Is there infringement even if the goods are non-competing?

Ang Tibay v. Teodoro, 74 Phil 50

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

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

Toribio Teodoro has continuously used “Ang Tibay” both as a trademark and tradename, in the
manufacture and sale of slippers, shoes and indoor baseballs since 1910. He formally
registered it as trademark on September 1915 and as a tradename in 1933. Petitioner
registered the same trademark “Ang Tibay” for pants and shirts in 1932. Petitioner now assails
the validity of respondent’s trademark. He contends that the phrase “Ang Tibay” is a descriptive
term and therefore, cannot be subject of a trademark. Petitioner claims also that respondent
committed infringement with regard to the trademark “Ang Tibay”.

ISSUE: Whether the trademark “Ang Tibay” is registrable

HELD: YES. “Ang Tibay” is not a descriptive term within the meaning of the Trademark Law but
rather a fanciful or coined phrase which may properly be appropriated as a trademark. And it
must be noted that it was the respondent who first used the term “Ang Tibay” and in fact it has
already acquired a secondary meaning in a proprietary connotation. With regard to the
infringement, it is proper to say that there is no infringement as the goods sold by the parties are
not the same. In fact, it is more correct to conclude that the selection by petitioner of the same
trademark for pants and shirts was motivated by a desire to get a free ride or the reputation and
selling power it has acquired at the expense of the respondent.

Chua Che v. Philippine Patent Office, 13 SCRA 67 (1965).

Facts:

On October 30, 1958, Chua Che presented with the Philippines Patent Office a petition
for the registration in his favor the trade name of "X-7". Chua Che declares that the trade name
was used by him in commerce within the Philippines on June 10, 1957, and had been
continuously used by him in trade in the Philippines for more than one year.

Sy Tuo opposed, claiming that he owns the trademark and had been using it since 1951
as mark for perfume, lipstick, and nail polish as opposed to Chua Che's use which was
admittedly only in 1957.

The Director of Patents denied the application for use on soap Class 51, being
manufactured by said Chua Che, upon the opposition of respondent Sy Tuo. The Director of
Patents held that the products of the parties, while specifically different, are products intended
for use in the home and usually have common purchasers. Furthermore, the use of X-7 for
laundry soap is but a natural expansion of business of the opposer.

Issue: WON allowing Chua Che to register the same mark for laundry soap would likely
to cause confusion on the purchasers of X-7 products by SY Tou.
 Ruling:

Yes. While it is no longer necessary to establish that the goods of the parties possess
the same descriptive properties, as previously required under the Trade Mark Act of 1905,
registration of a trademark should be refused in cases where there is a likelihood of confusion,
mistake, or deception, even though the goods fall into different categories

The products of appellee are common household items now-a-days, in the same manner
as laundry soap. The likelihood of purchasers to associate these products to a common origin is
not far-fetched. Both from the standpoint of priority of use and for the protection of the buying
public and appellee's rights to the trademark "X-7", it becomes manifest that the registration of
said trademark in favor of applicant-appellant should be denied.

Sta. Ana v. Maliwat, 24 SCRA 108

Facts of the Case: 

In 1962, Florentino Maliwat sought to register the trademark "FLORMANN" used on shirts,

pants, jackets and shoes for ladies men and children. He claimed its first use in commerce in
1955. Also in the same year (1962), Jose P. Sta. Ana (Petitioner) filed an application for the
registration of the trademark "FLORMEN" (used in ladies and children shoes). He claimed its
first use in commerce in 1959. Due to the confusing similarity, the Director of the Patent Office
ordered an interference. Maliwat's application was then granted due to his prior adoption and
use while that of Sta. Ana was denied. It was stipulated by the parties that 'Flormann' was used
as a trademark in 1953 and Maliwat used it on shoes in 1962.

Issue: Was there any trademark infringement committed?

Ruling: YES. Both products of the parties have the same descriptive properties, thus its
trademark must be protected.

The law does not require that the goods of the previous user and the late user of the same mark
should possess the same descriptive properties or should fall into the same categories in order
to bar the latter from registering his mark. The meat of the matter is the likelihood of confusion,
mistake or deception upon the purchase of the goods of the parties. Herein, the similarity of the
mark 'FLORMANN' and the name 'FLORMEN', as well as the likelihood of confusion is
admitted. As such, Maliwat as prior adopter has a better right to use the mark.

Philippine Refining Company v. Ng Sam, 115 SCRA 472 -1982

Topic: Related Goods

 Facts

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).

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. 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.

Issue(s)

Whether the Director of Patents erred in deciding that the application for trademark of Ng
Sam be granted

Ruling

No, 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, is certain to catch the eye of the class of consumers to which he caters.

Further, we hold that the business of the parties are noncompetitive 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.

Esso Standard Eastern, Inc. v. CA, 116 SCRA 336

Topic: Infringement of Marks – Dominancy Test

Facts
 Petitioner Esso Standard Eastern, Inc., then a foreign corporation duly licensed to do
business in the Philippines, is engaged in the sale of petroleum products which are identified
with its trademark ESSO (which as successor of the defunct Standard Vacuum Oil Co. it
registered as a business name with the Bureaus of Commerce and

Internal Revenue in April and May, 1962). Private respondent in turn is a domestic
corporation then engaged in the manufacture and sale of cigarettes, after it acquired in
November, 1963 the business, factory and patent rights of its predecessor La Oriental Tobacco
Corporation, one of the rights thus acquired having been the use of the trademark ESSO on its
cigarettes, for which a permit had been duly granted by the Bureau of Internal Revenue.

Barely had respondent as such successor started manufacturing cigarettes with the
trademark ESSO, when petitioner commenced a case for trademark infringement in the Court of
First Instance of Manila.

The complaint alleged that the petitioner had been for many years engaged in the sale of
petroleum products and its trademark ESSO had acquired a considerable goodwill to such an
extent that the buying public had always taken the trademark ESSO as equivalent to high
quality petroleum products. Petitioner asserted that the continued use by private respondent of
the same trademark ESSO on its cigarettes was being carried out for the purpose of deceiving
the public as to its quality and origin to the detriment and disadvantage of its own products.

Issue(s)

Whether there was a trademark infringement

Ruling

No. The law defines infringement as the use without consent of the trademark owner of
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,” Implicit in this definition is the concept that the goods
must be so related that there is a likelihood either of confusion of goods or business.

Respondent court correctly ruled that considering the general appearances of each mark
as a whole, the possibility of any confusion is unlikely. A comparison of the labels of the
samples of the goods submitted by the parties shows a great many differences on the
trademarks used. As pointed out by respondent court in its appealed decision, “(A) witness for
the plaintiff, Mr. Buhay, admitted that the color of the ‘ESSO’ used by the plaintiff for the oval
design where the blue word ESSO is contained is the distinct and unique kind of blue. In his
answer to the trial court’s question, Mr. Buhay informed the court that the plaintiff never used its
trademark on any product where the combination of colors is similar to the label of the Esso
cigarettes.”
 Even the lower court, which ruled initially for petitioner, found that a “noticeable
difference between the brand ESSO being used by the defendants and the trademark ESSO of
the plaintiff is that the former has a rectangular background, while in that of the plaintiff the word
ESSO is enclosed in an oval background.”

Hickok Manufacturing Co. v. CA, 116 SCRA 387

Topic: Related Goods

Facts

Petitioner is a foreign corporation and all its products are manufactures by Quality House
Inc. The latter pays royalty to the petitioner. Hickok registered the trademark 'Hickok' earlier and
used it in the sale of leather wallets, key cases, money folds, belts, men’s underwear, neckties,
hankies, and men's socks. While Sam Bun Liong used the same trademark in the sale of
Marikina shoes. Both products have different channels of trade. The Patent Office did not grant
the registration, but the Court of Appeals reversed the same.

Issue(s)

Whether infringement exists in this case

Ruling

No. It is established doctrine, as held in various Supreme Court cases, that “emphasis
should be on the similarity of the products involved and not on the arbitrary classification or
general description of their properties or characteristics” and that “the mere fact that one person
has adopted and used a trademark on his goods does not prevent the adoption and use of the
same trademark by others on unrelated articles of a different kind.” Taking into account the facts
of record that petitioner, a foreign corporation registered the trademark for its diverse articles of
men’s wear such as wallets, belts and men’s briefs which are all manufactured here in the
Philippines by a licensee Quality House, Inc. (which pays a royalty of 1-1½% of the annual net
sales) but are so labelled as to give the misimpression that the said goods are of foreign
(stateside) manufacture and that respondent secured its trademark registration exclusively for
shoes (which neither petitioner nor the licensee ever manufactured or traded in) and which are
clearly labelled in block letters as “Made in Marikina. Rizal, Philippines,” no error can be

attributed to the appellate court in upholding respondent’s registration of the same

trademark for his unrelated and non-competing product of Marikina shoes.

Faberge v. IAC, 215 SCRA 316

Facts of the Case:

Co Beng Kay applied for the registration of the trademark 'BRUTE' to be used in its underwear
(briefs) products. The petitioner opposed on the ground that there is similarity with their own
symbol (BRUT, Brut33 & Device) used on its aftershave, deodorant, cream shave, hairspray
and hair shampoo/soaps and that it would cause injury to their business reputation. It must be
noted that the petitioner never applied for registration of said trademark for its brief products.
The Patent Office allowed Co Beng Kay the registration and this was further affirmed by the
Court of Appeals.

Issue: Is there confusing similarity between the challenged marks and that its use would
likely cause confusion on the part of the purchasers?

HELD: NONE. Co Beng Kay may rightly appropriate the mark. In this case Sec. 20 (Philippine
Intellectual Property Law) is controlling. The certificate of registration issued confers the
exclusive right to use its own symbol only to those goods specified by the first user in the
certificate, subject to any conditions or limitations stated therein. Moreover, the two products are
so dissimilar that a purchaser of one (a brief) would not be misled or mistaken into buying the
other (such as an aftershave).

Canon Kabushiki v. CA, 336 SCRA 266 (2000)

FACTS: NSR Rubber Corp., filed an application for registration of the mark CANON for sandals
(Class 25) in the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT). The
application was opposed by Canon Kabushiki Kaisha (CKK), a foreign corp. under the laws of
Japan.

NSR was declared in default upon motion of CKK. CKK presented as its evidence certificates of
registration for the mark CANON in various countries and in the Philippines covering goods
belonging to Class 2 (paints, chemical products, toner and dyestuff).

Ruling of the BPTTT: denied the opposition of CKK and granted the application of NSR Rubber
Corp.

CA: affirmed

Both lower courts ruled that there is a dissimilarity between the products of CKK and NSR, i.e.
CKK: paints, chemical products, toner and dyestuff; while NSR: sandals

ISSUE/S:
1. WON CKK trademark is violated. NO.
2. WON CKK can exclusively use ‘CANON’ as protected by the Paris Convention. NO.

RULING:
Ordinarily, the ownership of a trademark or tradename is a property right that the owner is
entitled to protect as mandated by the Trademark Law. However, when a trademark is used by
a party for a product in which the other party does not deal, the use of the same trademark on
the latter’s product cannot be validly objected to.

The certificates of registration for the trademark CANON in other countries and in the
Philippines clearly showed that said certificates cover goods belonging to class 2 (paints,
chemical products, toner, dyestuff). As such, NSR t 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 and sandals.

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 CKK to use the trademark CANON is
limited to the products covered by its certificate of registration.

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.

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.

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. They may also be related because they serve the
same purpose or are sold in grocery stores.

Here, the paints, chemical products, toner and dyestuff of CKK that carry the trademark CANON
are unrelated to sandals, the product of NSR. The two classes of products in this case flow
through different trade channels. The products of CKK are sold through special chemical stores
or distributors while the products of NSR are sold in grocery stores, sari-sari stores and
department stores.

A tradename refers to the business and its goodwill while a trademark refers to the goods.

Regarding the applicability of Article 8 of the Paris Convention (“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.), 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. 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:

1.) the mark must be internationally known;
2.) the subject of the right must be a trademark, not a patent or copyright or anything else;
3.) the mark must be for use in the same or similar kinds of goods; and
4.) the person claiming must be the owner of the mark

CKK failed to comply with the third requirement of the said memorandum. CKK is using the
mark “CANON” for products belonging to class 2 (paints, chemical products) while NSR is using
the same mark for sandals (class 25).
 Pearl & Dean v. Shoemart, 409 SCRA 231 (2003)

FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units
simply referred to as light boxes. PDI was able to secure a Certificate of Copyright Registration,
the advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in certain SM Makati and SM Cubao. PDI submitted for signature
the contracts covering both stores, but only the contract for SM Makati, however, was returned
signed. Eventually, SMI’s informed PDI that it was rescinding the contract for SM Makati due to
non-performance of the terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at different SM
stores. It was further discovered that SMI’s sister company North Edsa Marketing Inc. (NEMI),
sells advertising space in lighted display units located in SMI’s different branches.

PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light boxes,
remove the same from SMI’s establishments and to discontinue the use of the trademark
“Poster Ads,” as well as the payment of compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case for
infringement of trademark and copyright, unfair competition and damages.

SMI maintained that it independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to PDI’s copyright. SMI
noted that the registration of the mark “Poster Ads” was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word “Poster Ads” is a
generic term which cannot be appropriated as a trademark, and, as such, registration of such
mark is invalid. On this basis, SMI, aside from praying for the dismissal of the case, also
counterclaimed for moral, actual and exemplary damages and for the cancellation of PDI’s
Certification of Copyright Registration, and Certificate of Trademark Registration.

The RTC of Makati City decided in favour of PDI, finding SMI and NEMI jointly and severally
liable for infringement of copyright and infringement of trademark

On appeal, however, the Court of Appeals reversed the trial court.

ISSUES:
 1. Whether the the light box depicted in such engineering drawings ipso facto also
protected by such copyright.
2. Whether there was a patent infringement.
3. Whether the owner of a registered trademark legally prevent others from using such
trademark if it is a mere abbreviation of a term descriptive of his goods, services or
business?

RULING:

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

The Court of Appeals correctly held that the copyright was limited to the drawings alone and not
to the light box itself.

Although petitioner’s copyright certificate was entitled “Advertising Display Units” (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Accordingly, it can cover
only the works falling within the statutory enumeration or description.

Even as we find that P & D indeed owned a valid copyright, the same could have referred only
to the technical drawings within the category of “pictorial illustrations.” It could not have possibly
stretched out to include the underlying light box. The light box was not a literary or artistic piece
which could be copyrighted under the copyright law.

The Court reiterated the ruling in the case of Kho vs. Court of Appeals, differentiating patents,
copyrights and trademarks, namely:

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.

ON THE ISSUE OF PATENT INFRINGEMENT

Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which
and could not legally prevent anyone from manufacturing or commercially using the contraption.
To be able to effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection.
ON THE ISSUE OF TRADEMARK INFRINGEMENT

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a
contraction of “poster advertising.” P & D was able to secure a trademark certificate for it, but
one where the goods specified were “stationeries such as letterheads, envelopes, calling cards
and newsletters.”Petitioner admitted it did not commercially engage in or market these goods.
On the contrary, it dealt in electrically operated backlit advertising units which, however, were
not at all specified in the trademark certificate.

Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P & D
to secure a trademark registration for specific use on the light boxes meant that there could not
have been any trademark infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As noted
by the Court of Appeals, petitioner’s expert witnesses himself had testified that ” ‘Poster Ads’
was too generic a name. So it was difficult to identify it with any company, honestly
speaking.”This crucial admission that “Poster Ads” could not be associated with P & D showed
that, in the mind of the public, the goods and services carrying the trademark “Poster Ads” could
not be distinguished from the goods and services of other entities.

“Poster Ads” was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. “Secondary meaning”
means that a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his property.

246 Corporation v. Daway, 416 SCRA 315 (2003)

Topic: Infringement of Marks – Dominancy Test

Facts

Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of Rolex and
Crown Device, filed against 246 Corporation the instant suit for trademark infringement and
damages with prayer for the issuance of a restraining order or writ of preliminary injunction
before the Regional Trial Court of Quezon City.

On July 1996, 246 adopted and, since then, has been using without authority the mark
“Rolex” in its business name “Rolex Music Lounge” as well as in its newspaper advertisements
as “Rolex Music Lounge, KTV, Disco & Party Club.” 246 answered special affirmative defenses
that no confusion would arise from the use by petitioner of the mark “Rolex” considering that its
entertainment business is totally unrelated to the items catered by respondents such as
watches, clocks, bracelets and parts thereof. The RTC quashed the subpoena ad testificandum
and denied petitioner’s motion for preliminary hearing on affirmative defenses with motion to
dismiss and the CA affirmed.

Issue(s)

Whether the question of trademark infringement is an affirmative defense

Ruling

The issue of whether or not a trademark infringement exists, is a question of fact that
could best be determined by the trial court.

Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293)

(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark

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

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

Societe Des Produits Nestle v. CA, 356 SCRA 207 (2001)

Topic: Infringement of Marks – Dominancy Test

Facts

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 Nestlé, S.A., a Swiss company registered under Swiss
laws and domiciled in Switzerland, filed an unverified Notice of Opposition, 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 Nestlé Philippines, Inc., a

Philippine corporation and a licensee of Societe Des Produits Nestlé S.A., against CFC’s
application for registration of the trademark FLAVOR MASTER. 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 Nestlé, 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 Nestlé’s 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.”

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.

Nestle’s “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.

Issue(s)

Whether, applying the dominancy test, CFC’s trademark bear a close resemblance with
that as Nestle Philippines as to create in the purchasing public’s mind the mistaken impression
that both coffee products come from one and the same source

Ruling

Yes. To begin with, the Supreme Court in this case declared the use of the dominancy
test, as opposed to the holistic test, as proper, to wit:

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 Nestlé’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.

Now, in applying the dominancy test, the Court ruled that 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.

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

Rather, the term “MASTER” is a suggestive term brought about by the advertising
scheme of Nestlé. Suggestive terms 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.

Levi Strauss v. Clinton Apparelle, GR No. 138900, 20 September 2005

FACTS:

The Complaint alleged that LS & Co., a foreign corporation duly organized and existing
under the laws of the State of Delaware, USA and engaged in the apparel business, is the
owner by prior adoption and use since 1986 of the internationally famous "Dockers and Design"
trademark. This ownership is evidenced by its valid and existing registrations in various member
countries if Paris Convention. In the Philippines, it has a Certificate of Registration No. 46619 in
the Principal Register for use of said trademark on pants, shirts, blouses, skirts, shorts,
sweatshirts and jackets under Class 25.

The "Dockers and Design" trademark was first used in the Philippines in or about May 1988,
by LSPI, a domestic corporation engaged in the manufacture, sale and distribution of various
products bearing trademarks owned by LS & Co. To date, LSPI continues to manufacture and
sell Dockers Pants with the "Dockers and Design" Trademark. LS & Co and LSPI alleged that
they discovered the presence in the local market of jeans under the brand name "Paddocks'
using a device which is substantially, if not exactly, similar to the "Dockers and Design"
trademark owned and registered in their name, without their consent Based on their belief, they
added Clinton Apparelle manufactured and continues to manufacture such "Paddocks" jeans
and other apparel. However, since LS & Co. and LSPI are unsure if both or just one of
impleaded defendants is behind the manufacture and sale of the "Paddocks" jeans complained
of, they brought this suit under Sec. 13 Rule 3 of the 1997 Rules of Court.

The evidence considered by the trial court in granting injunctive relief were as follows: (1) a
certified true copy of the certificate of trademark registration for "Dockers and Design" (2) a pair
of DOCKERS pants bearing the trademark (3) a pair of "Paddocks" pants bearing the
respondents assailed logo; (4) the trends MBL Survey Report purportedly proving that there was
confusing similarity between two marks; (5) the affidavit of one Bernabe Alajar which recounted
petitioners' prior adoption, use and registration of the "Dockers and Design" Trademark and (6)
the affidavit of Mercedes Abad of Trends MBL Inc which detailed the methodology and
procedure used in their survey and results
thereof.

The trial court issued a writ of preliminary injunction, which prompted Clinton Apparelle to file
a petition for certiorari, prohibition and mandamus with the Court of Appeals. Whereby the
Appellate Court granted the petition of Clinton Apparelle's petition; holding that the trial court did
not follow the procedure required by law. Thus, holding the issuance of the writ of preliminary
injunction is questionable after petitioner's failure to sufficiently establish its material and
substantial right to have the writ issued. Moreover, the Court of Appeals strongly believes that
the implementation of the questions writ would effectively shut down respondent's shut down.
Hence this petition.

ISSUE:
Whether or not the single registration of the trademark "Dockers and Design" confers on the
owner the right to prevent the use of a fraction thereof?

HELD:

Given the single registration of the trademark "Dockers and Design" and considering that
respondent only uses the assailed device but a different word mark, the right to prevent the
latter from using the challenged "Paddocks" device is far from clear. Stated otherwise, it is not
evident whether the single registration of the trademark "Dockers and Design" confers on the
owner the right to prevent the use of a fraction thereof in the course of trade.

It is also unclear whether the use without the owner's consent of a portion of a trademark
registered in its entirety constitutes material or substantial invasion of the owner's right. It is
likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the
dominant or central feature of petitioners' trademark—the feature that prevails or is retained in
the minds of the public—an imitation of which creates the likelihood of deceiving the public and
constitutes trademark infringement.

In sum, there are vital matters which have yet and may only be established through a full-
blown trial. From the above discussion, we find that petitioners' right to injunctive relief has not
been clearly and unmistakably demonstrated. The right has yet to be determined. Petitioners
also failed to show proof that there is material and substantial invasion of their right to warrant
the issuance of an injunctive writ. Neither were petitioners able to show
any urgent and permanent necessity for the writ to prevent serious damage.

Petitioners wish to impress upon the Court the urgent necessity for injunctive relief, urging
that the erosion or dilution of their trademark is protectable. They assert that a trademark owner
does not have to wait until the mark loses its distinctiveness to obtain injunctive relief, and that
the mere use by an infringer of a registered mark is already actionable even if he has not yet
profited thereby or has damaged the trademark owner.

Trademark dilution is the lessening of the capacity of a famous mark to identify and
distinguish goods or services, regardless of the presence or absence of: (1) competition
between the owner of the famous mark and other parties; or (2) likelihood of confusion, mistake
or deception. Subject to the principles of equity, the owner of a famous mark is entitled to an
injunction "against another person's commercial use in commerce of a mark or trade name, if
such use begins after the mark has become famous and causes dilution of the distinctive quality
of the mark," This is intended to protect famous marks from subsequent uses that blur
distinctiveness of the mark or tarnish or disparage it.

Based on the foregoing, to be eligible for protection from dilution, there has to be a finding
that: (1) the trademark sought to be protected is famous and distinctive; (2) the use by
respondent of "Paddocks and Design" began after the petitioners' mark became famous; and (3)
such subsequent use defames petitioners' mark. In the case at bar, petitioners have yet to
establish whether "Dockers and Design" has acquired a strong degree of distinctiveness and
whether the other two elements are present for their cause to fall within the ambit of the invoked
protection. The Trends MBL Survey Report which petitioners presented in a bid to establish that
there was confusing similarity between two marks is not sufficient proof of any dilution that the
trial court must enjoin.

After a careful consideration of the facts and arguments of the parties, the Court finds that
petitioners did not adequately prove their entitlement to the injunctive writ. In the absence of
proof of a legal right and the injury sustained by the applicant, an order of the trial court granting
the issuance of an injunctive writ will be set aside for having been issued with grave abuse of
discretion. Conformably, the Court of Appeals was correct in setting aside the assailed orders of
the trial court.

Section 20, RA 166 as compared to Sec. 138, IPC

Section 20. Certificate of registration prima facie evidence of validity. - A certificate

of registration of a mark or trade-name shall be 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.
 Section 138. Certificates of Registration. - A certificate of registration of a mark shall be
prima facie evidence of the validity of the registration, the registrant's ownership of the mark,
and of the registrant's exclusive right to use the same in connection with the goods or services
and those that are related thereto specified in the certificate. (Sec. 20, R.A. No. 165)

Issue of Parallel Importation:

Yu v. CA, 217 SCRA 328

In Yu v Court of Appeals 217 SCRA 329, the exclusive distributor of House of Mayfair
wallcovering products in the Philippines brought proceedings against his former goods dealer,
Unisia Merchandising Co. They had purchased merchandise from the House of Mayfair in
England and sold it in the Philippines. The Supreme Court ruled:

“Injunction is the appropriate remedy to prevent a wrongful interference with contracts by

strangers. Although its liability does not emanate from the four corners of the contract
establishing the exclusive license agreement, in respect of which Unisia is not a party, its
accountability is an independent act generative of civil liability … To our mind, the right to
perform an exclusive distributorship agreement and to reap the profits resulting from such
performance are proprietary rights which a party may protect, which otherwise may not be
diminished, may be rendered illusory by the expedient act of utilizing or interposing a person or
firm to obtain goods from the supplier to defeat the very purpose for which the exclusive
distributorship was conceptualized, at the expense of the sole authorized distributor.”

This does not necessarily mean that when a trade mark owner appoints an exclusive
licensee or distributor to market his products in the Philippines and a person other than the
exclusive licensee or distributor imports the products, that person is liable for damages. The
court must find that fraud or deceit is present. In Yu v Court of Appeals , the court found:

“that the House of Mayfair in England was duped into believing that the goods ordered
by the defendant were to be shipped to Nigeria only, but the goods were actually sent to and
sold in the Philippines. A ploy of this character is akin to the scenario of a third person who
induces a party to renege or violate his undertaking under a contract thereby entitling the
offended part to legal relief (Article 1314, New Civil Code).”

CASE DIGEST:

Facts:

Philip Yu, Petitioner, the exclusive distributor of the House of Mayfair wallcovering products in
the Philippines, cried foul when his former dealer of the same goods, herein private respondent,
purchased the merchandise from the House of Mayfair in England through FNF Trading in West
Germany and sold said merchandise in the Philippines.
Philip YU, the petitioner has had an exclusive sales agency agreement with the House of
Mayfair since 1987 to promote and procure orders for Mayfair wallcovering products from
customers in the Philippines.
Even as petitioner was such exclusive distributor, private respondent, which was then
petitioner's dealer, imported the same goods via the FNF Trading which eventually sold the
merchandise in the domestic market.
A suit for injunction was filed by YU before the Regional Trial Court of the National Capital
Judicial Region stationed at Manila, petitioner pressed the idea that he was practically by-
passed and that private respondent acted in concert with the FNF Trading in misleading Mayfair
into believing that the goods ordered by the trading firm were intended for shipment to Nigeria
although they were actually shipped to and sold in the Philippines.
Private respondent professed ignorance of the exclusive contract in favor of petitioner. Even
then, private respondent responded by asserting that petitioner's understanding with Mayfair is
binding only between the parties thereto.
RTC denied the motion for the issuance of a writ of preliminary injunction to restrain the
defendant from selling the goods it has ordered from the FNF Trading of Germany. In its
decision the court stated that the terms and conditions of the agreement between the plaintiff
(Philip YU) and The House of Mayfair of England for the exclusive distributorship by the plaintiff
of the latter's goods, appertain only to them and that there is no privity of contract between the
plaintiff and the defendant.
Philip yu filed a petition for review on certiorari with the Court of Appeals but the CA reacted in
the same nonchalant fashion. According to the appellate court, petitioner was not able to
demonstrate the unequivocal right which he sought to protect and that private respondent is a
complete stranger vis-a-vis the covenant between petitioner and Mayfair.

ISSUE: Did respondent appellate court correctly agree with the lower court in disallowing the
writ solicited by herein petitioner?

RULING: No. According to the SC, injunction is the appropriate remedy to prevent a wrongful
interference with contracts by strangers to such contracts where the legal remedy is insufficient
and the resulting injury is irreparable. The injury is irreparable where it is continuous and
repeated since from its constant and frequent recurrence, no fair and reasonable redress can be
had therefor by petitioner insofar as his goodwill and business reputation as sole distributor are
concerned. Furthermore, the CA overlooked that the House of Mayfair in England was duped
into believing that the goods ordered through the FNF Trading were to be shipped to Nigeria
only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is
akin to the scenario of a third person who induces a party to renege on or violate his
undertaking under a contract, thereby entitling the other contracting party to relief therefrom
(Article 1314, New Civil Code).

J. Remedies

Sec. 3, IPC

Section 3. International Conventions and Reciprocity. - Any person who is a national or who is
domiciled or has a real and effective industrial establishment in a country which is a party to any
convention, treaty or agreement relating to intellectual property rights or the repression of unfair
competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of
the Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any
provision of such convention, treaty or reciprocal law, in addition to the rights to which any
owner of an intellectual property right is otherwise entitled by this Act. (n)

Sec. 160, IPC

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement

Action. - Any foreign national or juridical person who meets the requirements of Section 3 of this
Act and does not engage in business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or false designation of
origin and false description, whether or not it is licensed to do business in the Philippines under
existing laws. (Sec. 21-A, R.A. No. 166a)

Sec. 231, IPC

Section 231. Reverse Reciprocity of Foreign Laws. - Any condition, restriction, limitation,

diminution, requirement, penalty or any similar burden imposed by the law of a foreign country
on a Philippine national seeking protection of intellectual property rights in that country, shall
reciprocally be enforceable upon nationals of said country, within Philippine jurisdiction. (n)

Leviton Industries v. Salvador, 114 SCRA 420

FACTS:
Leviton Manufacturing Co. (LMC) is a foreign corporation organized and existing under the laws
of the State of New York, USA, while Leviton Industries (LI) is a partnership organized and
existing under the laws of the Philippines. LMC is the largest manufacturer of electrical wiring
devices in the US under the trademark Leviton. Various devices bearing the trademark Leviton
and trade name Leviton Manufacturing Co. Inc. had been exported to the Philippines since
1954. However, long after the use of LMC’s trademark and trade name in the Philippines, LI
began manufacturing and selling electrical devices under the trademark Leviton and trade name
Leviton Industries Co. The foregoing caused LMC to file a complaint for unfair competition
against LI. Specifically, LMC alleged that LI’s use of the trademark Leviton is violative of its right
over the same and that the use thereof by LI of its products would cause confusion in the minds
of the consumers and likely to deceive them as to the source of origin, thereby enabling LI to
pass off their products as those of LMC’s.

LI, for its part, moved to dismiss the complaint on the ground that LMC failed to state a cause of
action, specifically its failure to allege its capacity to sue under Sec. 21-A of RA 166. LI also
argued that LMC has no registered trademark or trade name in the Philippine Patent Office of
any of its products and that it has no license to do business in the Philippines. The respondent
judge denied LI’s motion, hence the instant petition.

ISSUE:
WON Leviton Manufacturing Co. successfully alleged the essential facts bearing upon its
capacity to sue Leviton Industries before the Philippine courts for an alleged unfair competition.

RULING:
No, all that is alleged in its complaint is that it is a foreign corporation. Such bare averment fails
to comply with the requirements imposed by Section 21-A of R.A. 166.

RATIO:
Section 21-A of R.A. 166 grants to a foreign corporation, whether or not licensed to do business
in the Philippines, the right to seek redress for unfair competition before Philippine courts. But
the said law is not without qualifications; its literal tenor indicates as a condition sine qua non
the registration of trade mark of the suing foreign corporation with the Philippine Patent Office
or, in the least, that it be an assignee of such registered trademark. The said section further
requires that the country, of which the plaintiff foreign corporation or juristic person is a citizen or
domiciliary, grants to Filipino corporations or juristic entities the same reciprocal treatment,
either thru treaty, convention, or law.
CONCLUSION:
The petition is granted.

Puma v. IAC, 158 SCRA 233

Facts:

Puma Sportschuhfabriken Rudolf Dassler, K.G herein petitioner is a foreign corporation

organised under the country of Germany who manufacture and produce PUMA PRODUCTS.
On July 26, 1985, petitioner filed a complaint of infringement of patent and trademark against
MIL-ORO Manufacturing Corporation herein private respondent for registering its trademark as
“PUMA and DEVICE.” The trial court then issued a restraining order, restraining the respondent
and the Director of Patents from using the trademark “PUMA.” Private respondent, MIL-ORO
files a motion to dismiss contending that the petitioner has no cause of action and legal
personality having been a foreign corporation. Trial Court denied the motion and the Court of
Appeals reversed the decision thereby dismissing the case. The Court of Appeals contends in
its decision that the Philippine Patent Office concluded in its March 31 1986 decision that MIL-
ORO is the prior and actual owner of “PUMA and DEVICE” trademark and hence the rightful
owner. As to the legal capacity of the petitioner, CA held that Petitioner did not meet the
requisites of Sec 21-A of R.A No. 166 to be exempted to the general rule that foreign
corporation doing business in the Philippines must secure a license to do business before said
foreign corporation could maintain a court or administrative suit which are; first, the trademark of
the suing corporation must be registered in the Philippines and second, that there exist a
reciprocal treatment to the Philippine Corporations either by law or convention by the country or
origin of the foreign corporation. Petitioner however contends that it has met the requisites of
Sec 21-A of R.A No. 166 hence should have the legal capacity to sue

Issue:
Whether or not Petitioner has legal capacity being a foreign corporation registered under the
Germany law

Held:
Yes.

Ratio:
The Court held citing La Chemise Lacoste, S.A v. Fernandez, a foreign corporation not doing
business in the Philippines need no license to sue before Philippine courts for infringement of
trademark and unfair competition. It further added that the foreign corporation which is not
registered or licensed in the Philippines has legal right to maintain action in the Philippines to
prevent domestic corporation to use the same name so long as the foreign corporation is widely
and favourably known in the Philippines. Also, the court cited the Paris Convention where the
Philippines is a signatory, as a treaty which should be respected and assure its members an
effective protection against unfair competition the same way they are obligated to protect
Filipino citizens and firms.

La Chemise Lacoste v. Fernandez, 129 SCRA 373

FACTS:
La chemise Lacoste is a French corporation and the actual owner of the trademarks “Lacoste,”
“Chemise Lacoste,” “Crocodile Device” and a composite mark consisting of the word “Lacoste”
and a representation of a crocodile/alligator, used on clothings and other goods sold in many
parts of the world and which has been marketed in the Philippines (notably by Rustans) since
1964. In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the
trademark “Chemise Lacoste and Q Crocodile Device” both in the supplemental and Principal
Registry. In 1980, La Chemise Lacoste SA filed for the registration of the “Crocodile device” and
“Lacoste”. Games and Garments (Gobindram Hemandas, assignee of Hemandas Q.Co.)
opposed the registration of “Lacoste.” In 1983, La Chemise Lacoste filed with the NBI a letter-
complaint alleging acts of unfair competition committed by Hemandas and requesting the
agency’s assistance. A search warrant was issued by the trial court. Various goods and articles
were seized upon the execution of the warrants. Hemandas filed motion to quash the warrants,
which the court granted. The search warrants were recalled, and the goods ordered to be
returned. La Chemise Lacoste filed a petition for certiorari. The defendant argued that the
petitioner has no capacity to sue being a foreign corporation not doing business in the
Philippines

ISSUE:
Whether or not La Chemise Lacoste, as a foreign corporation, has capacity to sue?

HELD:
Yes

RULING:
As early as 1927, this Court was, and it still is, of the view that a foreign corporation not doing
business in the Philippines needs no license to sue before Philippine courts for infringement of
trademark and unfair competition.
Thus, in Western Equipment and Supply Co. v. Reyes, the Court held that a foreign corporation
which has never done any business in the Philippines and which is unlicensed and unregistered
to do business here, but is widely and favorably known in the Philippines through the use
therein of its products bearing its corporate and trade name, has a legal right to maintain an
action in the Philippines to restrain the residents and inhabitants thereof from organizing a
corporation therein bearing the same name as the foreign corporation, when it appears that they
have personal knowledge of the existence of such a foreign corporation, and it is apparent that
the purpose of the proposed domestic corporation is to deal and trade in the same goods as
those of the foreign corporation.
The 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
Since it is the trade and not the mark that is to be protected, a trade-mark 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.
Rules of Procedure for Intellectual Property Rights Cases (A.M. No. 10-3-10-SC)

1. Administrative

a) Cancellation Proceedings

Sec. 151 (and its sub-paragraphs), IPC

Section 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under this Act
may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be
damaged by the registration of a mark under this Act as follows:

(a) Within five (5) years from the date of the registration of the mark under this Act.

(b) At any time, if the registered mark becomes the generic name for the goods or
services, or a portion thereof, for which it is registered, or has been abandoned, or its
registration was obtained fraudulently or contrary to the provisions of this Act, or if the
registered mark is being used by, or with the permission of, the registrant so as to
misrepresent the source of the goods or services on or in connection with which the
mark is used. If the registered mark becomes the generic name for less than all of the
goods or services for which it is registered, a petition to cancel the registration for only
those goods or services may be filed. A registered mark shall not be deemed to be the
generic name of goods or services solely because such mark is also used as a name of
or to identify a unique product or service. The primary significance of the registered mark
to the relevant public rather than purchaser motivation shall be the test for determining
whether the registered mark has become the generic name of goods or services on or in
connection with which it has been used. (n)

(c) At any time, if the registered owner of the mark without legitimate reason fails to use
the mark within the Philippines, or to cause it to be used in the Philippines by virtue of a
license during an uninterrupted period of three (3) years or longer.

151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested
with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall
likewise exercise jurisdiction to determine whether the registration of said mark may be
cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the
proper court or agency shall exclude any other court or agency from assuming jurisdiction over
a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of
petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial
question that must be resolved before an action to enforce the rights to same registered mark
may be decided. (Sec. 17, R.A. No. 166a)

Sec. 152 (and its sub-paragraphs), IPC

Section 152. Non-use of a Mark When Excused. - 152.1. Non-use of a mark may be excused if
caused by circumstances arising independently of the will of the trademark owner. Lack of funds
shall not excuse non-use of a mark.
152.2. The use of the mark in a form different from the form in which it is registered, which does
not alter its distinctive character, shall not be ground for cancellation or removal of the mark and
shall not diminish the protection granted to the mark.

152.3. The use of a mark in connection with one or more of the goods or services belonging to
the class in respect of which the mark is registered shall prevent its cancellation or removal in
respect of all other goods or services of the same class.

152.4. The use of a mark by a company related with the registrant or applicant shall inure to the
latter's benefit, and such use shall not affect the validity of such mark or of its registration:
Provided, That such mark is not used in such manner as to deceive the public. If use of a mark
by a person is controlled by the registrant or applicant with respect to the nature and quality of
the goods or services, such use shall inure to the benefit of the registrant or applicant. (n)

Sections 153 and 154, IPC

Section 153. Requirements of Petition; Notice and Hearing. - Insofar as applicable, the petition
for cancellation shall be in the same form as that provided in Section 134 hereof, and notice and
hearing shall be as provided in Section 135 hereof.

Section 154. Cancellation of Registration. - If the Bureau of Legal Affairs finds that a case for
cancellation has been made out, it shall order the cancellation of the registration. When the
order or judgment becomes final, any right conferred by such registration upon the registrant or
any person in interest of record shall terminate. Notice of cancellation shall be published in the
IPO Gazette. (Sec. 19, R.A. No. 166a)

Sec. 230, IPC

Section 230. Equitable Principles to Govern Proceedings. - In all inter partes proceedings in the
Office under this Act, the equitable principles of laches, estoppel, and acquiescence where
applicable, may be considered and applied. (Sec. 9-A, R.A. No. 165)

Sec. 232.2, IPC

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of
administrative officials shall be provided in the Regulations. (n)

Romero v. Maiden Form, 10 SCRA 556

Andres Romero vs. Maiden Form Brassiere Co., Inc.

 No. L-18289
March 31, 1964

Topic: Registrability – Distinctive Marks

Facts

On February 12, 1957, respondent company filed an application for registration before
the Director of Patents, pursuant to the provisions of Republic Act 166, of the trademark Adagio
for the brassieres manufactured by respondent. 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, and that it had been continuously used by it in trade in, or with
the Philippines for over 30 years.

The Director of Patents issued a certificate of registration to respondent on October 17,

1957. On February 26, 1958, herein petitioner filed before the Director a petition to cancel the
said trademark, on the ground, among others, 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.

Subsequently, the Director denied the petition. Petitioner thus filed a motion for
reconsideration, and the same having been likewise denied, elevated the case to the Supreme
Court with the same issues.

Issue(s)

1. Whether the trademark ‘Adagio’ has become a descriptive name for a particular
style of brassieres, and thus rendering it unregistrable

2. Whether the fact that the trademark ‘Adagio’ has been used only for one type of
product renders it unregisterable

Ruling

1. The contention is untenable. Petitioner claims that said trademark had been used
by local brassiere manufacturers since 1948, without objection on the part of respondent
company, thus it has become descriptive of a particular style of brassieres. The Court however,
noted 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. Likewise,
respondent company's long and continuous use of the trademark "Adagio" has not rendered it
merely descriptive of the product. Arbitrary trademarks cannot become generic in this way.
2. The contention is without merit. Brassieres are usually of different types or styles, and appellee
has used different trademarks for every type as shown by its labels. The mere fact that appellee
uses "Adagio" for one type or style, does not affect the validity of such word as a trademark.

Philippine Nut Industry v. Standard Brands Inc., 65 SCRA 575

Philippine Nut Industry, Inc. vs. Standard Brands Inc. and Tiburcio S.
Evalle
No. L-23035
July 31, 1975

Topic: Registrability – Distinctive Marks

Facts

Philippine Nut a domestic corporation, obtained from the Patent Office on August 10, 1961,
Certificate of Registration No. SR-416 covering the trademark “PHILIPPINE PLANTERS
CORDIAL PEANUTS,” the label used on its product of salted peanuts. On May 14, 1962,
Standard Brands a foreign corporation, filed with the Director of Patente Inter Partes Case No.
268 asking for the cancellation of Philippine Nut’s certificate of registration on the ground that
“the registrant was not entitled to register the mark at the time of its application for registration
thereof” for the reason that it (Standard Brands) is the owner of the trademark “PLANTERS
COCKTAIL PEANUTS” covered by Certificate of Registration No. SR-172, issued by the Patent
Office on July 28, 1958. Herein respondents contend that the petitioner’s trademark is
confusingly similar to its trademark, which is also used on salted peanuts.

The Director of Patents gave due course to the petition and ordered the cancellation of the
certificate of registration of Philippine Nut. In its appeal, petitioner contends that it was error for
respondent Director to have enjoined it from using PLANTERS in the absence of evidence
showing that the term has acquired secondary meaning. Petitioner, invoking American
jurisprudence, asserts that the first user of a trade name composed of common words is given
no special preference unless it is shown that such words have acquired secondary meaning,
and this, respondent Standard Brands failed to do when no evidence was presented to establish
that fact.

Issue(s)

Whether the contention of the petitioner is correct

Ruling

No. The Supreme Court held that the 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.

The applicability of the doctrine of secondary meaning to the situation now is appropriate
because there is oral and documentary evidence showing that the word PLANTERS has been
used by and closely associated with Standard Brands for its canned salted peanuts since 1938
in this country. Not only is that fact admitted by petitioner in the amended stipulation of facts, but
the matter has been established by testimonial evidence consisting of invoices covering the sale
of “PLANTERS cocktail peanuts”. In other words, there is evidence to show that the term
PLANTERS has become a distinctive mark or symbol insofar as salted peanuts are concerned,
and by priority of use dating as far back as 1938, respondent Standard Brands has acquired a
preferential right to its adoption as its trademark warranting protection against its usurpation by
another. Ubi jus ibi remedium. Where there is a right there is a remedy. Standard Brands has
shown the existence of a property right and respondent Director has afforded the remedy.

Anchor Trading Co. v. Director of Patents, 99 Phil.1040

Principle we can derive is failure to oppose the registration does not bar subsequent
filing of cancellation of registration.

ISSUE: WON the failure of Kua Lian Ham to register his opposition to the petition for registration
in due time estops him from asking for the cancellation of the certificate of registration issued in
favor of Anchor? (NO)

HELD: The only consequence resulting from a late filing of an opposition to an

application for registration of TM is the oppositor’s relinquishment of the privilege given to him
by laws to object to such registration, but such cannot prevent him from asking later for its
cancellation when in his opinion there are good grounds justifying it.

Clorox Company v. Director of Patents, 20 SCRA 965 (1967)

FACTS:

Go Siu Gian filed an application for registration of the trademark "OLDROX" for his goods
(whitening agent for bleaching) in trade and commerce in the country; and that said trademark
has been used by him since 1959. Within 30 days from the date of its publication in the Official
Gazette, an unverified opposition to the application was filed by Clorox Company. Director of
Patents issued the order dismissing the petitioner's opposition to the application upon the
ground, that the Clorox Company failed to filed the required verified notice of opposition within
the period allowed by law.

Upon notice of the said order, petitioner's counsel filed a motion with the Patent Office, dated
January 10, 1961, advising that it has filed the verified notice of opposition on time, i.e., on
November 16, 1960; although it also admitted that the covering letter of said verified opposition
was given another case number (Inter Partes Case No. 200, entitled "The Shell Company of the
Philippines versus Faustino Co") which is also handled by the same counsel in the Patent
Office. Petitioner requested in that motion that the verified opposition be detached from the
record of Inter Partes Case No. 200 and to transfer the same in the corresponding file of this
case. The motion was opposed by herein respondent Go Siu Gian.

CLOROX filed a petition for relief from the order dismissing its opposition, alleging
circumstances constituting mistake or excusable negligence of its counsel and his employee
which led to the misfiling of its verified opposition, and praying that said order be set aside.
Hence, Director of Patents issued the resolution denying both the motion and the petition for
relief, and ordering the issuance of the Certificate of Registration of the trademark "OLDROX" in
the name of Go Siu Gian.

CLOROX argues that it was error for the respondent official to have dismissed the opposition, it
appearing in an indubitable manner that a verified opposition was timely filed. The Director of
Patents, on the other hand, maintains that the verified opposition cannot be considered as
having been filed on time, for the reason that it was misfiled in the record of another opposition
case through the negligence of its own counsel.

CLOROX contends that the Director of Patents erred in denying its motion and petition for relief
from the order of January 6, 1961, dismissing its opposition to the registration of the trademark
in question. It holds the view that said Official should have set aside the order and given due
course to its opposition.

ISSUE: WON the Director of Patents erred in dismissing its opposition to the registration of the
trademark in question, on the ground of failure to file the required "verified" opposition on time
(YES); and WON he erred in denying altogether its motion and petition for relief from said order.
(YES)

HELD:

R.A. 166 requires that an opposition to an application for registration of a trademark should be
filed within 30 days from the publication of the application in the Official Gazette. This
requirement is relaxed under Rule 187 (c) of the Revised Rules of Practice in Trademark Cases
which provide that an unverified notice of opposition may be filed by a duly authorized attorney,
but such opposition will be null and void unless verified by the opposer in person within sixty
days after such filing. .

There is no question that petitioner's counsel filed an unverified notice of opposition to the
application for registration of the trademark "OLDROX" within 30 days from the date of its
publication in the Official Gazette. An unverified opposition was filed, and it was for this reason
that the order was issued, because the law requires that for an opposition to be valid, it must be
verified. It is not disputed, however, that immediately after it received the notice of dismissal of
its opposition, petitioner, in due time, filed a motion advising the Director of Patents that its
verified opposition was filed on time, although it admitted its error in submitting it under a
covering letter designating another opposition case.

Under the circumstances, it is our considered opinion that the verified opposition mentioned was
filed on time, although it was submitted under an erroneous covering letter. That fact alone is no
argument to the proposition that a pleading "misfiled" is a pleading "not filed." A covering letter
is not part of the pleading. What is important is the fact that the pleading reached the official
designated by law to receive it within the prescribed time, regardless of the mistake in the
indorsement or covering letter which is not a necessary element of filing. It is gross negligence
on the part of a clerk of court to receive and file pleadings in the record of a case by relying
upon a letter of submittal or covering letter without bothering to examine whether or not the
pleading or document submitted corresponds to the enclosure mentioned in the letter.

And when, as in this case, the pleading is misfiled in the record of another case through the fault
of its clerk, it cannot be said that the papers were not filed.
The verified opposition of herein petitioner was lodged with the proper official authorized to
receive. Under the circumstances, we hold, that there was substantial compliance with the
requirement of the law.

It should be noted that the grounds of fraud, accident, mistake or excusable negligence for new
trial are substantially similar to the grounds of a petition for relief under the Rules; the only
difference being that a motion for new trial or for reconsideration is filed before the order or
judgment becomes final, while a petition for relief should be filed after the finality of the
judgment or order, but within the periods prescribed in Section 3 of Rule 38. Had herein
respondents so minded, the petition for relief filed by the petitioner in this case, having been
filed before the finality of the order dismissing its opposition, could have been treated as a
motion for reconsideration, and having been previously apprised of the fact that the verified
opposition in this case was misfiled in the record of another case, should have set aside said
order.

The rule is well settled that courts may vacate judgments and grant new trials or enter new
judgments on the grounds of error in fact or in law. They have no power, of course, to vacate
judgments after they have become final, in the sense that the party in whose favor they are
rendered is entitled as of right, to have execution thereon, but prior thereto, the courts have
plenary control over the proceedings including the judgment, and in the exercise of a sound
judicial discretion, may take such proper action in this regard as truth and justice may require.

When, as in this case, the allegation of the pleading clearly show circumstances constituting
mistake and excusable negligence which are grounds for a motion for reconsideration of the
order in question, a dismissal of the motion and a denial of the relief sought upon the flimsy
excuse that the same was filed as a petition for relief, will amount to an abuse of that discretion.
Neither may we consider the argument of herein respondent that the petitioner is not totally
deprived of its right to question the registration of the trademark in question because it may still
pursue a cancellation proceeding under RA. 166, and Rules 191 to 197 of the Rules of Practice
in Trademark Cases.

The opposition to a registration and the petition for cancellation are alternative proceedings
which a party may avail of according to his purposes, needs, and predicaments and herein
petitioner has the right to choose which remedy it deems best for the protection of its rights.

Wolverine Worldwide, Inc. v. CA, 169 SCRA 627 (1989)

FACTS: Wolverine brought a petition for the cancellation of Certificate of Registration of the
trademark HUSH PUPPIES and DOG DEVICE issued to Cruz. Wolverine alleged that it is the
registrant of the internationally known trademark HUSH PUPPIES and the DEVICE of a Dog in
other countries which are members of the Paris Convention for the Protection of Industrial
Property; that the goods sold by both parties belong to the same class such that Cruz's use of
the same trademark in the Philippines in connection with the goods he sells constitutes an act of
unfair competition, as denied in the Paris Convention.

Cruz moved to dismiss the petition on the ground of res judicata, averring that more than 10
years before this petition was filed, the same petitioner filed two petitions for cancellation and
was a party to an interference proceeding, all of which involved the trademark HUSH PUPPIES
and DEVICE, before the Philippine Patent Office. The Director of Patents had ruled in all three
inter parties cases in favor of Ramon Angeles, the Cruz’s predecessor-in-interest.
CA affirmed tile above decision. Accordingly, Certificate of Registration issued to Cruz, for the
trademark "HUSH PUPPIES" for use on shoes is, as it is hereby, declared valid and subsisting
for the duration of its term unless owner cancelled in accordance with law. CA affirmed.

ISSUE: WON the present petition for cancellation is barred by res judicata in the light of the final
and executory decision in 2 previous Inter Partes Cases. (YES)

HELD:

For a judgment to be a bar to a subsequent case, the following requisites must concur:

it must be a final judgment;

the court which rendered it had jurisdiction over the subject matter and the parties;
it must be a judgment on the merits; and

there must be Identity between the two cases, as to parties, — subject matter, and
cause of action.

The judgment in the previous Inter Partes Cases had long since become final and executory. A
judgment or order is final, as to give it the authority of res judicata, if it can no longer be modified
by the court issuing it or by any other court.

In the case at bar, the decision of the Court of Appeals affirming that of the Director of Patents,
in the cancellation cases filed, was never appealed to us. Consequently, when the period to
appeal from the Court of Appeals to this Court lapsed, with no appeal having been perfected,
the foregoing judgment denying cancellation of registration in the name of private respondent's
predecessor-in-interest but ordering cancellation of registration in the name of the petitioner's
predecessor-in-interest, became the settled law in the case.

Generally, the fundamental principle of res judicata applies to all cases and proceedings in
whatever form they may be. This principle applies, in the appropriate cases, to proceedings for
cancellation of trademarks before the Philippine Patent Office. To say that the doctrine applies
exclusively to decisions rendered by what are usually understood as courts would be to
unreasonably circumscribe the scope thereof. The more equitable attitude is to allow extension
of the defense to decisions of bodies upon whom judicial powers have been conferred.

Undoubtedly, final decisions, orders, and resolutions, of the Director of Patents are clothed with
a judicial character as they are, in fact, reviewable by the Court of Appeals and by us. The
subject judgment is undeniably on the merits of the case, rendered after both parties and
actually submitted their evidence.

Between the earlier petitions and the present one there is substantial identity of parties, subject
matter, and cause of action.

The petitioner in all of these cases is Wolverine Worldwide. The respondent-registrant in

this case is the assignee of Randelson Shoes which in turn, acquired its right from Ramon
Angeles, the original respondents-registrant.
 As regards the subject matter, all of these cases refer to the cancellation of registration
of the trademark HUSH PUPPIES and DEVICE of a Dog.

Finally, there is identity of cause of action, which is the alleged wrongful or erroneous
registration of the trademark.

Petitioner suggests that the petition is not barred by res judicata because while the former
petitions were filed under Republic Act 166, the present one was brought pursuant to the cited
memorandum which expressly sanctions the cancellation of registration of a trademark granted
even prior to the same memorandum.

BUT In the first place, the subject memorandum never amended, nor was it meant to amend,
the Trademark Law. It did not indicate a new policy with respect to the registration in the
Philippines of world-famous trademarks. The protection against unfair competition, and other
benefits, accorded to owners of internationally known marks, as mandated by the Paris
Convention, is already guaranteed under the Trademark Law. Thus, the subject memorandum,
as well as Executive Order No. 913, merely reiterated the policy already existing at the time of
its issuance. Such being the case, appellant-oppositor could have properly ventilated the issue
of whether or not it fell within the protective ambit of the Paris Convention in the previous
proceedings which culminated in the registration of the Hush Puppies trademark in appellee-
movant's name, i.e., in Case No. 967 before the Philippine Patent Office.

The Director of Patents in that case, after hearing both parties and thereafter, 53 deciding that
appellee-movant was entitled to the registration of the trademark in its name, must have
concluded that appellant-oppositor had not established the fact that it was entitled to the
application of the favorable provision; of the Paris Convention.

In the same light, the repeated filing of petitions for cancellation founded on substantially the
same ground as provided in Sec. 17 of the Trademark Law, we rule, is not permissible. For to
allow without any limitation whatsoever such a practice would be clearly violative of the time-
honored doctrine of res judicata. The present petition for cancellation raises basically the same
issue of ownership of the trademark HUSH PUPPIES, which issue was already discussed and
settled in the previous Inter Partes Cases.

The aforesaid cases, involving as they were the registration of a trademark, necessarily litigated
the issue of ownership of such trademark because ownership is, indeed, the basis of
registration of a trademark. Thus, the owner of a trademark, 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. . . " Res judicata now bars the
petitioner from reopening, by way of another petition for cancellation, the issue of ownership of
the trademark HUSH PUPPIES. Otherwise, there will never be an end to litigation.

Shangrila v. CA, 359 SCRA 273 (2001)

Facts:
Shangri-La Group filed a petition for the cancellation of the registration of the “Shangri-La” mark
and “S” device/logo issued to the Developers Group of Companies, Inc., on the ground that the
same was illegally and fraudulently obtained and appropriated for the latter’s restaurant
business. Likewise, the Shangri-La Group filed its own application for registration of the subject
mark and logo. As expected, Developers Group also filed an opposition. 3 years later, the
Developers Group instituted an infringement case against Shangri-La Group before the RTC of
Quezon City. Petitioner moved for the suspension of the proceedings on the account of the
pendency of the administrative proceedings before the BPTTT.

Issue:
Whether or not the infringement case before the RTC should be suspended pending the
administrative proceedings before the BPTTT.

Held:
No, the infringement case before the RTC should not be suspended. It does not constitute a
prejudicial question.

Ratio:
Section 151.2 of Republic Act No. 8293, otherwise known as the Intellectual Property Code,
provides, as follows –
Section 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency
vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered
mark shall likewise exercise jurisdiction to determine whether the registration of said mark may
be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with
the proper court or agency shall exclude any other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing
of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial
question that must be resolved before an action to enforce the rights to same registered mark
may be decided. (Emphasis provided)
Similarly, Rule 8, Section 7, of the Regulations on Inter Partes Proceedings, provides to wit –
Section 7. Effect of filing of a suit before the Bureau or with the proper court. - The filing of a suit
to enforce the registered mark with the proper court or Bureau shall exclude any other court or
agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark.
On the other hand, the earlier filing of petition to cancel the mark with the Bureau shall not
constitute a prejudicial question that must be resolved before an action to enforce the rights to
same registered mark may be decided.(Emphasis provided)
Hence, as applied in the case at bar, the earlier institution of an Inter Partes case by the
Shangri-La Group for the cancellation of the "Shangri-La" mark and "S" device/logo with the
BPTTT cannot effectively bar the subsequent filing of an infringement case by registrant
Developers Group. The law and the rules are explicit.

Superior Commercial Enterprises vs. Kunnan Enterprises Ltd., G.R. No. 169974, April 20,
2010.

FACTS:
 Kunnan appointed Superior as its exclusive distributor in the Philippines under a
Distributorship Agreement which states that “Kunnan intends to acquire ownership
of the Kennex Trademark registered by Superior Commercial in the Philippines.
Superior Commercial is desirious of being appointed as the sole distributor of
Kunnan products in the Philippines.”
 Superior’s President and General Manager misled Kunnan’s Officers into believing
that Kunnan could not acquire trademark rights in the Philippines. Thus, Kunnan
decided to assign its applications to register “Pro Kennex” as a trademark to
Superior, on condition that Superior acknowledged that Kunnan was still the real
owner of the mark and agreed to return to it to Kunnan on request.
 Upon termination of distributorship agreement with Superior, Kunnan appointed Sports
Concept as its new distributor.

 Kunnan caused the publication of a Notice and Warning in the Manila Bulletin’s
issue, stating that (1) it is the owner of the disputed trademarks; (2) it terminated its
Distributorship Agreement with Superior; and (3) it appointed Sports Concept as its
exclusive distributor. This notice prompted Superior to file its Complaint for
Infringement of Trademark and Unfair Competition against Kunnan.
 Prior to and during the pendency of the infringement and unfair competition case
before the RTC, Kunnan filed with the Bureau of Patents, Trademarks and
Technology Transfer separate Petitions for the Cancellation of Registration
Trademarks involving the Kennex and Pro Kennex trademarks.
 Kunna filed the petition on the ground that Superior fraudulently registered and appropriated
the disputed trademarks as mere distributor and not as lawful owner.
 Both the trial court and the Court of Appeals ruled in favor of Kunnan.

ISSUES: WON Superior, as a distributor, has true ownership over the trademarks.

RULING: No. An exclusive distributor does not acquire any proprietary interest in the
principal’s trademark and cannot register it, unless the owner has assigned the right.

1. To establish trademark infringement, the following elements must be proven:

a. The validity of the plaintiff’s mark;
b. The plaintiff’s ownership of the mark; and
c. The use of the mark or its colorable imitation by the alleged infringer
results in likelihood confusion.

 Based on these elements, the Court found it immediately obvious that the second
element was what the Registration Cancellation Case decided with finality. On this
element depended the validity of the registrations that, on their own, only gave rise to
the presumption of, but was not conclusive on, the issue of ownership.
  Inruledno that
certain terms, the appellate court in the Registration Cancellation Case
Superior was a mere distributor and could not have been the owner,
and was thus an invalid registrant of the disputed trademarks.
 The right to register a trademark is based on ownership, and therefore only the owner
can register it.
 Gabriel v. Perez provided that a mere distributor of a product bearing a
trademark, even if permitted to use said trademark has no right to and cannot
register the said trademark.

2. Unfair competition has been defined as the passing off or attempting to pass
off upon the public of the goods and business of one person as the goods or
business of another with the end and probable effect of deceiving the public.
The essential elements of unfair competition are:
a. Confusing similarity in the general appearance of the goods; and
b. Intent to deceive the public and defraud the competitor.

 The True Test of Unfair Competition: Whether the acts of the defendant have
the intent of deceiving or are calculated to deceive the ordinary buyer making his
purchases under the ordinary conditions of the particular trade to which the
controversy relates.
 Inpasstheoffhereby case, no evidence exist showing that Kunnan ever attempted to
goods it sold as those of Superior and that there is no bad faith or fraud
imputable to Kunnan in using the disputed trademarks.
Superior failed to adduce any evidence to show that Kunnan by the above-cited acts
intended to deceive the public as to the identity of the goods sold or of the manufacturer
of the goods sold.

b) Intellectual Property Rights Violations

Sec. 10(2) (and its sub-paragraphs), IPC

10.2. (a) Exercise original jurisdiction in administrative complaints for violations of laws involving
intellectual property rights: Provided, That its jurisdiction is limited to complaints where the total
damages claimed are not less than Two hundred thousand pesos (P200,000): Provided further,
That availment of the provisional remedies may be granted in accordance with the Rules of
Court. The Director of Legal Affairs shall have the power to hold and punish for contempt all
those who disregard orders or writs issued in the course of the proceedings. (n)

(b) After formal investigation, the Director for Legal Affairs may impose one (1) or more
of the following administrative penalties:

(i) The issuance of a cease and desist order which shall specify the acts that the
respondent shall cease and desist from and shall require him to submit a
compliance report within a reasonable time which shall be fixed in the order;
(ii) The acceptance of a voluntary assurance of compliance or discontinuance as
may be imposed. Such voluntary assurance may include one or more of the
following:

(1) An assurance to comply with the provisions of the intellectual property

law violated;

(2) An assurance to refrain from engaging in unlawful and unfair acts and
practices subject of the formal investigation;

(3) An assurance to recall, replace, repair, or refund the money value of

defective goods distributed in commerce; and

(4) An assurance to reimburse the complainant the expenses and costs

incurred in prosecuting the case in the Bureau of Legal Affairs.

The Director of Legal Affairs may also require the respondent to submit periodic
compliance reports and file a bond to guarantee compliance of his undertaking;

(iii) The condemnation or seizure of products which are subject of the offense.
The goods seized hereunder shall be disposed of in such manner as may be
deemed appropriate by the Director of Legal Affairs, such as by sale, donation to
distressed local governments or to charitable or relief institutions, exportation,
recycling into other goods, or any combination thereof, under such guidelines as
he may provide;

(iv) The forfeiture of paraphernalia and all real and personal properties which
have been used in the commission of the offense;

(v) The imposition of administrative fines in such amount as deemed reasonable

by the Director of Legal Affairs, which shall in no case be less than Five thousand
pesos (P5,000) nor more than One hundred fifty thousand pesos (P150,000). In
addition, an additional fine of not more than One thousand pesos (P1,000) shall
be imposed for each day of continuing violation;

(vi) The cancellation of any permit, license, authority, or registration which may
have been granted by the Office, or the suspension of the validity thereof for
such period of time as the Director of Legal Affairs may deem reasonable which
shall not exceed one (1) year;

(vii) The withholding of any permit, license, authority, or registration which is

being secured by the respondent from the Office;

(viii) The assessment of damages;

(ix) Censure; and

(x) Other analogous penalties or sanctions. (Secs. 6, 7, 8, and 9, Executive

Order No. 913 [1983]a)
 Sec. 232, IPC

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by
the Rules of Court. Unless restrained by a higher court, the judgment of the trial court shall be
executory even pending appeal under such terms and conditions as the court may prescribe.

Sec. 232.2, IPC

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of
administrative officials shall be provided in the Regulations. (n)

IN-N-Out Burger v. Sehwani, G.R. No. 179127. December 24, 2008.

In-N-Out Birger, Inc. vs. Sehwani Incorporated and Benitas Frites, Inc.

G.R. No. L-179127

December 24, 2008

Topic: Internationally Well-Known Marks

Facts

Petitioner IN-N-OUT BURGER, INC., a business entity incorporated under the laws of
California, USA, which is a signatory to the Convention of Paris on Protection of Industrial
Property and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
Petitioner is engaged mainly in the restaurant business, but it has never engaged in business in
the Philippines. Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations
organized in the Philippines.

Petitioner filed trademark and service mark applications with the Bureau of Trademarks of the
IPO for IN-N-OUT and IN-N-OUT Burger & Arrow Design and found out that respondent had
already obtained Trademark Registration for the mark IN N OUT (the inside of the letter O
formed like a star). By virtue of a licensing agreement, Benita Frites, Inc. was able to use the
registered mark of respondent Sehwani, Incorporated. Petitioner filed an administrative
complaint against respondents for unfair competition and cancellation of trademark registration.

Petitioner averred in its complaint that it is the owner of the trade name IN-N-OUT and the
following trademarks: (1) IN-N-OUT; (2) IN-N-OUT Burger & Arrow Design; and (3) IN-N-OUT
Burger Logo. These trademarks are registered with the Trademark Office of the US and in
various parts of the world, are internationally well-known, and have become distinctive of its
business and goods through its long and exclusive commercial use. Petitioner pointed out that
its internationally well-known trademarks and the mark of the respondents are all registered for
the restaurant business and are clearly identical and confusingly similar. Petitioner claimed that
respondents are making it appear that their goods and services are those of the petitioner, thus,
misleading ordinary and unsuspecting consumers that they are purchasing petitioners products.

Issue(s)
1. Who has the superior right to own and use the In-N-Out trademark?
2. Whether the respondent is guilty of unfair competition

Ruling

1. Petitioner has the superior right to own and use the IN-N-OUT trademarks vis--vis
respondents. Although the petitioner had never done business in the Philippines, it was widely
known in this country through the use herein of products bearing its corporate and trade name.
Petitioners marks are internationally well-known, given the world-wide registration of the mark
IN-N-OUT, and its numerous advertisements in various publications and in the Internet.
Moreover, the IPO had already declared in a previous inter partes case that In-N-Out Burger
and Arrow Design was an internationally well-known mark. Given these circumstances, the
petitioner had the right to use its trade name and mark IN-N-OUT in the Philippines to the
exclusion of others, including the respondents.

2. Respondents used the mark IN N OUT in bad faith and were guilty of unfair competition.
Administrative proceedings are governed by the substantial evidence rule. A finding of guilt in
an administrative case would have to be sustained for as long as it is supported by substantial
evidence that the respondent has committed acts stated in the complaint or formal charge. As
recounted by the IPO Director General in his decision, there is more than enough substantial
evidence to support his finding that respondents are guilty of unfair competition. The essential
elements of an action for unfair competition are (1) confusing similarity in the general
appearance of the goods and (2) intent to deceive the public and defraud a competitor. The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. The intent to deceive and
defraud may be inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown.

c) Prohibition of Importation
Sec. 166, IPC

Section 166. Goods Bearing Infringing Marks or Trade Names. - No article of imported

merchandise which shall copy or simulate the name of any domestic product, or manufacturer,
or dealer, or which shall copy or simulate a mark registered in accordance with the provisions of
this Act, or shall bear a mark or trade name calculated to induce the public to believe that the
article is manufactured in the Philippines, or that it is manufactured in any foreign country or
locality other than the country or locality where it is in fact manufactured, shall be admitted to
entry at any customhouse of the Philippines. In order to aid the officers of the customs service in
enforcing this prohibition, any person who is entitled to the benefits of this Act, may require that
his name and residence, and the name of the locality in which his goods are manufactured, a
copy of the certificate of registration of his mark or trade name, to be recorded in books which
shall be kept for this purpose in the Bureau of Customs, under such regulations as the Collector
of Customs with the approval of the Secretary of Finance shall prescribe, and may furnish to the
said Bureau facsimiles of his name, the name of the locality in which his goods are
manufactured, or his registered mark or trade name, and thereupon the Collector of Customs
shall cause one (1) or more copies of the same to be transmitted to each collector or to other
proper officer of the Bureau of Customs. (Sec. 35, R.A. No. 166)

3. Civil
 a) Infringement

Sec. 155 (and its sub-paragraphs), IPC

Section 155. Remedies; Infringement. - Any person who shall, without the consent of the owner
of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a

registered mark or the same container or a dominant feature thereof in connection with the sale,
offering for sale, distribution, advertising of any goods or services including other preparatory
steps necessary to carry out the sale of any goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used in commerce
upon or in connection with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the
remedies hereinafter set forth: Provided, That the infringement takes place at the moment any
of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether
there is actual sale of goods or services using the infringing material. (Sec. 22, R.A. No 166a)

Sec. 156 (and its sub-paragraphs), IPC

Section 156. Actions, and Damages and Injunction for Infringement. - 156.1. The owner of a
registered mark may recover damages from any person who infringes his rights, and the
measure of the damages suffered shall be either the reasonable profit which the complaining
party would have made, had the defendant not infringed his rights, or the profit which the
defendant actually made out of the infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty, then the court may award as damages
a reasonable percentage based upon the amount of gross sales of the defendant or the value of
the services in connection with which the mark or trade name was used in the infringement of
the rights of the complaining party. (Sec. 23, first par., R.A. No. 166a)

156.2. On application of the complainant, the court may impound during the pendency of the
action, sales invoices and other documents evidencing sales. (n)

156.3. In cases where actual intent to mislead the public or to defraud the complainant is
shown, in the discretion of the court, the damages may be doubled. (Sec. 23, first par., R.A. No.
166)

156.4. The complainant, upon proper showing, may also be granted injunction. (Sec. 23, second
par., R.A. No. 166a)

Sec. 157 (and its sub-paragraphs). IPC

Section 157. Power of Court to Order Infringing Material Destroyed. - 157.1 In any action
arising under this Act, in which a violation of any right of the owner of the registered mark is
established, the court may order that goods found to be infringing be, without compensation of
any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm
caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers,
receptacles and advertisements in the possession of the defendant, bearing the registered mark
or trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates,
molds, matrices and other means of making the same, shall be delivered up and destroyed.

157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be
sufficient other than in exceptional cases which shall be determined by the Regulations, to
permit the release of the goods into the channels of commerce. (Sec. 24, R.A. No. 166a)

Sec. 158, IPC

Section 158. Damages; Requirement of Notice. - In any suit for infringement, the owner of the
registered mark shall not be entitled to recover profits or damages unless the acts have been
committed with knowledge that such imitation is likely to cause confusion, or to cause mistake,
or to deceive. Such knowledge is presumed if the registrant gives notice that his mark is
registered by displaying with the mark the words '"Registered Mark" or the letter R within a circle
or if the defendant had otherwise actual notice of the registration. (Sec. 21, R.A. No. 166a)

Sec. 159 (and its sub-paragraphs), IPC, as amended by RA No. 9502

(Universally Accessible Cheaper and Quality Medicines Act of 2008)

Section 159 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
Philippines, is hereby amended to read as follows:

"SEC. 159. Limitations to Actions for Infringement. - Notwithstanding any other provision
of this Act, the remedies given to the owner of a right infringed under this Act shall be
limited as follows:

" 159.1. Notwithstanding the provisions of Section 155 hereof, a registered mark shall have no
effect against any person who, in good faith, before the filing date or the priority date, was using
the mark for the purposes of his business or enterprise: Provided, That his right may only be
transferred or assigned together with his enterprise or business or with that part of his enterprise
or business in which the mark is used.

159.2. Where an infringer who is engaged solely in the business of printing the mark or other
infringing materials for others is an innocent infringer, the owner of the right infringed shall be
entitled as against such infringer only to an injunction against future printing.

159.3. Where the infringement complained of is contained in or is part of paid advertisement in a

newspaper, magazine, or other similar periodical or in an electronic communication, the
remedies of the owner of the right infringed as against the publisher or distributor of such
newspaper, magazine, or other similar periodical or electronic communication shall be limited to
an injunction against the presentation of such advertising matter in future issues of such
newspapers, magazines, or other similar periodicals or in future transmissions of such electronic
communications. The limitations of this subparagraph shall apply only to innocent infringers:
Provided, That such injunctive relief shall not be available to the owner of the right infringed with
respect to an issue of a newspaper, magazine, or other similar periodical or an electronic
communication containing infringing matter where restraining the dissemination of such
infringing matter in any particular issue of such periodical or in an electronic communication
would delay the delivery of such issue or transmission of such electronic communication is
customarily conducted in accordance with the sound business practice, and not due to any
method or device adopted to evade this section or to prevent or delay the issuance of an
injunction or restraining order with respect to such infringing matter; and

"159.4 There shall be no infringement of trademarks or tradenames of imported or sold drugs

and medicines allowed under Section 72.1 of this Act, as well as imported or sold off-patent
drugs and medicines: Provided, That said drugs and medicines bear the registered marks that
have not been tampered, unlawfully modified, or infringed upon as defined under Section 155 of
this Code."

Sec. 161, IPC

Section 161. Authority to Determine Right to Registration. - In any action involving a registered
mark, the court may determine the right to registration, order the cancellation of a registration, in
whole or in part, and otherwise rectify the register with respect to the registration of any party to
the action in the exercise of this. Judgment and orders shall be certified by the court to the
Director, who shall make appropriate entry upon the records of the Bureau, and shall be
controlled thereby. (Sec. 25, R.A. No. 166a)

Sec. 163, IPC

Section 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164, and 166 to 169
shall be brought before the proper courts with appropriate jurisdiction under existing laws. (Sec.
27, R.A. No. 166)

Sec. 164, IPC

Section 164. Notice of Filing Suit Given to the Director. - It shall be the duty of the clerks of
such courts within one (1) month after the filing of any action, suit, or proceeding involving a
mark registered under the provisions of this Act, to notify the Director in writing setting forth: the
names and addresses of the litigants and designating the number of the registration or
registrations and within one (1) month after the judgment is entered or an appeal is taken, the
clerk of court shall give notice thereof to the Office, and the latter shall endorse the same upon
the filewrapper of the said registration or registrations and incorporate the same as a part of the
contents of said filewrapper. (n)

Sec. 232, IPC

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by
the Rules of Court. Unless restrained by a higher court, the judgment of the trial court shall be
executory even pending appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of
administrative officials shall be provided in the Regulations. (n)
 Rule on Search and Seizure in Civil Actions for Infringement of
Intellectual Property Rights (A.M. No. 02-1-06-SC)

This is actually a mode of discovery.

This is hardly used. Practically a dead administrative issuance.

Rules of Procedure for Intellectual Property Rights Cases (A.M. No.

10-3-10-SC) issued on 3 October 2011

Etepha v. Director of Patents, 16 SCRA 495 (1966)

Etepha, A.G. vs. Director of Patents and Westmont Pharmaceuticals

No. L-20635
March 31, 1966

Topic: Registrability – Distinctive Marks

Facts

On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation,
sought registration of trademark “Atussin” placed on its “medicinal preparation of expectorant
antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of
cough”. The trademark is used exclusively in the Philippines since January 21, 1959.

Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner

claims that it will be damaged because Atussin is so confusingly similar to its Pertussin
(Registration No. 6089, issued on Septem-ber 25, 1957) used on a preparation for the treatment
of coughs, that the buying public will be misled into believing that Westmont’s product is that of
petitioner’s which allegedly enjoys goodwill.

Issue(s)

Whether the petitioner’s contention is correct

Ruling

No. That the word “tussin” figures as a component of both trademarks is nothing to
wonder at. The Director of Patents aptly observes that it is “the common practice in the drug and
pharmaceutical industries to ‘fabricate’ marks by using syllables or words suggestive of the
ailments for which they are intended and adding thereto distinctive prefixes or suffixes”. And
appropriately to be considered now is the fact that, concededly, the “tussin” (in Pertussin and
Atussin) was derived from the Latin root-word “tussis” meaning cough.

“Tussin” is merely descriptive; it is generic; it furnishes to the buyer no indication of the

origin of the goods; it is open for appropriation by anyone. It is accordingly barred from
registration as trademark. With jurisprudence holding the line, we feel safe in making the
statement that any other conclusion would result in “appellant having practically a monopoly” of
the word “tussin” in a trademark. While “tussin” by itself cannot thus be used exclusively to
identify one’s goods, it may properly become the subject of a trademark “by combination with
another word or phrase”. And this union of words is reflected in petitioner’s Pertussin and
respondent’s Atussin, the first with prefix “Per” and the second with Prefix “A”.

Esso Standard Eastern v. CA, 116 SCRA 338

ESSO Standard Eastern, Inc. vs. Court of Appeals and United Cigarette Corporation

No. L-29971
August 31, 1982

Topic: Infringement of Marks – Dominancy Test

Facts

Petitioner Esso Standard Eastern, Inc., then a foreign corporation duly licensed to do business
in the Philippines, is engaged in the sale of petroleum products which are identified with its
trademark ESSO (which as successor of the defunct Standard Vacuum Oil Co. it registered as a
business name with the Bureaus of Commerce and

Internal Revenue in April and May, 1962). Private respondent in turn is a domestic corporation
then engaged in the manufacture and sale of cigarettes, after it acquired in November, 1963 the
business, factory and patent rights of its predecessor La Oriental Tobacco Corporation, one of
the rights thus acquired having been the use of the trademark ESSO on its cigarettes, for which
a permit had been duly granted by the Bureau of Internal Revenue.

Barely had respondent as such successor started manufacturing cigarettes with the trademark
ESSO, when petitioner commenced a case for trademark infringement in the Court of First
Instance of Manila.

The complaint alleged that the petitioner had been for many years engaged in the sale of
petroleum products and its trademark ESSO had acquired a considerable goodwill to such an
extent that the buying public had always taken the trademark ESSO as equivalent to high
quality petroleum products. Petitioner asserted that the continued use by private respondent of
the same trademark ESSO on its cigarettes was being carried out for the purpose of deceiving
the public as to its quality and origin to the detriment and disadvantage of its own products.

Issue(s)

Whether there was a trademark infringement

Ruling
No. The law defines infringement as the use without consent of the trademark owner of 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,” Implicit in this definition is the concept that the goods
must be so related that there is a likelihood either of confusion of goods or business.

Respondent court correctly ruled that considering the general appearances of each mark as a
whole, the possibility of any confusion is unlikely. A comparison of the labels of the samples of
the goods submitted by the parties shows a great many differences on the trademarks used. As
pointed out by respondent court in its appealed decision, “(A) witness for the plaintiff, Mr. Buhay,
admitted that the color of the ‘ESSO’ used by the plaintiff for the oval design where the blue
word ESSO is contained is the distinct and unique kind of blue. In his answer to the trial court’s
question, Mr. Buhay informed the court that the plaintiff never used its trademark on any product
where the combination of colors is similar to the label of the Esso cigarettes.”

Even the lower court, which ruled initially for petitioner, found that a “noticeable difference
between the brand ESSO being used by the defendants and the trademark ESSO of the plaintiff
is that the former has a rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background.”

Fruit of the Loom v. CA, 133 SCRA 405 (1984)

Fruit of the Loom, Inc. vs. Court of Appeals and General Garments Corporation

G.R. No. L-32747

November 29, 1984

Topic: Infringement of Marks – Holistic Test

Facts

Herein petitioner, Fruit of the Loom Inc., a corporation duly organized and existing under the
laws of the State of Rhode Island, United States of America, and the registrant of a trademark
“Fruit of the Loom” in the Philippines Patent Office, filed a complaint for infringement of
trademark and unfair competition against herein private respondent, General Garments Corp., a
domestic corporation duly organized and existing in the Philippines Patent Office, the registrant
of a trademark “Fruit for Eve” which allegedly covers undergarments similar to that of the
petitioner.

As alleged in the complaint, private respondent’s trademark “Fruit for Eve” is confusingly similar
to its trademark “Fruit of the Loom”. And that, even the color get-up and general appearance of
private respondent’s hang tag consisting of a big red apple is a colorable imitation to the hang
tag of petitioner. Private respondent invoked a special defense. However after trial, the
judgment was rendered by the lower court in favor of herein petitioner. The then Court of
Appeals rendered its questioned decision reversing the judgment of the lower court and
dismissing herein petitioner’s complaint. Petitioner’s motion for reconsideration having been
denied, the present petition was filed before this Court.

Issue(s)

Whether private respondent’s trademark “Fruit for Eve” and its hang tag are confusingly similar
to that of petitioner’s trademark and hang tag thereby constituting an infringement of the latter’s
trademark rights

Ruling

NO. The court consistently held that there is infringement of trademark when the use of the
mark involved would be likely to cause confusion or mistake in the mind of the public or to
deceive purchasers as to the origin or source of the commodity. However, standing by itself,
“Fruit of the Loom” is wholly different from “Fruit for Eve”. It is disagreeable that the dominant
feature of both trademarks is the word FRUIT for even in the printing of the trademark in both
hang tags, the word FRUIT is not at all made dominant over the other words. Thus, the
trademarks “Fruit of the Loom” and “Fruit for Eve” are not confusingly similar.

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 (Bristol Myers Co. vs. Director of Patents, 17 SCRA 131).
In the case at bar, the Court is more impressed by the dissimilarities than by the similarities
appearing therein. The similarities of the competing trademarks in this case are completely lost
in the substantial differences in the design and general appearance of their respective hang
tags.

These findings in effect render immaterial the other errors assigned by petitioner which are
premised on the assumption that private respondent’s trademark “Fruit for Eve” had infringed
petitioner’s trademark “Fruit of the Loom”. The decision appealed from is hereby affirmed with
costs against petitioner.

Del Monte Corporation v. CA, 181 SCRA 410

Del Monte Corporation vs. Court of Appeals

G.R. No. 78325
January 25, 1990

Topic: Infringement of Marks – Holistic Test

Facts

On April 11, 1969, Del Monte granted Philpack (Philippine Packing Corporation) the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.
 On October 27, 1965, Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was granted Certificate of
Trademark Registration No. SR-913 by the Philippine Patent Office under the Supplemental
Register. On November 20, 1972, Del Monte also obtained two registration certificates for its
trademark “DEL MONTE” and its logo.

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration

by the Bureau of Domestic Trade on April 17, 1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. This
logo was registered in the Supplemental Register on September 20, 1983. The product itself
was contained in various kinds of bottles, including the Del Monte bottle, which the private
respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte’s, Philpack warned it to desist from doing so on pain
of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte
filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction

The trial court of Makati dismissed the complaint, holding that there were substantial
differences between the logos or trademarks of the parties, that the defendant had ceased using
the petitioners’ bottles, and that in any case the defendant became the owner of the said bottles
upon its purchase thereof from the junk yards.

Issue(s)

Whether the trademarks are so confusingly similar as to warrant a cancellation of the certificate
of registration of Sunshine

Ruling

Yes. 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 and applying the
same, held that there was no colorable imitation of the petitioners’ trademark and logo by the
private respondent.

It has been correctly held that side-by-side comparison is not the final test of similarity. Such
comparison requires a careful scrutiny to determine in what points the labels of the products
differ, as was done by the trial judge. The ordinary 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.

The question is not whether the two articles are distinguishable by their label 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.

At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label
is a colorable imitation of the Del Monte trademark. The predominant colors used in the Del
Monte label are green and red-orange, the same with Sunshine. The word “catsup” in both
bottles is printed in white and the style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates that of a tomato.

As previously stated, the person who infringes a trade mark does not normally copy out but
only makes colorable changes, employing enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a boundless choice of words,
phrases, colors and symbols sufficient to distinguish his product from the others. When as in
this case, Sunshine chose, without a reasonable explanation, to use the same colors and letters
as those used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive.

Asia Brewery v. CA, 224 SCRA 437

Asia Brewery, Inc. vs. Court of Appeals and San Miguel Corporation
G.R. No. 103545
July 5, 1993

Topic: Registrability – Descriptive Marks

Facts

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia
Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of the
latter’s BEER PALE PILSEN or BEER NA BEER product which has been competing with
SMC’s SAN MIGUEL PALE PILSEN for a share of the local beer market. (San Miguel
Corporation vs. Asia Brewery Inc., Civ. Case No. 56390, RTC Branch 166, Pasig, Metro
Manila.)

On August 27, 1990, a decision was rendered by the trial Court, presided over by
Judge Jesus O. Bersamira, dismissing SMC’s complaint because ABI “has not committed
trademark infringement or unfair competition against” SMC.

Upon appeal to the Court of Appeals, the CA reversed the decision of the trial court,
contending that ABI was guilty of infringement. In due time, ABI appealed to the Supreme
Court through a petition for certiorari under Rule 45.

Description of SMC’s Pale Pilsen

“x x x a rectangular design [is] bordered by what appears to be minute grains arranged

in rows of three in which there appear in each corner hop designs. At the top is a phrase
written in small print ‘Reg. Phil. Pat. Off.’ and at the bottom ‘Net Contents: 320 Ml’ The
dominant feature is the phrase ‘San Miguel’ written horizontally at the upper portion. Below
are the words Pale Pilsen’ written diagonally across the middle of the rectangular design. In
between is a coat of arms and the phrase ‘Expertly Brewed.’ The ‘S’ in ‘San’ and the ‘M’ of
‘Miguel,’ ‘P’ of ‘Pale’ and ‘Pilsen’ are written in Gothic letters with fine strokes of serifs, the
kind that first appeared in the 1780s in England and used for printing German as distinguished
from Roman and Italic. Below ‘Pale Pilsen’ is the statement ‘And Bottled by’ (first line, ‘San
Miguel Brewery’ (second line), and ‘Philippines’ (third line).” (p. 177, Rollo; Italics supplied.)

Description of ABI’s Pale Pilsen

“x x x a rectangular design bordered by what appear to be buds of flowers with leaves.

The dominant feature is ‘Beer written across the upper portion of the rectangular
design.

The phrase ‘Pale Pilsen’ appears immediately below is smaller block letters. To the left
is a hop design and to the right, written in small prints, is the phrase ‘Net Contents 320 ml.’
Immediately below ‘Pale Pilsen’ is the statement written in three lines ‘Especially brewed and
bottled by’ (first line), ‘Asia Brewery Incorporated’ (second line), and ‘Philippines’ (third line),”
(p. 177, Rollo; Italics supplied.)

Issue(s)

Whether ABI infringed upon SMC’s trademark for its use of the words “PALE PILSEN”

Ruling

No. The Supreme Court, in arriving to the decision, focused on the dominant feature of
the trademarks in question, that is to say, the words “PALE PILSEN”. The fact that the words
pale pilsen are part of ABI’s trademark does not constitute an infringement of SMC’s
trademark: SAN MIGUEL PALE PILSEN, for “pale pilsen” are generic words descriptive of the
color (“pale”), of a type of beer (“pilsen”), which is a light bohemian beer with a strong hops
flavor that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle
Ages. (Webster’s Third New International Dictionary of the English Language, Unabridged.
Edited by Philip Babcock Gove. Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.)
“Pilsen” is a “primarily geographically descriptive word,” (Sec. 4, subpar. [e] Republic Act No.
166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not appropriable by
any beer manufacturer. The Trademark Law provides:

“Sec 4. x x x. The owner of 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 supplied.)
 Note (dissenting opinion of Justice Cruz):

It has been correctly held that side-by-side comparison is not the final test of similarity.
Such comparison requires a careful scrutiny to determine in what points the labels of the
products differ, as was done by the trial judge. The ordinary 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. Where the
housewife has to return home as soon as possible to

her baby or the working woman has to make quick purchases during her off hours, she
is apt to be confused by similar labels even if they do have minute differences. The male
shopper is worse as he usually does not bother about such distinctions.

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.

Conrad v. CA, 246 SCRA 691

FACTS: FITRITE and VICTORIA BISCUIT are engaged in the business of manufacturing,
selling and distributing biscuits and cookies bearing the trademark "SUNSHINE" in the
Philippines. CONRAD is also engaged in the business of importing, selling and distributing
biscuits and cookies in the Philippines.

FITRITE filed applications for registration of the trademark "SUNSHINE," both in the
Supplemental and Principal Registers, to be used on biscuits and cookies. Since 1981 FITRITE
had exclusively used this trademark in the concept of owner on its biscuits and cookies.
FITRITE's application for this trademark in the Supplemental Register and in the Principal
Registration was approved for a term of 20 years. FITRITE authorized VICTORIA BISCUIT to
use this trademark on its biscuits and cookies, as well as to manufacture, promote, sell and
distribute products bearing said trademark.

FITRITE assigned its trademark "SUNSHINE AND DEVICE LABEL," together with its interest
and business goodwill to said VICTORIA BISCUIT. From the time FITRITE was issued the
Certificate of Registration for this trademark up to the filing of the complaint, FITRITE and
VICTORIA BISCUIT have been manufacturing, selling and distributing on a massive scale
biscuits and cookies bearing this trademark; so that through the years of extensive marketing of
plaintiffs' biscuits and cookies with this trademark, their products have become popularly known
and enjoyed wide acceptability in Metro Manila and in the provinces.

Then plaintiffs discovered that CONRAD had been importing, selling and distributing biscuits
and cookies, and other food items bearing this trademark in the Philippines. Although CONRAD
had never before been engaged in the importation, sale and distribution of products similar to
those of plaintiffs, CONRAD was suddenly 67 designated exclusive importer and dealer of the
products of "Sunshine Biscuits, Inc." for sale in the Philippine market; and CONRAD made its
first importation.
Those acts of CONRAD, done without plaintiffs' consent, were deliberately calculated to mislead
and deceive the purchasers by making them believe that its (CONRAD'S) "Sunshine" products
had originated from plaintiffs and thereby inducing them to patronize those products, all to the
damage and prejudice of both the purchasing public and plaintiffs.

Plaintiffs demanded Conrad to cease and desist from continuing with those acts, but the
demand was ignored. Being acts of infringement and unfair competition in violation of plaintiffs'
rights, plaintiffs can validly avail themselves of the remedies against infringement, as well as of
the remedies against unfair competition.

In seeking the dismissal of the complaint, CONRAD invoked litis pendentia, the doctrine of
primary jurisdiction and failure to state a cause of action.

Petitioner contends that the "Petitions for Cancellation" of Fitrite's Certificate of Registration in
the Supplemental Register and the Principal Register, which Sunshine Biscuits filed with BPTTT
cast a cloud of doubt on private respondents' claim of ownership and exclusive right to the use
of the trademark "Sunshine." Considering that this matter is at issue before the BPTTT, which
has primary jurisdiction over the case, petitioner argues, an injunctive relief from any court
would be precipitate and improper.

ISSUE: WON the trial court can proceed with the case for "injunction with damages" filed by
private respondents notwithstanding the pendency of an administrative case for the cancellation
of the former's trademark filed by supposedly "petitioner's principal" (YES)

RULING: While an application for the administrative cancellation of a registered trademark falls
under the exclusive cognizance of BPTTT, an action, however, for infringement or unfair
competition, as well as the remedy of injunction and relief for damages, is explicitly and
unquestionably within the competence and jurisdiction of ordinary courts.

Private respondents are the holder of Certificate of Registration in the Principal Register for the
questioned trademark. Registration in the Principal Register gives rise to a presumption of
validity of the registration and of the registrant's ownership and right to the exclusive use of the
mark. It is precisely such a registration that can serve as the basis for an action for infringement.
An invasion of this right entitles the registrant to court protection and relief.

Surely, an application with BPTTT for an administrative cancellation of a registered trade mark
cannot per se have the effect of restraining or preventing the courts from the exercise of their
lawfully conferred jurisdiction. A contrary rule would unduly expand the doctrine of primary
jurisdiction which, simply expressed, would merely behoove regular courts, in controversies
involving specialized disputes, to defer to the findings of resolutions of administrative tribunals
on certain technical matters. This rule, evidently, did not escape the appellate court for it
likewise decreed that for "good cause shown, the lower court, in its sound discretion, may
suspend the action pending outcome of the cancellation proceedings" before BPTTT.

Thus, having the exclusive right over said trademark, FITRITE should be protected in the use
thereof; and considering that it is apparent that the invasion of the right FITRITE sought to
protect is material and substantial; that such right of FITRITE is clear and unmistakable; and
that there is an urgent necessity to prevent serious damage to FITRITE's business interest,
goodwill and profit, thus under the authority of Sec. 23 of said Republic Act No. 166, as
amended, a preliminary injunction may be issued in favor of FITRITE to maintain the status quo
pending trial of the action a quo on the merits without prejudice to the suspension of such action
if the aforesaid cancellation proceeding before the BPTTT has not been concluded.

The appellate court's finding that there is an urgent necessity for the issuance of the writ of
preliminary injunction pending resolution by BPTTT of the petition for cancellation filed by
Sunshine USA in Inter Partes Case No. 3397 would indeed appear to have merit.

The allegations of the complaint, perforced hypothetically deemed admitted by petitioner, would
here justify the issuance by appellate court of its injunction order. Petitioner, itself, does not
even appear to be a party in the administrative case. The averment that Sunshine USA is
petitioner's principal, and that it has a prior foreign registration that should be respected
conformably with the Convention of the Union of Paris for the Protection of Industrial Property
are mere asseverations in the motion to dismiss which, along with some other factual
assertions, are yet to be established.

Emerald Garment Manufacturing v. CA, 251 SCRA 600

FACTS:
Private respondent H.D. Lee Co., Inc., filed with the Bureau of Patents, Trademarks &
Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054 for the
trademark "STYLISTIC MR. LEE" issued on 27 October 1980 in the name of Petitioner Emerald
Garment Manufacturing Corporation

Private respondent averred that petitioner's trademark "so closely resembled its own
trademark, 'LEE' as previously registered and used in the Philippines cause confusion, mistake
and deception on the part of the purchasing public as to the origin of the goods."

The Director of Patents rendered a decision granting private respondent's petition for
cancellation and opposition to registration and 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. 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."

ISSUE:
WON the trademark “Stylistic Mr. Lee” tends to mislead or confuse the public and
constitutes an infringement of the trademark “Lee.”?

HELD:
NO

RULING:
Emerald Garment’s “STYLISTIC MR. LEE” is not confusingly similar to H.D. Lee’s “LEE”
trademark. The trademark “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, soysauce 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.

Second, like his beer, the average Filipino consumer generally buys his jeans by brand.
He is more or less knowledgeable and familiar with his preference and will not easily be
distracted.

Finally, 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 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.

Amigo v. Cluett Peabody, 354 SCRA 434 (2001)

Facts
 Cluett Peabody Co., Inc. (a New York corporation) filed a case against Amigo
Manufacturing Inc. (a Philippine corporation) for cancellation of trademark, claiming
exclusive ownership (as successor in interest of Great American Knitting Mills, Inc.) of
the following trademark and devices, as used on men's socks:
o a) GOLD TOE; b) DEVICE, representation of a sock and magnifying glass on the
toe of a sock; c) DEVICE, consisting of a 'plurality of gold colored lines arranged
in parallel relation within a triangular area of toe of the stocking and spread from
each other by lines of contrasting color of the major part of the stocking' ; and d)
LINENIZED.
 [petitioner's] Amigo Manufacturing Inc. trademark and device 'GOLD TOP, Linenized for
Extra Wear' has the dominant color 'white' at the center and a 'blackish brown'
background with a magnified design of the sock's garter, and is labeled 'Amigo
Manufacturing Inc.
 Patent Office (Decision): the application of the rule of idem sonans and the existence of
a confusing similarity in appearance between two trademarks.
 Court of Appeals:
o “there is hardly any variance in the appearance of the marks 'GOLD TOP' and
'GOLD TOE' since both show a representation of a man's foot wearing a sock,
and the marks are printed in identical lettering.”
o Section 4(d) of R.A. No. 166 declares to be unregistrable, 'a mark which consists
o[r] comprises a mark or trademark which so resembles a mark or tradename
registered in the Philippines of 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 or services of the applicant, to cause
confusion or mistake or to deceive the purchasers.
o [Petitioner]'s mark is a combination of the different registered marks owned by
[respondent].
 o [petitioner]'s mark is only registered with the Supplemental Registry which gives
no right of exclusivity to the owner and cannot overturn the presumption of
validity and exclusiv[ity] given to a registered mark.
 Hence this petition.

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

RATIO:
 The Bureau of Patents, however, did not rely on the idem sonans test alone in arriving at
its conclusion. The Bureau considered the drawings and the labels, the appearance of
the labels, the lettering, and the representation of a man's foot wearing a sock.
Obviously, its conclusion is based on the totality of the similarities between the parties'
trademarks and not on their sounds alone.
 Resort to either the Dominancy Test or the Holistic Test shows that colorable imitation
exists between respondent's "Gold Toe" and petitioner's "Gold Top."
o Petitioner’s mark shows that it definitely has a lot of similarities and in fact looks
like a combination of the trademark and devices that respondent has already
registered; namely, "Gold Toe," the representation of a sock with a magnifying
glass, the "Gold Toe" representation and "linenized."
 Though there are differences in the set of marks, the similarities, however, are of such
degree that the overall impression given is that the two brands of socks are deceptively
the same or similar to each other.
 their dominant features are gold checkered lines against a predominantly black
background and a representation of a sock with a magnifying glass. In addition, both
products use the same type of lettering.
 Both also include a representation of a man's foot wearing a sock and the word
"linenized" with arrows printed on the label.
 the names of the brands are similar -- "Gold Top" and "Gold Toe."
 the overall impression created is that the two products are deceptively and confusingly
similar to each other. Clearly, petitioner violated the applicable trademark provisions
during that time.

Societe Des Produits Nestle v. CA, 356 SCRA 207 (2001)

FACTS:

In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology
Transfers an application for the registration of its trademark “Flavor Master” – an instant coffee.
Nestle opposed the application as it alleged that “Flavor Master” is confusingly similar to Nestle
coffee products like Master Blend and Master Roast. Nestle alleged that in promoting their
products, the word Master has been used so frequently so much so that when one hears the
word Master it connotes to a Nestle product. They provided as examples the fact that they’ve
been using Robert Jaworski and Ric Puno Jr. as their commercial advertisers; and that in those
commercials Jaworski is a master of basketball and that Puno is a master of talk shows; that the
brand of coffee equitable or fit to them is Master Blend and Master Roast. CFC Corporation on
the other hand alleged that the word “Master” is a generic and a descriptive term, hence not
subject to trademark. The Director of Patents ruled in favor of Nestle but the Court of Appeals,
using the Holistic Test, reversed the said decision.
 ISSUE:
Whether or not the trademark FLAVOR MASTER is a colourable imitation of the
trademarks MASTER ROAST and MASTER BLEND.

Whether or not the Court of Appeals is correct.

HELD:
1. YES
2. NO

The proper test that should have been used is the Dominancy Test. 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. The use of the word Master by Nestle in its products
and commercials has made Nestle acquire a connotation that if it’s a Master product it is a
Nestle product. 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 addition, the word “MASTER” is neither a generic nor a descriptive term. As such, said
term cannot be invalidated as a trademark and, therefore, may be legally protected.
Generic terms 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 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 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.”
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 purchaser.

Mighty Corporation v. E. & J. Gallo Winery, GR No. 154342, 14 July 2004

FACTS:
On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC
(respondents) sued MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC.
(petitioners) in the RTC-Makati for trademark and trade name infringement and unfair
competition, with a prayer for damages and preliminary injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s and Gallo
and Ernest & Julio Gallo trademark’s established reputation and popularity, thus causing
confusion, deception and mistake on the part of the purchasing public who had always
associated Gallo and Ernest and Julio & Gallo trademarks with Gallo Winery’s wines.

In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo
cigarettes and Gallo Winery’s wine were totally unrelated products. To wit:
1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not
cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket while Gallo
cigarette buyers were farmers, fishermen, laborers and other low-income workers;
4. that the dominant feature of the Gallo cigarette was the rooster device with the
manufacturer’s name clearly indicated as MIGHTY CORPORATION, while in the case of Gallo
Winery’s wines, it was the full names of the founders-owners ERNEST & JULIO GALLO or just
their surname GALLO;

The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of
preliminary injunction. CA likewise dismissed respondent’s petition for review on certiorari.

After the trial on the merits, however, the Makati RTC held petitioners liable for committing
trademark infringement and unfair competition with respect to the GALLO trademark.

On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied petitioner’s
motion for reconsideration.

ISSUE/S: Whether GALLO cigarettes and GALLO wines were identical, similar or related goods
for the reason alone that they were purportedly forms of vice.

RULING: NO.
Wines and cigarettes are not identical, similar, competing or related goods.

In resolving whether goods are related, several factors come into play:
· the business (and its location) to which the goods belong
· the class of product to which the good belong
· the product’s quality, quantity, or size, including the nature of the package, wrapper or
container
· the nature and cost of the articles
· the descriptive properties, physical attributes or essential characteristics with reference to
their form, composition, texture or quality
· the purpose of the goods
· whether the article is bought for immediate consumption, that is, day-to-day household
items
· the field of manufacture
· the conditions under which the article is usually purchased and
· the articles of the trade through which the goods flow, how they are distributed, marketed,
displayed and sold.

The test of fraudulent simulation is to 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 simulation, in order to be objectionable, must be 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.

The petitioners are not liable for trademark infringement, unfair competition or damages.

McDonald's Corp v. L.C. Big Mak, GR 143993 dated 18 August 2004

McDonald’s Corporation and Mcgeorge Food Industries, Inc. vs. Big Mak Burger, Inc., et al.

G.R. No. 143993

August 18, 2004

Topic: Infringement of Marks – Dominancy Test

Facts

Petitioner McDonalds Corporation is a corporation organized under the laws of Delaware, USA.
McDonalds operates, by itself or through its franchisees, a global chain of fast-food restaurants.
McDonalds owns a family of marks including the Big Mac mark for its double-decker hamburger
sandwich. McDonalds registered this trademark with the US Trademark Registry on 16 October
1979. Based on this Home Registration, McDonalds applied for the registration of the same
mark in the Principal Register of the then Philippine Bureau of Patents, Trademarks and
Technology (PBPTT), now the IPO. Pending approval of its application, McDonalds introduced
its Big Mac hamburger sandwiches in the Philippine market in September 1981. On 18 July
1985, the PBPTT allowed registration of the Big Mac mark in the Principal Register based on its
Home Registration in the United States. Like its other marks, McDonalds displays the Big Mac

mark in items and paraphernalia in its restaurants, and in its outdoor and indoor signages. From
1982 to 1990, McDonalds spent P10.5 million in advertisement for Big Mac hamburger
sandwiches alone. Petitioner McGeorge Food Industries is a domestic corporation, is
McDonalds Philippine franchisee.

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food
outlets and snack vans in Metro Manila and nearby provinces. Respondent corporations menu
includes hamburger sandwiches and other food items. On 21 October 1988, respondent
corporation applied with the PBPTT for the registration of the Big Mak mark for its hamburger
sandwiches. McDonalds opposed respondent corporations application on the ground that Big
Mak was a colorable imitation of its registered Big Mac mark for the same food products.
McDonalds also informed respondent Francis Dy, the chairman of the Board of Directors of
respondent corporation, of its exclusive right to the Big Mac mark and requested him to desist
from using the Big Mac mark or any similar mark.

Issue(s)

1. Whether LC BIG MAK BURGER is liable for trademark infringement

2. Whether LC BIG MAK BURGER is liable for unfair competition

Ruling

1. Yes. Under the dominancy test, which is now explicitly incorporated into law in Section
155.1 of the Intellectual Property Code which defines infringement as the colorable imitation of a
registered mark xxx or a dominant feature thereof, the Court finds that respondents use of the
Big Mak mark results in likelihood of confusion. First, Big Mak sounds exactly the same as Big
Mac. Second, the first word in Big Mak is exactly the same as the first word in Big Mac. Third,
the first two letters in Mak are the same as the first two letters in Mac. Fourth, the last letter in
Mak while a k sounds the same as c when the word Mak is pronounced. Fifth, in Filipino, the
letter k replaces c in spelling, thus Caloocan is spelled Kalookan. In short, aurally the two marks
are the same, with the first word of both marks phonetically the same, and the second word of
both marks also phonetically the same. Visually, the two marks have both two words and six
letters, with the first word of both marks having the same letters and the second word having the
same first two letters. In spelling, considering the Filipino language, even the last letters of both
marks are the same.

Clearly, the respondents have adopted in Big Mak not only the dominant but also almost all the
features of Big Mac. Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind. Certainly, Big Mac and Big Mak for hamburgers create
even greater confusion, not only aurally but also visually. Indeed, a person cannot distinguish
Big Mac from Big Mak by their sound. When one hears a Big Mac or Big Mak hamburger
advertisement over the radio, one would not know whether the Mac or Mak ends with a c or a k.
Thus, we hold that confusion is likely to result in the public mind.

Moreover, petitioners' failure to present proof of actual confusion does not negate their claim of
trademark infringement. As noted in American Wire & Cable Co. v. Director of Patents, Section
22 requires the less stringent standard of "likelihood of confusion" only. While proof of actual
confusion is the best evidence of infringement, its absence is inconsequential.

2. Yes, the respondent is liable for unfair competition for the reason that there is actually no
notice to the public that the "Big Mak" hamburgers are products of "L.C. Big Mak Burger, Inc."
and not those of petitioners who have the exclusive right to the "Big Mac" mark. This clearly
shows respondents' intent to deceive the public. Had respondents' placed a notice on their
plastic wrappers and bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.", then
they could validly claim that they did not intend to deceive the public. In such case, there is only
trademark infringement but no unfair competition. Respondents, however, did not give such
notice.
McDonald's Corp. v. Macjoy Fastfood Corp., GR No. 166115, 2 February 2007

McDonald’s Corporation vs. Macjoy Fastfood Corporation G.R. No. 166115

February 2, 2007

Topic: Infringement of Marks – Dominancy Test

Facts

On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic corporation engaged

in the sale of fast food products in Cebu City, filed with the then Bureau of Patents, Trademarks
and Technology Transfer (BPTT), now the Intellectual Property Office (IPO), an application,
thereat identified as Application Serial No. 75274, for the registration of the trademark
“MACJOY & DEVICE” for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok,
tacos, sandwiches, halo-halo and steaks under classes 29 and 30 of the International
Classification of Goods.

Petitioner McDonald’s Corporation, a corporation duly organized and existing under the laws of
the State of Delaware, USA, filed a verified Notice of Opposition against the respondent’s
application claiming that the trademark “MACJOY & DEVICE” so resembles its corporate logo,
otherwise known as the Golden Arches or “M” design, and its marks “McDonalds,” McChicken,”
“MacFries,” “BigMac,” “McDo,” “McSpaghetti,” “McSnack,” and “Mc,” (hereinafter collectively
known as the MCDONALD’S marks) such that when used on identical or related goods, the
trademark applied for would confuse or deceive purchasers into believing that the goods
originate from the same source or origin. Likewise, the petitioner alleged that the respondent’s
use and adoption in bad faith of the “MACJOY & DEVICE” mark would falsely tend to suggest a
connection or affiliation with petitioner’s restaurant services and food products, thus, constituting
a fraud upon the general public and further cause the dilution of the distinctiveness of

petitioner’s registered and internationally recognized MCDONALD’S marks to its prejudice and
irreparable damage.

Respondent averred that its use of said mark would not confuse affiliation with the petitioner’s
restaurant services and food products because of the differences in the design and detail of the
two (2) marks.

The IPO found that the predominance of the letter “M,” and the prefixes “Mac/Mc” in both the
“MACJOY” and the “MCDONALDS” marks lead to the conclusion that there is confusing
similarity between them especially since both are used on almost the same products falling
under classes 29 and 30 of the International Classification of Goods, i.e., food and ingredients
of food, sustained the petitioner’s opposition and rejected the respondent’s application.

Therefrom, the respondent filed a Petition for Review with prayer for Preliminary Injunction
before the CA, which subsequently reversed and set aside the herein IPO decision. In its
resolution, the CA said that the IPO brushed aside and rendered useless the glaring and drastic
differences and variations in style of the two trademarks and even decreed that these
pronounced differences are “miniscule” and considered them to have been “overshadowed by
the appearance of the predominant features” such as “M,” “Mc,” and “Mac” appearing in both
MCDONALD’S and MACJOY marks. Instead of taking into account these differences, the IPO
unreasonably shrugged off these differences in the device, letters and marks in the trademark
sought to be registered.

Issue(s)

Whether the CA erred in setting aside the ruling of the IPO

Ruling

Yes. In ruling in favor of McDonald’s Corporation, the IPO correctly applied the dominancy test.
In determining similarity and likelihood of confusion, jurisprudence has developed two tests, the
dominancy test and the holistic test. The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might cause confusion or deception. In
contrast, the holistic test requires the court to consider the entirety of the marks as applied to
the products, including the labels and packaging, in determining confusing similarity. Under the
latter test, a comparison of the words is not the only determinant factor.

Here, the IPO used the dominancy test in concluding that there was confusing similarity
between the two (2) trademarks in question as it took note of the appearance of the
predominant features “M,” “Mc” and/or “Mac” in both the marks. In reversing the conclusion
reached by the IPO, the CA, while seemingly applying the dominancy test, in fact actually
applied the holistic test.

Applying the dominancy test to the instant case, the Court finds that herein petitioner’s
“MCDONALD’S” and respondent’s “MACJOY” marks are confusingly similar with each other
such that an ordinary purchaser can conclude an association or relation between the marks.

To begin with, both marks use the corporate “M” design logo and the prefixes “Mc” and/or “Mac”
as dominant features. The first letter “M” in both marks puts emphasis on the prefixes “Mc”
and/or “Mac” by the similar way in which they are depicted i.e., in an arch-like, capitalized and
stylized manner.

For sure, it is the prefix “Mc,” an abbreviation of “Mac,” which visually and aurally catches the
attention of the consuming public. Verily, the word “MACJOY” attracts attention the same way
as did “McDonalds,” “MacFries,” “McSpaghetti,” “McDo,” “Big Mac” and the rest of the
MCDONALD’S marks which all use the prefixes Mc and/or Mac.

Besides and most importantly, both trademarks are used in the sale of fastfood products.
Indisputably, the respondent’s trademark application for the “MACJOY & DEVICE” trademark
covers goods under Classes 29 and 30 of the International Classification of Goods, namely,
fried chicken, chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner’s
trademark registration for the MCDONALD’S marks in the Philippines covers goods which are
similar if not identical to those covered by the respondent’s application.

Skechers v. Inter Pacific Industrial Trading, G.R. No. 164321, March 28, 2011

Skechers USA, Inc. vs. Inter Pacific Industrial Trading Corp. G.R. No. 164321

March 28, 2011

Topic: Infringement of Marks – Dominancy Test

Facts

Herein petitioner, Skechers USA Inc., filed an application for the issuance of search warrants
against an outlet and warehouse operated by respondents, Inter Pacific Industrial Trading
Corp., for infringement of trademark. In the course of its business, petitioner has registered the
trademark “Skechers” and the trademark “S” (within an oval design) with the Intellectual
Property Office (IPO). Consequently, two search warrants were issued by the RTC and were
served on the premises of respondents capturing more than 6,000 pairs of shoes bearing the
“S” trademark.

Later, respondents moved to quash the search warrants, arguing that there was no confusing
similarity between petitioner’s “Skechers” rubber shoes and its “Strong” rubber shoes.

The RTC issued an Order quashing the search warrants and directing the NBI to return the
seized goods. The RTC agreed with respondent’s view that Skechers rubber shoes and Strong
rubber shoes have glaring differences such that an ordinary prudent purchaser would not likely
be misled or confused in purchasing the wrong article. Aggrieved, petitioner filed a petition for
certiorari with the Court of Appeals assailing the RTC Order. However, the CA affirmed the
ruling of the RTC. Hence, this petition.

Issue(s)

Whether respondent is guilty of trademark infringement

Ruling

YES. The Court ruled that the essential element of infringement under R.A. No. 8293 is that the
infringing mark is likely to cause confusion. In determining similarity and likelihood of confusion,
jurisprudence has developed tests—the Dominancy Test and the Holistic or Totality Test.

Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized “S”
by respondent in its Strong rubber shoes infringes on the mark already registered by petitioner
with the IPO. While it is undisputed that petitioner’s stylized “S” is within an oval design, to this
Court’s mind, the dominant feature of the trademark is the stylized “S,” as it is precisely the
stylized “S” which catches the eye of the purchaser. Thus, even if respondent did not use an
oval design, the mere fact that it used the same stylized “S”, the same being the dominant
feature of petitioner’s trademark, already constitutes infringement under the Dominancy Test.

The Dominancy Test focuses on the similarity of the prevalent or dominant features of the
competing trademarks that might cause confusion, mistake, and deception in the mind of the
purchasing public. Duplication or imitation is not necessary; neither is it required that the mark
sought to be registered suggests an effort to imitate. Given more consideration are the aural
and visual impressions created by the marks on the buyers of goods, giving little weight to
factors like prices, quality, sales outlets, and market segments.

While respondent’s shoes contain some dissimilarities with petitioner’s shoes, this Court cannot
close its eye to the fact that for all intents and purpose, respondent had deliberately attempted
to copy petitioner’s mark and overall design and features of the shoes. Let it be remembered,
that defendants in cases of infringement do not normally copy but only make colorable changes.
The most successful form of copying is to employ enough points of similarity to confuse the
public, with enough points of difference to confuse the courts.

Cases on bottles and containers:

Cagayan Valley Enterprises v. CA, 179 SCRA 218

FACTS

1. La Tondena Inc (LTI) registered with the Phil Patent Office 350 cc. White flint bottles it had
been using for its gin named Ginebra San Miguel.

2. LTI filed a case for injunction and damages against Cagayan Valley Enterprises, Inc.
(Cagayan, for brevity) for using the 350 c.c., white flint bottles with the mark "La Tondeña Inc."
and "Ginebra San Miguel" stamped or blown-in therein by filling the same with Cagayan's liquor
product bearing the label "Sonny Boy" for commercial sale and distribution, without LTI's written
consent

3. In its subsequent pleadings, Cagayan contended that the bottles they are using are not the
registered bottles of LTI since the former was using the bottles marked with "La Tondeña, Inc."
and "Ginebra San Miguel" but without the words "property of" indicated in said bottles as stated
in the sworn statement attached to the certificate of registration of LTI for said bottles.

4. CA Ruled injunction as permanent, Cagayan filed an MR but was denied. Hence, this present
petition

ISSUE/S

W/N Cagayan can used the bottles

RULING & RATIO

NO THEY CANNOT

RA 623 grants protection to a qualified manufacturer who successfully registered with the
Philippine Patent Office its duly stamped or marked bottles, boxes, casks and other similar
containers. The mere use of registered bottles or containers without the written consent of the
manufacturer is prohibited, the only exceptions being when they are used as containers for
"sisi," bagoong," "patis" and similar native products.

It is an admitted fact that herein petitioner Cagayan buys from junk dealers and retailers bottles
which bear the marks or names La Tondeña Inc." and "Ginebra San Miguel" and uses them as
containers for its own liquor products. The contention of Cagayan that the aforementioned
bottles without the words "property of" indicated thereon are not the registered bottles of LTI,
since they do not conform with the statement or description in the supporting affidavits attached
to the original registration certificate and renewal, is untenable.

Republic Act No. 623 which governs the registration of marked bottles and containers merely
requires that the bottles, in order to be eligible for registration, must be stamped or marked with
the names of the manufacturers or the names of their principals or products, or other marks of
ownership. No drawings or labels are required but, instead, two photographs of the container,
duly signed by the applicant, showing clearly and legibly the names and other marks of
ownership sought to be registered and a bottle showing the name or other mark or ownership,
irremovably stamped or marked, shall be submitted.

-The term "Name or Other Mark of Ownership" means the name of the applicant or the name of
his principal, or of the product, or other mark of ownership. The second set of bottles of LTI
without the words "property of" substantially complied with the requirements of Republic Act No.
623, as amended, since they bear the name of the principal, La Tondeña Inc., and of its
product, Ginebra San Miguel. The omitted words "property of" are not of such vital
indispensability such that the omission thereof will remove the bottles from the protection of the
law. The owner of a trade-mark or trade-name, and in this case the marked containers, does not
abandon it by making minor modifications in the mark or name itself. With much more reason
will this be true where what is involved is the mere omission of the words "property of" since
even without said words the ownership of the bottles is easily Identifiable. The words "La
Tondeña Inc." and "Ginebra San Miguel" stamped on the bottles, even without the words
"property of," are sufficient notice to the public that those bottles so marked are owned by LTI.

-Petitioner also claims that hard liquor is not included under the term "other lawful beverages"
as provided in Section I of Republic Act No. 623, as amended by Republic Act No. 5700, this is
without merit. The title of the law itself, which reads " An Act to Regulate the Use of Duly
Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers" clearly
shows the legislative intent to give protection to all marked bottles and containers of all lawful
beverages regardless of the nature of their contents. The words "other lawful beverages" is
used in its general sense, referring to all beverages not prohibited by law. Beverage is defined
as a liquor or liquid for drinking. Hard liquor, although regulated, is not prohibited by law, hence
it is within the purview and coverage of Republic Act No. 623, as amended.

Decision of CA Affirmed and petition is denied

Distilleria Washington v. CA, 263 SCRA 303

FACTS
La Tondeña Distillers , Inc. (LTDI) filed a case against Distilleria Washington for the
seizure of 18,157 empty bottles bearing the blown-in marks of La Tondeña Inc. and GinebraSan
Miguel. Said bottles were being used by Washington for its own products without the consent of
LTDI.LTDI asserted that as the owner of the bottles they were entitled for the protection
extended by RA no. 623 (An Act to regulate the use of duly stamped or marked bottles, boxes,
kegs, barrels and other similar containers). Washington countered that RA no. 623 should not
apply to alcoholic beverages and the ownership of the bottles were lawfully transferred to the
buyer upon the sale of the gin and the containers at a single price. The trial court rendered a
decision favoring Washington and ordered LTDI for the return of the seized bottles. LTDI
appealed the decision to the Court of Appeals. The appellate court reversed the court a quo and
ruled against Washington.

ISSUE
WON hard liquor bottles can be regulated and protected.

RATIO
 YES. It is a fact that R.A. No. 623 extends trademark protection in the use of containers
duly registered with the Philippine Patent Office.

The claim of petitioner that hard liquor is not included under the term other lawful
beverages as provided in Section 1 of Republic Act No. 623, as amended by Republic Act No.
5700, is without merit. The title of the law itself, which reads An Act to Regulate the Use of Duly
Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers clearly
shows the legislative intent to give protection to all marked bottles and containers of all lawful
beverages regardless of the nature of their contents. The words other lawful beverages is used
in its general sense, referring to all beverages not prohibited by law. Beverage is defined as a
liquor or liquid for drinking. Hard liquor, although regulated, is not prohibited by law, hence it is
within the purview and coverage of Republic Act No. 623, as amended.

The fact of the matter is that R.A. 623, as amended, in affording trademark protectionto
the registrant, has additionally expressed a prima facie presumption of illegal use by apossessor
whenever such use or possession is without the written permission of theregistered
manufacturer, a provision that is neither arbitrary nor without appropriaterationale.The above-
quoted provisions grant protection to a qualified manufacturer who successfullyregistered with
the Philippine Patent Office its duly stamped or marked bottles, boxes, casksand other similar
containers. The mere use of registered bottles or containers without the written consent of the
manufacturer is prohibited, the only exceptions being when they are used as containers for
"sisi," "bagoong," "patis" and similar native products.

Distilleria Washington v. La Tondena, 280 SCRA 116

Facts:

La Tondeña Distillers, Inc. filed before the Regional Trial Court for the recovery, under its claim
of ownership, of possession or replevin against Distilleria Washington, Inc. or Washington
Distillery, Inc. of 18,157 empty “350 c.c. white flint bottles” bearing the blown-in marks of “La
Tondeña Inc.” and “Ginebra San Miguel,” averring that Distilleria Washington was using the
bottles for its own “Gin Seven” products without the consent of Distilleria Washington in violation
of Republic Act 623.

In the original decision, the court acknowledged that there was a valid transfer of the bottles to
Distilleria Washington, except that its possession of the bottles without the written consent of La
Tondeña gives rise to a prima facie presumption of illegal use under R.A. 623.

In seeking reconsideration of the decision, petitioner raises the issue that if petitioner became
the owner over the bottles seized from it by replevin, then it has the right to their possession and
use as attributes of ownership.

The instant case is one for replevin (manual delivery) where the claimant must be able to show
convincingly that he is either the owner or clearly entitled to the possession of the object sought
to be recovered. Replevin is a possessory action. The gist of which focuses on the right of
possession that in turn, is dependent on a legal basis that, not infrequently, looks to the
ownership of the object sought to be replevied.

Issue:

Since replevin as a possessory action is dependent upon ownership, it is relevant to ask:

Whether or not there was a transfer ownership of La Tondeña Distillers’ marked bottles or
containers when it sold its products in the market? Were the marked bottles or containers part of
the products sold to the public?

Held:

The manufacturer sells the product in marked containers, through dealers, to the public in
supermarkets, grocery shops, retail stores and other sales outlets. The buyer takes the item; he
is neither required to return the bottle nor required to make a deposit to assure its return to the
seller. He could return the bottle and get a refund. A number of bottles at times find their way to
commercial users. It cannot be gainsaid that ownership of the containers does pass on the
consumer albeit subject to the statutory limitations on the use of the registered containers and to
the trademark rights of the registrant.

In plain terms, therefore, La Tondeña not only sold its gin products but also the marked bottles
or containers, as well. And when these products were transferred by way of sale, then
ownership over the bottles and all its attributes (jus utendi, jus abutendi, just fruendi, jus
disponendi) passed to the buyer. It necessarily follows that the transferee has the right to
possession of the bottles unless he uses them in violation of the original owner’s registered or
incorporeal rights.

Furthermore, Sec. 5 of R.A. 623 states that when the bottles have been “transferred by way of
sale,” there should not be any need of institution of any action included in the same act (where
there is a need of the written consent of the manufacturer, bottler, or seller). Since the Court has
found that the bottles have been transferred by way of sale then, La Tondeña has relinquished
all its proprietary rights over the bottles in favor of Distilleria Washington who has obtained them
in due course. Now as owner, it can exercise all attributes of ownership over the bottles.

The general rule on ownership, therefore, must apply and petitioner be allowed to enjoy all the
rights of an owner in regard the bottles in question, to wit: the jus utendi or the right to receive
from the thing what it produces; the jus abutendi or the right to consume the thing by its use; the
jus disponendi or the power of the owner to alienate, encumber, transform and even destroy the
thing owned; and the jus vindicandi or the right to exclude from the possession of the thing
owned any other person to whom the owner has not transmitted such thing. What is proscribed
is the use of the bottles in infringement of another’s trademark or incorporeal rights.
 Twin Ace Holdings v. CA, 280 SCRA 884

TWIN ACE HOLDINGS CORPORATION, petitioner vs COURT OF APPEALS and

LORENZANA FOOD CORPORATION, respondents
G.R. No. 123248, October 16, 1997

FACTS:
TWIN ACE HOLDINGS CORPORATION (TWIN ACE) is a manufacturer, distiller and bottler of
distillery products, e.g., rhum, gin, brandy, whiskey, vodka, liquor and cordial under the name
and style of Tanduay Distillers, Inc. (TANDUAY). Lorenzana Food Corporation (LORENZANA),
on the other hand, manufactures and exports processed foods and other related products, e.g.,
patis, toyo, bagoong, vinegar and other food seasonings.

TWIN ACE filed a complaint for replevin to recover three hundred eighty thousand (380,000)
bottles of 350 ml., 375 ml. and 750 ml. allegedly owned by it but detained and used by
LORENZANA as containers for native products without its express permission, in violation of RA
No. 623. This law prohibits the use of registered bottles and other containers for any purpose
other than that for which they were registered without the express permission of the owner.
LORENZANA moved to dismiss the complaint on the ground that RA No. 623 could not be
invoked by TWIN ACE because the law contemplated containers of non-alcoholic beverages
only. But, assuming arguendo that the law applied in TWIN ACE's favor, the right of
LORENZANA to use the bottles as containers for its patis and other native products was
expressly sanctioned by Sec. 6 of the same law and upheld by this Court in Cagayan Valley
Enterprises, Inc. v. Court of Appeals
The RTC of Manila dismissed the complaint. TWIN ACE appealed to respondent CA which
affirmed the decision of the trial court, respondent court ruled that while bottles and containers
of alcoholic beverages were indeed covered within the protective mantle of RA No. 623,
nevertheless the Supreme Court in Cagayan Valley Enterprises, Inc. v. Court of Appeals
expressly recognized the exception granted in Sec. 6 thereof to those who used the bottles as
containers for sisi, bagoong, patis and other native products. Hence, no injunctive relief and
damages could be obtained against LORENZANA for exercising what was precisely allowed by
the law.

Petitioner TWIN ACE contends that Sec. 6 notwithstanding, respondent LORENZANA is obliged
to pay just compensation for the use of the subject bottles because Sec. 6 exempts the user
from criminal sanction only but does not shield him from civil liability arising from the use of the
registered bottles without the express consent of the registered owner. Such civil liability arises
from the fact that Sec. 5 of RA No 623 expressly reserves for the registered owner the
ownership of the containers notwithstanding the sale of the beverage contained therein. Private
respondent, on the other hand, contends that petitioner's bottles used as containers for hard
liquor are not protected by RA No. 623. But even assuming the applicability of the law,
LORENZANA invokes the exemption granted in Sec. 6 thereof.

ISSUE:
Whether or not petitioner TWIN ACE HOLDINGS CORPORATION (TWIN ACE) is correct in his
contention

HELD:
NO. The petition is denied. The question of whether registered containers of hard liquor such as
rhum, gin, brandy and the like are protected by RA No. 623 has already been settled in
Cagayan Valley Enterprises, Inc. v. Court of Appeals. The Court thereat dealt squarely with the
issue and ruled in the affirmative reasoning that hard liquor, although regulated, is not prohibited
by law, hence, still within the purview of the phrase "other lawful beverages" protected by RA
No. 623, as amended. We adopt the foregoing precedent and rule therewith, but, we will not
decide this case in favor of petitioner because it is quite clear that respondent falls within the
exemption granted in Sec. 6 which states: "The provisions of this Act shall not be interpreted as
prohibiting the use of bottles as containers for "sisi," "bagoong," "patis," and similar native
products."

Petitioner alleges that respondent LORENZANA uses the subject 350 ml., 375 ml. and 750 ml.
bottles as containers for processed foods and other related products such as patis, toyo,
bagoong, vinegar and other food seasonings. Hence, Sec. 6 squarely applies in private
respondent's favor. Obviously, the contention of TWIN ACE that the exemption refers only to
criminal liability but not to civil liability is without merit. It is inconceivable that an act specifically
allowed by law, in other words legal, can be the subject of injunctive relief and damages.
Besides, the interpretation offered by petitioner defeats the very purpose for which the
exemption was provided.

Republic Act No. 623, "An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes,
Casks, Kegs, Barrels and Other Similar Containers," as amended by RA No. 5700 was meant to
protect the intellectual property rights of the registrants of the containers and prevent unfair
trade practices and fraud on the public. However, the exemption granted in Sec. 6 thereof was
deemed extremely necessary to provide assistance and incentive to the backyard, cottage and
small-scale manufacturers of indigenous native products such as patis, sisi and toyo who do not
have the capital to buy brand new bottles as containers nor afford to pass the added cost to the
majority of poor Filipinos who use the products as their daily condiments or viands.

Petitioner cannot seek refuge in Sec. 5 of RA No. 623 to support its claim of continuing
ownership over the subject bottles. In United States v. Manuel we held that since the purchaser
at his discretion could either retain or return the bottles, the transaction must be regarded as a
sale of the bottles when the purchaser actually exercised that discretion and decided not to
return them to the vendor. We also take judicial notice of the standard practice today that the
cost of the container is included in the selling price of the product such that the buyer of liquor or
any such product from any store is not required to return the bottle nor is the liquor placed in a
plastic container that possession of the bottle is retained by the store. WHEREFORE, the
questioned decision and resolution of the Court of Appeals are AFFIRMED.

b) Unfair Competition

Sec. 168 (and its sub-paragraphs), IPC

Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who has
identified in the mind of the public the goods he manufactures or deals in, his business or
services from those of others, whether or not a registered mark is employed, has a property
right in the goodwill of the said goods, business or services so identified, which will be protected
in the same manner as other property rights.

168.2. Any person who shall employ deception or any other means contrary to good faith by
which he shall pass off the goods manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an
action therefor.
168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or 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 a manufacturer or dealer, other than the
actual manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his legitimate trade, or
any subsequent vendor of such goods or any agent of any vendor engaged in selling
such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of another
who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall
commit any other act contrary to good faith of a nature calculated to discredit the goods,
business or services of another.

168.4. The remedies provided by Sections 156, 157 and 161 shall apply mutatis mutandis. (Sec.
29, R.A. No. 166a)

Sec. 232, IPC

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by
the Rules of Court. Unless restrained by a higher court, the judgment of the trial court shall be
executory even pending appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of
administrative officials shall be provided in the Regulations. (n)

Difference between Infringement and Unfair Competition:

Del Monte Corporation v. CA, 181 SCRA 410

Facts

On April 11, 1969, Del Monte granted Philpack (Philippine Packing Corporation) the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.

On October 27, 1965, Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was granted Certificate of
Trademark Registration No. SR-913 by the Philippine Patent Office under the Supplemental
Register. On November 20, 1972, Del Monte also obtained two registration certificates for its
trademark “DEL MONTE” and its logo.
 Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade on April 17, 1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. This
logo was registered in the Supplemental Register on September 20, 1983. The product itself
was contained in various kinds of bottles, including the Del Monte bottle, which the private
respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte’s, Philpack warned it to desist from doing so on pain
of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte
filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction

The trial court of Makati dismissed the complaint, holding that there were substantial
differences between the logos or trademarks of the parties, that the defendant had ceased using
the petitioners’ bottles, and that in any case the defendant became the owner of the said bottles
upon its purchase thereof from the junk yards.

Issue(s)

Whether the trademarks are so confusingly similar as to warrant a cancellation of the certificate
of registration of Sunshine

Ruling

Yes. 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 and applying the
same, held that there was no colorable imitation of the petitioners’ trademark and logo by the
private respondent.

It has been correctly held that side-by-side comparison is not the final test of similarity. Such
comparison requires a careful scrutiny to determine in what points the labels of the products
differ, as was done by the trial judge. The ordinary 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.

The question is not whether the two articles are distinguishable by their label 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.

At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label
is a colorable imitation of the Del Monte trademark. The predominant colors used in the Del
Monte label are green and red-orange, the same with Sunshine. The word “catsup” in both
bottles is printed in white and the style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates that of a tomato.

As previously stated, the person who infringes a trade mark does not normally copy out but
only makes colorable changes, employing enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a boundless choice of words,
phrases, colors and symbols sufficient to distinguish his product from the others. When as in
this case, Sunshine chose, without a reasonable explanation, to use the same colors and letters
as those used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive.

Pro Line Sports Center v. CA, 281 SCRA 162

FACTS: QUESTOR, a US-based corporation, became the owner of the trademark "Spalding"
appearing in sporting goods, implements and apparatuses. While PRO LINE, a domestic
corporation, is the exclusive distributor of "Spalding" sports products in the Philippines.
UNIVERSAL is a domestic corporation engaged in the sale and manufacture of sporting goods.
A criminal case for unfair competition was filed by Pro Line and Questor against Sehwani,
president of Universal. The complaint was dropped for the reason that it was doubtful whether
QUESTOR had indeed acquired the registration rights over the mark "Spalding" from A.G.
Spalding Bros., Inc., and complainants failed to adduce an actual receipt for the sale of
"Spalding" balls by UNIVERSAL. In that case Sehwani was exonerated. The dismissal became
final and executory with the entry of judgment.

In connection with the criminal complaint for unfair competition, the Minister of Justice issued a
Resolution ordering the filing of an Information for unfair competition against Sehwani. The
Information was accordingly filed. Sehwani pleaded not guilty to the charge. But, while he
admitted to having manufactured "Spalding" basketballs and volleyballs, he nevertheless
stressed that this was only for the purpose of complying with the requirement of trademark
registration with the Philippine Patent Office.

He cited Rules of Practice on Trademark Cases, which requires that the mark applied for be
used on applicant's goods for at least sixty (60) days prior to the filing of the trademark
application and that the applicant must show substantial investment in the use of the mark. He
also disclosed that UNIVERSAL applied for registration with the Patent Office.

As a retaliatory move, Sehwani and UNIVERSAL filed a civil case for damages against PRO
LINE and QUESTOR for what they perceived as the wrongful and malicious filing of the criminal
action for unfair competition against them, charging that PRO LINE and QUESTOR maliciously
and without legal basis committed the following acts to their damage and prejudice:

(a) procuring the issuance by the Pasig trial court of Search Warrant;

(b) procuring an order authorizing the sealing and padlocking of UNIVERSAL's machineries
and equipment resulting in the paralyzation and virtual closure of its operations;
(c) securing a TRO to prevent the implementation of the trial court's order which authorized
the lifting of the seal and padlock on the subject machineries and equipment to allow
UNIVERSAL to resume operations;

(d) securing a TRO against the CA and charging the latter with grave abuse of discretion for
holding that the order was judiciously issued, thus prolonging the continued closure of
UNIVERSAL's business;

(e) initiating the criminal prosecution of Sehwani for unfair competition; and,

(f) appealing the order of acquittal in Crim. Case directly to the Supreme Court with no
other purpose than to delay the proceedings of the case and prolong the wrongful invasion of
UNIVERSAL's rights and interests. 79

PRO LINE and QUESTOR denied all the allegations in the complaint and filed a counterclaim
for damages based mainly on the unauthorized and illegal manufacture by UNIVERSAL of
athletic balls bearing the trademark "Spalding." The trial court granted the claim of UNIVERSAL
declaring that the series of acts complained of were "instituted with improper, malicious,
capricious motives and without sufficient justification." It ordered PRO LINE and QUESTOR
jointly and severally to pay UNIVERSAL and Sehwani actual and compensatory damages,
moral damages, exemplary damages and attorney's fees.

ISSUES:
whether Sehwani and UNIVERSAL are entitled to recover damages for the alleged
wrongful recourse to court proceedings by petitioners PRO LINE and QUESTOR (NO);

whether petitioners counterclaim should be sustained. (NO)

HELD: PRO LINE and QUESTOR cannot be adjudged liable for damages for the alleged
unfounded suit.
The complainants were unable to prove two (2) essential element of the crime of malicious
prosecution, namely, absence of probable cause and legal malice on the part of petitioners.
UNIVERSAL failed to show that the filing of Crim. Case was bereft of probable cause. In the
case before us, then Minister of Justice found probable cause when he reversed the Fiscal who
initially dismissed the complaint and directed him instead to file the corresponding Information
for unfair competition against private respondents herein.
The intent on the part of Universal Sports to deceive the public and to defraud a competitor by
the use of the trademark "Spalding" on basketballs and volleyballs seems apparent. Sehwani
should have known of the prior registration of the trademark "Spalding" on basketballs and
volleyballs when he filed the application for registration of the same trademark in behalf of
Universal. He was even notified by the Patent Office that "Spalding" was duly registered with
said office in connection with sporting goods, implements and apparatus by A.G. Spalding.

That Universal has been selling these allegedly misbranded "Spalding" balls has been
controverted by the firms allegedly selling the goods. However, there is sufficient proof that
Universal manufactured balls with the trademark "Spalding" as admitted by Monico himself and
as shown by the goods confiscated by virtue of the search warrant.

Either a seller or a manufacturer of imitation goods may be liable for violation of Section 29 of
Rep. Act No. 166.
The existence of probable cause for unfair competition by UNIVERSAL is derivable from the
facts and circumstances of the case. The affidavit of a former employee of UNIVERSAL,
attesting to the illegal sale and manufacture of "Spalding " balls and seized "Spalding" products
and instruments from UNIVERSAL's factory was sufficient prima facie evidence to warrant the
prosecution of private respondents. That a corporation other than the certified owner of the
trademark is engaged in the unauthorized manufacture of products bearing the same trademark
engenders a reasonable belief that a criminal offense for unfair competition is being committed.

PRO LINE and QUESTOR could not have been moved by legal malice in instituting the criminal
complaint for unfair competition which led to the filing of the Information against Sehwani. A
resort to judicial processes is not per se evidence of ill will upon which a claim for damages may
be based. A contrary rule would discourage peaceful recourse to the courts of justice and
induce resort to methods less than legal, and perhaps even violent.

PRO LINE as the authorized agent of QUESTOR exercised sound judgment in taking the
necessary legal steps to safeguard the interest of its principal with respect to the trademark in
question. If the process resulted in the closure and padlocking of UNIVERSAL's factory and the
cessation of its business operations, these were unavoidable consequences of petitioners' valid
and lawful exercise of their right. One who makes use of his own legal right does no injury.

The law brands business practices which are unfair, unjust or deceitful not only as contrary to
public policy but also as inimical to private interests.

Arguably, respondents' act may constitute unfair competition even if the element of selling has
not been proved. To hold that the act of selling is an indispensable element of the crime of
unfair competition is illogical because if the law punishes the seller of imitation goods, then with
more reason should the law penalize the manufacturer.

In this case, it was observed by the Minister of Justice that the manufacture of the "Spalding"
balls was obviously done to deceive would-be buyers. The projected sale would have pushed
through were it not for the timely seizure of the goods made by the NBI. That there was intent to
sell or distribute the product to the public cannot also be disputed given the number of goods
manufactured and the nature of the machinery and other equipment installed in the factory.

In an acquittal on the ground that an essential element of the crime was not proved, it is
fundamental that the accused cannot be held criminally nor civilly liable for the offense.
Although the New Civil Code authorizes the filing of a civil action separate and distinct from the
criminal proceedings, the right of petitioners to institute the same is not unfettered. Civil liability
arising from the crime is deemed instituted and determined in the criminal proceedings where
the offended party did not waive nor reserve his right to institute it separately. This is why we
now hold that the final judgment rendered therein constitutes a bar to the present counterclaim
for damages based upon the same cause.

Universal Rubber Products v. CA, 130 SCRA 10

Converse Rubber Corp. v. Jacinto Rubber and Plastic Co., 97 SCRA 158
Facts:

Converse Rubber alleged that "Custombuilt" shoes are Identical in design and General
appearance to "Chuck Taylor" and, claiming prior Identification of "Chuck Taylor" in the mind of
the buying public in the Philippines, they contend that defendants are guilty of unfair competition
by selling "Custombuilt" of the design and with the general appearance of "Chuck Taylor".

Jacinto Rubber contends that there is no unfair competition because the general appearance
between "Custombuilt" and "Chuck Taylor" are not the same.

Jacinto Rubber alleged that "Custombuilt" is readily Identifiable by the tradename "Custombuilt"
appearing on the ankle patch, the heel patch, and on the sole.

Furthermore Jacinto contended that the registration of Jacinto Rubber's trademark

"Custombuilt" being prior to the registration in the Philippines of plaintiff Converse Rubber's
trademark "Chuck Taylor", plaintiffs have no cause of action. It appears that defendant started
to manufacture and sell "Custombuilt" of its present design and with its present appearance in
1962.

Issue:
Whether or not Jacinto Rubber’s act constitutes unfair competition.

Ruling:

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

These elements are more than sufficient to serve as basis for a charge of unfair competition.
Even if not all the details just mentioned were Identical, with the general appearances alone of
the two products, any ordinary, or even perhaps even a not too perceptive and discriminating
customer could be deceived, and, therefore, Custombuilt could easily be passed off for Chuck
Taylor. Jurisprudence supports the view that under such circumstances, the imitator must be
held liable. Thus, there is unfair competition.

Asia Brewery v. CA, 224 SCRA 437 (1993)

Asia Brewery, Inc. vs. Court of Appeals and San Miguel Corporation G.R. No. 103545

July 5, 1993

Topic: Infringement of Marks – Dominancy Test

Facts

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery
Inc. (ABI) for infringement of trademark and unfair competition on account of the latter’s BEER
PALE PILSEN or BEER NA BEER product which has been competing with SMC’s SAN
MIGUEL PALE PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia
Brewery Inc., Civ. Case No. 56390, RTC Branch 166, Pasig, Metro Manila.)

On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus
O. Bersamira, dismissing SMC’s complaint because ABI “has not committed trademark
infringement or unfair competition against” SMC.
Upon appeal to the Court of Appeals, the CA reversed the decision of the trial court, contending
that ABI was guilty of infringement. In due time, ABI appealed to the Supreme Court through a
petition for certiorari under Rule 45.

Description of SMC’s Pale Pilsen

“x x x a rectangular design [is] bordered by what appears to be minute grains arranged in rows
of three in which there appear in each corner hop designs. At the top is a phrase written in small
print ‘Reg. Phil. Pat. Off.’ and at the bottom ‘Net Contents: 320 Ml’ The dominant feature is the
phrase ‘San Miguel’ written horizontally at the upper portion. Below are the words Pale Pilsen’
written diagonally across the middle of the rectangular design. In between is a coat of arms and
the phrase ‘Expertly Brewed.’ The ‘S’ in ‘San’ and the ‘M’ of ‘Miguel,’ ‘P’ of ‘Pale’ and ‘Pilsen’ are
written in Gothic letters with fine strokes of serifs, the kind that first appeared in the 1780s in
England and used for printing German as distinguished from Roman and Italic. Below ‘Pale
Pilsen’ is the statement ‘And Bottled by’ (first line, ‘San Miguel Brewery’ (second line), and
‘Philippines’ (third line).” (p. 177, Rollo; Italics supplied.)

Description of ABI’s Pale Pilsen

“x x x a rectangular design bordered by what appear to be buds of flowers with leaves. The
dominant feature is ‘Beer written across the upper portion of the rectangular design. The phrase
‘Pale Pilsen’ appears immediately below is smaller block letters. To the left is a hop design and
to the right, written in small prints, is the phrase ‘Net Contents 320 ml.’ Immediately below ‘Pale
Pilsen’ is the statement written in three lines ‘Especially brewed and bottled by’ (first line), ‘Asia
Brewery Incorporated’ (second line), and ‘Philippines’ (third line),” (p. 177, Rollo; Italics
supplied.)

Issue(s)

Whether ABI infringed upon SMC’s trademark for its use of the words “PALE PILSEN”

Ruling

No. The Supreme Court, in arriving to the decision, focused on the dominant feature of the
trademarks in question, that is to say, the words “PALE PILSEN”. Infringement is determined by
the “test of dominancy” rather than by differences or variations in the details of one trademark
and of another. Similarity in size, form and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of another, and
confusion and deception is likely to result, infringement takes place. Duplication or imitation is
not necessary; nor is it necessary that the infringing label should suggest an effort to imitate.

There is hardly any dispute that the dominant feature of SMC’s trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the
beginning and end of the letters “S” and “M” on an amber background across the upper portion
of the rectangular design.

On the other hand, the dominant feature of ABI’s trademark is the name: BEER PALE PILSEN,
with the word “Beer” written in large amber letters, larger than any of the letters found in the
SMC label.
The trial court perceptively observed that the word “BEER” does not appear in SMC’s
trademark, just as the words “SAN MIGUEL” do not appear in ABI’s trademark. Hence, there is
absolutely no similarity in the dominant features of both trademarks.

Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly
similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can
possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was
presented by SMC proving otherwise.

Note (dissenting opinion of Justice Cruz):

It has been correctly held that side-by-side comparison is not the final test of similarity. Such
comparison requires a careful scrutiny to determine in what points the labels of the products
differ, as was done by the trial judge. The ordinary 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. Where the housewife
has to return home as soon as possible to her baby or the working woman has to make quick
purchases during her off hours, she is apt to be confused by similar labels even if they do have
minute differences. The male shopper is worse as he usually does not bother about such
distinctions.

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.

Solid Triangle v. Sheriff, 370 SCRA 491 (2001)

FACTS.
 January 28, 1999: J. Bruselas issued against Sanly Corporation for violation of Sec 168 of
RA 8293 (unfair competition). By virtue of said SW, EIIB agents seized 451 boxes of
Mitsubishi photographic color paper, which according to Solid Triangle, were sold and
distributed by Sanly to their damage and prejudice, the former being the sole and exclusive
distributor thereof.
 Solid Triangle then filed with the QC City Prosecutor a complaint for unfair competition
against Sanly and LWT who were alleged to be in conspiracy.
 February 8, 1999: Sanly, LWT and ERA moved to quash the SW which was granted upon
MR. J. Bruselas held that there was doubt as to whether the act complained of amounted to
unfair competition. Solid Triangle filed an MR as to the quashal but such was denied.
 Bruselas, then directed Solid Triangle to divulge and report to the court the exact location of
the warehouse where the goods are kept.
 CA: initially granted Solid Triangle’s certiorari holding that the quashal of the warrant
deprived the prosecution of vital evidence to determine probable cause.
 Upon motion of the defendants, the CA reversed itself. It held that there was no probable
cause for the issuance of the search warrant. Hence the evidence obtained by virtue of the
warrant was inadmissible in the preliminary investigation.
 o Under Sections 168 and 170 of R.A. 8293 (the Intellectual Property Code), there is unfair
competition if the alleged offender has given to his goods the general appearance of the
goods of another manufacturer or dealer and sells or passes them off as goods of that
manufacturer or dealer in order to deceive or defraud the general public or the legitimate
trader.
o In this case: (1) the things seized are genuine and not mere imitations (2) no showing that
Sanly has presented, sold, or passed off its photographic paper as goods which come
from Solid Triangle (3) Both Sanly and Solid Triangle sell genuine Mitsubishi products, and
Sanly is a parallel importer, taking its goods from HK (4) Sanly sold the products without
altering its appearance
o On a factual basis, the real dispute is between Solid Triangle and Mitsubishi.1
 Petitioner contends before the SC that the Constitution does not authorize the judge to
reverse himself and quash the warrant “especially after the goods had been seized pursuant
to the SW, and the prosecution is poised to push forward with the goods as evidence.”

ISSUES & RATIO.

1. WON the quashal of the warrant was valid. – YES.

 Inherent in the courts’ power to issue search warrants is the power to quash warrants already
issued. A search warrant maybe quashed when the requisites under Sec 3, Rule 126 (Sec 4,
after amendment)2 are not present. In this case, probable cause was found to be wanting.
 As to the contention that the quashal resulted in deprivation of vital evidence in the prelim
investigation, the Court held that although such is the inevitable result as evidence obtained
illegaly is inadmissible, this doesn’t mean that the prelim investigation will not proceed
because other competent evidence may be admitted.
o Proceedings for the issuance/quashal of a search warrant and prelim investigation are
proceedings independent of each other.
o One is not bound by the other’s finding as regards the existence of a crime such that when
the court, in determining probable cause for a search warrant, finds that no offense has
been committed, it does not affect the proceedings in the prelim investigation. Such does
not preclude the authorized officer conducting the prelim investigation from making his
own determination that a crime has been committed and that probable cause exists for
purposes of filing the information.

2. WON the facts of the case constitute an offense. – NO.

 The evidence presented before the trial court does not prove unfair competition under
Section 168 of the Intellectual Property Code. Sanly Corporation did not pass off the
subject goods as that of another. See CA ruling as to this issue.

DECISION.

1
If Solid Triangle feels aggrieved, it should sue Mitsubishi for damages, if at all for breach of
its distributorship.
2
SEC. 3. Requisites for issuing search warrant.—A search warrant shall not issue but
upon probable cause in connection with one specific offense to be determined personally
by the judge after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched and the
things to be seized (which may be anywhere in the Philippines.-amendment)
Petition upheld the quashal and petitioners are ordered to return to respondent Sanly the 451
boxes of Mitsubishi photographic color paper seized.

Sony Computer v. Supergreen, Inc., GR No. 161823, 22 March 2007

FACTS: The case stemmed from the complaint filed with NBI by Sony against Supergreen.
The NBI found that respondent engaged in the reproduction and distribution of

counterfeit "PlayStation" game software, consoles and accessories in violation of Sony

Computer's intellectual property rights. Thus, NBI applied for warrants to search respondent's
premises. The Search Warrants were issued and NBI simultaneously served the search
warrants on the subject premises and seized a replicating machine and several units of
counterfeit "PlayStation" consoles, joy pads, housing, labels and game software.

Respondent filed a motion to quash Search Warrants and/or release of seized properties on
the ground that the search warrant failed to particularly describe the properties to be seized.
The trial court denied the motion for lack of merit.

Respondent filed another motion to quash, this time, questioning the propriety of the venue.
Petitioner opposed the motion on the ground that it violated the omnibus motion rule wherein
all objections not included shall be deemed waived. The RTC affirmed the validity of Search
Warrants covering respondent's premises but quashed the other Search Warrants. The trial
court held that lack of jurisdiction is an exception to the omnibus motion rule and may be raised
at any stage of the proceedings.

Petitioner contends that the rule on venue for search warrant application is not jurisdictional.
Hence, failure to raise the objection waived it. Moreover, petitioner maintains that applying for
search warrants in different courts increases the possibility of leakage and contradictory
outcomes that could defeat the purpose for which the warrants were issued.

Petitioner further asserts that even granting that the rules on search warrant applications are
jurisdictional, the application filed either in the courts of the National Capital Region or Fourth
Judicial Region is still proper because the crime was continuing and committed in both
Parañaque City and Cavite.

Respondent counters that Section 2 is explicit on where applications should be filed and
provided the territorial limitations on search warrants. Respondent claims that Malaloan is no
longer applicable jurisprudence with the promulgation of the 2000 Rules of Criminal Procedure.
Even granting that petitioner has compelling reasons, respondent maintains that petitioner
cannot file the application with the RTC of Manila because Cavite belongs to another judicial
region. Respondent also argues that the doctrine on continuing crime is applicable only to the
institution of a criminal action, not to search warrant applications which is governed by Rule
126, and in this case Section 2.

ISSUE: whether the quashal of Search Warrants was valid.

HELD:

Respondent’s premises in Cavite, within the Fourth Judicial Region, is definitely beyond the
territorial jurisdiction of the RTC of Manila, in the National Capital Region. Thus, the RTC of
Manila does not have the authority to issue a search warrant for offenses committed in Cavite.
The instant case involves a court in another region. Any other interpretation re-defining
territorial jurisdiction would amount to judicial legislation.

Nonetheless, we agree with petitioner that this case involves a transitory or continuing offense
of unfair competition uder Section 168.

Respondent's imitation of the general appearance of petitioner's goods was done allegedly in
Cavite. It sold the goods allegedly in Mandaluyong City, Metro Manila.

The alleged acts would constitute a transitory or continuing offense. Thus, clearly, under
Section 2 (b) of Rule 126, Section 168 of Rep. Act No. 8293 and Article 189 (1) of the Revised
Penal Code, petitioner may apply for a search warrant in any court where any element of the
alleged offense was committed, including any of the courts within the National Capital Region
(Metro Manila).

Sehwani, Inc. and Benita’s Frites, Inc. vs. IN-N-OUT Burger, Inc., 536 SCRA 255 (2007)

FACTS:
Respondent IN-N-OUT Burger, Inc., a foreign corporation (California, USA), and not doing
business in the Philippines, filed before the Bureau of Legal Affairs of the IPO, an
administrative complaint against petitioners Sehwani, Inc. and Benita’s Frites, Inc. for violation
of intellectual property rights, attorney’s fees and damages with prayer for the issuance of a
restraining order or writ of preliminary injunction.

Respondent, alleges that it is the owner of the tradename “IN-N-OUT” and trademarks “IN-N-
OUT,” “IN-N-OUT Burger & Arrow Design” and “IN-N-OUT Burger Logo” which are used in its
business since 1948 up to the present. These tradename and trademarks were registered in
the United States as well as in other parts of the world. Petitioner Sehwani allegedly had
obtained a trademark registration for the mark “IN N OUT” (with the inside letter O formed like a
star) without its authority.

In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to
sue because it was not doing business in the Philippines and that it has no cause of action
because its mark is not registered or used in the Philippines. Petitioner Sehwani, Inc. also
claimed that as the registered owner of the "IN-N-OUT" mark, it enjoys the presumption that
the same was validly acquired and that it has the exclusive right to use the mark. Moreover,
petitioners argued that other than the bare allegation of fraud in the registration of the mark,
respondent failed to show the existence of any of the grounds for cancellation thereof under
Section 151 of Republic Act (R.A.) No. 8293, otherwise known as The Intellectual Property
Code of the Philippines.

The Bureau ruled in favor of In-N-Out and cancelled the registration of Shwani.

ISSUE/S:
1. Whether or not the Respondent has the legal capacity to sue for the protection of its
trademarks albeit it is not doing business in the Philippines

2. Whether or not a ground exists for the cancellation of the Petitioners’ registration

RULING:
1. Yes. Section 160 RA No. 8293 provides for the right of foreign corporations to sue in
trademark or service mark enforcement action, provided that it meets the requirements under
Section 3 thereof, which are a) Any convention, treaty or agreement relation to intellectual
property right or the repression of unfair competition wherein Philippines is also a party; and b)
An extension therein of reciprocal rights.

Moreoever, Article 6 of The Paris Convention, which governs the protection of well-known
trademarks, is a self-executing provision and does not require legislative enactment to give it
effect in the member country. The essential requirement therein is that the trademark must be
well-known in the country where protection is sought. In this case, Director Beltran-Abelardo
found that In-n-out Burger and Arrow Design is an internationally well known mark as
evidenced by its trademark registrations around the world and its comprehensive
advertisements therein.

2. Yes. Section 151(b) of RA 8293 provides that a petition to cancel a registration of a mark
may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be
damaged by the registration of a mark at any time, if the registered mark becomes the generic
name for the goods or services, or a portion thereof, for which it is registered, or has been
abandoned, or its registration was fraudulently or contrary to the provisions of this Act, or if the
registered mark is being used by or with the permission of, the registrant so as to misrepresent
the source of goods or services on or in connection with which the mark is used. The evidence
showed that not only did the petitioners use the IN-N-OUT Burger trademark for the name of
their restaurant, but they also used identical or confusingly similar mark for their hamburger
wrappers and French-fries receptacles, thereby effectively misrepresenting the source of the
goods and services.

Coca Cola v. Gomez, G.R. No. 154491, November 14, 2008

FACTS: Coca-Cola applied for a search warrant against Pepsi for hoarding Coke empty bottles
in Pepsi's yard in Naga City, an act allegedly penalized as unfair competition under the IP
Code. Coca-Cola claimed that the bottles must be confiscated to preclude their illegal use,
destruction or concealment by the respondents.

MTC Executive Judge of Naga City, after taking the joint deposition of the witnesses, issued
Search Warrant to seize 2, empty Coke bottles at Pepsi's Naga yard for violation of Section
168.3 (c) of the IP Code. The local police seized and brought to the MTC's custody empty
Coke bottles, Pepsi shells for Litro, and Pepsi shells for smaller empty Coke bottles, and later
filed a complaint against two Pepsi officers for violation of Section 168.3 (c) in relation to
Section 170 of the IP Code.

The named respondents, also the respondents in this petition, were Pepsi regional sales
manager Danilo E. Galicia (Galicia) and its Naga general manager Quintin J. Gomez, Jr.
(Gomez).

Galicia and Gomez claimed that

the bottles came from various Pepsi retailers and wholesalers who included them in their
return to make up for shortages of empty Pepsi bottles;
they had no way of ascertaining beforehand the return of empty Coke bottles as they
 simply received what had been delivered; the presence of the bottles in their yard
was not intentional nor deliberate; 83
(3) Ponce and Regaspi's statements are hearsay as they had no personal knowledge of

the alleged crime; there is no mention in the IP Code of the crime of possession of empty
bottles; and that

the ambiguity of the law, which has a penal nature, must be construed strictly against the
State and liberally in their favor. Pepsi security guards Eduardo E. Miral and Rene Acebuche
executed a joint affidavit stating that per their logbook, Lirio did not visit

or enter the plant premises in the afternoon of July 2, 2001.

In its petition, the petitioner insists the RTC should have dismissed the respondents' petition for
certiorari because it found no grave abuse of discretion by the MTC in issuing the search
warrant. The petitioner further argues that the IP Code was enacted into law to remedy various
forms of unfair competition accompanying globalization as well as to replace the inutile
provision of unfair competition under Article 189 of the Revised Penal Code.

Section 168.3(c) of the IP Code does not limit the scope of protection on the particular acts
enumerated as it expands the meaning of unfair competition to include "other acts contrary to
good faith of a nature calculated to discredit the goods, business or services of another." The
inherent element of unfair competition is fraud or deceit, and that hoarding of large quantities of
a competitor's empty bottles is necessarily characterized by bad faith. It claims that its Bicol
bottling operation was prejudiced by the respondents' hoarding and destruction of its empty
bottles.

The petitioner also argues that the quashal of the search warrant was improper because it
complied with all the essential requisites of a valid warrant. The empty bottles were concealed
in Pepsi shells to prevent discovery while they were systematically being destroyed to hamper
the petitioner's bottling operation and to undermine the capability of its bottling operations in
Bicol.

The respondents counter-argue that although Judge Ocampo conducted his own examination,
he gravely erred and abused his discretion when he ignored the rule on the need of sufficient
evidence to establish probable cause; satisfactory and convincing evidence is essential to hold
them guilty of unfair competition; the hoarding of empty Coke bottles did not cause actual or
probable deception and confusion on the part of the general public; the alleged criminal acts do
not show conduct aimed at deceiving the public; there was no attempt to use the empty bottles
or pass them off as the respondents' goods.

The respondents also argue that the IP Code does not criminalize bottle hoarding, as the acts
penalized must always involve fraud and deceit. The hoarding does not make them liable for
unfair competition as there was no deception or fraud on the end-users.

Issues:
Is the hoarding of a competitor's product containers punishable as unfair
competition under the Intellectual Property Code (IP Code, Republic Act
No. 8293) that would entitle the aggrieved party to a search warrant
against the hoarder?

Ruling:

In the context of the present case, the question is whether the act
charged - alleged to be hoarding of empty Coke bottles - constitutes an
offense under Section 168.3 (c) of the IP Code.

SECTION 168. Unfair Competition, Rights, Regulation and Remedies.

168.1. A person who has identified in the mind of the public the goods he
manufactures or deals in, his business or services from those of others,
whether or not a registered mark is employed, has a property right in the
goodwill of the said goods, business or services so... identified, which will
be protected in the same manner as other property rights.

168.2. Any person who shall employ deception or any other means
contrary to good faith by which he shall pass off the goods manufactured
by him or in which he deals, or his business, or services for those of the
one having established such goodwill, or who shall commit any acts...
calculated to produce said result, shall be guilty of unfair competition,
and shall be subject to an action therefor.

The petitioner theorizes that the above section does not limit the scope
of protection on the particular acts enumerated as it expands the
meaning of unfair competition to include "other acts contrary to good
faith of a nature calculated to discredit the goods, business or... services
of another."  Allegedly, the respondents' hoarding of Coca Cola empty
bottles is one such act.

We do not agree with the petitioner's expansive interpretation of Section

168.3 (c).

What unfair competition is, is further particularized under Section 168.3

when it provides specifics of what unfair competition is "without in any
way limiting the scope of protection against unfair competition."  Part of
these particulars is provided under Section 168.3(c)... which provides the
general "catch-all" phrase that the petitioner cites.  Under this phrase, a
person shall be guilty of unfair competition "who shall commit any other
act contrary to good faith of a nature calculated to discredit the goods,
business or services of... another."
The critical question, however, is not the intrinsic unfairness of the act of
hoarding; what is... critical for purposes of Section 168.3 (c) is to
determine if the hoarding, as charged, "is of a nature calculated to
discredit the goods, business or services" of the petitioner.

Under all the above approaches, we conclude that the "hoarding" - as

defined and charged by the petitioner - does not fall within the coverage
of the IP Code and of Section 168 in particular.  It does not relate to any
patent, trademark, trade name or service mark that the... respondents
have invaded, intruded into or used without proper authority from the
petitioner.

In this light, hoarding for purposes of destruction is closer to what

another law - R.A. No. 623

If it serves any purpose at all in our discussions, it is to show that the

underlying factual situation of the present case is in fact covered by
another law, not by the IP Code that the petitioner cites.

Viewed in this light, the lack of probable cause to support the disputed
search warrant at once becomes apparent.

Principles:

Articles 168.1 and 168.2, as quoted above, provide the concept and 
general rule on the definition of unfair competition. The law does not
thereby cover every unfair act committed in the course of business; it
covers only acts characterized by "deception or... any other means
contrary to good faith" in the passing off of goods and services as those
of another who has established goodwill in relation with these goods or
services, or any other act calculated to produce the same result.

Superior Commercial Enterprises vs. Kunnan Enterprises Ltd., G.R. No. 169974. April 20,
2010.

FACTS:
 Kunnan appointed Superior as its exclusive distributor in the Philippines under a
Distributorship Agreement which states that “Kunnan intends to acquire ownership
of the Kennex Trademark registered by Superior Commercial in the Philippines.
Superior Commercial is desirious of being appointed as the sole distributor of
Kunnan products in the Philippines.”
 Superior’s President and General Manager misled Kunnan’s Officers into believing
that Kunnan could not acquire trademark rights in the Philippines. Thus, Kunnan
decided to assign its applications to register “Pro Kennex” as a trademark to
Superior, on condition that Superior acknowledged that Kunnan was still the real
owner of the mark and agreed to return to it to Kunnan on request.
 Upon termination of distributorship agreement with Superior, Kunnan appointed Sports
Concept as its new distributor.

 Kunnan caused the publication of a Notice and Warning in the Manila Bulletin’s
issue, stating that (1) it is the owner of the disputed trademarks; (2) it terminated its
Distributorship Agreement with Superior; and (3) it appointed Sports Concept as its
exclusive distributor. This notice prompted Superior to file its Complaint for
Infringement of Trademark and Unfair Competition against Kunnan.
 Prior to and during the pendency of the infringement and unfair competition case
before the RTC, Kunnan filed with the Bureau of Patents, Trademarks and
Technology Transfer separate Petitions for the Cancellation of Registration
Trademarks involving the Kennex and Pro Kennex trademarks.
 Kunna filed the petition on the ground that Superior fraudulently registered and appropriated
the disputed trademarks as mere distributor and not as lawful owner.
 Both the trial court and the Court of Appeals ruled in favor of Kunnan.

ISSUES: WON Superior, as a distributor, has true ownership over the trademarks.

RULING: No. An exclusive distributor does not acquire any proprietary interest in the
principal’s trademark and cannot register it, unless the owner has assigned the right.

2. To establish trademark infringement, the following elements must be proven:

a. The validity of the plaintiff’s mark;
b. The plaintiff’s ownership of the mark; and
c. The use of the mark or its colorable imitation by the alleged infringer
results in likelihood confusion.

 Based on these elements, the Court found it immediately obvious that the second
element was what the Registration Cancellation Case decided with finality. On this
element depended the validity of the registrations that, on their own, only gave rise to
the presumption of, but was not conclusive on, the issue of ownership.
  InSuperior
no certain terms, the appellate court in the Registration Cancellation Case ruled that
was a mere distributor and could not have been the owner, and was thus an invalid
registrant of the disputed trademarks.
 The right to register a trademark is based on ownership, and therefore only the owner can register it.
 Gabriel v. Perez provided that a mere distributor of a product bearing a trademark, even if
permitted to use said trademark has no right to and cannot register the said trademark.

3. Unfair competition has been defined as the passing off or attempting to pass off upon the
public of the goods and business of one person as the goods or business of another with
the end and probable effect of deceiving the public. The essential elements of unfair
competition are:
a. Confusing similarity in the general appearance of the goods; and b. Intent to
deceive the public and defraud the competitor.

 The True Test of Unfair Competition: Whether the acts of the defendant have the intent of
deceiving or are calculated to deceive the ordinary buyer making his purchases under the
ordinary conditions of the particular trade to which the controversy relates.
 Insoldtheashereby case, no evidence exist showing that Kunnan ever attempted to pass off goods it
those of Superior and that there is no bad faith or fraud imputable to Kunnan in using
the disputed trademarks.
Superior failed to adduce any evidence to show that Kunnan by the above-cited acts intended to
deceive the public as to the identity of the goods sold or of the manufacturer of the goods sold.

c) Action for False or Fraudulent Declaration

Sec. 162, IPC
Section 162. Action for False or Fraudulent Declaration. - Any person who shall procure registration in the
Office of a mark by a false or fraudulent declaration or representation, whether oral or in writing, or by any false
means, shall be liable in a civil action by any person injured thereby for any damages sustained in
consequence thereof (Sec. 26, R.A. No. 166)

Sec. 163, IPC

Section 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164, and 166 to 169 shall be brought
before the proper courts with appropriate jurisdiction under existing laws. (Sec. 27, R.A. No. 166)

Sec. 164, IPC

Section 164. Notice of Filing Suit Given to the Director. - It shall be the duty of the clerks of such courts within
one (1) month after the filing of any action, suit, or proceeding involving a mark registered under the provisions
of this Act, to notify the Director in writing setting forth: the names and addresses of the litigants and
designating the number of the registration or registrations and within one (1) month after the judgment is
entered or an appeal is taken, the clerk of court shall give notice thereof to the Office, and the latter shall
endorse the same upon the filewrapper of the said registration or registrations and incorporate the same as a
part of the contents of said filewrapper. (n)

Sec. 232, IPC

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by the Rules of
Court. Unless restrained by a higher court, the judgment of the trial court shall be executory even pending
appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of administrative officials
shall be provided in the Regulations. (n)

d) Action for False Designation of Origin

Sec. 169 (and its sub-paragraphs), IP Code

Section 169. False Designations of Origin; False Description or Representation. - 169.1. Any person who, on
or in connection with any goods or services, or any container for goods, uses in commerce any word, term,
name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading
description of fact, or false or misleading representation of fact, which:
 (a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or
association of such person with another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person; or

(b) In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or

geographic origin of his or her or another person's goods, services, or commercial activities, shall be
liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any
person who believes that he or she is or is likely to be damaged by such act.

169.2. Any goods marked or labelled in contravention of the provisions of this Section shall not be imported
into the Philippines or admitted entry at any customhouse of the Philippines. The owner, importer, or consignee
of goods refused entry at any customhouse under this section may have any recourse under the customs
revenue laws or may have the remedy given by this Act in cases involving goods refused entry or seized. (Sec.
30, R.A. No. 166a)

Sec. 232, IPC

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by the Rules of
Court. Unless restrained by a higher court, the judgment of the trial court shall be executory even pending
appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of administrative officials
shall be provided in the Regulations. (n)

3. Criminal
Sec. 170, IPC
Section 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos
(P50,000) to Two hundred thousand pesos(P200,000), shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1. (Arts. 188 and 189,
Revised Penal Code)

Rule 10, Sec. 2, Rules of Procedure for Intellectual Property Rights Cases (A.M.
No. 10-3-10-SC) –courts that can issue search warrants

Sy v. Court of Appeals, 113 SCRA 334

FACTS: Sy was charged with unfair competition, in that he, for the purpose of deceiving or defrauding the Sea
Commercial Company of its legitimate trade or the public sold or offered for sale hand pumps of inferior quality
and labeled JETMATIC DRAGON HAND PUMP and at a lower price and giving them the general appearance
of the JETMATIC DRAGON hand pumps of the Sea Commercial Company, as to the outside appearance,
including, among others, the color, the embossed words PAT No. 463490 on the spout the embossed word
MODEL chamber assembly, the embossed words JETMATIC DRAGON HAND PUMP on the lateral surface of
the cylinder assembly and many other parts both as to the design and the materials used which induced the
public to believe that the JETMATIC DRAGON HAND pumps offered are those of the Sea Commercial
Company, to the damage and prejudice of the said Sea Commercial Company, Incorporated and the general
public. RTC acquitted Sy. Upon order of the RTC, the Fiscal then filed an information charging Sy of trademark
infringement when Sy sold hand pumps of inferior quality and labelled JETMATIC DRAGON HAND PUMP at a
lower price, Sy knowing fully well that the mark JETMATIC DRAGON HAND PUMP has been fraudulently used
in the said hand pumps, thereby giving them the general appearance of the old and/or being offered for sale
are those of the Sea Commercial Company, when in fact they are not to the damage and prejudice of the said
Sea Commercial Company, Incorporated and the general public. Sy contends that by the filing of the second
information, he would be placed in double jeopardy because under the first information, he could have been
convicted of the offense charged in the second information. Since he was acquitted under the first information,
to charge him again for the same offense as aforestated would according to petitioner, constitute double
jeopardy.

In advancing the above propositions, Sy would treat the two offenses of infringement of trademark and unfair
competition as separate and distinct, not as one necessarily included in, or including, the other. Upon this
premise, it cannot be successfully contended that what happened with respect to the offense of infringement of
trademark, assuming it was also charged in the first information as a separate offense, is, by no manner of
reasoning, one of acquittal for said offense.
HELD:

In the opinion of the trial court, the first information did not properly charge the offense of infringement of
trademark, for what was expressly charged was unfair competition. In proceeding in accordance with the
above quoted provisions of the Rules of Court, the trial court evidently felt it cannot properly convict the
accused of infringement of trademark, although it found evidence sufficient to justify filing the proper
information for said offense. But, undoubtedly, the court found it not proper to acquit the accused of said
offense. Hence there can be no double jeopardy as to the offense charged in the second information on the
ground of a prior acquittal for the same offense.

What makes the ruling cited by Sy not applicable to the present is that in the cases cited, acquittal was for the
offense specifically charged without the trial court expressly finding that for the other offense also charged but
not expressly so by the statutory designation of the offense, evidence exists to justify his being held to answer
for such offense, in accordance with Section 12, Rule 119 of the Rules of Court, as the trial court in the instant
case very explicitly did. It is this circumstance that, clearly and undisputably would prevent double jeopardy to
attach, for there is neither acquittal nor conviction, not even dismissal of the case, which might result in double
jeopardy arising to ban the proceedings contemplated in the aforecited provisions of the Rules of Court.

It felt that under the information as so worded, conviction was not legally possible obviously for not sufficiently
informing the accused of the nature and cause of the accusation against him, which is one of his constitutional
rights, although factually, the assessment of the evidence by the court tended towards justifying conviction.

Verily, the situation fits into what is contemplated by the provisions of the Rules of Court already referred to,
which do not call for a new or separate preliminary investigation, which petitioner contends is indispensable, to
which the Solicitor General expressed agreement.

As to the offense of infringement of trademark, which petitioner himself contends was also charged in the first
information, the Court rendered no judgment yet, either for acquittal or for conviction, as it appeared to the trial
judge that the accused cannot properly be convicted for said offense, even if conviction was warranted by the
evidence, a mistake having been made, as he read the information, and with reason, in charging the proper
offense.

However, if petitioner insists on another preliminary investigation, the same may be granted by way of
"reinvestigation", the Solicitor General who actually represents also the prosecution having expressed
conformity to the holding of one, Let it not be said that We are not mindful of the rule that all doubts should be
resolved in favor of the accused, a rule which itself should be liberally construed in his favor.

Samson v. Judge Daway, GR Nos. 160054-55, July 21, 2004

FACTS: 2 informations for unfair competition were filed against Samson, the registered owner of ITTI Shoes.
Samson, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation distributed, sold and/or
offered for sale CATERPILLAR products such as footwear, garments, clothing, bags, accessories and
paraphernalia which are closely identical to and/or colorable imitations of the authentic Caterpillar products and
likewise using trademarks, symbols and/or designs as would cause confusion, mistake or deception on the part
of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of
the following internationally: "CATERPILLAR", "CAT", "CATERPILLAR & DESIGN", "CAT AND DESIGN",
"WALKING MACHINES" and "TRACK-TYPE TRACTOR & DESIGN."

ISSUE: Which court has jurisdiction over criminal and civil cases for violation of intellectual property rights?
(RTC)

HELD:

R.A. No. 8293 and R.A. No. 166 are special laws conferring jurisdiction over violations of intellectual property
rights to the Regional Trial Court. They should therefore prevail over R.A. No. 7691, which is a general law.
Hence, jurisdiction over the instant criminal case for unfair competition is properly lodged with the Regional
Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2 to 5 years and a fine
ranging from P50,000.00 to P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual property
rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002 designating
certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court further issued a
Resolution consolidating jurisdiction to hear and decide Intellectual Property Code and Securities and
Exchange Commission cases in specific Regional Trial Courts designated as Special Commercial Courts.
William C. Yao, Sr. vs. The People Of The Philippines, G.R. No. 168306. June 19, 2007.
FACTS

Petitioners are incorporators and officers of MASAGANA GAS CORPORATION (MASAGANA), an entity
engaged in the refilling, sale and distribution of LPG products, while Private respondents Petron and Pilipinas
Shell are two of the largest bulk suppliers and producers of LPG in the Philippines. Their LPG products are
sold under the marks "GASUL" and "SHELLANE," respectively. They are authorized to allow refillers and
distributors to refill, use, sell and distribute their respective LPG containers and products. NBI agent Oblanca
filed applications for search warrant against petitioners and other occupants of MASAGANA compound, on the
ground that petitioners are actually producing, selling, offering for sale and/or distributing LPG products using
steel cylinders owned by, and bearing the tradenames, trademarks, and devices of Petron and Pilipinas Shell,
without authority and in violation of the rights of the said entities. Presiding Judge of RTC Cavite found
probable cause, hence, commanded the immediate search and seizure of the items. Petitioners filed with the
RTC a Motion to quash Search Warrants alleging that the items are being used in the conduct of the lawful
business of respondents and the same are not being used in refilling Shellane and Gasul LPGs. RTC denied
the said petitioner’s Motion, and was affirmed by CA. Hence, this petition.

ISSUE

Whether Petitioners are liable for Trademark Infringement.

DECISION

YES. Section 155 of Republic Act No. 8293 identifies the acts constituting trademark infringement. As can be
gleaned in Section 155.1, mere unauthorized use of a container bearing a registered trademark in connection
with the sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or
deception among the buyers/consumers can be considered as trademark infringement.

In Oblanca’s sworn affidavits, he stated that before conducting an investigation on the alleged illegal activities
of MASAGANA, he reviewed the certificates of trademark registrations issued by the Philippine Intellectual
Property Office in favor of Petron and Pilipinas Shell; that he confirmed from Petron and Pilipinas Shell that
MASAGANA is not authorized to sell, use, refill or distribute GASUL and SHELLANE LPG cylinder containers;
that he and Alajar monitored the activities of MASAGANA in its refilling plant station located within its
compound at Governor’s Drive, Barangay Lapidario, Trece Martires, Cavite City; that, using different names,
they conducted two test-buys therein where they purchased LPG cylinders bearing the trademarks GASUL and
SHELLANE; that the said GASUL and SHELLANE LPG cylinders were refilled in their presence by the
MASAGANA employees; that while they were inside the MASAGANA compound, he noticed stock piles of
multi-branded cylinders including GASUL and SHELLANE LPG cylinders; and that they observed delivery
trucks loaded with GASUL and SHELLANE LPG cylinders coming in and out of the MASAGANA compound
and making deliveries to various retail outlets

K. TRADENAMES
1. Definition
Sec. 121.3, IPC

121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise; (Sec. 38, R.A.
No. 166a)

Converse Rubber Corporation v. Universal Rubber Products, 117 SCRA 154

Facts:

Respondent Universal Rubber applied for the registration of the trademark ‘Universal Converse and Device’
used on its rubber shoes and rubber slippers. Petitioner Converse opposed on the ground that the trademark
sought to be registered is confusingly similar to the word ‘Converse’ which is part of its corporate name
‘Converse Rubber Corporation’ and will likely deceive purchasers and cause irreparable injury to its reputation
and goodwill in the Philippines. Respondent argued that the trademarks petitioner uses on its rubber shoes are
‘Chuck Taylor’ and ‘All Star Device.’ The Director of Patents gave due course to respondent’s application. MR
was denied.

Issue:

Whether or not there is confusing similarity between the two trademarks.

Ruling: YES.

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 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. 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.” 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 … “

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.

2. What May Not Be Used As A Tradename?

Sec. 165.1, IPC

Section 165. Trade Names or Business Names. - 165.1. A name or designation may not be used as a
trade name if by its nature or the use to which such name or designation may be put, it is contrary to public
order or morals and if, in particular, it is liable to deceive trade circles or the public as to the nature of the
enterprise identified by that name.

3. Rights of the Tradename Owner

Secs. 165.2, IPC

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

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

Sec. 165.3, IPC

165.3. The remedies provided for in Sections 153 to 156 and Sections 166 and 167 shall apply mutatis
mutandis.

Sec. 165.4, IPC

165.4. Any change in the ownership of a trade name shall be made with the transfer of the enterprise or part
thereof identified by that name. The provisions of Subsections 149.2 to 149.4 shall apply mutatis mutandis.

Philips Export v. CA, 206 SCRA 457

A corporation’s right to use its corporate and trade name is a property right, a right in rem, which it may assert
and protect against the whole world.

FACTS:
Philips Export B.V. (PEBV) filed with the SEC for the cancellation of the word “Philips” the corporate name of
Standard Philips Corporation in view of its prior registration with the Bureau of Patents and the SEC. However,
Standard Philips refused to amend its Articles of Incorporation so PEBV filed with the SEC a petition for the
issuance of a Writ of Preliminary Injunction, however this was denied ruling that it can only be done when the
corporate names are identical and they have at least 2 words different. This was affirmed by the SEC en banc
and the Court of Appeals thus the case at bar.

ISSUE:
Whether or not Standard Philips can be enjoined from using Philips in its corporate name
RULING: YES
A corporation’s right to use its corporate and trade name is a property right, a right in rem, which it may assert
and protect against the whole world. According to Sec. 18 of the Corporation Code, no corporate name may be
allowed if the proposed name is identical or deceptively confusingly similar to that of any existing corporation or
to any other name already protected by law or is patently deceptive, confusing or contrary to existing law.

For the prohibition to apply, 2 requisites must be present:

(1) the complainant corporation must have acquired a prior right over the use of such corporate name and

(2) the proposed name is either identical or deceptively or confusingly similar to that of any existing corporation
or to any other name already protected by law or patently deceptive, confusing or contrary to existing law.

With regard to the 1st requisite, PEBV adopted the name “Philips” part of its name 26 years before Standard
Philips. As regards the 2nd, the test for the existence of confusing similarity is whether the similarity is such as
to mislead a person using ordinary care and discrimination. Standard Philips only contains one word,
“Standard”, different from that of PEBV. The 2 companies’ products are also the same, or cover the same line
of products. Although PEBV primarily deals with electrical products, it has also shipped to its subsidiaries
machines and parts which fall under the classification of “chains, rollers, belts, bearings and cutting saw”, the
goods which Standard Philips also produce. Also, among Standard Philips’ primary purposes are to buy, sell
trade x x x electrical wiring devices, electrical component, electrical supplies. Given these, there is nothing to
prevent Standard Philips from dealing in the same line of business of electrical devices. The use of “Philips” by
Standard Philips tends to show its intention to ride on the popularity and established goodwill of PEBV.

Armco Steel Corporation v. SEC, 156 SCRA 822

FACTS: A corporation organized in Ohio, U.S.A., ARMCO-OHIO, obtained a Certificate of Registration for its
trademark consisting of the word "ARMCO" and a triangular device for "ferrous metals and ferrous metal
castings and forgings." It filed an "Affidavit of Use" for said trademark, which was subsequently accepted and
for which the Patent Office issued the corresponding notice of acceptance of "Affidavit of Use."

ARMCO Marsteel-Alloy Corporation was also incorporated under its original name Marsteel Alloy Company,
Inc. but its name was changed to ARMCO-Marsteel, by amendment of its Articles of Incorporation after the
ARMCO-Ohio purchased 40% of its capital stock. Both said corporations are engaged in the manufacture of
steel products.

ARMCO-Ohio and ARMCO-Marsteel then filed a petition in SEC to compel ARMCO-Philippines to change its
corporate name on the ground that it is very similar, if not exactly the same as the name of one of the
petitioners.

SEC granted the petition and ARMCO STEEL CORPORATION was ordered to take out 'ARMCO' and
substitute another word in lieu thereof in its corporate name by amending the articles of incorporation to that
effect. The order became final and executory.

Respondent amended its articles of incorporation by changing its name to "ARMCO structures, Inc." which was
filed with and approved by the SEC. Petitioners then alleged that the change of name of said respondent was
not done in good faith and is not in accordance respondent in contempt for disobeying the orders.

The SEC found that the respondent have not complied with the final order and required them to show cause
why they should not be punished for contempt by the Commission.

HELD:

Far from complying with said order petitioner amended its corporate name into ARMCO Structures, Inc., and
secured its approval by the SEC. That this amendment was made by petitioner without the knowledge of the
proper authorities of the SEC is home by the fact that thereafter an order was issued by the SEC requiring
petitioner to comply with the order of the Commission.

When the attention of the SEC was called by petitioner that the change of corporate name had been
undertaken by it to ARMCO Structures, Inc. and asked that it be considered as a substantial compliance with
the order, the SEC ruled as follows: The fact that the SEC issued its certificate of filing of amended articles of
incorporation, is nothing but an illusory approval of the change of corporate name and a self-induced protection
from the Commission to further exact compliance of the Order.
Craftily, the SEC was made to issue such certificate during its unguarded moment. Verily, the certificate could
not have been issued were it not for such lapses or had respondent been in good faith by making the proper
disclosures of the circumstances which led it to amend its articles of incorporation.

The Court finds that the said amendment in the corporate name of petitioner is not in substantial compliance
with the order of February 14, 1975. Indeed it is in contravention therewith. To repeat, the order was for the
removal of the word "ARMCO" from the corporate name of the petitioner which it failed to do. And even if this
change of corporate name was erroneously accepted and approved in the SEC it cannot thereby legalize nor
change what is clearly unauthorized if not contemptuous act of petitioner in securing the registration of a new
corporate name against the very order of the SEC.

By mere looking at the names it is clear that the name of petitioner, ARMCO STEEL CORPORATION (of Ohio,
U.S.A.), and that of the respondent, ARMCO STEEL CORPORATION, are not only similar but Identical and
the words "of Ohio, U.S.A.," are being used only to Identify petitioner ARMCO STEEL-OHIO as a U.S.
corporation.

It is indisputable that ARMCO-STEEL-OHIO, having patented the term 'Armco' as part of its trademark on its
steel products, is entitled to protection in the use thereof in the Philippines. The term "Armco" is now being
used on the products being manufactured and sold in this country by Armco-Marsteel by virtue of its tie-up with
ARMCO-STEEL-OHIO. Clearly, the two companies have the right to the exclusive use and enjoyment of said
term.

ARMCO STEEL-PHILIPPINES, has not only an Identical name but also a similar line of business, as shown
above, as that of ARMCO STEEL- OHIO. People who are buying and using products bearing the trademark
"Armco" might be led to believe that such products are manufactured by the respondent, when in fact, they
might actually be produced by the petitioners. Thus, the goodwill that should grow and inure to the benefit of
petitioners could be impaired and prejudiced by the continued use of the same term by the respondent.

Western Equipments & Supply Co. v. Reyes, 51 Phil 115

Short Version:
Western is foreign company engaged in dealing with telephone equipment and apparatus. Is seeks to prevent
Reyes et al, from incorporating a domestic corp in the PH with substantially the same name, while Reyes et al,
question Western’s capacity to sue since it is no licensed to do business in the PH. The SC ruled that Western
has standing. In doing so, it distinguishes between infringement of trademark suits, and suits for unfair
competition. This case falls under unfair competition, and Western does not need a license in order to have
standing.

Facts:
Western is a foreign corp (Nevada and New York) engaged in the business of telephone equipment and
apparatus. It must be noted that is has been engaged in commerce and is well known in the trade in all
countries of the world for 50 years, and at the time of the suit, most of the telephone equipment used in the PH
were manufactured and sold by Western. It is alleged that ¾ of such equipment used around the world has
been manufactured and/or sold by Western.
 “Western Electric Company, Inc.” has been registered as a trade-mark under the Act of Congress of
Feb. 20, 1905
 Note that Western has applied for a provisional license to engage in business in the PH on May 20,
1926, and this was made permanent on Aug. 23, 1926

Defendants O’Brien, Diaz, Mapoy, and Zamora all seek to incorporate a domestic corporation in the PH to be
known as Western Electric Company, Inc.
 Note that all of them have been associated with Western as employees, or stockholders, or agents,
whatever
 The point is, they have actual knowledge of the company and how it does its business

Defendant Reyes is the Director of Bureau of Commerce and Industry. Reyes subsequently has made known
to the would-be incorporators that he intends to rule in their favor, amidst a protest from Western.

Western sough a temporary restraining order from the lower court. Defendants question Western’s standing to
sue. Lower court granted. Hence, this suit.

Issue and Dispositive:

Does Western have standing to sue? Yes. This is a suit for unfair competition, not a suit for infringement of
trademark.
Ratio:
Has an unregistered corporation which has not transacted business in the Philippine Islands, but which has
acquired a valuable goodwill and high reputation therein, through the sale, by importers, and the extensive use
within the Islands of products bearing either its corporate name, or trade-mark consisting of its corporate name,
a legal right to restrain an officer of the Commerce and Industry, with knowledge of those facts, from issuing a
certificate of incorporation to residents of the Philippine Islands who attempt to organize a corporation for the
purpose of pirating the corporate name of such foreign corporation, of engaging in the same business as such
foreign corporation, and of defrauding the public into thinking that its goods are those of such foreign
corporation, and of defrauding such foreign corporation and its local dealers of their legitimate trade?
 Pao’s note: I don’t exactly understand why Western is considered as a corp NOT doing business in the
PH since it has already applied for a provisional license which was then made permanent. But I think it
has to do with the fact that Western agreed to such stipulation of facts during the pre-trial

SC says yes, Western has standing

 Generally, opponents who want to question the standing of foreign corps must follow this rule:
o The noncompliance of a foreign corporation with the statute may be pleaded as an affirmative
defense. Thereafter, it must appear from the evidence, first, that the plaintiff is a foreign
corporation, second, that it is doing business in the Philippines, and third, that it has not
obtained the proper license as provided by the statute. (Marshal-Wells Co. v. Elser & Co.)
 But, it must be noted that the sole purpose of the action of Western is to:
o “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."
 Western contends that its rights to the use of its corporate and trade name:
o Is a property right, a right in rem, which may assert and protect against all the world, in any of
the courts of the world — even in jurisdictions where it does not transact busines s — just the
same as it may protect its tangible property, real or personal, against trespass, or conversion.
o “Since it is the trade and not the mark that is to be protect, a trade-mark 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.”

SC agrees with Western, saying that defendants are confused as to Western’s standing because the failed to
distinguished between suits for unfair competition, and suits for infringement of trademark
 xxx a confusion of the bases of two classes of suits, — those for infringements of trade-marks, and
those for unfair competition in trade
 In the former, title to the trade-marks is indispensable to a good cause of action;
 in the latter, no proprietary interest in the words, names, or means by which the fraud is perpetrated is
requisite to maintain a suit to enjoin it.
o It is sufficient that the complainant is entitled to the custom — the goodwill — of a business, and
that this goodwill is injured, or is about to be injured, by the palming off of the goods of another
as his.

SC notes that the purpose and intent of the defendants is was to “unfairly and unjustly compete in the PH with
Western in (the manufacture and selling of telephone equipment and apparatus)”
 They are basically “asking the Government of the PH to permit them to pirate the name of Western, by
incorporating xxx
 So that they may deceive the public into thinking that the goods they are manufacturing and selling are
those of the real (Western)
It would be “a prostitution of the powers of government” to allow such an act

Fredco Manufacturing Corporation V. President And Fellows Of Harvard College (Harvard University),
G.R. No. 185917, June 1, 2011

Topic: Internationally Well-Known Marks

Facts

On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation organized and
existing under the laws of the Philippines, filed a Petition for Cancellation of Registration No. 56561 before the
Bureau of Legal Affairs of the Intellectual Property Office (IPO) against respondents President and Fellows of
Harvard College (Harvard University), a corporation organized and existing under the laws of Massachusetts,
United States of America.

Fredco alleged that Registration No. 56561 was issued to Harvard University on 25 November 1993 for the
mark “Harvard Veritas Shield Symbol” for decals, tote bags, serving trays, sweatshirts, t-shirts, hats and flying
discs under Classes 16, 18, 21, 25 and 28 of the Nice International Classification of Goods and Services.
Fredco alleged that the mark “Harvard” for t-shirts, polo shirts, sandos, briefs, jackets and slacks was first used
in the Philippines on 2 January 1982 by New York Garments Manufacturing & Export Co., Inc. (New York
Garments), a domestic corporation and Fredco’s predecessor-in-interest. Fredco alleged that at the time of
issuance of Registration No. 56561 to Harvard University, New York Garments had already registered the
mark “Harvard” for goods under Class 25.

Harvard University, on the other hand, alleged that it is the lawful owner of the name and mark “Harvard” in
numerous countries worldwide, including the Philippines. The name and mark “Harvard” was adopted in 1639
as the name of Harvard College of Cambridge, Massachusetts, U.S.A. The name and mark “Harvard” was
allegedly used in commerce as early as 1872. Harvard University is over 350 years old and is a highly
regarded institution of higher learning in the United States and throughout the world. Harvard University
promotes, uses, and advertises its name “Harvard” through various publications, services, and products in
foreign countries, including the Philippines. Harvard University further alleged that the name and the mark have
been rated as one of the most famous brands in the world, valued between US $750,000,000 and US
$1,000,000,000.

In a Decision dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau of Legal Affairs, IPO
cancelled Harvard University’s registration of the mark “Harvard” under Class 25 “only with respect to goods
falling under Class 25.” Upon appeal by herein respondent, the Director General of the IPO reversed and set
aside the former decision. The Court of Appeals adopted the latter findings.

Issue(s)

Whether the Court of Appeals committed a reversible error in affirming the decision of the Office of the Director
General of the IPO

Ruling

No. There is no dispute that the mark “Harvard” used by Fredco is the same as the mark “Harvard” in the
“Harvard Veritas Shield Symbol” of Harvard University. It is also not disputed that Harvard University was
named Harvard College in 1639 and that then, as now, Harvard University is located in Cambridge,
Massachusetts, U.S.A. It is also unrefuted that Harvard University has been using the mark “Harvard” in
commerce since 1872. It is also established that Harvard University has been using the marks “Harvard” and
“Harvard Veritas Shield Symbol” for Class 25 goods in the United States since 1953. Further, there is no
dispute that Harvard University has registered the name and mark “Harvard” in at least 50 countries.

L. COLLECTIVE MARKS
1. Definition
Sec. 121.2, IPC
121.2. "Collective mark" means any visible sign designated as such in the application for registration and
capable of distinguishing the origin or any other common characteristic, including the quality of goods or
services of different enterprises which use the sign under the control of the registered owner of the collective
mark; (Sec. 40, R.A. No. 166a)

4. Section 167 (and its sub-paragraphs), IPC

Section 167. Collective Marks. - 167.1. Subject to Subsections 167.2 and 167.3, Sections 122 to 164 and 166
shall apply to collective marks, except that references therein to "mark" shall be read as "collective mark".

167.2.(a) An application for registration of a collective mark shall designate the mark as a collective mark and
shall be accompanied by a copy of the agreement, if any, governing the use of the collective mark.

(b) The registered owner of a collective mark shall notify the Director of any changes made in respect of the
agreement referred to in paragraph (a).

167.3. In addition to the grounds provided in Section 149, the Court shall cancel the registration of a collective
mark if the person requesting the cancellation proves that only the registered owner uses the mark, or that he
uses or permits its use in contravention of the agreements referred to in Subsection 166.2 or that he uses or
permits its use in a manner liable to deceive trade circles or the public as to the origin or any other common
characteristics of the goods or services concerned.

167.4. The registration of a collective mark, or an application therefor shall not be the subject of a license
contract. (Sec. 40, R.A. No. 166a)