every opportunity to present ex-parte all of its evidence to prove that its certificates of registration for the trademark CANON cover footwear. The certificates of registration for the trademark CANON in other countries and in the Philippines as presented by petitioner, clearly showed that said certificates of registration cover goods belonging to class 2 (paints, chemical products, toner, dyestuff). On this basis, the BPTTT correctly ruled that since the certificate of registration of petitioner for the trademark CANON covers class 2 (paints, chemical products, toner, dyestuff), private respondent can use the trademark CANON

for its goods classified as class 25 (sandals). Clearly, there is a world of difference between the paints, chemical products, toner, and dyestuff of petitioner and the sandals of private respondent.

 

Petitioner counters that notwithstanding the dissimilarity of the products of the parties, the trademark owner is entitled to protection when the use of by the junior user "forestalls the normal expansion of his business". 7 Petitioner's opposition to the registration of its trademark CANON by private respondent rests upon petitioner's insistence that it would be precluded from using the mark CANON for various kinds of footwear, when in fact it has earlier used said mark for said goods. Stretching this argument, petitioner claims that it is possible that the public could presume that petitioner would also produce a wide variety of footwear considering the diversity of its products marketed worldwide.

We do not agree. Even in this instant petition, except for its bare assertions, petitioner failed to attach evidence that would convince this Court that petitioner has also embarked in the production of footwear products. We quote with approval the observation of the Court of Appeals that:

"The herein petitioner has not made known that it intends to venture into the business of producing sandals. This is clearly shown in its Trademark Principal Register (Exhibit "U") where the products of the said petitioner had been clearly and specifically described as "Chemical products, dyestuffs, pigments, toner developing preparation, shoe polisher, polishing agent." It would be taxing one's credibility to aver at this point that the production of sandals could be considered as a possible "natural or normal expansion" of its business operation". 8

In Faberge, Incorporated vs. Intermediate Appellate Court, 9 the Director of patents allowed the junior user to use the trademark of the senior user on the ground that the briefs manufactured by the junior user, the product for which the trademark BRUTE was sought to be registered, was unrelated and non-competing with the products of the senior user consisting of after shave lotion, shaving cream, deodorant, talcum powder, and toilet soap. The senior user vehemently objected and claimed that it was expanding its trademark to briefs and argued that permitting the junior user to register the same trademark would allow the latter to invade the senior user's exclusive domain. In sustaining the Director of Patents, this Court said that since "(the senior user) has not ventured in the production of briefs, an item which is not listed in its certificate of registration, (the senior user), cannot and should not be allowed to feign that (the junior user) had invaded (the senior user's) exclusive domain." 10 We reiterated the principle that the certificate of registration confers upon the trademark owner the exclusive right to use its own symbol only to those goods specified in the certificate, subject to the conditions and limitations stated therein. 11 Thus, the exclusive right of petitioner in this case to use the trademark CANON is limited to the products covered by its certificate of registration.

Petitioner further argues that the alleged diversity of its products all over the world makes it plausible that the public might be misled into thinking that there is some supposed connection between private respondent's goods and petitioner. Petitioner is apprehensive that there could be confusion as to the origin of the goods, as well as confusion of business, if private respondent is allowed to register the mark CANON. In such a case, petitioner would allegedly be immensely prejudiced if private respondent would be permitted to take "a free ride on, and reap the advantages of, the goodwill and reputation of petitioner Canon". 12 In support of the foregoing arguments, petitioner invokes the rulings in Sta. Ana vs. Maliwat, 13 Ang vs. Teodoro 14 and Converse Rubber Corporation vs. Universal Rubber Products, Inc. 15

The likelihood of confusion of goods or business is a relative concept, to be determined only according to the particular, and sometimes peculiar, circumstances of each case. 16 Indeed, in trademark law cases, even more than in other litigation, precedent must be studied in the light of the facts of the particular case. 17 Contrary to petitioner's supposition, the facts of this case will show that the cases of Sta. Ana vs. Maliwat, Ang vs. Teodoro and Converse Rubber Corporation vs. Universal Rubber Products, Inc. are hardly in point. The just cited cases involved goods that were confusingly similar, if not identical, as in the case of Converse Rubber Corporation vs. Universal Rubber Products, Inc. Here, the products involved are so unrelated that the public will not be misled

that there is the slightest nexus between petitioner and the goods of private respondent.

In cases of confusion of business or origin, the question that usually arises is whether the respective goods or services of the senior user and the junior user are so related as to likely cause confusion of business or origin, and thereby render the trademark or tradenames confusingly similar. 18 Goods are related when they belong to the same class or have the same descriptive properties; when they possess the same physical attributes or essential characteristics with reference to their form, composition, texture or quality. 19 They may also be related because they serve the same purpose or are sold in grocery stores. 20

Thus, in Esso Standard Eastern, Inc. vs. Court of Appeals, this Court ruled that the petroleum products on which the petitioner therein used the trademark ESSO, and the product of respondent, cigarettes are "so foreign to each other as to make it unlikely that purchasers would think that petitioner is the manufacturer of respondent's goods." 21 Moreover, the fact that the goods involved therein flow through different channels of trade highlighted their dissimilarity, a factor explained in this wise:

"The products of each party move along and are disposed through different channels of distribution. The (petitioner's) products are distributed principally through gasoline service and lubrication stations, automotive shops and hardware stores. On the other hand, the (respondent's) cigarettes are sold in sari-sari stores, grocery store, and other small distributor outlets. (Respondent's) cigarettes are even peddled in the streets while (petitioner's) 'gasul' burners are not. Finally, there is a marked distinction between oil and tobacco, as well as between petroleum and cigarettes. Evidently, in kind and nature the products of (respondent) and of (petitioner) are poles apart." 22

Undoubtedly, the paints, chemical products, toner and dyestuff of petitioner that carry the trademark CANON are unrelated to sandals, the product of private respondent. We agree with the BPTTT, following the Esso doctrine, when it noted that the two classes of products in this case flow through different trade channels. The products of petitioner are sold through special chemical stores or distributors while the products of private respondent are sold in grocery stores, sari-sari stores and department stores. 23 Thus, the evident disparity of the products of the parties in the case at bar renders unfounded the apprehension of petitioner that confusion of business or origin might occur if private respondent is allowed to use the mark CANON.

In its bid to bar the registration of private respondent of the mark CANON, petitioner invokes the protective mantle of the Paris Convention. Petitioner asserts that it has the exclusive right to the mark CANON because it forms part of its corporate name or tradename, protected by Article 8 of the Paris Convention, to wit: AcSHCD

"A tradename shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark."

Public respondents BPTTT and the Court of Appeals allegedly committed an oversight when they required petitioner to prove that its mark is a well-known mark at the time the application of private respondent was filed. Petitioner questions the applicability of the guidelines embodied in the Memorandum of then Minister of Trade and Industry Roberto Ongpin (Ongpin) dated October 25, 1983 which according to petitioner implements Article 6bis of the Paris Convention, the provision referring to the protection of trademarks. The memorandum reads:

"a) the mark must be internationally known;

b) the subject of the right must be a trademark, not a patent or copyright or anything else;

c) the mark must be for use in the same or similar class of goods;

d) the person claiming must be the owner of the mark."

According to petitioner, it should not be required to prove that its trademark is well-known and that the products are not similar as required by the quoted memorandum. Petitioner emphasizes that the guidelines in the memorandum of Ongpin implement Article 6bis of the Paris Convention, the provision for the protection of trademarks, not tradenames. Article 6bis of the Paris Convention states:

(1) The countries of the Union undertake, either administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration and to prohibit the use of a trademark which constitutes a reproduction, imitation or translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well-known in that country as being already the mark of a person entitled to the benefits of the present Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.

(2) A period of at least five years from the date of registration shall be allowed for seeking the cancellation of such a mark. The countries of the Union may provide for a period within which the prohibition of use must be sought.

 

(3) No time limit shall be fixed for seeking the cancellation or the prohibition of the use of marks or used in bad faith."

Petitioner insists that what it seeks is the protection of Article 8 of the Paris Convention, the provision that pertains to the protection of tradenames. Petitioner believes that the appropriate memorandum to consider is that issued by the then Minister of Trade and Industry, Luis Villafuerte, directing the Director of Patents to:

"reject all pending applications for Philippine registration of signature and other world famous trademarks by applicants other than the original owners or users."

As far as petitioner is concerned, the fact that its tradename is at risk would call for the protection granted by Article 8 of the Paris Convention. Petitioner calls attention to the fact that Article 8, even as embodied in par. 6, Sec. 37 of RA 166, mentions no requirement of similarity of goods. Petitioner claims that the reason there is no mention of such a requirement, is "because there is a difference between the referent of the name and that of the mark" 24 and that "since Art. 8 protects the tradename in the countries of the Union, such as Japan and the Philippines, Petitioner's tradename should be protected here." 25

We cannot uphold petitioner's position.

The term "trademark" is defined by RA 166, the Trademark Law, as including "any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them for those manufactured, sold or dealt in by others." 26 Tradename is defined by the same law as including "individual names and surnames, firm names, tradenames, devices or words used by manufacturers, industrialists, merchants, agriculturists, and others to identify their business, vocations, or occupations; the names or titles lawfully adopted and used by natural or juridical persons, unions, and any manufacturing, industrial, commercial, agricultural or other organizations engaged in trade or commerce." 27 Simply put, a trade name refers to the business and its goodwill; a trademark refers to the goods. 28

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris Convention, of which both the Philippines and Japan, the country of petitioner, are signatories, 29 is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial designs, trademarks, service marks, trade names and indications of source or appellations of origin, and at the same time aims to repress unfair competition. 30 We agree with public respondents that the controlling doctrine with respect to the applicability of Article 8 of the Paris Convention is that established in Kabushi Kaisha Isetan vs. Intermediate Appellate Court. 31 As pointed out by the BPTTT:

"Regarding the applicability of Article 8 of the Paris Convention, this Office believes that there is no automatic protection afforded an entity whose tradename is alleged to have been infringed through the use of that name as a trademark by a local entity.

In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No. 75420, 15 November 1991, the Honorable Supreme Court held that:

'The Paris Convention for the Protection of Industrial Property does not automatically exclude all countries of the world which have signed it from using a tradename which happens to be used in one country. To illustrate — if a taxicab or bus company in a town in

the United Kingdom or India happens to use the tradename "Rapid Transportation", it does not necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji, or the Philippines.

This office is not unmindful that in the Treaty of Paris for the Protection of Intellectual Property regarding well-known marks and possible application thereof in this case. Petitioner, as this office sees it, is trying to seek refuge under its protective mantle, claiming that the subject mark is well known in this country at the time the then application of NSR Rubber was filed.

However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin, issued a memorandum dated 25 October 1983 to the Director of Patents, a set of guidelines in the implementation of Article 6bis (sic) of the Treaty of Paris. These conditions are:

a) the mark must be internationally known;

b) the subject of the right must be a trademark, not a patent or copyright or anything else;

c) the mark must be for use in the same or similar kinds of goods; and

d) the person claiming must be the owner of the mark (The Parties Convention Commentary on the Paris Convention. Article by Dr. Bogsch, Director General of the World Intellectual Property Organization, Geneva, Switzerland, 1985)'

From the set of facts found in the records, it is ruled that the Petitioner failed to comply with the third requirement of the said memorandum that is the mark must be for use in the same or similar kinds of goods. The Petitioner is using the mark "CANON" for products belonging to class 2 (paints, chemical products) while the Respondent is using the same mark for sandals (class 25). Hence, Petitioner's contention that its mark is well-known at the time the Respondent filed its application for the same mark should fail." 32

Petitioner assails the application of the case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court to this case. Petitioner points out that in the case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court, petitioner therein was found to have never at all conducted its business in the Philippines unlike herein petitioner who has extensively conducted its business here and also had its trademark registered in this country. Hence, petitioner submits that this factual difference renders inapplicable our ruling in the case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court that Article 8 of the Paris Convention does not automatically extend protection to a tradename that is in danger of being infringed in a country that is also a signatory to said treaty. This contention deserves scant consideration. Suffice it to say that the just quoted pronouncement in the case of Kabushi Kaisha Isetan vs. Intermediate Appellate Court, was made independent of the factual finding that petitioner in said case had not conducted its business in this country.

WHEREFORE, in view of the foregoing, the instant petition for review on certiorari is DENIED for lack of merit. SDaHEc

SO ORDERED.

Melo, Vitug, Panganiban, and Purisima, JJ ., concur.