Coffee Partners v. San Francisco

COFFEE PARTNERS, INC.
, Petitioner,
vs.
SAN FRANCISCO COFFEE & ROASTERY, INC., Respondent.
Coffee Partners, Inc. is a local corporation engaged in the business of establishing and maintaining
coffee shops in the country. It has a franchise agreement6 with Coffee Partners Ltd. (CPL), a
business entity organized and existing under the laws of British Virgin Islands, for a non-
exclusive right to operate coffee shops in the Philippines using trademarks designed by CPL such
as "SAN FRANCISCO COFFEE
Respondent is a local corporation engaged in the wholesale and retail sale of coffee registered with
the SEC under the business name "SAN FRANCISCO COFFEE & ROASTERY, INC. Respondent
had since built a customer base that included Figaro Company, Tagaytay Highlands, Fat Willy’s, and
other coffee companies.
They also formed a joint venture company with Boyd Coffee USA under the company name Boyd
Coffee Company Philippines, Inc. (BCCPI). BCCPI engaged in the processing, roasting, and
wholesale selling of coffee. Respondent later embarked on a project study of setting up coffee carts
in malls and other commercial establishments in Metro Manila.
June 2001, respondent discovered that petitioner was about to open a coffee shop under the name
"SAN FRANCISCO COFFEE" in Libis, Quezon City. According to respondent, petitioner’s shop
caused confusion in the minds of the public as it bore a similar name and it also engaged in the
business of selling coffee. Respondent sent a letter to petitioner demanding that the latter stop using
the name "SAN FRANCISCO COFFEE." Respondent also filed a complaint with the Bureau of Legal
Affairs-Intellectual Property Office (BLA-IPO) for infringement and/or unfair competition with claims
for damages.
Answer of Petitioner: Petitioner contends that when a trade name is not registered, a suit for
infringement is not available. Petitioner alleges respondent has abandoned its trade name. Petitioner
points out that respondent’s registration of its business name with the DTI expired on 16 June 2000
and it was only in 2001 when petitioner opened a coffee shop in Libis, Quezon City that respondent
made a belated effort to seek the renewal of its business name registration. Petitioner argued
respondent stopped operating under the trade name "SAN FRANCISCO COFFEE" when it formed a
joint venture with Boyd Coffee USA.
It also alleged they filed with the Intellectual Property Office (IPO) applications for registration of the
mark "SAN FRANCISCO COFFEE & DEVICE" for class 42 in 1999 and for class 35 in 2000.
BLA-IPO held that petitioner’s trademark infringed on respondent’s trade name. It ruled that
the right to the exclusive use of a trade name with freedom from infringement by similarity is
determined from priority of adoption. Since respondent registered its business name with the
DTI in 1995 and petitioner registered its trademark with the IPO in 2001 in the Philippines and
in 1997 in other countries, then respondent must be protected from infringement of its trade
name. The BLA-IPO also held that respondent did not abandon the use of its trade name as
substantial evidence indicated respondent continuously used its trade name in connection
with the purpose for which it was organized.
The ODG-IPO reversed the BLA-IPO
he Court of Appeals set aside the 22 October 2003 decision of the ODG-IPO in so far as it ruled that
there was no infringement. It reinstated the 14 August 2002 decision of the BLA-IPO finding
infringement.
ISSUE: whether petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes
infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC.,"
even if the trade name is not registered with the Intellectual Property Office (IPO).
RULING
NO.
Prosource International, Inc. v. Horphag Research Management SA,9 this Court laid down what
constitutes infringement - a trade name need not be registered with the IPO before an infringement
suit may be filed by its owner against the owner of an infringing trademark. All that is required is that
the trade name is previously used in trade or commerce in the Philippines.
Section 22 of Republic Act No. 166,12 as amended, required registration of a trade name as a
condition for the institution of an infringement suit. However, RA 8293, which took effect on 1
January 1998, has dispensed with the registration requirement. Section 165.2 of RA 8293
categorically states that trade names shall be protected, even prior to or without registration with the
IPO, against any unlawful act including any subsequent use of the trade name by a third party,
whether as a trade name or a trademark likely to mislead the public
Applying either the dominancy test or the holistic test, petitioner’s "SAN FRANCISCO COFFEE"
trademark is a clear infringement of respondent’s "SAN FRANCISCO COFFEE & ROASTERY, INC."
trade name. The descriptive words "SAN FRANCISCO COFFEE" are precisely the dominant
features of respondent’s trade name. Petitioner and respondent are engaged in the same business
of selling coffee, whether wholesale or retail.

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COFFEE PARTNERS, INC.

The ODG-IPO reversed the BLA-IPO

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