1

IPL CASES

1. E.I. Dupont De Nemours and Co. vs. Francisco, G.R. No. 174379, August 31, 2016

2. Pearl & Dean (Phil.), Inc. vs. Shoemart, Inc., G.R. No. 148222, August 15, 2003

3. Smith Kline Beckman Corporation vs. Court of Appeals, G.R. No. 126627, August 14, 2003

4. Birkenstock Orthopaedie GMBH and Co. KG (formerly Birkenstock Orthopaedie GMBH) vs. Philippine Shoe Expo Marketing Corporation, G.R. No. 194307, November 20, 2013

5. Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. vs. Renaud Cointreau & Cie, G.R. No. 185830, June 5, 2013)

6. UFC Philippines, Inc. [now merged with Nutri-Asia, Inc. as the surviving entity] vs. Barrio Fiesta Manufacturing Corporation, G.R. No. 198889, January 20, 2016

7. Shang Properties Realty Corp. vs. St. Francis Development Corp., G.R. No. 190706, July 21, 2014

8. Asia Brewery, Inc. vs. Court of Appeals, G.R. No. 103543, July 5, 1993

9. Great White Shark Enterprises, Inc. vs. Caralde, Jr., G.R. No. 192294, November 21, 2012

10. Levi Strauss & Co. vs. Clinton Apparelle, Inc., G.R. No. 138900, September 20, 2005
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11. W Land Holdings, Inc. vs. Starwood Hotels and Resorts Worldwide, Inc., G.R. No. 222366, December 4, 2017

12. McDonald’s Corp. vs. L.C. Big Mak Burger, Inc., G.R. No. 143993, August 18, 2004

13. Microsoft Corporation vs. Manansala, G.R. No. 166391, October 21, 2015

14. Habana vs. Robles, G.R. No. 131522, July 19, 1999

15. ABS-CBN Publishing Inc. vs. Dir. of the Bureau of Patents, G.R. No. 217916, June 20, 2018
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SECOND DIVISION Therefore, an official revocation of the Power of Attorney of the former counsel and the appointment of
the present by the applicant is therefore required before further action can be undertaken.
G.R. No. 174379, August 31, 2016
1. Contrary to what was alleged, the Chemical Examining Division's (CED) record will
show that as far as the said division is concerned, it did not fail to issue the proper
E.I. DUPONT DE NEMOURS AND CO. (ASSIGNEE OF INVENTORS CARINI, DUNCIA AND
and timely action on the instant application. CED record shows that the subject
WONG), Petitioner, v. DIRECTOR EMMA C. FRANCISCO (IN HER CAPACITY AS DIRECTOR
application was assigned to the examiner on June 7, 1988. A month after that was
GENERAL OF THE INTELLECTUAL PROPERTY OFFICE), DIRECTOR EPIFANIO M. EVASCO (IN
July 19, 1988, the first Office Action was mailed but was declared abandoned as of
HIS CAPACITY AS THE DHUECTOR OF THE BUREAU OF PATENTS), AND THERAPHARMA,
September 20, 1988 for applicant's failure to respond within the period as prescribed
INC., Respondents.
under Rule 112. Since then, no other official transactions were recorded. This record
is complemented by the Examiner-in-charge's own record . . . .
DECISION
....
LEONEN, J.:
2. It was noted that it took thirteen (13) long years for the applicant to request for such
Office Action. This is not expected of the applicant since it is an acceptable fact that
A patent is granted to provide rights and protection to the inventor after an invention is disclosed to the almost all inventors/applicants wish for the early disposition for their applications.14
public. It also seeks to restrain and prevent unauthorized persons from unjustly profiting from a
protected invention. However, ideas not covered by a patent are free for the public to use and exploit.
Thus, there are procedural rules on the application and grant of patents established to protect against On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of Attorney
any infringement. To balance the public interests involved, failure to comply with strict procedural rules executed by Miriam Meconnahey, authorizing Ortega, Castillo, Del Castillo, Bacorro, Odulio, Calma, and
will result in the failure to obtain a patent. Carbonell to prosecute and handle its patent applications.15 On the same day, it also filed a Petition for
Revival with Cost of Philippine Patent Application No. 35526.16chanrobleslaw
This resolves a Petition for Review on Certiorari1 assailing the Court of Appeals Amended
Decision2 dated August 30, 2006, which denied the revival of Philippine Patent Application No. 35526, In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili, did not
and the Court of Appeals Resolution3 dated January 31, 2006, which granted the intervention of inform it about the abandonment of the application, and it was not aware that Atty. Mapili had already
Therapharma, Inc. in the revival proceedings. died.17 It argued that it discovered Atty. Mapili's death when its senior-level patent attorney visited the
Philippines in 1996.18 It argued that it only had actual notice of the abandonment on January 30, 2002,
E.I. Dupont Nemours and Company (E.I. Dupont Nemours) is an American corporation organized under the date of Paper No. 2.19 Thus, it argued that its Petition for Revival was properly filed under Section
the laws of the State of Delaware.4 It is the assignee of inventors David John Carini, John Jonas 113 of the 1962 Revised Rules of Practice before the Philippines Patent Office in Patent Cases (1962
Vytautas Duncia, and Pancras Chor Bun Wong, all citizens of the United States of Revised Rules of Practice).20chanrobleslaw
America.5chanrobleslaw
On April 18, 2002, the Director of Patents denied the Petition for Revival for having been filed out of
On July 10, 1987, E.I. Dupont Nemours filed Philippine Patent Application No. 35526 before the Bureau time.21 The Resolution22 stated:
of Patents, Trademarks, and Technology Transfer.6 The application was for Angiotensin II Receptor Propriety dictates that the well-settled rule on agency should be applied to this case to maintain the
Blocking Imidazole (losartan), an invention related to the treatment of hypertension and congestive objectivity and discipline of the Office. Therefore, for cases such as the instant case, let the Office
heart failure.7 The product was produced and marketed by Merck, Sharpe, and Dohme Corporation maintain its position that mistakes of the counsel bind the client,' regardless of the degree of negligence
(Merck), E.I. Dupont Nemours' licensee, under the brand names Cozaar and Hyzaar.8chanrobleslaw committed by the former counsel. Although it appears that the former counsel, Arty. Nicanor Mapili was
remiss in his obligations as counsel for the applicants, the Office cannot revive the abandoned
The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident agent who application because of the limitations provided in Rule 115. Clearly, the Petition for Revival was filed
handled a majority of E.I. Dupont Nemours' patent applications in the Philippines from 1972 to beyond the reglementary period. Since the law and rules do not give the Director of Patents the
1996.9chanrobleslaw discretion to stretch the period for revival, the Office is constrained to apply Rule 115 to the instant
case.
On December 19, 2000, E.I. Dupont Nemours' new counsel, Ortega, Del Castillo, Bacorro, Odulio,
Calma, and Carbonell,10 sent the Intellectual Property Office11 a letter requesting that an office action be In view of the foregoing considerations, applicants' petition to revive the subject application is hereby
issued on Philippine Patent Application No. 35526.12chanrobleslaw denied.

In response, Patent Examiner Precila O. Bulihan of the Intellectual Property Office sent an office action SO ORDERED.23
marked Paper No. 2 on January 30, 2002,13 which stated: E.I. Dupont Nemours appealed the denial to the Director-General of the Intellectual Property Office on
August 26, 2002.24 In the Decision25cralawred dated October 22, 2003, Director-General Emma C.
The appointed attorney on record was the late Atty. Nicanor D. Mapili. The reconstituted documents Francisco denied the appeal and affirmed the Resolution of the Director of Patents.
provided no documents that will show that the authority to prosecute the instant application is now
transferred to the present counsel. No official revocation on record is available. On November 21, 2003, petitioner filed before the Court of Appeals a Petition for Review seeking to set
aside the Intellectual Property Office's Decision dated October 22, 2003.26chanrobleslaw
 4

On August 31, 2004, the Court of Appeals granted the Petition for Review.27 In allowing the Petition for First, whether the Petition for Review on Certiorari complied with Rule 45, Section 4 of the Rules of
Revival, the Court of Appeals stated: Court when petitioner failed to attach certain documents to support the allegations in the complaint;
After an exhaustive examination of the records of this case, this Court believes that there is sufficient
justification to relax the application of the above-cited doctrine in this case, and to afford petitioner Second, whether petitioner should have filed a petition for certiorari under Rule 65 of the Rules of
some relief from the gross negligence committed by its former lawyer, Atty. Nicanor D. Mapili[.]28 Court;
The Office of the Solicitor General, on behalf of the Intellectual Property Office, moved for
Third, whether the Petition for Review on Certiorari raises questions of fact;
reconsideration of this Decision on September 22, 2004.29chanrobleslaw
Fourth, whether the Court of Appeals erred in allowing the intervention of respondent Therapharma,
In the interim, Therapharma, Inc. moved for leave to intervene and admit the Attached Motion for
Inc. in petitioner's appeal;
Reconsideration dated October 11, 200430 and argued that the Court of Appeals' August 31, 2004
Decision directly affects its "vested" rights to sell its own product.31chanrobleslaw
Fifth, whether the Court of Appeals erred in denying petitioner's appeal for the revival of its patent
application on the grounds that (a) petitioner committed inexcusable negligence in the prosecution of its
Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and Drugs its own
patent application; and (b) third-party rights and the public interest would be prejudiced by the appeal;
application for a losartan product "Lifezar," a medication for hypertension, which the Bureau
granted.32 It argued that it made a search of existing patent applications for similar products before its
Sixth, whether Schuartz applies to this case in that the negligence of a patent applicant's counsel binds
application, and that no existing patent registration was found since E.I. Dupont Nemours' application
the applicant; and 
for its losartan product was considered abandoned by the Bureau of Patents, Trademarks, and
Technology Transfer.33 It alleged that sometime in 2003 to 2004, there was an exchange of
Lastly, whether the invention has already become part of public domain.
correspondence between Therapharma, Inc. and Merck. In this exchange, Merck informed
Therapharma, Inc. that it was pursuing a patent on the losartan products in the Philippines and that it
would pursue any legal action necessary to protect its product.34chanrobleslaw I

On January 31, 2006, the Court of Appeals issued the Resolution35 granting the Motion for Leave to The question of whether the Court of Appeals may resolve a motion for intervention is a question that
Intervene. According to the Court of Appeals, Therapharma, Inc. had an interest in the revival of E.I. assails an interlocutory order and requests a review of a lower court's exercise of discretion. Generally,
Dupont Nemours' patent application since it was the local competitor for the losartan product.36 It stated a petition for certiorari under Rule 65 of the Rules of Court will lie to raise this issue in a limited
that even if the Petition for Review was premised on the revival of the patent application, Therapharma, manner. There must be a clear showing of grave abuse of discretion for the writ of certiorari to be
Inc.'s intervention was not premature since E.I. Dupont Nemours, through Merck, already threatened issued.
Therapharma, Inc. with legal action if it continued to market its losartan product.37chanrobleslaw
However, when the Court of Appeals has already resolved the question of intervention and the merits of
E.I. Dupont Nemours moved for reconsideration on February 22, 2006, assailing the Court of Appeals' the case, an appeal through a petition for review on certiorari under Rule 45 of the Rules of Court is the
January 31, 2006 Resolution.38chanrobleslaw proper remedy.

On August 30, 2006, the Court of Appeals resolved both Motions for Reconsideration and rendered the Respondent Therapharma, Inc. argues that the Petition should be dismissed outright for being the
Amended Decision39 reversing its August 31, 2004 Decision. wrong mode of appeal.53 It argues that petitioner should have filed a petition for certiorari under Rule
65 since petitioner was assailing an act done by the Court of Appeals in the exercise of its
The Court of Appeals ruled that the public interest would be prejudiced by the revival of E.I. Dupont discretion.54 It argues that petitions under Rule 45 are limited to questions of law, and petitioner raised
Nemours' application.40 It found that losartan was used to treat hypertension, "a chronic ailment findings of fact that have already been affirmed by the Court of Appeals.55chanrobleslaw
afflicting an estimated 12.6 million Filipinos,"41 and noted that the presence of competition lowered the
price for losartan products.42 It also found that the revival of the application prejudiced Therapharma, Petitioner, on the other hand, argues that Rule 65 is only available when there is no appeal or any plain,
Inc.'s interest, in that it had already invested more than P20,000,000.00 to develop its own losartan speedy remedy in the ordinary course of law. Since a petition for review under Rule 45 was still
product and that it acted in good faith when it marketed its product.43chanrobleslaw available to it, it argues that it correctly availed itself of this remedy.56 Petitioner also argues that there
are exceptions to the general rule on the conclusiveness of the Court of Appeals' findings of fact.57 It
The Court of Appeals likewise found that it erroneously based its August 31, 2004 Decision on E.I argues that it was necessary for it to discuss relevant facts in order for it to show that the Court of
Dupont Nemours' allegation that it took seven (7) to 13 years for the Intellectual Property Office to act Appeals made a misapprehension of facts.58chanrobleslaw
on a patent application.44 It stated that while it might have taken that long to issue the patent, it did not
take that long for the Intellectual Property Office to act on application.45 Citing Schuartz v. Court of The special civil action of certiorari under Rule 65 is intended to correct errors of jurisdiction.59 Courts
Appeals,46 it found that both E.I. Dupont Nemours and Arty. Mapili were inexcusably negligent in lose competence in relation to an order if it acts in grave abuse of discretion amounting to lack or
prosecuting the patent application.47chanrobleslaw excess of jurisdiction.60 A petition for review under Rule 45, on the other hand, is a mode of appeal
intended to correct errors of judgment.61 Errors of judgment are errors committed by a court within its
On October 19, 2006, petitioner E.I. Dupont Nemours filed before this Court this Petition for Review on jurisdiction.62 This includes a review of the conclusions of law63 of the lower court and, in appropriate
Certiorari.48 Both respondents Intellectual Property Office and Therapharma, Inc. were directed to cases, evaluation of the admissibility, weight, and inference from the evidence presented.
comment on the comment on the Petition.49 Upon submission of their respective Comments,50 petitioner
was directed to file its Consolidated Reply.51 Thereafter, the parties were directed to file their respective Intervention results in an interlocutory order ancillary to a principal action.64 Its grant or denial is
memoranda.52chanrobleslaw subject to the sound discretion of the court.65 Interlocutory orders, or orders that do not make a final
disposition of the merits of the main controversy or cause of action,66 are generally not
The arguments of the parties present several issues for this Court's resolution, as follows: reviewable.67 The only exception is a limited one, in that when there is no plain, speedy, and adequate
remedy, and where it can be shown that the court acted without, in excess, or with such grave abuse of
discretion that such action ousts it of jurisdiction.
 5

Third, a petition lacking an essential pleading or part of the case record may still be given due course or
Judicial economy, or the goal to have cases prosecuted with the least cost to the parties,68 requires that reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, or
unnecessary or frivolous reviews of orders by the trial court, which facilitate the resolution of the main that it will serve the higher interest of justice that the case be decided on the merits.79
merits of the case, be reviewed together with the main merits of the case. After all, it would be more
Although Magsino referred to a petition for review under Rule 42 before the Court of Appeals, the
efficient for an appellate court to review a case in its entire context when the case is finally disposed.
procedural guideposts cited in Magsino may apply to this case since the contents of a pleading under
Rule 4280 are substantially the same as the contents of a pleading under Rule 45,81 in that both
The question of whether intervention is proper is a question of law. Settled is the distinction between a
procedural rules require the submission of "material portions of the record as would support the
question of law and a question of fact. A question of fact arises when there is doubt as to the truth or
allegations of the petition."82chanrobleslaw
falsity of certain facts.69 A question of law, on the other hand, arises when "the appeal raises doubt as
to the applicable law on a certain set of facts."70 The test often used by this Court to determine whether
In support of its Petition for Review on Certiorari, petitioner attached the Court of Appeals Decision
there is a question of fact or a question of law "is not the appellation given to such question by the
dated August 31, 2004,83 the Resolution dated January 31, 2006,84 and the Amended Decision dated
party raising the same; rather, it is whether the appellate court can determine the issue raised without
August 30, 2006.85 The Court of Appeals Resolution and Amended Decision quoted extensive portions of
reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it is a question of
its rollo in support of its rulings.86 These conclusions were sufficient to convince this Court not to
fact."71chanrobleslaw
outright dismiss the Petition but to require respondents to first comment on the Petition, in satisfaction
of the first and second procedural guideposts in Magsino.
Petitioner raises the question of whether Republic Act No. 165 allows the Court of Appeals to grant a
motion for intervention. This necessarily requires a determination of whether Rule 19 of the Rules of
Upon filing of its Consolidated Reply,87 petitioner was able to attach the following additional documents:
Court72 applies in appeals of cases filed under Republic Act No. 165. The determination of this question
does not require a review of re-evaluation of the evidence. It requires a determination of the applicable
law.
(1) Petition for Review filed before the Court of Appeals;88
II
(2) Letters dated July 18, 1995, December 12, 1995, and December 29, 1995;89
If a petition fails to attach material portions of the record, it may still be given due course if it falls (3) Declaration of Ms. Miriam Meconnahey dated June 25, 2002;90
under certain exceptions. Although Rule 45, Section 4 of the Rules of Court requires that the petition
"be accompanied by . . . such material portions of the record as would support the petition," the failure (4) Spreadsheet of petitioner's patent applications handled by Atty. Mapili;91
to do so will not necessarily warrant the outright dismissal of the complaint.73chanrobleslaw
(5) Power of Attorney and Appointment of Resident Agent dated September 26, 1996;92
Respondent Therapharma, Inc. argues that the Petition should have been outright dismissed since it (6) Letter dated December 19, 2000 requesting an Office Action on Patent Application No. 35526;93
failed to attach certain documents to support its factual allegations and legal arguments, particularly:
the annexes of the Petition for Review it had filed before the Court of Appeals and the annexes in the (7) Paper No. 2 dated January 30, 2002;94
Motion for Leave to Intervene it had filed.74 It argues that petitioner's failure to attach the documents
violates Rule 45, Section 4, which requires the submission of material portions of the (8) Petition for Revival dated January 30, 2002 with attached Power of Attorney and Appointment
record.75chanrobleslaw of Resident Agent;95

(9) Resolution dated July 24, 2002 by Director of the Bureau of Patents;96 and
On the other hand, petitioner argues that it was able to attach the Court of Appeals Decision dated
August 31, 2004, the Resolution dated January 31, 2006, and the Amended Decision dated August 30, (10) Notice of and Memorandum on Appeal before the Director-General of the Intellectual Property
2006, all of which were sufficient for this Court to give due course to its Petition.76chanrobleslaw Office.97

In Magsino v. De Ocampo,77 this Court applied the procedural guideposts in Galvez v. Court of The third procedural guidepost in Magsino was complied with upon the submission of these documents.
Appeals78 in determining whether the Court of Appeals correctly dismissed a petition for review under Petitioner, therefore, has substantially complied with Rule 45, Section 4 of the Rules of Court.
Rule 42 for failure to attach relevant portions of the record. Thus:
In Galvez v. Court of Appeals, a case that involved the dismissal of a petition for certiorari to assail an
unfavorable ruling brought about by the failure to attach copies of all pleadings submitted and other III
material portions of the record in the trial court (like the complaint, answer and position paper) as
would support the allegations of the petition, the Court recognized three guideposts for the CA to Appeal is not a right but a mere privilege granted by statute.98 It may only be exercised in accordance
consider in determining whether or not the rules of procedures should be relaxed, as follows: with the law that grants it.
First, not all pleadings and parts of case records are required to be attached to the petition. Only those
which are relevant and pertinent must accompany it. The test of relevancy is whether the document in Accordingly, the Court of Appeals is not bound by the rules of procedure in administrative agencies. The
question will support the material allegations in the petition, whether said document will make out procedural rules of an administrative agency only govern proceedings within the agency. Once the Court
a prima facie case of grave abuse of discretion as to convince the court to give due course to the of Appeals has given due course to an appeal from a ruling of an administrative agency, the
petition. proceedings before it are governed by the Rules of Court.

Second, even if a document is relevant and pertinent to the petition, it need not be appended if it is However, petitioner argues that intervention should not have been allowed on appeal99 since the revival
shown that the contents thereof can also [sic] found in another document already attached to the of a patent application is ex parte and is "strictly a contest between the examiner and the
petition. Thus, if the material allegations in a position paper are summarized in a questioned judgment, applicant"100 under Sections 78101 and 79102 of the 1962 Revised Rules of Practice.103 It argues that the
it will suffice that only a certified true copy of the judgment is attached. disallowance of any intervention is to ensure the confidentiality of the proceedings under Sections 13
and 14 of the 1962 Revised Rules of Practice.104chanrobleslaw
 6

Rule 19 of the Rules of Court provides that a court has the discretion to determine whether to give due
Respondents argue that the 1962 Revised Rules of Practice is only applicable before the Intellectual course to an intervention. Rule 19, Section 1 states:
Property Office.105 In particular, respondent Therapharma, Inc. argues that the issue before the Court of RULE 19
Appeals was beyond the realm of patent examination proceedings since it did not involve the INTERVENTION
patentability of petitioner's invention.106 It further argues that its intervention did not violate the
confidentiality of the patent application proceedings since petitioner was not required to divulge SECTION 1. Who may intervene. — A person who has a legal interest in the matter in litigation, or in
confidential information regarding its patent application.107chanrobleslaw the success of either of the parties, or an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the custody of the court or of an officer
In the 1962 Revised Rules of Practice, final decisions of the Director of Patents are appealed to this thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether
Court and governed by Republic Act No. 165. In particular: or not the intervention will unduly delay or prejudice the adjudication of the rights of the original
PART X parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.
PETITION AND APPEALS
The only questions the court need to consider in a motion to intervene are whether the intervenor has
standing to intervene, whether the motion will unduly delay the proceedings or prejudice rights already
....
established, and whether the intervenor's rights may be protected in a separate action.108chanrobleslaw
CHAPTER IV
If an administrative agency's procedural rules expressly prohibit an intervention by third parties, the
APPEALS TO THE SUPREME COURT FROM FINAL ORDERS OR DECISIONS OF THE DIRECTOR OF
prohibition is limited only to the proceedings before the administrative agency. Once the matter is
PATENTS IN EX PARTE AND INTER PARTES PROCEEDINGS
brought before the Court of Appeals in a petition for review, any prior prohibition on intervention does
not apply since the only question to be determined is whether the intervenor has established a right to
265. Appeals to the Supreme Court in ex parte and inter partes proceedings.—Any person who is
intervene under the Rules of Court.
dissatisfied with the final decision of the Director of Patents, (affirming that of a Principal Examiner)
denying him a patent for an invention, industrial design or utility model; any person who is dissatisfied
In this case, respondent Therapharma, Inc. filed its Motion for Leave to Intervene109 before the Court of
with any final decision of the Director of Patents (affirming that of the Executive Examiner) in any
Appeals, not before the Intellectual Property Office. In assessing whether to grant the intervention, the
proceeding; and any party who is dissatisfied with any final decision of the Director of Patents in
Court of Appeals considered respondent Therapharma, Inc.'s legal interest in the case and its other
an inter partes proceeding, may appeal such final decision to the Supreme Court within thirty days from
options for the protection of its interests.110 This was within the discretion of the Court of Appeals under
the date he receives a copy of such decision. (Republic Act No. 165, section 16, as amended by section
the Rules of Court.
3, Republic Act No. 864.)
Respondent Therapharma, Inc. was able to show that it had legal interest to intervene in the appeal of
266. Procedure on appeal to the Supreme Court.—For the procedure on appeal to the Supreme Court,
petitioner's revival of its patent application. While its intervention may have been premature as no
from the final decisions of the Director of Patents, see sections 63 to 73, inclusive, of Republic Act No.
patent has been granted yet, petitioner's own actions gave rise to respondent Therapharma, Inc.'s right
165 (patent law).
to protect its losartan product.
Particularly instructive is Section 73 of Republic Act No. 165, which provides:
Section 73. Rules of Court applicable. — In all other matters not herein provided, the applicable Respondent Therapharma, Inc. filed an application for product registration before the Bureau of Food
provisions of the Rules of Court shall govern. and Drugs on June 4, 2003 and was granted a Certificate of Product Registration on January 27,
2004.111 It conducted patent searches from October 15, 1995 and found that no patent application for
Republic Act No. 165 has since been amended by Republic Act No. 8293, otherwise known as the
losartan had been filed either before the Bureau of Patents, Trademarks, and Technology Transfer or
Intellectual Property Code of the Philippines (Intellectual Property Code), in 1997. This is the applicable
before the Intellectual Property Office.112chanrobleslaw
law with regard to the revival of petitioner's patent application. Section 7(7.1)(a) of the Intellectual
Property Code states:
As early as December 11, 2003, petitioner through Merck was already sending communications
SECTION 7. The Director General and Deputies Director General. —
threatening legal action if respondent Therapharma, Inc. continued to develop and market losartan in
the Philippines. The letter stated:
7.1. Functions. — The Director General shall exercise the following powers and functions:
Merck is strongly committed to the protection of its valuable intellectual property rights, including the
subject losartan patents. While fair competition by sale of pharmaceutical products which are
....
domestically produced legally is always welcomed by Merck and MSD Philippines, Merck will vigorously
pursue all available legal remedies against any unauthorized manufacturer, distributor or supplier of
b. Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal Affairs,
losartan in countries where its patents are in force and where such activity is prohibited by law. Thus,
the Director of Patents, the Director of Trademarks, and the Director of the Documentation, Information
Merck is committed to preventing the distribution of losartan in the Philippines if it originates from, or
and Technology Transfer Bureau. The decisions of the Director General in the exercise of his appellate
travels through, a country in which Merck holds patent rights.113 (Emphasis supplied)
jurisdiction in respect of the decisions of the Director of Patents, and the Director of Trademarks shall
be appealable to the Court of Appeals in accordance with the Rules of Court; and those in respect of the This letter was presented before the Court of Appeals, which eventually granted the revival of the
decisions of the Director of Documentation, Information and Technology Transfer Bureau shall be patent application in its August 31, 2004 Decision. Petitioner had no pending patent application for its
appealable to the Secretary of Trade and Industry[.] (Emphasis supplied) losartan product when it threatened respondent Therapharma, Inc. with legal action.114chanrobleslaw
Thus, it is the Rules of Court, not the 1962 Revised Rules of Practice, which governs the Court of
Respondent Therapharma, Inc. expressed its willingness to enter into a Non-Use and Confidentiality
Appeals' proceedings in appeals from the decisions of the Director-General of the Intellectual Property
Contract if there was a pending patent application.115 After several negotiations on the clauses of the
Office regarding the revival of patent applications.
contract,116 the parties were unable to come to an agreement. In its letter dated May 24,
2004,117 respondent Therapharma, Inc. expressed its frustration on petitioner's refusal to give a clear
answer on whether it had a pending patent application:
 7

For easy reference, we have reproduced below paragraph 5 of the Confidentiality and Non-Use During the interpellations before the House of Representatives, then Representative Neptali Gonzales II
Agreement ("Confidentiality Agreement"), underscoring your proposed amendment: (Gonzales) explained that under the Intellectual Property Code, the period of protection would have
"THERAPHARMA agrees that upon receipt of Specifications and Claims of Application No. 35526 or at been shortened because of the publication requirement:
any time thereafter, before it becomes part of the public domain, through no fault of THERAPHARMA, it MR. TAÑADA. Under the proposed measure, Your Honor, what is the period of protection that is given to
will not, either directly or indirectly, alone, or through, on behalf of, or in conjunction with any other the holder of the patent registered?
person or entity, make use of any information contained therein, particularly the product covered by its
claims and the equivalents thereof, in any manner whatsoever." MR. GONZALES. Seventeen years from grant of patent, Mr. Speaker. Unlike before . . .
We find your proposed insertion odd. What may be confidential, and which we agree you have every
MR. TAÑADA. Under the present law, Mr. Speaker.
right to protect by way of the Confidentiality Agreement, are the Specifications and Claims in the patent
application, not the product per se. The product has been in the market for years. Hence, how can it be
MR. GONZALES. I mean 17 years from filing, Mr. Speaker, unlike before which is 20 years from grant.
confidential? Or is the ambiguity intended to create a legal handle because you have no cause of action
Okay.
against us should we launch our own version of the losartan product?
I am sorry, Mr. Speaker. Seventeen years from filing under the existing law, 20 years from grant under
....
the proposed measure. It would appear, Mr. Speaker, that the proposed measure seeks to extend the
grant of the patent.
Finally, the questions we posed in our previous letters are plain and simple — Is the Philippine Patent
Application No. 35526 still pending before the IPO, i.e., it has neither been withdrawn by
MR. TAÑADA. But you have made the period of protection longer, Mr. Speaker.
your licensor nor denied registration by the IPO for any reason whatsoever? When did your
licensor file said application with the IPO? These questions are easy to answer, unless there is an
MR. GONZALES. On the contrary, Mr. Speaker, when a similar question was previously propounded
intention to mislead. You are also aware that the IPO is the only government agency that can grant
before, actually Mr. Speaker, it may decrease in fact the period of protection, Mr. Speaker. Because
letters patent. This is why we find disturbing your statement that the pendency of the patent application
unlike before 17 years from grant, Mr. Speaker, now 20 years from application or from filing but
before the IPO is "not relevant". Hence, unless we receive unequivocal answers to the questions above,
actually, Mr. Speaker, it normally takes three to four years before a patent is actually granted even
we regret that we cannot agree to execute the Confidentiality Agreement; otherwise, we may be
under the proposed measure. Because as you can see[,] publication in the BPTTT Gazette would even
acknowledging by contract a right that you do not have, and never will have, by law.118 (Emphasis and
taken place after 18 months from filing. In other words, the procedure itself is such a manner that
underscoring in the original)
normally takes a period of about three years to finally grant the patent. So even if 20 years is given
The threat of legal action against respondent Therapharma, Inc. was real and imminent. If respondent from the time of filing actually in essence it will be the same, Mr. Speaker, because under the existing
Therapharma, Inc. waited until petitioner was granted a patent application so it could file a petition for law 17 years from grant. But even under our existing law from the time that a patent application is filed
compulsory licensing and petition for cancellation of patent under Section 240119 and Section 247120 of it also takes about three to four years, Mr. Speaker, to grant the same.
the 1962 Revised Rules of Practice,121 its continued marketing of Lifezar would be considered as an
infringement of petitioner's patent. Now, why from filing, Mr. Speaker? Because the patent holder applicant is now required to publish in a
manner easily understood by a person trained or with the same skill as that of a patent holder. And
Even assuming that the Intellectual Property Office granted the revival of Philippine Patent Application from that time this is published, this process covered by the patent is already made available. In fact,
No. 35526 back in 2000, petitioner's claim of absolute confidentiality in patent proceedings is from the time that it is published, any interested person may even examine and go over the records as
inaccurate. filed with the BPTTT and, therefore, this new technology or new invention is now made available to
persons equipped or possessed with the same skills as that of the patent holder. And that is the reason
In the 1962 Revised Rules of Practice, the Bureau of Patents, Trademarks, and Technology Transfer why the patent is — the time of the patent is now tacked from the time it is filed because as a
previously required secrecy in pending patent applications. Section 13 states: compromise it is now mandatory to publish the said patent together with its description - the
13. Pending applications are preserved in secrecy. — No information will be given to anyone respecting description of the process and even would, at times demand the deposit of sample of the industrial
the filing by any particular person of any application for a patent, the pendency of any particular case design, Mr. Speaker.128
before the Office, or the subject matter of any particular application, unless the same is authorized by
Gonzales further clarified that the publication requirements of the Intellectual Property Code would
the applicant in writing, and unless it shall be necessary, in the opinion of the Director of Patents for the
necessarily shorten the period for confidentiality of patent applications:
proper conduct of business before the Office.
MR. MONFORT. Now, another question is, (another is) you know, the time from the filing of the date up
The Intellectual Property Code, however, changed numerous aspects of the old patent law. The to publication which is the period of pendency or confidentiality, may I know how many years will it
Intellectual Property Code was enacted not only to amend certain provisions of existing laws on take, that confidentiality period, variability.
trademark, patent, and copyright, but also to honor the country's commitments under the World Trade
Organization - Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), MR. GONZALES. Eighteen months, Mr. Speaker.
a treaty that entered force in the Philippines on January 1, 1995.122chanrobleslaw
MR. MONFORT. How many?
The mandatory disclosure requirement in the TRIPS Agreement123 precipitated the shift from a first-to-
invent system to a first-to-file system. The first-to-file system required citizens of foreign countries to MR. GONZALES. Eighteen months.
register their patents in the Philippines before they can sue for infringement.124chanrobleslaw
MR. MONFORT. I do not think it is 18 months.
Lawmakers, however, expressed their concern over the extension of the period of protection for
registered patents.125 Under Section 21126 of Republic Act No. 165, a patent had a term of 17 years. The MR. GONZALES. It is provided for in the law, Mr. Speaker, because prior to the publication, naturally,
Intellectual Property Code extended the period to 20 years.127chanrobleslaw the records become confidential because the essence of a patent, trademark, or copyright is to give the
author or the inventor exclusive right to work on his own invention. And that is his invention, and
 8

naturally, it is but right that he should have the exclusive right over his invention. eight (8) years constitutes actual abandonment.138 It also points out that from the time petitioner
submitted its new Special Power of Attorney on September 29, 1996, it took them another four (4)
On the other hand, the law requires that after 18 months, it should now be published. When it is now years to request a status update on its application.139chanrobleslaw
published, naturally, it ceases to be confidential in character because it is now ready for examination. It
is now ready for possible copying of any interested person because the application, as we have Under Chapter VII, Section 111(a) of the 1962 Revised Rules of Practice, a patent application is deemed
repeatedly said on the floor, would require the filing of a description of the invention that can be carried abandoned if the applicant fails to prosecute the application within four months from the date of
out by a person similarly trained in the arts and sciences as that of the patent holder.129 the mailing of the notice of the last action by the Bureau of Patents, Trademarks, and Technology
Transfer, and not from applicant's actual notice. Section 111 (a) states:
Thus, the absolute secrecy required by the 1962 Revised Rules of Practice would not be applicable to a
Chapter VII
patent application before the Intellectual Property Office. Section 13 of the 1962 Revised Rules of
TIME FOR RESPONSE BY APPLICANT; ABANDONMENT OF APPLICATION
Practice does not appear in the Intellectual Property Code,130 in the Rules and Regulations on
Inventions,131 or in the Revised Implementing Rules and Regulations for Patents, Utility Models and
111. Abandonment for failure to respond within the time limit. — (a) If an applicant fails to prosecute
Industrial Design.132 The Intellectual Property Code now states that all patent applications must be
his application within four months after the date when the last official notice of action by the Office was
published in the Intellectual Property Office Gazette and that any interested party may inspect all
mailed to him, or within such time as may be fixed (rule 112), the application will become abandoned.
documents submitted to the Intellectual Property Office. The patent application is only
confidential before its publication. Sections 44 and 45 of the Intellectual Property Code provide: According to the records of the Bureau of Patents, Trademarks, and Technology Transfer Chemical
SECTION 44. Publication of Patent Application. — Examining Division, petitioner filed Philippine Patent Application No. 35526 on July 10, 1987. It was
assigned to an examiner on June 7, 1988. An Office Action was mailed to petitioner's agent, Atty.
44.1. The patent application shall be published in the IPO Gazette together with a search document Mapili, on July 19, 1988. Because petitioner failed to respond within the allowable period, the
established by or on behalf of the Office citing any documents that reflect prior art, after the expiration application was deemed abandoned on September 20, 1988.140 Under Section 113, petitioner had until
of eighteen (18) months from the filing date or priority date. January 20, 1989 to file for a revival of the patent application. Its Petition for Revival, however, was
filed on May 30, 2002,14113 years after the date of abandonment.
44.2. After publication of a patent application, any interested party may inspect the application
documents filed with the Office. Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code, Rule 930 of
the Rules and Regulations on Inventions, and Rule 929 of the Revised Implementing Rules and
44.3. The Director General, subject to the approval of the Secretary of Trade and Industry, may prohibit Regulations for Patents, Utility Models and Industrial Design. The period of four (4) months from the
or restrict the publication of an application, if in his opinion, to do so would be prejudicial to the national date of abandonment, however, remains unchanged. The Intellectual Property Code even provides for a
security and interests of the Republic of the Philippines. (n) shorter period of three (3) months within which to file for revival:
SECTION 133. Examination and Publication. —
SECTION 45. Confidentiality Before Publication. — A patent application, which has not yet been
published, and all related documents, shall not be made available for inspection without the consent of ....
the applicant.
133.4. An abandoned application may be revived as a pending application within three (3) months from
It was inaccurate, therefore, for petitioner to argue that secrecy in patent applications prevents any
the date of abandonment, upon good cause shown and the payment of the required fee.
intervention from interested parties. The confidentiality in patent applications under the Intellectual
Property Code is not absolute since a party may already intervene after the publication of the Rule 930 of the Rules and Regulations on Inventions provides:
application. Rule 930. Revival of application. - An application deemed withdrawn for failure to prosecute may be
revived as a pending application within a period of four (4) months from the mailing date of the notice
IV of withdrawal if it is shown to the satisfaction of the Director that the failure was due to fraud, accident,
mistake or excusable negligence.
An abandoned patent application may only be revived within four (4) months from the date of
abandonment. No extension of this period is provided by the 1962 Revised Rules of Practice. Section A petition to revive an application deemed withdrawn must be accompanied by (1) a showing of the
113 states: cause of the failure to prosecute, (2) a complete proposed response, and (3) the required fee.
113. Revival of abandoned application. — An application abandoned for failure to prosecute may be
revived as a pending application if it is shown to the satisfaction of the Director that the delay was An application not revived in accordance with this rule shall be deemed forfeited.
unavoidable. An abandoned application may be revived as a pending application within four months Rule 929 of the Revised Implementing Rules and Regulations for Patents, Utility Models and Industrial
from the date of abandonment upon good cause shown and upon the payment of the required fee of Design provides:
P25. An application not revived within the specified period shall be deemed forfeited. Rule 929. Revival of Application. - An application deemed withdrawn for failure to prosecute may be
Petitioner argues that it was not negligent in the prosecution of its patent application133 since it was revived as a pending application within a period of four (4) months from the mailing date of the notice
Atty. Mapili or his heirs who failed to inform it of crucial developments with regard to its patent of withdrawal if it is shown to the satisfaction of the Director that the failure was due to fraud, accident,
application.134 It argues that as a client in a foreign country, it does not have immediate supervision mistake, or excusable negligence.
over its local counsel so it should not be bound by its counsel's negligence.135 In any case, it complied
with all the requirements for the revival of an abandoned application under Rule 113 of the 1962 A petition to revive an application deemed withdrawn shall be accompanied by:
Revised Rules of Practice.136chanrobleslaw
(a) A showing of a justifiable reason for the failure to prosecute;
Respondents, on the other hand, argue that petitioner was inexcusably and grossly negligent in the (b) A complete proposed response; and
prosecution of its patent application since it allowed eight (8) years to pass before asking for a status (c) Full payment of the required fee.
update on its application.137 Respondent Intellectual Property Office argues that petitioner's inaction for
 9

No revival shall be granted to an application that has been previously revived with cost. that had already been archived. It was not the Bureau's duty to resurrect previous notices of forfeited
and abandoned applications to be sent to new resident agents unless a specific status update was
An application not revived in accordance with this Rule shall be deemed forfeited. requested. Considering that petitioner only requested a status update on December 14, 2000, it was
only then that the Intellectual Property Office would start sending notices to it.
Even if the delay was unavoidable, or the failure to prosecute was due to fraud, accident, mistake, or
excusable negligence, or the Petition was accompanied by a complete proposed response, or all fees
Contrary to the posturing of petitioner, Schuartz is applicable.
were paid, the Petition would still be denied since these regulations only provide a four (4)-month
period within which to file for the revival of the application. The rules do not provide any exception that
In Schuartz, several foreign inventors seeking to file patent applications in the Philippines hired the law
could extend this four (4)-month period to 13 years.
firm Siguion Reyna, Montecillo and Ongsiako to process their applications.151 The Bureau of Patents,
Trademarks, and Technology Transfer mailed the law firm several notices of abandonment on its patent
Petitioner's patent application, therefore, should not be revived since it was filed beyond the allowable
applications from June 1987 to September 1987. The law firm only found out about this in December
period.
1987, after it dismissed two (2) of its employees in charge of handling correspondences from the
Bureau.152 The law firm filed petitions for revival of its patent applications from March 1988, all of which
V were denied by the Director of the Bureau of Patents for being filed out of time.153 An appeal was
subsequently filed before the Court of Appeals but was dismissed for being filed beyond the
Even assuming that the four (4)-month period could be extended, petitioner was inexcusably negligent reglementary period.154chanrobleslaw
in the prosecution of its patent application.
This Court found that although the Court of Appeals may have erred in counting the period for appeal, it
Negligence is inexcusable if its commission could have been avoided through ordinary diligence and could not grant the Petition. This Court stated:
prudence.142 It is also settled that negligence of counsel binds the client as this "ensures against the [Petitioners lost sight of the fact that the petition could not be granted because of laches. Prior to the
resulting uncertainty and tentativeness of proceedings if clients were allowed to merely disown their filing of the petition for revival of the patent application with the Bureau of Patents, an unreasonable
counsels' conduct."143chanrobleslaw period of time had lapsed due to the negligence of petitioners' counsel. By such inaction, petitioners
were deemed to have forfeited their right to revive their applications for patent.
Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in failing to respond to the Office
Action sent by the Bureau of Patents, Trademarks, and Technology Transfer on June 19, 1988. Because Facts show that the patent attorneys appointed to follow up the applications for patent registration had
of his negligence, petitioner's patent application was declared abandoned. He was again negligent when been negligent in complying with the rules of practice prescribed by the Bureau of Patents. The firm had
he failed to revive the abandoned application within four (4) months from the date of abandonment. been notified about the abandonment as early as June 1987, but it was only after December 7, 1987,
when their employees Bangkas and Rosas had been dismissed, that they came to know about it. This
Petitioner tries to disown Atty. Mapili's conduct by arguing that it was not informed of the abandonment clearly showed that petitioners' counsel had been remiss in the handling of their clients' applications.
of its patent application or of Atty. Mapili's death. By its own evidence, however, petitioner requested a
status update from Atty. Mapili only on July 18, 1995, eight (8) years after the filing of its "A lawyer's fidelity to the cause of his client requires him to be ever mindful of the responsibilities that
application.144It alleged that it only found out about Atty. Mapili's death sometime in March 1996, as a should be expected of him. A lawyer shall not neglect a legal matter entrusted to him." In the instant
result of its senior patent attorney's visit to the Philippines. 145 Although it was in petitioner's discretion case, petitioners' patent attorneys not only failed to take notice of the notices of abandonment, but they
as a foreign client to put its complete trust and confidence on its local resident agent, there was a failed to revive the application within the four-month period, as provided in the rules of practice in
correlative duty on its part to be diligent in keeping itself updated on the progress of its patent patent cases. These applications are deemed forfeited upon the lapse of such period.155 (Emphasis
applications. Its failure to be informed of the abandonment of its patent application was caused by its supplied)
own lack of prudence.
Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in Schuartz had
In Bernardo v. Court of Appeals,146 "[n]o prudent party will leave the fate of his case entirely to his actual notice of abandonment while petitioner here was only able to have actual notice when it received
lawyer . . . . It is the duty of a party-litigant to be in contact with his counsel from time to time in order Paper No. 2.
to be informed of the progress of his case."147chanrobleslaw
The four (4)-month period in Section 111156 of the 1962 Revised Rules of Practice, however, is not
Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on time, it was counted from actual notice of abandonment but from mailing of the notice. Since it appears from the
clearly negligent when it subsequently failed to immediately apprise itself of the status of its patent Intellectual Property Office's records that a notice of abandonment was mailed to petitioner's resident
application. agent on July 19, 1988,157 the time for taking action is counted from this period. Petitioner's patent
application cannot be revived simply because the period for revival has already lapsed and no extension
Upon learning of Atty. Mapili's death, petitioner issued a Power of Attorney and Appointment of Resident of this period is provided for by the 1962 Revised Rules of Practice.
Agent in favor of Bito, Lozada, Ortega & Castillo on March 25, 1996.148 Despite the immediate action in
the substitution of its resident agent, it only requested a status update of Philippine Patent Application VI
No. 35526 from the Intellectual Property Office on December 14, 2000,149 or four (4) years after it
learned of Atty. Mapili's death. The right of priority given to a patent applicant is only relevant when there are two or more conflicting
patent applications on the same invention. Because a right of priority does not automatically grant
Petitioner attempts to explain that it took them four (4) years to request a status update because the letters patent to an applicant, possession of a right of priority does not confer any property rights on the
Bureau of Patents, Trademarks, and Technology Transfer failed to take any action when it submitted its applicant in the absence of an actual patent.
Power of Attorney and Appointment of Resident Agent in favor of Bito, Lozada, Ortega & Castillo.150 The
Power of Attorney, however, shows that it was only to inform the Bureau that all notices relating to its Petitioner argues that its patent application was filed on July 10, 1987, within 12 months from the prior
pending patent applications should be sent to it. Philippine Patent Application No. 35526 was declared filing of a U.S. patent application on July 11, 1986.158 It argues that it is protected from becoming part
abandoned on September 20, 1988. As far as the Bureau was concerned, it was a forfeited application of the public domain because of convention priority under the Paris Convention for the Protection of
 10

Industrial Property and Section 9 of Republic Act No. 165.159chanrobleslaw The grant of a patent provides protection to the patent holder from the indiscriminate use of the
invention. However, its mandatory publication also has the correlative effect of bringing new ideas into
Respondent Therapharma, Inc., on the other hand, argues that a mere patent application does not vest the public consciousness. After the publication of the patent, any person may examine the invention
any right in the applicant before the issuance of the patent.160 It argues that the "priority date" argued and develop it into something further than what the original patent holder may have envisioned. After
by petitioner is only relevant in determining who has a better right to the patent among the other the lapse of 20 years,172 the invention becomes part of the public domain and is free for the public to
applicants who subsequently apply for the same invention.161chanrobleslaw use. In Pearl and Dean v. Shoemart, Inc.:173
To be able to effectively and legally preclude others from copying and profiting from the invention, a
Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent applicant patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to
who has previously applied for a patent in a country that grants the same privilege to Filipinos. Section bring new designs and technologies into the public domain through disclosure. Ideas, once disclosed to
31 states: the public without the protection of a valid patent, are subject to appropriation without significant
SECTION 31. Right of Priority. — An application for patent filed by any person who has previously restraint.
applied for the same invention in another country which by treaty, convention, or law affords similar
privileges to Filipino citizens, shall be considered as filed as of the date of filing the foreign application: On one side of the coin is the public which will benefit from new ideas; on the other are the inventors
Provided, That: who must be protected. As held in Bauer & Cie vs. O'Donnell, "The act secured to the inventor the
exclusive right to make use, and vend the thing patented, and consequently to prevent others from
a. the local application expressly claims priority; exercising like privileges without the consent of the patentee. It was passed for the purpose of
encouraging useful invention and promoting new and useful inventions by the protection and
b. it is filed within twelve (12) months from the date the earliest foreign application was filed; and  stimulation new and useful inventions by the protection and stimulation given to inventive genius, and
was intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of
c. a certified copy of the foreign application together with an English translation is filed within six (6) such inventions and improvements."
months from the date of filing in the Philippines.
The law attempts to strike an ideal balance between the two interests:
A patent applicant with the right of priority is given preference in the grant of a patent when there are
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and
two or more applicants for the same invention. Section 29 of the Intellectual Property Code provides:
disclosure of new useful and non-obvious advances in technology and design, in return for the exclusive
SECTION 29. First to File Rule. — If two (2) or more persons have made the invention separately and
right to practice the invention for a number of years. The inventor may keep his invention secret and
independently of each other, the right to the patent shall belong to the person who filed an application
reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the
for such invention, or where two or more applications are filed for the same invention, to the applicant
community, the patent is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the
who has the earliest filing date or, the earliest priority date.
expiration of that period, the knowledge of the invention inures to the people, who are thus enabled to
Since both the United States162 and the Philippines163 are signatories to the Paris Convention for the practice it and profit by its use."
Protection of Industrial Property, an applicant who has filed a patent application in the United States
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention;
may have a right of priority over the same invention in a patent application in the
second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to
Philippines.164 However, this right of priority does not immediately entitle a patent applicant the grant of
practice the invention once the patent expires; third, the stringent requirements for patent protection,
a patent. A right of priority is not equivalent to a patent. Otherwise, a patent holder of any member-
seek to ensure that ideas in the public domain remain therefor the free use of the public."
state of the Paris Convention need not apply for patents in other countries where it wishes to exercise
its patent.
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because "in rewarding a useful invention, the rights and welfare of the
It was, therefore, inaccurate for petitioner to argue that its prior patent application in the United States
community must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining
removed the invention from the public domain in the Philippines. This argument is only relevant if
a patent are strictly observed and when a patent is issued, the limitations on its exercise are equally
respondent Therapharma, Inc. had a conflicting patent application with the Intellectual Property Office.
strictly enforced. To begin with, a genuine invention or discovery must be demonstrated lest in the
A right of priority has no bearing in a case for revival of an abandoned patent application.
constant demand for new appliances, the heavy hand of tribute be laid on each slight technological
advance in art."174 (Emphasis supplied)
VII
In addition, a patent holder of inventions relating to food or medicine does not enjoy absolute monopoly
The grant of a patent is to provide protection to any inventor from any patent infringement.165 Once an over the patent. Both Republic Act No. 165 and the Intellectual Property Code provide for compulsory
invention is disclosed to the public, only the patent holder has the exclusive right to manufacture, licensing. Compulsory licensing is defined in the Intellectual Property Code as the "grant a license to
utilize, and market the invention.166 In Creser Precision Systems v. Court of Appeals:167 exploit a patented invention, even without the agreement of the patent owner."175chanrobleslaw
Under American jurisprudence, an inventor has no common-law right to a monopoly of his invention. He
has the right to make, use and vend his own invention, but if he voluntarily discloses it, such as by Under Republic Act No. 165, a compulsory license may be granted to any applicant three (3) years after
offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives the the grant of a patent if the invention relates to food or medicine necessary for public health or
inventor the right to exclude all others. As a patentee, he has the exclusive right of making, using or safety.176 In Smith Kline & French Laboratories, Ltd. vs. Court of Appeals:177
selling the invention.168 Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the [Paris]
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the
Under the Intellectual Property Code, a patent holder has the right to "to restrain, prohibit and explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the
prevent"169 any unauthorized person or entity from manufacturing, selling, or importing any product grant of a compulsory license was not only to afford others an opportunity to provide the public with the
derived from the patent. However, after a patent is granted and published in the Intellectual Property quantity of the patented product, but also to prevent the growth of monopolies. Certainly, the growth of
Office Gazette,170 any interested third party "may inspect the complete description, claims, and monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and which our
drawings of the patent."171chanrobleslaw Congress likewise wished to prevent in enacting R.A. No. 165.178
 11

The patent holder's proprietary right over the patent only lasts for three (3) years from the grant of the is granted a patent for its losartan products, Cozaar and Hyzaar, the loss of competition in the market
patent, after which any person may be allowed to manufacture, use, or sell the invention subject to the for losartan products may result in higher prices. For the protection of public interest, Philippine Patent
payment of royalties: Application No. 35526 should be considered a forfeited patent application.
The right to exclude others from the manufacturing, using, or vending an invention relating to food or
medicine should be conditioned to allowing any person to manufacture, use, or vend the same after a WHEREFORE, the Petition is DENIED. The Resolution dated January 31, 2006 and the Amended
period of three years from the date of the grant of the letters patent. After all, the patentee is not Decision dated August 30, 2006 of the Court of Appeals are AFFIRMED.
entirely deprived of any proprietary right. In fact, he has been given the period of three years of
complete monopoly over the patent. Compulsory licensing of a patent on food or medicine without SO ORDERED.
regard to the other conditions imposed in Section 34 is not an undue deprivation of proprietary interests
over a patent right because the law sees to it that even after three years of complete monopoly
something is awarded to the inventor in the form of a bilateral and workable licensing agreement and a
reasonable royalty to be agreed upon by the parties and in default of such agreement, the Director of
Patent may fix the terms and conditions of the license.179
A patent is a monopoly granted only for specific purposes and objectives. Thus, its procedures must be
complied with to attain its social objective. Any request for leniency in its procedures should be taken in
this context. Petitioner, however, has failed to convince this court that the revival of its patent
application would have a significant impact on the pharmaceutical industry.

Hypertension, or high blood pressure, is considered a "major risk factor for cardiovascular
disease"180 such as "heart disease, stroke, kidney failure and blindness."181 In a study conducted by the
World Health Organization, 25% of adults aged 21 years and older in the Philippines suffer from high
blood pressure.182 According to the Department of Health, heart disease remains the leading cause of
mortality in the Philippines.183 Angiotensin II Receptor Blocking Imidazole or "losartan" is one of the
medications used for the treatment of hypertension.184chanrobleslaw

In a study conducted by the Philippine Institute for Development Studies, "affordability of drugs remains
a serious problem"185 in the Philippines. It found that because of the cost of drugs, accessibility to drugs
become prohibitive for the lowest-earning households and are "even more prohibitive for the
unemployed and indigent."186 Several measures have been enacted by the government to address the
high costs of medicine, among them, parallel drug importation187 and the passage of Republic Act No.
9502, otherwise known as the Universally Accessible Cheaper and Quality Medicines Act of
2008.188 Figures submitted by respondent Therapharma, Inc., however, also show that the presence of
competition in the local pharmaceutical market may ensure the public access to cheaper medicines.

According to respondent Therapharma, Inc., the retail price of petitioner's losartan product, Cozaar,
decreased within one (1) month of respondent Therapharma, Inc.'s entry into the market:189
BRAND TRADER RETAIL PRICE RETAIL PRICE
 As of Lifezar's first entry into the  Within one month from Lifezar's
market on June 4, 2004 entry or by July 4, 2004

LIFEZAR Therapharma 50 mg - P20.20 50mg - P20.20

50mg - P39.50 50mg - P39.50

COZAAR Merck
 100mg - P55.00  100 - P44.00
Respondent Therapharma, Inc. also presented figures showing that there was a 44% increase in the
number of losartan units sold within five (5) months of its entry into the market.190 More Filipinos are
able to purchase losartan products when there are two (2) different players providing competitive prices
in the market.

Lifezar, and another of respondent Therapharma, Inc.'s products, Combizar, have also been
recommended as cheaper alternative losartan medication, since they were priced "50 percent less than
foreign brands."191chanrobleslaw

Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition for Revival is
granted. Even without a pending patent application and the absence of any exception to extend the
period for revival, petitioner was already threatening to pursue legal action against respondent
Therapharma, Inc. if it continued to develop and market its losartan product, Lifezar.192 Once petitioner
 12

G.R. No. 148222               August 15, 2003 Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at
SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that
aside from the two (2) reported SM branches, light boxes similar to those it manufactures were also
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,
installed in two (2) other SM stores. It further discovered that defendant-appellant North Edsa
vs.
Marketing Inc. (NEMI), through its marketing arm, Prime Spots Marketing Services, was set up
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING, INCORPORATED, Respondents.
primarily to sell advertising space in lighted display units located in SMI’s different branches. Pearl and
Dean noted that NEMI is a sister company of SMI.
DECISION
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and
CORONA, J.: NEMI enjoining them to cease using the subject light boxes and to remove the same from SMI’s
establishments. It also demanded the discontinued use of the trademark "Poster Ads," and the payment
to Pearl and Dean of compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl &
Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision1 of the Court of Appeals reversing the
October 31, 1996 decision2 of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light
which declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable boxes and NEMI took down its advertisements for "Poster Ads" from the lighted display units in SMI’s
for infringement of trademark and copyright, and unfair competition. stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant
case for infringement of trademark and copyright, unfair competition and damages.
FACTUAL ANTECEDENTS
In denying the charges hurled against it, SMI maintained that it independently developed its poster
panels using commonly known techniques and available technology, without notice of or reference to
The May 22, 2001 decision of the Court of Appeals3 contained a summary of this dispute: Pearl and Dean’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
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of Ads" is a generic term which cannot be appropriated as a trademark, and, as such, registration of such
advertising display units simply referred to as light boxes. These units utilize specially printed posters mark is invalid. It also stressed that Pearl and Dean is not entitled to the reliefs prayed for in its
sandwiched between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure complaint since its advertising display units contained no copyright notice, in violation of Section 27 of
a Certificate of Copyright Registration dated January 20, 1981 over these illuminated display units. The P.D. 49. SMI alleged that Pearl and Dean had no cause of action against it and that the suit was purely
advertising light boxes were marketed under the trademark "Poster Ads". The application for intended to malign SMI’s good name. On this basis, SMI, aside from praying for the dismissal of the
registration of the trademark was filed with the Bureau of Patents, Trademarks and Technology Transfer case, also counterclaimed for moral, actual and exemplary damages and for the cancellation of Pearl
on June 20, 1983, but was approved only on September 12, 1988, per Registration No. 41165. From and Dean’s Certification of Copyright Registration No. PD-R-2558 dated January 20, 1981 and
1981 to about 1988, Pearl and Dean employed the services of Metro Industrial Services to manufacture Certificate of Trademark Registration No. 4165 dated September 12, 1988.
its advertising displays.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the having engaged in the business of advertising. It repleaded SMI’s averments, admissions and denials
lease and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under and prayed for similar reliefs and counterclaims as SMI."
construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and
Dean agreed. On September 11, 1985, Pearl and Dean’s General Manager, Rodolfo Vergara, submitted The RTC of Makati City decided in favor of P & D:
for signature the contracts covering SM Cubao and SM Makati to SMI’s Advertising Promotions and
Publicity Division Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned
signed. On October 4, 1985, Vergara wrote Abano inquiring about the other contract and reminding him Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright
that their agreement for installation of light boxes was not only for its SM Makati branch, but also for under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166,
SM Cubao. SMI did not bother to reply. as amended, and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24
of RA 166, as amended. Accordingly, defendants are hereby directed:
Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated (1) to pay plaintiff the following damages:
February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the
same letter, he pushed for the signing of the contract for SM Cubao.
(a) actual damages - ₱16,600,000.00,
representing profits
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to derived by defendants
fabricate its display units, offered to construct light boxes for Shoemart’s chain of stores. SMI approved as a result of infringe-
the proposal and ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its ment of plaintiff’s copyright
contract with Metro Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising from 1991 to 1992
Corporation to make the light boxes. Some 300 units were fabricated in 1991. These were delivered on
a staggered basis and installed at SM Megamall and SM City.
 13

(b) moral damages - ₱1,000.000.00 design illustrated in plaintiff’s drawings. In this case it was held that protection of the drawing does not
extend to the unauthorized duplication of the object drawn because copyright extends only to the
description or expression of the object and not to the object itself. It does not prevent one from using
(c) exemplary damages - ₱1,000,000.00
the drawings to construct the object portrayed in the drawing.

(d) attorney’s fees - ₱1,000,000.00

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v.
Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one who, without being
plus authorized, uses a copyrighted architectural plan to construct a structure. This is because the copyright
does not extend to the structures themselves.
(e) costs of suit;
In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the technical drawings
of the latter’s advertising display units.
(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which
were fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
xxx xxx xxx
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster
Ads", for destruction; and The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the
protective mantle of the Trademark Law extends only to the goods used by the first user as specified in
the certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166,
(4) to permanently refrain from infringing the copyright on plaintiff’s light boxes and its as amended, otherwise known as the Trademark Law, which reads:
trademark "Poster Ads".

SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a

Defendants’ counterclaims are hereby ordered dismissed for lack of merit. 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
SO ORDERED.4 connection with the goods, business or services specified in the certificate, subject to any conditions
and limitations stated therein." (underscoring supplied)

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

The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark
"Poster Ads" with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial recorded in the Principal Register on September 12, 1988 under Registration No. 41165 covering the
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable following products: stationeries such as letterheads, envelopes and calling cards and newsletters.
class "O" work, we have to agree with SMI when it posited that what was copyrighted were the
technical drawings only, and not the light boxes themselves, thus:
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the
defendants-appellants for their use of the words "Poster Ads", in the advertising display units in suit.
42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like Jurisprudence has interpreted Section 20 of the Trademark Law as "an implicit permission to a
plaintiff-appellant’s will not extend to the actual object. It has so been held under jurisprudence, of manufacturer to venture into the production of goods and allow that producer to appropriate the brand
which the leading case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a name of the senior registrant on goods other than those stated in the certificate of registration." The
copyright protection for a book entitled "Selden’s Condensed Ledger or Bookkeeping Simplified" which Supreme Court further emphasized the restrictive meaning of Section 20 when it stated, through Justice
purported to explain a new system of bookkeeping. Included as part of the book were blank forms and Conrado V. Sanchez, that:
illustrations consisting of ruled lines and headings, specially designed for use in connection with the
system explained in the work. These forms showed the entire operation of a day or a week or a month
on a single page, or on two pages following each other. The defendant Baker then produced forms Really, if the certificate of registration were to be deemed as including goods not specified therein, then
which were similar to the forms illustrated in Selden’s copyrighted books. The Court held that exclusivity a situation may arise whereby an applicant may be tempted to register a trademark on any and all
to the actual forms is not extended by a copyright. The reason was that "to grant a monopoly in the goods which his mind may conceive even if he had never intended to use the trademark for the said
underlying art when no examination of its novelty has ever been made would be a surprise and a fraud goods. We believe that such omnibus registration is not contemplated by our Trademark Law.
upon the public; that is the province of letters patent, not of copyright." And that is precisely the point.
No doubt aware that its alleged original design would never pass the rigorous examination of a patent While we do not discount the striking similarity between Pearl and Dean’s registered trademark and
application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by conveniently defendants-appellants’ "Poster Ads" design, as well as the parallel use by which said words were used in
resorting to a copyright registration which merely employs a recordal system without the benefit of an the parties’ respective advertising copies, we cannot find defendants-appellants liable for infringement
in-depth examination of novelty. of trademark. "Poster Ads" was registered by Pearl and Dean for specific use in its stationeries, in
contrast to defendants-appellants who used the same words in their advertising display units. Why Pearl
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. and Dean limited the use of its trademark to stationeries is simply beyond us. But, having already done
Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing so, it must stand by the consequence of the registration which it had caused.
entitled "Bridge Approach – the drawing showed a novel bridge approach to unsnarl traffic congestion".
The defendant constructed a bridge approach which was alleged to be an infringement of the new
 14

xxx xxx xxx (2) or should the light box be registered separately and protected by a patent issued by the
Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) — in
addition to the copyright of the engineering drawings?
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads" are a simple
contraction of the generic term poster advertising. In the absence of any convincing proof that "Poster
Ads" has acquired a secondary meaning in this jurisdiction, we find that Pearl and Dean’s exclusive right (3) can the owner of a registered trademark legally prevent others from using such trademark
to the use of "Poster Ads" is limited to what is written in its certificate of registration, namely, if it is a mere abbreviation of a term descriptive of his goods, services or business?
stationeries.
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster Ads".
Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes when SMI had
There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the the units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously,
monetary award granted by the lower court to Pearl and Dean has no leg to stand on. petitioner’s position was premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said drawings. In ruling that there was
no copyright infringement, the Court of Appeals held that the copyright was limited to the drawings
xxx xxx xxx
alone and not to the light box itself. We agree with the appellate court.

WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is
First, petitioner’s application for a copyright certificate — as well as Copyright Certificate No. PD-R2588
rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit.5
issued by the National Library on January 20, 1981 — clearly stated that it was for a class "O" work
under Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing.
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following Said Section 2 expressly enumerated the works subject to copyright:
errors for the Court’s consideration:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT any of the following works:
INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;
x x x           x x x          x x x
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF
PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS COMMITTED BY RESPONDENTS SM AND
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
NEMI;

x x x           x x x          x x x
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL
COURT, DESPITE THE LATTER’S FINDING, NOT DISPUTED BY THE HONORABLE COURT OF
APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which depicted the
CONTRACTS WITH PEARL & DEAN. box-type electrical devices), its claim of copyright infringement cannot be sustained.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the
NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEY’S rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the
FEES AND COSTS OF SUIT.6 subjects and by the persons, and on terms and conditions specified in the statute.7 Accordingly, it can
cover only the works falling within the statutory enumeration or description. 8
ISSUES
P & D secured its copyright under the classification class "O" work. This being so, petitioner’s copyright
protection extended only to the technical drawings and not to the light box itself because the latter was
In resolving this very interesting case, we are challenged once again to put into proper perspective four
not at all in the category of "prints, pictorial illustrations, advertising copies, labels, tags and box
main concerns of intellectual property law — patents, copyrights, trademarks and unfair competition
wraps." Stated otherwise, even as we find that P & D indeed owned a valid copyright, the same could
arising from infringement of any of the first three. We shall focus then on the following issues:
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 strict application9 of the law’s
(1) if the engineering or technical drawings of an advertising display unit (light box) are enumeration in Section 2 prevents us from giving petitioner even a little leeway, that is, even if its
granted copyright protection (copyright certificate of registration) by the National Library, is copyright certificate was entitled "Advertising Display Units." What the law does not include, it excludes,
the light box depicted in such engineering drawings ipso facto also protected by such and for the good reason: the light box was not a literary or artistic piece which could be copyrighted
copyright? under the copyright law. And no less clearly, neither could the lack of statutory authority to make the
light box copyrightable be remedied by the simplistic act of entitling the copyright certificate issued by
the National Library as "Advertising Display Units."
 15

In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without license from stimulation given to inventive genius, and was intended to secure to the public, after the lapse of the
P & D, then no doubt they would have been guilty of copyright infringement. But this was not the case. exclusive privileges granted the benefit of such inventions and improvements."
SMI’s and NEMI’s acts complained of by P & D were to have units similar or identical to the light box
illustrated in the technical drawings manufactured by Metro and EYD Rainbow Advertising, for leasing
The law attempts to strike an ideal balance between the two interests:
out to different advertisers. Was this an infringement of petitioner’s copyright over the technical
drawings? We do not think so.
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and
disclosure of new useful and non-obvious advances in technology and design, in return for the exclusive
During the trial, the president of P & D himself admitted that the light box was neither a literary not an
right to practice the invention for a number of years. The inventor may keep his invention secret and
artistic work but an "engineering or marketing invention."10 Obviously, there appeared to be some
reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the
confusion regarding what ought or ought not to be the proper subjects of copyrights, patents and
community, the patent is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the
trademarks. In the leading case of Kho vs. Court of Appeals,11 we ruled that these three legal rights are
expiration of that period, the knowledge of the invention inures to the people, who are thus enabled to
completely distinct and separate from one another, and the protection afforded by one cannot be used
practice it and profit by its use."17
interchangeably to cover items or works that exclusively pertain to the others:

The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention;
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged
second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to
with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or
practice the invention once the patent expires; third, the stringent requirements for patent protection
services (service mark) of an enterprise and shall include a stamped or marked container of goods. In
seek to ensure that ideas in the public domain remain there for the free use of the public."18
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 It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any investigation is required because "in rewarding a useful invention, the rights and welfare of the
field of human activity which is new, involves an inventive step and is industrially applicable. community must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining
a patent are strictly observed and when a patent is issued, the limitations on its exercise are equally
strictly enforced. To begin with, a genuine invention or discovery must be demonstrated lest in the
ON THE ISSUE OF PATENT INFRINGEMENT
constant demand for new appliances, the heavy hand of tribute be laid on each slight technological
advance in art."19
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for infringement
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the effect
of P & D’s copyright over its technical drawings of the said light boxes, should they be liable instead for
that a person is claiming the creation of a work. The law confers the copyright from the moment of
infringement of patent? We do not think so either.
creation20 and the copyright certificate is issued upon registration with the National Library of a sworn
ex-parte claim of creation.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired
no patent rights which could have protected its invention, if in fact it really was. And because it had no
Therefore, not having gone through the arduous examination for patents, the petitioner cannot exclude
patent, petitioner could not legally prevent anyone from manufacturing or commercially using the
others from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright
contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,12 we held that "there can be no
certificate over the technical drawings.
infringement of a patent until a patent has been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent. x x x (A)n inventor has no common law
right to a monopoly of his invention. He has the right to make use of and vend his invention, but if he Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office (IPO)
voluntarily discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. to scrutinize the light box’s eligibility as a patentable invention. The irony here is that, had petitioner
A patent, however, gives the inventor the right to exclude all others. As a patentee, he has the secured a patent instead, its exclusivity would have been for 17 years only. But through the simplified
exclusive right of making, selling or using the invention.13 On the assumption that petitioner’s procedure of copyright-registration with the National Library — without undergoing the rigor of
advertising units were patentable inventions, petitioner revealed them fully to the public by submitting defending the patentability of its invention before the IPO and the public — the petitioner would be
the engineering drawings thereof to the National Library. protected for 50 years. This situation could not have been the intention of the law.

To be able to effectively and legally preclude others from copying and profiting from the invention, a In the oft-cited case of Baker vs. Selden21 , the United States Supreme Court held that only the
patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
bring new designs and technologies into the public domain through disclosure.14 Ideas, once disclosed to copyright of a book which expounded on a new accounting system he had developed. The publication
the public without the protection of a valid patent, are subject to appropriation without significant illustrated blank forms of ledgers utilized in such a system. The defendant reproduced forms similar to
restraint.15 those illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled that:

On one side of the coin is the public which will benefit from new ideas; on the other are the inventors "There is no doubt that a work on the subject of book-keeping, though only explanatory of well known
who must be protected. As held in Bauer & Cie vs. O’Donnel,16 "The act secured to the inventor the systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a
exclusive right to make use, and vend the thing patented, and consequently to prevent others from clear distinction between the books, as such, and the art, which it is, intended to illustrate. The mere
exercising like privileges without the consent of the patentee. It was passed for the purpose of statement of the proposition is so evident that it requires hardly any argument to support it. The same
encouraging useful invention and promoting new and useful inventions by the protection and distinction may be predicated of every other art as well as that of bookkeeping. A treatise on the
 16

composition and use of medicines, be they old or new; on the construction and use of ploughs or Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate
watches or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of Court,23 where we, invoking Section 20 of the old Trademark Law, ruled that "the certificate of
drawing lines to produce the effect of perspective, would be the subject of copyright; but no one would registration issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its
contend that the copyright of the treatise would give the exclusive right to the art or manufacture own symbol only to those goods specified in the certificate, subject to any conditions and limitations
described therein. The copyright of the book, if not pirated from other works, would be valid without specified in the certificate x x x. One who has adopted and used a trademark on his goods does not
regard to the novelty or want of novelty of its subject matter. The novelty of the art or thing described prevent the adoption and use of the same trademark by others for products which are of a
or explained has nothing to do with the validity of the copyright. To give to the author of the book different description."24 Faberge, Inc. was correct and was in fact recently reiterated in Canon Kabushiki
an exclusive property in the art described therein, when no examination of its novelty has Kaisha vs. Court of Appeals.25
ever been officially made, would be a surprise and a fraud upon the public. That is the
province of letters patent, not of copyright. The claim to an invention of discovery of an art or
Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P & D to secure
manufacture must be subjected to the examination of the Patent Office before an exclusive
a trademark registration for specific use on the light boxes meant that there could not have been any
right therein can be obtained; and a patent from the government can only secure it.
trademark infringement since registration was an essential element thereof.1âwphi1

The difference between the two things, letters patent and copyright, may be illustrated by reference to
ON THE ISSUE OF UNFAIR COMPETITION
the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great
value in the healing art. If the discoverer writes and publishes a book on the subject (as
regular physicians generally do), he gains no exclusive right to the manufacture and sale of If at all, the cause of action should have been for unfair competition, a situation which was possible
the medicine; he gives that to the public. If he desires to acquire such exclusive right, he even if P & D had no registration.26 However, while the petitioner’s complaint in the RTC also cited unfair
must obtain a patent for the mixture as a new art, manufacture or composition of matter. He competition, the trial court did not find private respondents liable therefor. Petitioner did not  appeal this
may copyright his book, if he pleases; but that only secures to him the exclusive right of particular point; hence, it cannot now revive its claim of unfair competition.
printing and publishing his book. So of all other inventions or discoveries.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, competition.
gives no exclusive right to the modes of drawing described, though they may never have been known or
used before. By publishing the book without getting a patent for the art, the latter is given to the public.
By the nature of things, there can be no unfair competition under the law on copyrights although it is
applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as
xxx a trademark or tradename may, by long and exclusive use by a business (such that the name or phrase
becomes associated with the business or product in the mind of the purchasing public), be entitled to
protection against unfair competition.27 In this case, there was no evidence that P & D’s use of "Poster
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book
Ads" was distinctive or well-known. As noted by the Court of Appeals, petitioner’s expert witnesses
intended to convey instruction in the art, any person may practice and use the art itself which he has
himself had testified that " ‘Poster Ads’ was too generic a name. So it was difficult to identify it with any
described and illustrated therein. The use of the art is a totally different thing from a publication
company, honestly speaking."28 This crucial admission by its own expert witness that "Poster Ads" could
of the book explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right
not be associated with P & D showed that, in the mind of the public, the goods and services carrying the
to make, sell and use account books prepared upon the plan set forth in such book. Whether the art
trademark "Poster Ads" could not be distinguished from the goods and services of other entities.
might or might not have been patented, is a question, which is not before us. It was not patented, and
is open and free to the use of the public. And, of course, in using the art, the ruled lines and headings
of accounts must necessarily be used as incident to it. This fact also prevented the application of the doctrine of secondary meaning. "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
The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas
incapable of exclusive appropriation with reference to an article in the market (because it is
produced by the peculiar nature of the art described in the books, which have been made the subject of
geographically or otherwise descriptive) might nevertheless have been used for so long and so
copyright. In describing the art, the illustrations and diagrams employed happened to correspond more
exclusively by one producer with reference to his article that, in the trade and to that branch of the
closely than usual with the actual work performed by the operator who uses the art. x x x The
purchasing public, the word or phrase has come to mean that the article was his property.29 The
description of the art in a book, though entitled to the benefit of copyright, lays no
admission by petitioner’s own expert witness that he himself could not associate "Poster Ads" with
foundation for an exclusive claim to the art itself. The object of the one is explanation; the
petitioner P & D because it was "too generic" definitely precluded the application of this exception.
object of the other is use. The former may be secured by copyright. The latter can only be
secured, if it can be secured at all, by letters patent." (underscoring supplied)
Having discussed the most important and critical issues, we see no need to belabor the rest.
ON THE ISSUE OF TRADEMARK INFRINGEMENT
All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the
Regional Trial Court of Makati City.
This issue concerns the use by respondents of the mark "Poster Ads" which petitioner’s president said
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 WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22,
newsletters."22 Petitioner admitted it did not commercially engage in or market these goods. On the 2001 is AFFIRMED in toto.
contrary, it dealt in electrically operated backlit advertising units and the sale of advertising spaces
thereon, which, however, were not at all specified in the trademark certificate.
 17

SO ORDERED.
 18

attorney’s fees.chanrob1es virtua1 1aw 1ibrary

THIRD DIVISION
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, 9 the dispositive
[G.R. No. 126627. August 14, 2003.] portion of which reads:chanrob1es virtual 1aw library

SMITH KLINE BECKMAN CORPORATION, Petitioner, v. THE HONORABLE COURT OF APPEALS WHEREFORE, in view of the foregoing, plaintiff’s complaint should be, as it is hereby, DISMISSED. The
and TRYCO PHARMA CORPORATION, Respondents. Writ of injunction issued in connection with the case is hereby ordered DISSOLVED.

DECISION The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and
void for being in violation of Sections 7, 9 and 15 of the Patents Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel
CARPIO MORALES, J.:
Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state P100,000.00 attorney’s fees as prayed for in its counterclaim but said amount awarded to defendant is
of Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on subject to the lien on correct payment of filing fees.
October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks
and Technology Transfer) an application for patent over an invention entitled "Methods and SO ORDERED. (Emphasis supplied)
Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole
Carbamate." The application bore Serial No. 18989.chanrob1es virtua1 1aw 1ibrary On appeal, the Court of Appeals, by Decision of April 21, 1995, 10 upheld the trial court’s finding that
private respondent was not liable for any infringement of the patent of petitioner in light of the latter’s
On September 24, 1981, Letters Patent No. 14561 1 for the aforesaid invention was issued to petitioner failure to show that Albendazole is the same as the compound subject of Letters Patent No. 14561.
for a term of seventeen (17) years. Noting petitioner’s admission of the issuance by the U.S. of a patent for Albendazole in the name of
Smith Kline and French Laboratories which was petitioner’s former corporate name, the appellate court
The letters patent provides in its claims 2 that the patented invention consisted of a new compound considered the U.S. patent as implying that Albendazole is different from methyl 5 propylthio-2-
named methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the benzimidazole carbamate. It likewise found that private respondent was not guilty of deceiving the
compound as an active ingredient in fighting infections caused by gastrointestinal parasites and public by misrepresenting that Impregon is its product.
lungworms in animals such as swine, sheep, cattle, goats, horses, and even pet animals.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes petitioner’s explanation that Patent Application Serial No. 18989 which was filed on October 8, 1976
and sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient was a divisional application of Patent Application Serial No. 17280 filed on June 17, 1975 with the
and is claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and fluke Philippine Patent Office, well within one year from petitioner’s filing on June 19, 1974 of its Foreign
infestation in carabaos, cattle and goats. Application Priority Data No. 480,646 in the U.S. covering the same compound subject of Patent
Application Serial No. 17280.
Petitioner sued private respondent for infringement of patent and unfair competition before the
Caloocan City Regional Trial Court (RTC). 3 It claimed that its patent covers or includes the substance Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial No.
Albendazole such that private respondent, by manufacturing, selling, using, and causing to be sold and 18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application
used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent abroad in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the
No. 14561 4 as well as committed unfair competition under Article 189, paragraph 1 of the Revised submission that the compound in Letters Patent No. 14561 was not patentable, citing the
Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as jurisprudentially established presumption that the Patent Office’s determination of patentability is
its own the drug Impregon although the same contained petitioner’s patented Albendazole. 5 correct. Finally, it ruled that petitioner established itself to be the one and the same assignee of the
patent notwithstanding changes in its corporate name. Thus the appellate court disposed:chanrob1es
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order against virtual 1aw library
private respondent enjoining it from committing acts of patent infringement and unfair competition. 6 A
writ of preliminary injunction was subsequently issued. 7 WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that the orders for the
nullification of Letters Patent No. 14561 and for its cancellation are deleted therefrom.chanrob1es
Private respondent in its Answer 8 averred that Letters Patent No. 14561 does not cover the substance virtua1 1aw 1ibrary
Albendazole for nowhere in it does that word appear; that even if the patent were to include
Albendazole, such substance is unpatentable; that the Bureau of Food and Drugs allowed it to SO ORDERED.
manufacture and market Impregon with Albendazole as its known ingredient; that there is no proof that
it passed off in any way its veterinary products as those of petitioner; that Letters Patent No. 14561 is Petitioner’s motion for reconsideration of the Court of Appeals’ decision having been denied 11 the
null and void, the application for the issuance thereof having been filed beyond the one year period present petition for review on certiorari 12 was filed, assigning as errors the following:chanrob1es
from the filing of an application abroad for the same invention covered thereby, in violation of Section virtual 1aw library
15 of Republic Act No. 165 (The Patent Law); and that petitioner is not the registered patent holder.
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE ACTIVE
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as may INGREDIENT IN TRYCO’S "IMPREGON" DRUG, IS INCLUDED IN PETITIONER’S LETTERS PATENT NO.
be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in 14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
 19

From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA mention is made of the compound Albendazole. All that the claims disclose are: the covered invention,
CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEY’S FEES. that is, the compound methyl 5 propylthio-2-benzimidazole carbamate; the compound’s being
anthelmintic but nontoxic for animals or its ability to destroy parasites without harming the host
Petitioner argues that under the doctrine of equivalents for determining patent infringement, animals; and the patented methods, compositions or preparations involving the compound to maximize
Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug its efficacy against certain kinds of parasites infecting specified animals.
Impregon, is substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its
patent since both of them are meant to combat worm or parasite infestation in animals. It cites the When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
"unrebutted" testimony of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula anything beyond them. 17 And so are the courts bound which may not add to or detract from the claims
in Letters Patent No. 14561 refers to the compound Albendazole. Petitioner adds that the two matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that
substances substantially do the same function in substantially the same way to achieve the same which the inventor claimed and the patent office allowed, even if the patentee may have been entitled
results, thereby making them truly identical. Petitioner thus submits that the appellate court should to something more than the words it had chosen would include. 18
have gone beyond the literal wordings used in Letters Patent No. 14561, beyond merely applying the
literal infringement test, for in spite of the fact that the word Albendazole does not appear in petitioner’s It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-benzimidazole determinative of Albendazole’s non-inclusion in the claims of the patent. While Albendazole is
carbamate. admittedly a chemical compound that exists by a name different from that covered in petitioner’s letters
patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And
Petitioner likewise points out that its application with the Philippine Patent Office on account of which it no extrinsic evidence had been adduced to prove that Albendazole inheres in petitioner’s patent in spite
was granted Letters Patent No. 14561 was merely a divisional application of a prior application in the of its omission therefrom or that the meaning of the claims of the patent embraces the same.chanrobles
U.S. which granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5 propylthio- virtual law library
2-benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other and
mutually contribute to produce a single result, thereby making Albendazole as much a part of Letters While petitioner concedes that the mere literal wordings of its patent cannot establish private
Patent No. 14561 as the other substance is. respondent’s infringement, it urges this Court to apply the doctrine of equivalents.

Petitioner concedes in its Sur-Rejoinder 13 that although methyl 5 propylthio-2-benzimidazole The doctrine of equivalents provides that an infringement also takes place when a device appropriates a
carbamate is not identical with Albendazole, the former is an improvement or improved version of the prior invention by incorporating its innovative concept and, although with some modification and
latter thereby making both substances still substantially the same. change, performs substantially the same function in substantially the same way to achieve substantially
the same result. 19 Yet again, a scrutiny of petitioner’s evidence fails to convince this Court of the
With respect to the award of actual damages in favor of private respondent in the amount of substantial sameness of petitioner’s patented compound and Albendazole. While both compounds have
P330,000.00 representing lost profits, petitioner assails the same as highly, speculative and conjectural, the effect of neutralizing parasites in animals, identity of result does not amount to infringement of
hence, without basis. It assails too the award of P100,000.00 in attorney’s fees as not falling under any patent unless Albendazole operates in substantially the same way or by substantially the same means
of the instances enumerated by law where recovery of attorney’s fees is allowed.chanrob1es virtua1 as the patented compound, even though it performs the same function and achieves the same result.
1aw 1ibrary 20 In other words, the principle or mode of operation must be the same or substantially the same. 21

In its Comment, 14 private respondent contends that application of the doctrine of equivalents would The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the
not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate patentee having the burden to show that all three components of such equivalency test are met. 22
being two different compounds with different chemical and physical properties. It stresses that the
existence of a separate U.S. patent for Albendazole indicates that the same and the compound in As stated early on, petitioner’s evidence fails to explain how Albendazole is in every essential detail
Letters Patent No. 14561 are different from each other; and that since it was on account of a divisional identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an
application that the patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and
definition of a divisional application, such a compound is just one of several independent inventions accordingly substantiated regarding the method or means by which Albendazole weeds out parasites in
alongside Albendazole under petitioner’s original patent application. animals, thus giving no information on whether that method is substantially the same as the manner by
which petitioner’s compound works. The testimony of Dr. Orinion lends no support to petitioner’s cause,
As has repeatedly been held, only questions of law may be raised in a petition for review he not having been presented or qualified as an expert witness who has the knowledge or expertise on
on certiorari before this Court. Unless the factual findings of the appellate court are mistaken, absurd, the matter of chemical compounds.
speculative, conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings
culled by the court of origin, 15 this Court does not review them. As for the concept of divisional applications proffered by petitioner, it comes into play when two or more
inventions are claimed in a single application but are of such a nature that a single patent may not be
From an examination of the evidence on record, this Court finds nothing infirm in the appellate court’s issued for them. 23 The applicant thus is required "to divide," that is, to limit the claims to whichever
conclusions with respect to the principal issue of whether private respondent committed patent invention he may elect, whereas those inventions not elected may be made the subject of separate
infringement to the prejudice of petitioner. applications which are called "divisional applications." 24 What this only means is that petitioner’s
methyl 5 propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions
The burden of proof to substantiate a charge for patent infringement rests on the plaintiff. 16 In the claimed in the original application divided out, Albendazole being one of those other inventions.
case at bar, petitioner’s evidence consists primarily of its Letters Patent No. 14561, and the testimony Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been the subject of a
of Dr. Orinion, its general manager in the Philippines for its Animal Health Products Division, by which it divisional application if a single patent could have been issued for it as well as Albendazole.
sought to show that its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also
covers the substance Albendazole. The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages and
attorney’s fees in favor of private Respondent. The claimed actual damages of P330,000.00
 20

representing lost profits or revenues incurred by private respondent as a result of the issuance of the
injunction against it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for
eleven months, were supported by the testimonies of private respondent’s President 25 and Executive
Vice-President that the average monthly sale of Impregon was P100,000.00 and that sales plummeted
to zero after the issuance of the injunction. 26 While indemnification for actual or compensatory
damages covers not only the loss suffered (damnum emergens) but also profits which the obligee failed
to obtain (lucrum cessans or ganacias frustradas), it is necessary to prove the actual amount of
damages with a reasonable degree of certainty based on competent proof and on the best evidence
obtainable by the injured party. 27 The testimonies of private respondent’s officers are not the
competent proof or best evidence obtainable to establish its right to actual or compensatory damages
for such damages also require presentation of documentary evidence to substantiate a claim therefor.
28

In the same vein, this Court does not sustain the grant by the appellate court of attorney’s fees to
private respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been
allegedly forced to litigate as a result of petitioner’s suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its rights, still attorney’s fees may not be awarded where
no sufficient showing of bad faith could be reflected in a party’s persistence in a case other than an
erroneous conviction of the righteousness of his cause. 29 There exists no evidence on record indicating
that petitioner was moved by malice in suing private Respondent.chanrob1es virtua1 1aw 1ibrary

This Court, however, grants private respondent temperate or moderate damages in the amount of
P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss
the amount of which cannot, from the nature of the case, be established with certainty. 30

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION.
The award of actual or compensatory damages and attorney’s fees to private respondent, Tryco Pharma
Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as temperate or
moderate damages.

SO ORDERED.
 21

SECOND DIVISION obtained a Certificate of Copyright Registration No. 0-11193 for the word "BIRKENSTOCK" ; (d) while
respondent and its predecessor-in-interest failed to file the 10th Yea r DAU, it continued the use of
"BIRKENSTOCK AND DEVICE" in lawful commerce; and (e) to record its continued ownership and
G.R. No. 194307               November 20, 2013
exclusive right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application
" of its old registration, Registration No. 56334.13 On November 13, 2007, the Bureau of Legal Affairs
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK ORTHOPAEDIE (BLA) of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes cases
GMBH), Petitioner, (Consolidated Opposition Cases).14
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent.
The Ruling of the BLA

DECISION
In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondent’s opposition, thus,
ordering the rejection of the subject applications. It ruled that the competing marks of the parties are
PERLAS-BERNABE, J.: confusingly similar since they contained the word "BIRKENSTOCK" and are used on the same and
related goods. It found respondent and its predecessor-in-interest as the prior user and adopter of
"BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed to present evidence of
Assailed in this Petition for Review on Certiorari1 are the Court of Appeals (CA) Decision2 dated June 25, actual use in the trade and business in this country. It opined that while Registration No. 56334 was
2010 and Resolution3 dated October 27, 2010 in CA-G.R. SP No. 112278 which reversed and set aside cancelled, it does not follow that prior right over the mark was lost, as proof of continuous and
the Intellectual Property Office (IPO) Director General’s Decision4 dated December 22, 2009 that uninterrupted use in trade and business in the Philippines was presented. The BLA likewise opined that
allowed the registration of various trademarks in favor of petitioner Birkenstock Orthopaedie GmbH & petitioner’s marks are not well -known in the Philippines and internationally and that the various
Co. KG. certificates of registration submitted by petitioners were all photocopies and, therefore, not admissible
as evidence.16
The Facts
Aggrieved, petitioner appealed to the IPO Director General.
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for various
trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark Application The Ruling of the IPO Director General
Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the International Classification of
Goods and Services (Nice Classification) with filing date of March 11, 1994; (b) "BIRKENSTOCK BAD
HONNEF -RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A In his Decision17 dated December 22, 2009, the IPO Director General reversed and set aside the ruling
FOOT, CROSS AND SUNBEA M" under TASN 4-1994-091509 for goods falling under Class 25 of the Nice of the BLA, thus allowing the registration of the subject applications. He held that with the cancellation
Classification with filing date of March 11, 1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE of Registration No. 56334 for respondent’s failure to file the 10th Year DAU, there is no more reason to
COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" reject the subject applications on the ground of prior registration by another proprietor.18 More
under TASN 4-1994-095043 for goods falling under Class 10 of the Nice Classification with filing date of importantly, he found that the evidence presented proved that petitioner is the true and lawful owner
September 5, 1994 (subject applications).5 and prior user of "BIRKENSTOCK" marks and thus, entitled to the registration of the marks covered by
the subject applications.19 The IPO Director General further held that respondent’s copyright for the
word "BIRKENSTOCK" is of no moment since copyright and trademark are different forms of intellectual
However, registration proceedings of the subject applications were suspended in view of an existing property that cannot be interchanged.20
registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 dated October 21,
1993 (Registration No. 56334) in the name of Shoe Town International and Industrial Corporation, the
predecessor-in-interest of respondent Philippine Shoe Expo Marketing Corporation.6 In this regard, on Finding the IPO Director General’s reversal of the BLA unacceptable, respondent filed a petition for
May 27, 1997 petitioner filed a petition for cancellation of Registration No. 56334 on the ground that it review with the CA.
is the lawful and rightful owner of the Birkenstock marks (Cancellation Case).7 During its pendency,
however, respondent and/or its predecessor-in-interest failed to file the required 10th Year Declaration
Ruling of the CA
of Actual Use (10th Year DAU) for Registration No. 56334 on or before October 21, 2004,8 thereby
resulting in the cancellation of such mark.9 Accordingly, the cancellation case was dismissed for being
moot and academic.10 In its Decision21 dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director
General and reinstated that of the BLA. It disallowed the registration of the subject applications on the
ground that the marks covered by such applications "are confusingly similar, if not outright identical"
The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the subject
with respondent’s mark.22 It equally held that respondent’s failure to file the 10th Year DAU for
applications in the IPO e-Gazette on February 2, 2007.11 In response, respondent filed three (3)
Registration No. 56334 "did not deprive petitioner of its ownership of the ‘BIRKENSTOCK’ mark since it
separate verified notices of oppositions to the subject applications docketed as Inter Partes Case Nos.
has submitted substantial evidence showing its continued use, promotion and advertisement thereof up
14-2007-00108, 14-2007-00115, and 14-2007-00116,12 claiming, inter alia, that: (a) it, together with
to the present."23 It opined that when respondent’s predecessor-in-interest adopted and started its
its predecessor-in-interest, has been using Birkenstock marks in the Philippines for more than 16 years
actual use of "BIRKENSTOCK," there is neither an existing registration nor a pending application for the
through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject applications are
same and thus, it cannot be said that it acted in bad faith in adopting and starting the use of such
identical to the one covered by Registration No. 56334 and thus, petitioner has no right to the
mark.24 Finally, the CA agreed with respondent that petitioner’s documentary evidence, being mere
registration of such marks; (c) on November 15, 1991, respondent’s predecessor-in-interest likewise
 22

photocopies, were submitted in violation of Section 8.1 of Office Order No. 79, Series of 2005 (Rules on Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantive
Inter Partes Proceedings). issues.

Dissatisfied, petitioner filed a Motion for Reconsideration25 dated July 20, 2010, which was, however, B. Registration and ownership of "BIRKENSTOCK."
denied in a Resolution26 dated October 27, 2010. Hence, this petition.27
Republic Act No. (RA) 166,34 the governing law for Registration No. 56334, requires the filing of a DAU
Issues Before the Court on specified periods,35 to wit:

The primordial issue raised for the Court’s resolution is whether or not the subject marks should be Section 12. Duration. – Each certificate of registration shall remain in force for twenty years: Provided,
allowed registration in the name of petitioner. That registrations under the provisions of this Act shall be cancelled by the Director, unless within one
year following the fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of
registration, the registrant shall file in the Patent Office an affidavit showing that the mark or trade-
The Court’s Ruling
name is still in use or showing that its non-use is due to special circumstance which excuse such non-
use and is not due to any intention to abandon the same, and pay the required fee.
The petition is meritorious.
The Director shall notify the registrant who files the above- prescribed affidavits of his acceptance or
A. Admissibility of Petitioner’s Documentary Evidence. refusal thereof and, if a refusal, the reasons therefor. (Emphasis and underscoring supplied)

In its Comment28 dated April 29, 2011, respondent asserts that the documentary evidence submitted by The aforementioned provision clearly reveals that failure to file the DAU within the requisite period
petitioner in the Consolidated Opposition Cases, which are mere photocopies, are violative of Section results in the automatic cancellation of registration of a trademark. In turn, such failure is tantamount
8.1 of the Rules on Inter Partes Proceedings, which requires certified true copies of documents and to the abandonment or withdrawal of any right or interest the registrant has over his trademark.36
evidence presented by parties in lieu of originals.29 As such, they should be deemed inadmissible.
In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334
The Court is not convinced. within the requisite period, or on or before October 21, 2004. As a consequence, it was deemed to have
abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK." Neither can it invoke
Section 23637 of the IP Code which pertains to intellectual property rights obtained under previous
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the attainment of intellectual property laws, e.g., RA 166, precisely because it already lost any right or interest over the
justice, rather than its frustration. A strict and rigid application of the rules must always be eschewed said mark.
when it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite
justice. Technicalities should never be used to defeat the substantive rights of the other party. Every
party-litigant must be afforded the amplest opportunity for the proper and just determination of his Besides, petitioner has duly established its true and lawful ownership of the mark "BIRKENSTOCK."
cause, free from the constraints of technicalities."30 "Indeed, the primordial policy is a faithful
observance of [procedural rules], and their relaxation or suspension should only be for persuasive
Under Section 238 of RA 166, which is also the law governing the subject applications, in order to
reasons and only in meritorious cases, to relieve a litigant of an injustice not commensurate with the
register a trademark, one must be the owner thereof and must have actually used the mark in
degree of his thoughtlessness in not complying with the procedure prescribed."31 This is especially true
commerce in the Philippines for two (2) months prior to the application for registration. Section 2-A39 of
with quasi-judicial and administrative bodies, such as the IPO, which are not bound by technical rules of
the same law sets out to define how one goes about acquiring ownership thereof. Under the same
procedure.32 On this score, Section 5 of the Rules on Inter Partes Proceedings provides:
section, it is clear that actual use in commerce is also the test of ownership but the provision went
further by saying that the mark must not have been so appropriated by another. Significantly, to be an
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. – The rules of owner, Section 2-A does not require that the actual use of a trademark must be within the Philippines.
procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases. The Rules of Thus, under RA 166, one may be an owner of a mark due to its actual use but may not yet have the
Court may be applied suppletorily. The Bureau shall not be bound by strict technical rules of procedure right to register such ownership here due to the owner’s failure to use the same in the Philippines for
and evidence but may adopt, in the absence of any applicable rule herein, such mode of proceedings two (2) months prior to registration.40
which is consistent with the requirements of fair play and conducive to the just, speedy and inexpensive
disposition of cases, and which will give the Bureau the greatest possibility to focus on the contentious
It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
issues before it. (Emphasis and underscoring supplied)
ownership.1âwphi1 If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the validity of the registration, of
In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the the registrant’s ownership of the trademark, and of the exclusive right to the use thereof. Such
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the originals of presumption, just like the presumptive regularity in the performance of official functions, is rebuttable
such documentary evidence in the related Cancellation Case earlier filed before it. Under this and must give way to evidence to the contrary.41
circumstance and the merits of the instant case as will be subsequently discussed, the Court holds that
the IPO Director General’s relaxation of procedure was a valid exercise of his discretion in the interest of
Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it is the
substantial justice.33
ownership of a trademark that confers the right to register the same. A trademark is an industrial
property over which its owner is entitled to property rights which cannot be appropriated by
 23

unscrupulous entities that, in one way or another, happen to register such trademark ahead of its true
and lawful owner. The presumption of ownership accorded to a registrant must then necessarily yield to
superior evidence of actual and real ownership of a trademark.

The Court’s pronouncement in Berris Agricultural Co., Inc. v. Abyadang42 is instructive on this point:

The ownership of a trademark is acquired by its registration and its actual use by the manufacturer or
distributor of the goods made available to the purchasing public. x x x A certificate of registration of a
mark, once issued, constitutes prima facie evidence of the validity of the registration, of 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. x x x In other words,
the prima facie presumption brought about by the registration of a mark may be challenged and
overcome in an appropriate action, x x x by evidence of prior use by another person, i.e. , it will
controvert a claim of legal appropriation or of ownership based on registration by a subsequent user.
This is because a trademark is a creation of use and belongs to one who first used it in trade or
commerce.43 (Emphasis and underscoring supplied)

In the instant case, petitioner was able to establish that it is the owner of the mark "BIRKENSTOCK." It
submitted evidence relating to the origin and history of "BIRKENSTOCK" and its use in commerce long
before respondent was able to register the same here in the Philippines. It has sufficiently proven that
"BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker,
on his line of quality footwear and thereafter, numerous generations of his kin continuously engaged in
the manufacture and sale of shoes and sandals bearing the mark "BIRKENSTOCK" until it became the
entity now known as the petitioner. Petitioner also submitted various certificates of registration of the
mark "BIRKENSTOCK" in various countries and that it has used such mark in different countries
worldwide, including the Philippines.44

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its claim of
ownership of the mark "BIRKENSTOCK" as these merely show the transactions made by respondent
involving the same.45

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful owner of
the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad faith in
having it registered in its name. In this regard, the Court quotes with approval the words of the IPO
Director General, viz.:

The facts and evidence fail to show that [respondent] was in good faith in using and in registering the
mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and arbitrary mark.
It is very remote that two persons did coin the same or identical marks. To come up with a highly
distinct and uncommon mark previously appropriated by another, for use in the same line of business,
and without any plausible explanation, is incredible. The field from which a person may select a
trademark is practically unlimited. As in all other cases of colorable imitations, the unanswered riddle is
why, of the millions of terms and combinations of letters and designs available, [respondent] had to
come up with a mark identical or so closely similar to the [petitioner’s] if there was no intent to take
advantage of the goodwill generated by the [petitioner’s] mark. Being on the same line of business, it is
highly probable that the [respondent] knew of the existence of BIRKENSTOCK and its use by the
[petitioner], before [respondent] appropriated the same mark and had it registered in its name.46

WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution dated October
27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET ASIDE. Accordingly,
the Decision dated December 22, 2009 of the IPO Director General is hereby REINSTATED.

SO ORDERED.
 24

G.R. No. 185830               June 5, 2013 In its Decision8 dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the IPO sustained Ecole’s
opposition to the subject mark, necessarily resulting in the rejection of Cointreau’s application.9 While
noting the certificates of registration obtained from other countries and other pertinent materials
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES), INC., Petitioner,
showing the use of the subject mark outside the Philippines, the BLA did not find such evidence
vs.
sufficient to establishCointreau’s claim of prior use of the same in the Philippines. It emphasized that
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L., B.V., Respondents.
the adoption and use of trademark must be in commerce in the Philippines and not abroad. It then
concluded that Cointreau has not established any proprietary right entitled to protection in the
DECISION Philippine jurisdiction because the law on trademarks rests upon the doctrine of nationality or
territoriality.10
PERLAS-BERNABE, J.:
On the other hand, the BLA found that the subject mark, which was the predecessor of the mark "LE
1 2
CORDON BLEU MANILLE" has been known and used in the Philippines since 1948 and registered under
Assailed in this petition for review on certiorari  is the December 23, 2008 Decision  of the Court of the name "ECOLE DE CUISINE MANILLE (THE CORDON BLEU OF THE PHILIPPINES), INC." on May 9,
Appeals (CA) in CA-G.R. SP No. 104672 which affirmed in toto the Intellectual Property Office (IPO) 1980.11
Director General’s April 21, 2008 Decision3 that declared respondent Renaud Cointreau & Cie
(Cointreau) as the true and lawful owner of the mark "LE CORDON BLEU & DEVICE" and thus, is entitled
to register the same under its name. Aggrieved, Cointreau filed an appeal with the IPO Director General.

The Facts The Ruling of the IPO Director General

On June 21, 1990, Cointreau, a partnership registered under the laws of France, filed before the (now In his Decision dated April 21, 2008, the IPO Director General reversed and set aside the BLA’s decision,
defunct) Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) of the Department of Trade thus, granting Cointreau’s appeal and allowing the registration of the subject mark.12 He held that while
and Industry a trademark application for the mark "LE CORDON BLEU & DEVICE" for goods falling under Section 2 of R.A. No. 166 requires actual use of the subject mark in commerce in the Philippines for at
classes 8, 9, 16, 21, 24, 25, 29, and 30 of the International Classification of Goods and Services for the least two (2) months before the filing date of the application, only the owner thereof has the right to
Purposes of Registrations of Marks ("Nice Classification") (subject mark). The application was filed register the same, explaining that the user of a mark in the Philippines is not ipso facto its owner.
pursuant to Section 37 of Republic Act No. 166, as amended (R.A. No. 166), on the basis of Home Moreover, Section 2-A of the same law does not require actual use in the Philippines to be able to
Registration No. 1,390,912, issued on November 25, 1986 in France. Bearing Serial No. 72264, such acquire ownership of a mark.13
application was published for opposition in the March-April 1993 issue of the BPTTT Gazette and
released for circulation on May 31, 1993.4
In resolving the issue of ownership and right to register the subject mark in favor of Cointreau, he
considered Cointreau’s undisputed use of such mark since 1895 for its culinary school in Paris, France
On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject (in which petitioner’s own directress, Ms. Lourdes L. Dayrit, had trained in 1977). Contrarily, he found
application, averring that: (a) it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE that while Ecole may have prior use of the subject mark in the Philippines since 1948, it failed to explain
MANILLE," which it has been using since 1948 in cooking and other culinary activities, including in its how it came up with such name and mark. The IPO Director General therefore concluded that Ecole has
restaurant business; and (b) it has earned immense and invaluable goodwill such that Cointreau’s use unjustly appropriated the subject mark, rendering it beyond the mantle of protection of Section 4(d)14 of
of the subject mark will actually create confusion, mistake, and deception to the buying public as to the R.A. No. 166.15
origin and sponsorship of the goods, and cause great and irreparable injury and damage to Ecole’s
business reputation and goodwill as a senior user of the same.5
Finding the IPO Director General’s reversal of the BLA’s Decision unacceptable, Ecole filed a Petition for
Review16 dated June 7, 2008 with the CA.
On October 7, 1993, Cointreau filed its answer claiming to be the true and lawful owner of the subject
mark. It averred that: (a) it has filed applications for the subject mark’s registration in various
Ruling of the CA
jurisdictions, including the Philippines; (b) Le Cordon Bleu is a culinary school of worldwide acclaim
which was established in Paris, France in 1895; (c) Le Cordon Bleu was the first cooking school to have
set the standard for the teaching of classical French cuisine and pastry making; and (d) it has trained In its Decision dated December 23, 2008, the CA affirmed the IPO Director General’s Decision in
students from more than eighty (80) nationalities, including Ecole’s directress, Ms. Lourdes L. Dayrit. toto.17 It declared Cointreau as the true and actual owner of the subject mark with a right to register
Thus, Cointreau concluded that Ecole’s claim of being the exclusive owner of the subject mark is a the same in the Philippines under Section 37 of R.A. No. 166, having registered such mark in its country
fraudulent misrepresentation.6 of origin on November 25, 1986.18

During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos. 60631 The CA likewise held that Cointreau’s right to register the subject mark cannot be barred by Ecole’s
and 54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU PARIS 1895 & DEVICE" for prior use thereof as early as 1948 for its culinary school "LE CORDON BLEU MANILLE" in the Philippines
goods and services under classes 21 and 41 of the Nice Classification, respectively.7 because its appropriation of the mark was done in bad faith. Further, Ecole had no certificate of
registration that would put Cointreau on notice that the former had appropriated or has been using the
subject mark. In fact, its application for trademark registration for the same which was just filed on
The Ruling of the Bureau of Legal Affairs
February 24, 1992 is still pending with the IPO.19
 25

Hence, this petition. A trade name shall be protected in all the countries of the Union without the obligation of filing or
registration, whether or not it forms part of a trademark. (Emphasis and underscoring supplied)
Issues Before the Court
In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris Convention, to wit:
The sole issue raised for the Court’s resolution is whether the CA was correct in upholding the IPO
Director General’s ruling that Cointreau is the true and lawful owner of the subject mark and thus, Section 37. Rights of foreign registrants. - Persons who are nationals of, domiciled in, or have a bona
entitled to have the same registered under its name. fide or effective business or commercial establishment in any foreign country, which is a party to any
international convention or treaty relating to marks or trade-names, or the repression of unfair
competition to which the Philippines may be a party, shall be entitled to the benefits and subject to the
At this point, it should be noted that the instant case shall be resolved under the provisions of the old
provisions of this Act to the extent and under the conditions essential to give effect to any such
Trademark Law, R.A. No. 166, which was the law in force at the time of Cointreau’s application for
convention and treaties so long as the Philippines shall continue to be a party thereto, except as
registration of the subject mark.
provided in the following paragraphs of this section. x x x x

The Court’s Ruling

Trade-names of persons described in the first paragraph of this section shall be protected without the
obligation of filing or registration whether or not they form parts of marks. x x x x
The petition is without merit.
In view of the foregoing obligations under the Paris Convention, the Philippines is obligated to assure
In the petition, Ecole argues that it is the rightful owner of the subject mark, considering that it was the nationals of the signatory-countries that they are afforded an effective protection against violation of
first entity that used the same in the Philippines. Hence, it is the one entitled to its registration and not their intellectual property rights in the Philippines in the same way that their own countries are
Cointreau. obligated to accord similar protection to Philippine nationals.24 "Thus, under Philippine law, a trade name
of a national of a State that is a party to the Paris Convention, whether or not the trade name forms
part of a trademark, is protected "without the obligation of filing or registration.’"25
Petitioner’s argument is untenable.

In the instant case, it is undisputed that Cointreau has been using the subject mark in France since
Under Section 220 of R.A. No. 166, in order to register a trademark, one must be the owner thereof and 1895, prior to Ecole’s averred first use of the same in the Philippines in 1948, of which the latter was
must have actually used the mark in commerce in the Philippines for two (2) months prior to the fully aware thereof. In fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its foundress,
application for registration. Section 2-A21 of the same law sets out to define how one goes about Pat Limjuco Dayrit), had trained in Cointreau’s Le Cordon Bleu culinary school in Paris, France.
acquiring ownership thereof. Under Section 2-A, it is clear that actual use in commerce is also the test Cointreau was likewise the first registrant of the said mark under various classes, both abroad and in
of ownership but the provision went further by saying that the mark must not have been so the Philippines, having secured Home Registration No. 1,390,912 dated November 25, 1986 from its
appropriated by another. Additionally, it is significant to note that Section 2-A does not require that the country of origin, as well as several trademark registrations in the Philippines.26
actual use of a trademark must be within the Philippines. Thus, as correctly mentioned by the CA, under
R.A. No. 166, one may be an owner of a mark due to its actual use but may not yet have the right to
register such ownership here due to the owner’s failure to use the same in the Philippines for two (2) On the other hand, Ecole has no certificate of registration over the subject mark but only a pending
months prior to registration.22 application covering services limited to Class 41 of the Nice Classification, referring to the operation of a
culinary school. Its application was filed only on February 24, 1992, or after Cointreau filed its
trademark application for goods and services falling under different classes in 1990. Under the foregoing
Nevertheless, foreign marks which are not registered are still accorded protection against infringement circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be said to have
and/or unfair competition. At this point, it is worthy to emphasize that the Philippines and France, validly appropriated the same.
Cointreau’s country of origin, are both signatories to the Paris Convention for the Protection of Industrial
Property (Paris Convention).23 Articles 6bis and 8 of the Paris Convention state:
It is thus clear that at the time Ecole started using the subject mark, the same was already being used
by Cointreau, albeit abroad, of which Ecole’s directress was fully aware, being an alumna of the latter’s
ARTICLE 6bis culinary school in Paris, France. Hence, Ecole cannot claim any tinge of ownership whatsoever over the
subject mark as Cointreau is the true and lawful owner thereof. As such, the IPO Director General and
(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an the CA were correct in declaring Cointreau as the true and lawful owner of the subject mark and as
interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which such, is entitled to have the same registered under its name.
constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark
considered by the competent authority of the country of registration or use to be well known in that In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the Intellectual
country as being already the mark of a person entitled to the benefits of this Convention and used for Property Code of the Philippines, as amended, has already dispensed with the requirement of prior
identical or similar goods.1âwphi1 These provisions shall also apply when the essential part of the mark actual use at the time of registration.27 Thus, there is more reason to allow the registration of the
constitutes a reproduction of any such well-known mark or an imitation liable to create confusion subject mark under the name of Cointreau as its true and lawful owner.
therewith.

As a final note, "the function of a trademark is to point out distinctly the origin or ownership of the
ARTICLE 8 goods (or services) to which it is affixed; to secure to him, who has been instrumental in bringing into
the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that
 26

they are procuring the genuine article; to prevent fraud and imposition; and to protect the
manufacturer against substitution and sale of an inferior and different article as his product."28 As such,
courts will protect trade names or marks, although not registered or properly selected as trademarks,
on the broad ground of enforcing justice and protecting one in the fruits of his toil.29 WHEREFORE, the
petition is DENIED. Accordingly, the December 23, 2008 Decision of the Court of Appeals in CA-G.R. SP
No. 104672 is hereby AFFIRMED in toto. SO ORDERED.
 27

G.R. No. 198889, January 20, 2016 7. On August 11, 1983, Hernan D. Reyes was issued Certificate of Registration No. SR-
6282 which was subsequently assigned to Acres & Acres Food, Inc., Southeast Asia
Food, Inc., Heinz-UFC Philippines, Inc.;
UFC PHILIPPINES, INC. (NOW MERGED WITH NUTRI-ASIA, INC., WITH NUTRI-ASIA, INC. AS
THE SURVIVING ENTITY), Petitioner, v. FIESTA BARRIO MANUFACTURING
CORPORATION, Respondent. 8. After its expiration, Opposer filed on November 15, 2006 Trademark Application
Serial No. 4-2006-012346 for the re-registration of the "PAPA Label Design";

DECISION
9. The mark "PAPA KETSARAP" for use on banana sauce falling under Class 30 was also
registered in favor of Acres & Acres Food, Inc. under Registration No. 34681 issued
LEONARDO-DE CASTRO, J.: on August 23, 1985 and renewed last August 23, 2005 by Heinz-UFC Philippines, Inc.
for ten (10) years;
For our disposition is a petition for review on certiorari under Rule 45 seeking to annul and set aside the
June 23, 2011 Decision1 and the October 4, 2011 Resolution2 of the Court of Appeals in CA-G.R. SP 10. On November 07, 2006, Registration No. 34681 was assigned to Opposer;
No. 107570, which reversed and set aside the March 26, 2008 Decision3 of the Bureau of Legal Affairs
of the Intellectual Property Office (IPO-BLA) and the January 29, 2009 Decision4 of the Director 11. Opposer has not abandoned the use of the mark "PAPA" and the variations thereof as
General of the IPO. Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized and existing Opposer has continued their use up to the present;
under Philippine laws.5 It is the emergent entity in a merger with UFC Philippines, Inc. that was
completed on February 11, 2009.6 Respondent Barrio Fiesta Manufacturing Corporation (respondent) is
12. The mark "PAPA BOY & DEVICE" is identical to the mark "PAPA" owned by Opposer
likewise a corporation organized and existing under Philippine laws.
and duly registered in its favor, particularly the dominant feature thereof;
On April 4, 2002, respondent filed Application No. 4-2002-002757 for the mark "PAPA BOY & DEVICE"
for goods under Class 30, specifically for "lechon sauce."7 The Intellectual Property Office (IPO) 13. [With the] dominant feature of respondent-applicant's mark "PAPA BOY & DEVICE",
published said application for opposition in the IP Phil. e-Gazette released on September 8, 2006. The which is Opposer's "PAPA" and the variations thereof, confusion and deception is
mark appears as follows: likely to result: The consuming public, particularly the unwary customers, will be
deceived, confused, and mistaken into believing that respondent-applicant's goods
come from Opposer or are authorized by Opposer to Opposer's prejudice, which is
(Please see image G.R. No. 198889 pg. 2)
particularly true considering that Opposer's sister company, Southeast Asia Food,
Inc., and its predecessors-in-interest have been major manufacturers and
distributors of lechon sauce and other table sauces since 1965 under its registered
On December 11, 2006, petitioner filed with the IPO-BLA a Verified Notice of Opposition to the above-
mark "Mang Tomas";
mentioned application and alleged that:

14. Respondent-applicant's mark "PAPA BOY & DEVICE" which nearly resembles
1. The mark "PAPA" for use on banana catsup and other similar goods was first used Opposer's mark "PAPA" and the variations thereof will impress upon the gullible or
[in] 1954 by Neri Papa, and thus, was taken from his surname; unsuspecting public that it is the same or related to Opposer as to source because its
dominant part is the same as Opposer's mark and, thus, will likely be mistaken to be
2. After using the mark "PAPA" for about twenty-seven (27) years, Neri Papa the mark, or related to, or a derivative or variation of, Opposer's mark;
subsequently assigned the mark "PAPA" to Hernan D. Reyes who, on September 17,
1981, filed an application to register said mark "PAPA" for use on banana catsup, 15. The goods covered by respondent-applicant's application fall under Class 30, the
chili sauce, achara, banana chips, and instant ube powder; same Class under which Opposer's goods enumerated in its earlier issued
registrations;
3. On August 14, 1983, Hernan D. Reyes was issued Certificate of Registration No.
32416; 16. The test of dominancy is now explicitly incorporated into law in Section 155.1 of the
IP Code which defines infringement as the colorable imitation of a registered mark or
4. [Certificate of] Registration No. 32416 was subsequently assigned to the following in a dominant feature thereof, and is provided for by jurisprudence;
successive fashion: Acres & Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC
Philippines, Inc., and Opposer UFC Philippines, Inc.; 17. As a corporation also engaged in the food business, Respondent- applicant knew
and/or ought to know that Opposer and its predecessors-in-interest have been using
5. Last October 28, 2005, Heinz-UFC Philippines, Inc. filed Application Serial No. 4- the mark "PAPA" and the variations thereof for the last fifty-two (52) years while its
2005-010788 which, in effect, is a re- registration of Registration No. 32416 which sister company is engaged in the business of manufacturing and distributing "lechon
expired on August 11, 2003; sauce" and other table sauces for the last forty-one (41) years;

6. Hernan D. Reyes also filed on March 04, 1982 an application to register in the 18. The approval of the subject application will violate Opposer's right to the exclusive
Supplemental Register the "PAPA BANANA CATSUP Label"; use of its registered mark "PAPA" and the variations thereof per Section 13 8 of the
IP Code;
 28

19. The approval of the subject application has caused and will continue to cause great 9. The dissimilarities between the marks are so distinct, thus, confusion is very unlikely: While
and irreparable damage and injury to Opposer; Opposer's mark is a plain word mark, Respondent-applicant's mark "PAPA BOY & DEVICE" is much more
intricate and distinctive such as Opposer's mark not having the words "Lechon Sauce" printed inside a
20. Respondent-applicant filed the subject application fraudulently and in bad faith; and blue ribbon-like device which is illustrated below the words "PAPA BOY", Opposer's mark not having a
prominent smiling hog-like character gesturing a thumbs-up sign and wearing a Filipino hat and scarf
stands beside the words "PAPA BOY", and Opposer's mark not having the words "Barrio Fiesta" albeit
21. Respondent-applicant is not entitled to register the subject mark in its favor.8 conspicuously displayed above the mark, all which leave no doubt in the consumer's mind on the
product that he is purchasing;

In its verified opposition before the IPO, petitioner contended that "PAPA BOY & DEVICE" is confusingly 10. Aside from the fact that Respondent-applicant's mark "PAPA BOY & DEVICE" is distinct and different
similar with its "PAPA" marks inasmuch as the former incorporates the term "PAPA," which is the in appearance, spelling, sound, meaning, and style from Opposer's mark "PAPA KETSARAP", the
dominant feature of petitioner's "PAPA" marks. Petitioner averred that respondent's use of "PAPA BOY & difference in the goods covered by both marks is obvious: Since the goods covered by Respondent-
DEVICE" mark for its lechon sauce product, if allowed, would likely lead the consuming public to believe applicant's mark is unrelated and non- competing to those covered by Opposer's mark, the doctrine
that said lechon sauce product originates from or is authorized by petitioner, and that the "PAPA BOY & allowing the registrations of marks covering unrelated and non-competing goods as enunciated by the
DEVICE" mark is a variation or derivative of petitioner's "PAPA" marks. Petitioner argued that this was Supreme Court is therefore applicable in this case;
especially true considering that petitioner's ketchup product and respondent's lechon sauce product are
related articles that fall under the same Class 30.9 11. Respondent-applicant's mark cannot be confusingly similar to Opposer's mark considering that the
products covered by these marks are different: While Respondent-applicant's mark "PAPA BOY &
Petitioner alleged that the registration of respondent's challenged mark was also likely to damage the DEVICE" covers lechon sauce under Class 30, Opposer's mark "PAPA KETSARAP" covers banana sauce;
petitioner, considering that its former sister company, Southeast Asia Food, Inc., and the latter's
predecessors-in-interest, had been major manufacturers and distributors of lechon and other table 12. If a consumer is in the market for banana sauce, he will not buy lechon sauce and vice-versa and as
sauces since 1965, such as products employing the registered "Mang Tomas" mark. a result, the margin of error in the acquisition of one from the other is simply remote;

In its Verified Answer, respondent argued that there is no likelihood of confusion between petitioner's 13. Respondent-applicant is the exclusive owner of the mark "PAPA BOY & DEVICE" for lechon sauce
family of "PAPA" trademarks and respondent's "PAPA BOY & DEVICE" trademark. Respondent raised under Class 30: The words "PAPA BOY" is a combination of the nickname of Bonifacio Ongpauco who is
affirmative defenses and we quote the relevant ones below: one of Respondent-applicant's incorporators and founders- "BOY"- and the word "PAPA" as Bonifacio
Ongpauco's mother, Sixta P. Evangelista, had been fondly known as "Mama Chit", making Respondent-
applicant the prior adopter, user, and applicant of the mark "PAPA BOY & DEVICE" in the Philippines;
3. Opposer cites several of its following marks in support of its opposition to the application but an
examination of said marks [reveals] that these have already expired and/or that no confusing similarity
14. To protect its ownership over the mark "PAPA BOY & DEVICE" considering that it is the first to adopt
exists x xx;
and use said mark, Respondent-applicant applied for its registration under Application Serial No. 4-
2002-002757 for Class 30, and said application was found registrable by the Examiner as a
4. Assuming that the mark "PAPA KETSARAP" had been timely renewed on August 23, 2005 for "banana
consequence of which the same was recommended for allowance after undergoing a thorough process
sauce" under Class 30, the same is not a hindrance to the successful registration of the mark "PAPA
of examination, which recommendation was then approved by the Director of the Bureau of Trademarks
BOY & DEVICE": Jurisprudence provides that a certificate of registration confers upon the trademark
(BOT);
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;
15. Respondent-applicant's mark "PAPA BOY & DEVICE" has been commercially used in the Philippines;
5. As a result, Opposer's right to use the mark "PAPAKETSARAP" is limited to the products covered by
16. Respondent-applicant's mark "PAPA BOY & DEVICE" has been promoted and advertised for a
its certificate of registration which is Class 30 for banana sauce;
considerable duration of time and over wide geographical areas: Respondent-applicant has invested
tremendous amount of resources in the promotion of its mark "PAPA BOY & DEVICE" through various
6. Contrary to Opposer's belief, the dominant features of Respondent-applicant's mark "PAPA BOY &
media including print publications and promotional materials;
DEVICE" are the words "PAPA BOY" and the representation of a smiling hog-like character gesturing the
thumbs-up sign and wearing a traditional Filipino hat and scarf while the dominant feature of Opposer's
17. The widespread local commercial use of the subject mark by Respondent-applicant to distinguish
mark "PAPA KETSARAP" are the words "Papa" and "Ketsarap", not the word "Papa"; and the word
and identify its various high-quality consumer products has earned Respondent-applicant a well-
"Ketsarap " is more prominently printed and displayed in the foreground than the word "Papa" for which
deserved business reputation and goodwill;
reasons opposer's reference to the Dominancy Test fails;
18. Respondent-applicant's mark is distinctive and capable of identifying its goods and distinguishing
7. Opposer's allegation that the registration of Respondent-applicant's mark "PAPA BOY & DEVICE" will
them from those offered for sale by others in the market including Opposer's goods for which reason no
damage and prejudice the mark "MANG TOMAS" is irrelevant considering that Opposer's basis for filing
confusion will result because Respondent-applicant's mark is for lechon sauce while Opposer's mark is
this opposition is the alleged confusing similarity between Respondent-applicant's mark and Opposer's
for banana sauce; and
mark "PAPA KETSARAP", not the mark "MANG TOMAS";
19. The presence of a common prefix "PAPA" in the marks of both parties does not render said marks
8. Respondent-applicant's mark "PAPA BOY & DEVICE" is neither identical nor confusingly similar to
identical or confusingly similar: Opposer cannot exclusively appropriate said prefix considering that
Opposer's mark "PAPA KETSARAP": Respondent-applicant's mark "PAPABOY & DEVICE" is an arbitrary
other marks such as "Papa Heinz Pizza", "Papa Heinz Sausage", "Papa Beaver", "Papa Pop", "Pizza Papa
mark which differs in overall sound, spelling, meaning, style, configuration, presentation, and
John's & Design", "Papadoods", and "Papa in Wine and Device" are valid and active.10chanrobleslaw
appearance from Opposer's mark "PAPA KETSARAP";
 29

of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision
Petitioner's mark and its variations appear as follows: for information, guidance, and records purposes."16

1. 1. "PAPA" under Registration No. 32416 for Class 29 goods;11

DECISION OF THE COURT OF APPEALS
(Please see image G.R. No. 198889 page 7.)
Respondent then filed a petition with the Court of Appeals, questioning the above decision of the IPO
Director General that affirmed the decision of the IPO Bureau of Legal Affairs Director, which disallowed
respondent's application for trademark registration. Respondent's arguments before the Court of
Appeals are quoted below:
2. The mark "PAPA" as it appeared upon re-registration of Certificate No. 32416, under
Application No. 4-2005-010788 for Classes 29 and 30 goods;12 A.

(Please see image G.R. No. 198889 page 7.) REGISTRATION NOS. 32416 AND 42005010788 ISSUED FOR THE "PAPA" MARK AND REGISTRATION
NOS. SR-6282 AND 42006012364 ISSUED FOR THE TRADEMARK "PAPA BANANA CATSUP LABEL/PAPA
LABEL DESIGN" SHOULD NOT BE USED AS BASIS IN DETERMINING THE EXISTENCE OF CONFUSING
SIMILARITY.

3. "PAPA LABEL DESIGN" under Registration No. 4-2006-012364;13 and

B.

(Please see image G.R. No. 198889 page 7.)

THERE IS NO CONFUSING SIMILARITY BETWEEN PETITIONER-APPLICANT'S "PAPA BOY & DEVICE" AND
RESPONDENT'S "PAPA KETSARAP" MARK.

C.
4. "PAPA KETSARAP" under Certificate of Registration No. 34681, for banana sauce (Class 30).14

PETITIONER-APPLICANT IS ENTITLED TO THE REGISTRATION OF THE MARK "PAPA BOY & DEVICE."
(Please see image G.R. No. 198889 page 8.)

D.

PROCEEDINGS BEFORE THE INTELLECTUAL PROPERTY OFFICE THE OPPOSITION STATES NO CAUSE OF ACTION, AND HENCE, SHOULD BE DENIED
OUTRIGHT.17chanrobleslaw
The case was referred to mediation but the parties failed to arrive at an amicable settlement. The case
was thus set for preliminary conference. Subsequently, the IPO-BLA directed the parties to file their
respective position papers and draft decisions. As regards the first ground, the Court of Appeals held:

The IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's Opposition and rejecting Records show that respondent UFC has Certificates of Registration for the trademarks PAPA, PAPA
respondent's application for "PAPA BOY & DEVICE." The fallo of said decision reads as follows: BANANA CATSUP label and PAPA KETSARAP. A closer look at the respective Certificate[s] of Registration
of the aforementioned marks, however, reveals that at the time the trademark application of petitioner
WHEREFORE, the VERIFIED NOTICE OF OPPOSITION filed by UFC Philippines, Inc. is, as it is hereby, was published in the IPO e-Gazette on September 8, 2006, the duration of the trademark registration of
SUSTAINED. Consequently, Application Serial No. 4-2002-002757 for the mark "PAPA BOY & DEVICE" respondent over the marks PAPA and PAPA BANANA CATSUP have already expired. On the other
for lechon sauce under Class 30 filed on April 04, 2002 by Barrio Fiesta Manufacturing Corporation, is, hand, the mark PAPA KETSARAP was timely renewed by respondent as shown by the
as it is hereby, REJECTED. Let the file wrapper of PAPA BOY & Device subject matter of this case be Certificate of Renewal of Registration issued on September 1, 2006 by the Director of the
forwarded to the Bureau of Trademarks (BOT) for appropriate action in accordance with this Bureau of Trademarks.
Decision.15chanrobleslaw
Under R.A. No. 8293, as amended by R.A. No. 9150, the duration of a trademark registration is 10
years, renewable for periods of 10 years each renewal. The request for renewal must be made within 6
Respondent filed an appeal before the IPO Director General, who found it unmeritorious, and disposed months before or after the expiration of the registration. Respondent's PAPA mark was not renewed
of the case in the following manner: within the period provided for under RA No. 8293. Its registered term ended on August 11, 2003 but
was reapplied for registration only on April 4, 2005. Meanwhile, the mark PAPA BANANA CATSUP was
WHEREFORE, the instant appeal is hereby DISMISSED. Let a copy of this Decision as well as the registered by respondent only in the Supplemental Register, hence, was not provided any protection, x
trademark application and records be furnished and returned to the Director of the Bureau of Legal x x. It is noted that the PAPA BANANA CATSUP label was applied for registration on November 15,
Affairs for appropriate action. Further, let also the Director of the Bureau of Trademarks and the library 2006, over three years after the expiration of its registration in the Supplemental Register of the
 30

Philippine Patent Office on August 11, 2003. Thus, while petitioner has a point that the marks
PAPA and PAPA BANANA CATSUP have already expired and the latter having been afforded
no protection at all and should not be juxtaposed with petitioner's trademark, respondent The court a quo erred in holding that there is no likelihood of confusion between the contending marks
can still use the marks PAPA KETSARAP and PAPA BANANA CATSUP, it appearing that the given that the "PAPA BOY & DEVICE" mark is used on lechon sauce, as opposed to ketchup products.
Intellectual Property Office issued a Certificate of Registration No. 4-2006-012364 for the
latter on April 30, 2007, to bar the registration of petitioner's "PAPA BOY & DEVICE" III.
mark.18 (Emphases supplied, citations omitted.)

Anent the second ground, the Court of Appeals ruled in the following manner: The court a quo erred in holding that Petitioner cannot claim exclusive ownership and use of the "PAPA"
mark for its sauce products because "PAPA" is supposedly a common term of endearment for one's
father.20chanrobleslaw
After taking into account the aforementioned doctrines and the factual circumstances of the
case at bar, this Court, after considering the trademarks involved as a whole, is of the view
that petitioner's trademark "PAPA BOY & DEVICE" is not confusingly similar to respondent's Under the first ground, petitioner submitted the following arguments:
"PAPA KETSARAP" and "PAPA BANANA CATSUP" trademark. Petitioner's trademark is "PAPA
BOY" as a whole as opposed to respondent's "PAPA". Although on its label the word "PAPA" is
1. The findings of administrative agencies, if supported by substantial evidence, are
prominent, the trademark should be taken as a whole and not piecemeal. The difference between the
binding upon the courts.21
two marks are conspicuous and noticeable. While respondent's products are both labeled as banana
sauces, that of petitioner Barrio Fiesta is labeled as lechon sauce.

Moreover, it appears on the label of petitioner's product that the said lechon sauce is manufactured by
Barrio Fiesta thus, clearly informing the public [of) the identity of the manufacturer of the lechon sauce. Petitioner alleges that the Court of Appeals should have respected the ruling of the IPO Director
As claimed by respondent, its products have been in commercial use for decades. It is safe to assume General, which was consistent with the ruling of the IPO-BLA and supported by substantial evidence,
then that the consumers are already aware that "PAPA KETSARAP" and "PAPA BANANA CATSUP" are instead of substituting its findings of fact for those of the Director General and the IPO-BLA.
products of UFC and not of petitioner or the other way around. In addition, as correctly pointed out by
petitioner, if a consumer is in the market for banana sauce, he will not buy lechon sauce and vice-versa
because aside from the fact that the labels of both parties' products contain the kind of sauce they are 2. The dominancy test should have been applied to determine if there is confusing
marketing, the color of the products is visibly different. An ordinary consumer is familiar with the fact similarity between the competing marks.22
that the color of a banana sauce is red while a lechon sauce is dark brown. There can be no deception
as both products are marketed in bottles making the distinction visible to the eye of the consumer and
the likelihood of acquiring a wrong sauce, remote. Even if the products are placed side by side, the Petitioner points out that the Director General and the IPO-BLA found that the dominant feature of the
dissimilarities between the two marks are conspicuous, noticeable and substantial enough to matter competing marks is the word "PAPA" and the minor additions to respondent's "PAPA BOY & DEVICE"
especially in the light of the following variables that must be factored in. mark do not negate likelihood of confusion caused by the latter's use of the dominant word "PAPA."
Petitioner claims that even compared solely to petitioner's "PAPA KETSARAP" mark (Registration No.
Lastly, respondent avers that the word "PAPA" was coined after the surname of the person who first 34681), which is conceded to have been timely renewed and to have never expired, respondent's "PAPA
created and made use of the mark. Admittedly, while "PAPA" is a surname, it is more widely known as a BOY & DEVICE" would still create the likelihood of confusion.23
term of endearment for one's father. Respondent cannot, therefore, claim exclusive ownership over and
singular use of [the] term. Petitioner was able to explain that it adopted the word "PAPA" in parallel to According to petitioner, the Court of Appeals based its decision on Mead Johnson & Co. v. N.V.J. Van
the nickname of the founder of Barrio fiesta which is "MAMA CHIT". "PAPA BOY" was derived from the Dorp, Ltd.,24 a case decided almost five decades ago, long before Republic Act No. 8293 or the 1998
nickname of one of the incorporators of herein petitioner, a certain Bonifacio Ongpauco, son of Mama Intellectual Property Code was enforced. Thus, the Court of Appeals erroneously applied the holistic test
Chit.19(Emphasis ours, citation omitted.) since given the nature of the products bearing the competing marks, the dominancy test should have
been applied.

THEORY OF PETITIONER Petitioner claims that "[k]etchup and lechon sauce are common and inexpensive household products
that are sold in groceries and regularly encountered by the ordinary or common purchaser who is not
Thus, petitioner came to this Court, seeking the reversal of the questioned decision and resolution of expected to examine, scrutinize, and compare the details of the competing marks."25cralawred
the Court of Appeals, and the reinstatement of the decision of the IPO Director General affirming the
decision of the IPO-BLA. Petitioner raises the following grounds: Petitioner distinguishes this case from Mead Johnson  and claims that the ordinary purchaser of ketchup
or lechon sauce is not likely to closely scrutinize each mark as a whole, for the latter is "undiscerningly
rash" and usually in a hurry, and cannot be expected to take note of the smiling hog-like character or
I. the blue ribbon-like device with the words "Lechon Sauce." Petitioner argues that under the Intellectual
Property Code, it is not necessary for one to colorably imitate the competing trademark as a whole. It is
sufficient that one imitates a "dominant feature" of the mark to constitute trademark infringement.
The court a quo erred in applying the "holistic test" to determine whether there is confusing similarity
between the contending marks, and in reversing the IPO-BLA and the Director General's application of Petitioner asserts that as the IPO-BLA and the Director General observed that the ordinary purchaser is
the "dominancy test." most likely to notice the words "PAPA BOY," which, in turn, may lead him to believe that there is a
connection between respondent's lechon sauce and petitioner's ketchup products.
II.
 31

Under the second ground, petitioner argues that the Court of Appeals seemed to be unmindful that two renewal application, but could only be considered a new application under the new Trademark Law, with
kinds of confusion may arise from the use of similar or colorable imitation marks, i.e., confusion of the filing date reckoned on October 28, 2005. The registrability of the mark under the new application
goods (product confusion) and confusion of business (source or origin confusion). Petitioner claims that was examined again, and any certificate issued for the registration of "PAPA" could not have been a
it is reasonable to assume that it may expand its business to producing lechon sauce, inasmuch as it renewal certificate.
already produces food sauce products and its Articles of Incorporation authorizes it to do so.
As for petitioner's other mark "PAPA BANANA CATSUP LABEL," respondent claims that its 20-year term
Petitioner alleges that the IPO-BLA recognized that confusion of business may arise from respondent's also expired on August 11, 2003 and that petitioner only filed its application for the new "PAPA LABEL
use of its "PAPA BOY & DEVICE" mark for lechon sauce products, and that the Director-General agreed DESIGN" on November 15, 2006. Having been filed three years beyond the renewal application
with the IPO-BLA's findings on this issue. deadline, petitioner was not able to renew its application on time, and cannot claim a "continuous
existence of its rights over the 'PAPA BANANA CATSUP LABEL.'" Respondent claims that the two marks
Petitioner asserts that ketchup and lechon sauce are undeniably related goods; that they belong to the are different from each other and that the registration of one is independent of the other. Respondent
same class, i.e., Class 30 of the Nice Classifications; that they serve practically the same concludes that the certificate of registration issued for "PAPA LABEL DESIGN" is "not and will never be a
purpose,  i.e., to spice up dishes; and that they are sold in similar bottles in the same shelves in grocery renewal certificate."31
stores. Petitioner argues that the Court of Appeals had absolutely no basis for stating that a person who
is out to buy ketchup is not likely to buy lechon sauce by mistake, as this analysis allegedly only applies Respondent also avers as follows:
to "product confusion" and does not consider confusion of business. Petitioner alleges that "[t]here
equally is actionable confusion when a buyer purchases Respondent's 'PAPA BOY' lechon sauce believing 1.3. With regard to the two new registrations of petitioner namely: "PAPA" (Reg. No. 4-2005-010788)
that the said product is related to or associated with the famous 'PAPA KETSUP' makers." Petitioner and "PAPA LABEL DESIGN" (Reg. No. 4-2006-012364), these were filed on October 28, 2005 and
further alleges that "it is reasonable and likely for a consumer to believe that Respondent's 'PAPA BOY' November 15, 2006, respectively, under the Intellectual Property Code (RA 8293), which follows the
lechon sauce originated from or is otherwise connected with Petitioner's line of sauces" and that this is "first to file" rule, and were obviously filed later than respondent's "PAPA BOY & DEVICE" mark filed on
"the precise evil that recognition of confusion of business seeks to prevent."26 April 4, 2002. These new marks filed much later than the opposed "PAPA BOY & DEVICE" mark cannot,
therefore, be used as basis for the opposition and should in fact, be denied outrightly.
Petitioner avers that "PAPA" is a well-known mark and that it has been in commercial use as early as
1954 on banana ketchup and similar goods. The "PAPA" mark is also registered as a trademark and in xxxx
commercial use in other parts of the world such as the United States of America and the Middle East.
Petitioner claims that "[bjeing a trademark that is registered and well-known both locally and A search of the Online Trademark Database of Intellectual Property Office (IPO) will show that only
internationally, Petitioner's 'PAPA' marks cannot be appropriated by another person or entity not only Registration No. 34681 issued for "PAPA KETSARAP" was properly renewed on August 23, 2005. x x x
with respect to goods similar to those with respect to which it is registered, but also with respect to Clearly, the registrations of "PAPA" and "PAPA BANANA CATSUP LABEL" marks under registration nos.
goods which are not similar to those for which the 'PAPA' marks are registered."27 32416 and SR-6282 respectively, have already expired when Petitioner filed its opposition proceeding
against Respondent's trademark on December 11, 2006. Having expired, and therefore, no longer
Under the third ground, petitioner claims that the fact that the word "PAPA" is a known term of legally existing, the "PAPA" and "PAPA BANANA CATSUP LABEL" marks CANNOT BAR the registration of
endearment for fathers does not preclude it from being used as a mark to identify goods. Petitioner respondent's mark. To allow petitioner's expired marks to prevent respondent's distinct "PAPA BOY &
claims that their mark falls under a type of mark known as "arbitrary or fanciful marks," which are DEVICE" mark from being registered would be the ultimate absurdity.32chanrobleslaw
"marks that bear no logical relation to the actual characteristics of the products they represent," are
"highly distinctive and valid," and "are entitled to the greatest protection."28
Respondent posits that the Court of Appeals did not err in reversing the decisions of the administrative
Petitioner claims that the mark "PAPA" falls under this class of arbitrary marks, even if "PAPA" is also a agencies, alleging that "[while] it is true that the general rule is that the factual findings of
common term of endearment for one's father. Petitioner states that there is no logical connection administrative bodies deserve utmost respect when supported by evidence, the same is subject to
between one's father and food sauces, such as ketchup; thus, with respect to ketchup, food sauces, and exceptions,"33 and that the Court of Appeals had justifiable reasons to disregard the factual finding of
their related products, and for the purpose of identifying its products, petitioner claims exclusive the IPO. Here, the Court of Appeals wisely identified certain material facts that were overlooked by the
ownership of the term "PAPA" as an arbitrary mark. IPO-BLA and the IPO Director General which it opined, when correctly appreciated, would alter the
result of the case.
Petitioner alleges that if respondent "has a good faith and proud desire to unmistakably and distinctly
identify its lechon sauce product out in the market, it should have coined a mark that departs from and Respondent alleges that the IPO-BLA erroneously considered petitioner's marks "PAPA" and "PAPA
is distinguished from those of its competitors." Petitioner claims that respondent, with full knowledge of BANANA CATSUP LABEL" when it applied the dominancy test in determining whether petitioner's marks
the fame and the decades-long commercial use of petitioner's "PAPA" marks, opted for "PAPA BOY & are confusingly similar to those of respondent's mark "PAPA BOY & DEVICE."
DEVICE," which obviously is just a "colorable imitation."29
Respondent avers that the IPO-BLA absurdly took emphasis on the mark "PAPA" to arrive at its decision
THEORY OF RESPONDENT and did not take into consideration that petitioner's mark was already expired when respondent applied
for the registration of its "PAPA BOY & DEVICE" mark. Respondent compares its "PAPA BOY & DEVICE"
In its Comment,30 respondent claims that petitioner's marks have either expired and/or "that no with the only mark that respondent allegedly has, "PAPA KETSARAP," and found no confusing similarity
confusing similarity exists between them and respondent's "PAPA BOY & DEVICE' mark." Respondent between the two.
alleges that under Section 15 of Republic Act No. 166, a renewal application should be filed within six
months before the expiration of the period or within three months after such expiration. Respondent We quote below respondent's discussion of its application of the dominancy test to the marks in
avers that the expiration of the 20-year term for the "PAPA" mark under Registration No. 32416 issued question:
on August 11, 1983 was August 11, 2003. The sixth month before August 11, 2003 was February 11,
2003 and the third month after August 11, 2003 was November 11, 2003. Respondent claims that the Applying the Dominancy test, as correctly emphasized by the Court of Appeals, the dominant feature in
application that petitioner filed on October 28, 2005 was almost two years late. Thus, it was not a respondent's mark is "PAPA BOY" and not "PAPA". It can be gleaned from respondent's mark that the
 32

word "PAPA" was written in the same font, style and color as the word "BOY". There is also the presence
of a "smiling hog-like character" which is positioned very prominently, both in size and location in said Respondent also contends that "PAPA BOY & DEVICE" mark is not confusingly similar to petitioner's
mark, at glance (sic) even more dominant than the word "PAPA BOY". trademark "PAPA KETSARAP" in terms of appearance, sound, spelling and meaning. The difference in
nature, usage, taste and appearance of products decreases the possibility of deception among buyers.37
xxxx

On the other hand, the dominant feature in petitioner's mark is "KETSARAP", not "PAPA". Even an Respondent alleges that since petitioner merely included banana catsup as its product in its certificate,
ordinary examiner could observe that the word "KETSARAP" in petitioner's mark is more prominently it cannot claim any further right to the mark "PAPA KETSARAP" on products other than banana catsup.
printed than the word "PAPA". Respondent also alleges that petitioner cannot raise "international notoriety of the mark" for the first
time on appeal and that there is no proof that petitioner's mark is internationally well-known.38
xxxx
Furthermore, respondent argues that petitioner cannot claim exclusive ownership over the use of the
In a dominancy test, the prominent feature of the competing trademarks must be similar to cause word "PAPA," a term of endearment for one's father. Respondent points out that there are several other
confusion or deception, x x x. valid and active marks owned by third parties which use the word "PAPA," even in classes of goods
similar to those of petitioner's. Respondent avers that petitioner's claim that its "PAPA" mark is an
Verily, respondent's dominant feature "PAPA BOY" and the smiling hog-like character and petitioner's arbitrary mark is belatedly raised in the instant petition, and cannot be allowed because the "PAPA
dominant feature "KETSARAP", being the word written in a larger font, are neither confusing nor KETSARAP" mark would immediately bring the consuming public to thinking that the product involved is
deceiving to the public. In fact, the differences between their dominant marks are very noticeable and catsup and the description of said catsup is "masarap" (delicious) and due to the logical relation of the
conspicuous to every purchaser. petitioner's mark to the actual product, it being descriptive or generic, it is far from being arbitrary or
fanciful.39
Furthermore, the Supreme Court in Societe des Produits Nestle, S.A. v. Dy  [641 Phil. 345], applied the
dominancy test by taking into account the aural effects of the words and letters contained in the marks Lastly, respondent claims that the Court of Appeals correctly ruled that respondent's product cannot be
in determining the issue of confusing similarity. Obviously, petitioners' "PAPA KETSARAP" mark does not confused as originating from the petitioner. Since it clearly appears in the product label of the
in any way sounds (sic) like respondent's "PAPA BOY" mark. The common prefix "PAPA" does not render respondent that it is manufactured by Barrio Fiesta, the public is dutifully informed of the identity of the
the marks aurally the same. As discussed above, the dominant feature in petitioner's mark is lechon sauce manufacturer. The Court of Appeals further took into account the fact that petitioner's
"KETSARAP" and the dominant feature in respondent's mark is "PAPA BOY". Thus, the words products have been in commercial use for decades.40
"KETSARAP" and "PAPA BOY" in petitioner's and respondent's respective marks are obviously different in
sound, making "PAPA BOY & DEVICE" even more distinct from petitioner's "PAPA KETSARAP" Petitioner, in its Reply41 to respondent's Comment, contends that respondent cannot invoke a prior
mark.35chanrobleslaw filing date for the "PAPA BOY" mark as against Petitioner's "PAPA" and "PAPA BANANA CATSUP LABEL"
marks, because the latter marks were still registered when respondent applied for registration of its
"PAPA BOY" mark. Thus, the IPO-BLA and Director General correctly considered them in deciding
Using the holistic test, respondent further discusses the differences in the marks in this wise:
whether the "PAPA BOY" mark should be registered, using the "first to file" rule under Section 123.1(d)
of Republic Act No. 8293, or the Intellectual Property Code (IP Code).
Even the use of the holistic test x x x takes into consideration the entirety of the marks in question [to]
be considered in resolving confusing similarity. The differences are again very obvious. Respondent's Petitioner reiterates its argument that the Court of Appeals erred in applying the holistic test and that
mark has (1) the word "lechon sauce" printed inside a blue ribbon-like device which is illustrated below the proper test under the circumstances is the dominancy test, which was correctly applied by the IPO-
the word "PAPA BOY"; (2) a prominent smiling hog-like character gesturing a thumbs-up sign and BLA and the Director General.42
wearing a Filipino hat and scarf stands beside the word "PAPA BOY"; and the word "BARRIO FIESTA"
conspicuously displayed above the said trademark which leaves no doubt in the consumer's mind on the THIS COURT'S RULING
product that he or she is purchasing. On the other hand, petitioner's mark is the word "PAPA" enclosed
by a cloud on top of the word "KETSARAP' enclosed by a geometrical figure. The petition has merit. We find that the Court of Appeals erred in applying the holistic test and in
reversing and setting aside the decision of the IPO-BLA and that of the IPO Director General, both of
xxxx which rejected respondent's application for the mark "PAPA BOY & DEVICE."

In the instant case, the respective marks are obviously different in color scheme, logo, spelling, sound, In Dermaline, Inc. v. Myra Pharmaceuticals, Inc.,43 we defined a trademark as "any distinctive word,
meaning and connotation. Thus, yet again, under the holistic test there can be no confusion or name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by a
deception between these marks. manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold,
or dealt by others." We held that a trademark is "an intellectual property deserving protection by law."
It also bears stressing that petitioner's "PAPA KETSARAP" mark covers "banana catsup" while
respondent's "PAPA BOY & DEVICE" covers "lechon sauce", thereby obliterating any confusion of The rights of the trademark owner are found in the Intellectual Property Code, which provides:
products of both marks as they travel different channels of trade. If a consumer is in the market for
banana catsup, he or she will not buy lechon sauce and vice-versa. As a result, the margin of error in
Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall have the exclusive
the acquisition of one for the other is simply remote. Lechon sauce which is liver sauce is distinct from
right to prevent all third parties not having the owner's consent from using in the course of trade
catsup extracted/ made from banana fruit. The flavor and taste of a lechon sauce are far from those of
identical or similar signs or containers for goods or services which are identical or similar to those in
a banana catsup. Lechon sauce is sauce for "lechon" while banana catsup is apparently catsup made
respect of which the trademark is registered where such use would result in a likelihood of confusion. In
from banana.36chanrobleslaw
case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.
 33

Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who has considered as being similar or dissimilar to each other on the ground that, in any registration or
identified in the mind of the public the goods he manufactures or deals in, his business or services from publication by the Office, they appear in different classes of the Nice Classification.
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
In this case, the findings of fact of the highly technical agency, the Intellectual Property Office, which
property rights.
has the expertise in this field, should have been given great weight by the Court of Appeals. As we held
in Berris Agricultural Co., Inc. v. Abyadang44:
The guideline for courts in determining likelihood of confusion is found in A.M. No. 10-3-10-SC, or the
Rules of Procedure for Intellectual Property Rights Cases, Rule 18, which provides: R.A. No. 8293 defines a "mark" as 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. It
RULE 18 also defines a "collective mark" as 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
Evidence in Trademark Infringement and Unfair Competition Cases SECTION 1. Certificate of of the collective mark.
Registration. — A certificate of registration of a mark shall be prima facie  evidence of:
On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol, emblem,
a) the validity of the registration; b) the registrant's ownership of the mark; and sign, or device, or any combination thereof, adopted and used by a manufacturer or merchant on his
goods to identify and distinguish them from those manufactured, sold, or dealt by another. A
c) the registrant's exclusive right to use the same in connection with the goods or services and those trademark, being a special property, is afforded protection by law. But for one to enjoy this legal
that are related thereto specified in the certificate. protection, legal protection ownership of the trademark should rightly be established.

xxxx The ownership of a trademark is acquired by its registration and its actual use by the manufacturer or
distributor of the goods made available to the purchasing public. Section 122 of R.A.. No. 8293 provides
that the rights in a mark shall be acquired by means of its valid registration with the IPO. A certificate of
SECTION 3. Presumption of Likelihood of Confusion. — Likelihood of confusion shall be presumed in registration of a mark, once issued, constitutes prima facie  evidence of the validity of the registration,
case an identical sign or mark is used for identical goods or services. of 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. R.A.
SECTION 4. Likelihood of Confusion in Other Cases.  — In determining whether one trademark is No. 8293, however, requires the applicant for registration or the registrant to file a declaration of actual
confusingly similar to or is a colorable imitation of another, the court must consider the general use (DAU) of the mark, with evidence to that effect, within three (3) years from the filing of the
impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and application for registration; otherwise, the application shall be refused or the mark shall be removed
giving the attention such purchasers usually give in buying that class of goods. Visual, aural, from the register. In other words, the prima facie presumption brought about by the registration of a
connotative comparisons and overall impressions engendered by the marks in controversy as they are mark may be challenged and overcome, in an appropriate action, by proof of the nullity of the
encountered in the realities of the marketplace must be taken into account. Where there are both registration or of non-use of the mark, except when excused. Moreover, the presumption may likewise
similarities and differences in the marks, these must be weighed against one another to see which be defeated by evidence of prior use by another person, i.e., it will controvert a claim of legal
predominates. appropriation or of ownership based on registration by a subsequent user. This is because a trademark
is a creation of use and belongs to one who first used it in trade or commerce.
In determining likelihood of confusion between marks used on non-identical goods or services, several
factors may be taken into account, such as, but not limited to: The determination of priority of use of a mark is a question of fact. Adoption of the mark alone does not
suffice. One may make advertisements, issue circulars, distribute price lists on certain goods, but these
a) the strength of plaintiff s mark; alone will not inure to the claim of ownership of the mark until the goods bearing the mark are sold to
the public in the market. Accordingly, receipts, sales invoices, and testimonies of witnesses as
b) the degree of similarity between the plaintiffs and the defendant's marks; customers, or orders of buyers, best prove the actual use of a mark in trade and commerce during a
certain period of time.
c) the proximity of the products or services;
xxxx
d) the likelihood that the plaintiff will bridge the gap;
Verily, the protection of trademarks as intellectual property is intended not only to preserve the goodwill
e) evidence of actual confusion; and reputation of the business established on the goods bearing the mark through actual use over a
period of time, but also to safeguard the public as consumers against confusion on these goods. On
f) the defendant's good faith in adopting the mark; this matter of particular concern, administrative agencies, such as the IPO, by reason of their
special knowledge and expertise over matters falling under their jurisdiction, are in a better
g) the quality of defendant's product or service; and/or h) the sophistication of the buyers. position to pass judgment thereon. Thus, their findings of fact in that regard are generally
accorded great respect, if not finality by the courts, as long as they are supported by
"Colorable imitation" denotes such a close or ingenious imitation as to be calculated to deceive ordinary substantial evidence, even if such evidence might not be overwhelming or even
persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention preponderant. It is not the task of the appellate court to weigh once more the evidence
as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other. submitted before the administrative body and to substitute its own judgment for that of the
administrative agency in respect to sufficiency of evidence. (Emphasis added, citations omitted.)
SECTION 5. Determination of Similar and Dissimilar Goods or Services. — Goods or services may not be
 34

While there may be dissimilarities between the appearances of the shoes, to this Court's mind such
In trademark controversies, each case must be scrutinized according to its peculiar circumstances, such dissimilarities do not outweigh the stark and blatant similarities in their general features, x x x.
that jurisprudential precedents should only be made to apply if they are specifically in point.45 The cases
discussed below are mentioned only for purposes of lifting the applicable doctrines, laws, and concepts, Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic
but not for their factual circumstances, because of the uniqueness of each case in controversies such as test, ruled that there was no colorable imitation, when it cannot be any more clear and apparent to this
this one. Court that there is colorable imitation. The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondent's products will cause confusion and mistake in the eyes of
There are two tests used in jurisprudence to determine likelihood of confusion, namely the dominancy the public. Respondent's shoes may not be an exact replica of petitioner's shoes, but the features and
test used by the IPO, and the holistic test adopted by the Court of Appeals. In Skechers, U.S.A., Inc. v. overall design are so similar and alike that confusion is highly likely.
Inter Pacific Industrial Trading Corp.,46 we held:
xxxx
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 — Neither can the difference in price be a complete defense in trademark infringement. In McDonald's
the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of Corporation v. L.C. Big Mak Burger, Inc., this Court held:
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 Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to
it required that the mark sought to be registered suggests an effort to imitate. Given more guarding his goods or business from actual market competition with identical or similar products of the
consideration are the aural and visual impressions created by the marks on the buyers of goods, giving parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-
little weight to factors like prices, quality, sales outlets, and market segments. name is likely to lead to a confusion of source, as where prospective purchasers would be misled into
thinking that the complaining party has extended his business into the field (see 148 ALR 56 et seq; 53
xxxx Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the
normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x x x.
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types
of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser
Indeed, the registered trademark owner may use its mark on the same or similar products, in different
would be induced to purchase one product in the belief that he was purchasing the other; and (2)
segments of the market, and at different price levels depending on variations of the products for specific
confusion of business (source or origin confusion), where, although the goods of the parties are
segments of the market. The purchasing public might be mistaken in thinking that petitioner had
different, the product, the mark of which registration is applied for by one party, is such as might
ventured into a lower market segment such that it is not inconceivable for the public to think that
reasonably be assumed to originate with the registrant of an earlier product, and the public would then
Strong or Strong Sport Trail might be associated or connected with petitioner's brand, which scenario is
be deceived either into that belief or into the belief that there is some connection between the two
plausible especially since both petitioner and respondent manufacture rubber shoes.
parties, though inexistent.
Withal, the protection of trademarks as intellectual property is intended not only to preserve the
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by
goodwill and reputation of the business established on the goods bearing the mark through actual use
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
over a period of time, but also to safeguard the public as consumers against confusion on these goods.
IPO. While it is undisputed that petitioner's stylized "S" is within an oval design, to this Court's mind,
While respondent's shoes contain some dissimilarities with petitioner's shoes, this Court cannot close its
the dominant feature of the trademark is the stylized "S," as it is precisely the stylized "S" which
eye to the fact that for all intents and purpose, respondent had deliberately attempted to copy
catches the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact
petitioner's mark and overall design and features of the shoes. Let it be remembered, that defendants
that it used the same stylized "S", the same being the dominant feature of petitioner's trademark,
in cases of infringement do not normally copy but only make colorable changes. The most successful
already constitutes infringement under the Dominancy Test.
form of copying is to employ enough points of similarity to confuse the public, with enough points of
difference to confuse the courts. (Citations omitted.)
This Court cannot agree with the observation of the CA that the use of the letter "S" could hardly be
considered as highly identifiable to the products of petitioner alone. The CA even supported its
conclusion by stating that the letter "S" has been used in so many existing trademarks, the most The Court discussed the concept of confusion of business in the case of Societe Des Produits Nestle,
popular of which is the trademark "S" enclosed by an inverted triangle, which the CA says is identifiable S.A. v. Dy, Jr.,47 as quoted below:
to Superman. Such reasoning, however, misses the entire point, which is that respondent had used
a stylized "S," which is the same stylized "S" which petitioner has a registered trademark for. The letter "S"
Among the elements, the element of likelihood of confusion is the gravamen of trademark infringement.
used in the Superman logo, on the other hand, has a block-like tip on the upper portion and a round
There are two types of confusion in trademark infringement: confusion of goods and confusion of
elongated tip on the lower portion. Accordingly, the comparison made by the CA of the letter "S" used in
business. In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, the Court
the Superman trademark with petitioner's stylized "S" is not appropriate to the case at bar.
distinguished the two types of confusion:
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on
the font and the size of the lettering, the stylized "S" utilized by respondent is the very same stylized Callman notes two types of confusion. The first is the confusion of goods "in which event the ordinarily
"S" used by petitioner; a stylized "S" which is unique and distinguishes petitioner's trademark. prudent purchaser would be induced to purchase one product in the belief that he was purchasing the
Indubitably, the likelihood of confusion is present as purchasers will associate the respondent's use of other." In which case, "defendant's goods are then bought as the plaintiffs, and the poorer quality of
the stylized "S" as having been authorized by petitioner or that respondent's product is connected with the former reflects adversely on the plaintiffs reputation." The other is the confusion of business: "Here
petitioner's business. though the goods of the parties are different, the defendant's product is such as might reasonably be
assumed to originate with the plaintiff, and the public would then be deceived either into that belief or
XXXX into the belief that there is some connection between the plaintiff and defendant which, in fact, does not
exist."
 35

This Court x x x has relied on the dominancy test rather than the holistic test. The dominancy test
There are two tests to determine likelihood of confusion: the dominancy test and holistic test. The considers the dominant features in the competing marks in determining whether they are confusingly
dominancy test focuses on the similarity of the main, prevalent or essential features of the competing similar. Under the dominancy test, courts give greater weight to the similarity of the appearance of the
trademarks that might cause confusion. Infringement takes place when the competing trademark product arising from the adoption of the dominant features of the registered mark, disregarding minor
contains the essential features of another. Imitation or an effort to imitate is unnecessary. The question differences. Courts will consider more the aural and visual impressions created by the marks in the
is whether the use of the marks is likely to cause confusion or deceive purchasers. public mind, giving little weight to factors like prices, quality, sales outlets and market segments.

xxxx Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled:

In cases involving trademark infringement, no set of rules can be deduced. Each case must be decided x x x It has been consistently held that the question of infringement of a trademark is to be determined
on its own merits. Jurisprudential precedents must be studied in the light of the facts of each particular by the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the
case. In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court held: 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
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs.
another, no set rules can be deduced because each case must be decided on its merits. In such cases, Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579).
even more than in any other litigation, precedent must be studied in the light of the facts of the The question at issue in cases of infringement of trademarks is whether the use of the marks involved
particular case. That is the reason why in trademark cases, jurisprudential precedents should be applied would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
only to a case if they are specifically in point. Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; x x x)

xxxx
In the light of the facts of the present case, the Court holds that the dominancy test is applicable. In
recent cases with similar factual milieus, the Court has consistently applied the dominancy test, x x x. The test of dominancy 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 x x x or
xxxx a dominant feature  thereof."

In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy test in Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark results in
holding that "MACJOY" is confusingly similar to "MCDONALD'S." The Court held: 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
While we agree with the CA's detailed enumeration of differences between the two (2) competing same as the first two letters in "Mac." Fourth, the last letter "Mak" while a "k" sounds the same as "c"
trademarks herein involved, we believe that the holistic test is not the one applicable in this case, the when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in spelling, thus
dominancy test being the one more suitable. In recent cases with a similar factual milieu as here, the "Caloocan" is spelled "Kalookan."
Court has consistently used and applied the dominancy test in determining confusing similarity or
likelihood of confusion between competing trademarks. In Societe Des Produits Nestle, S.A. v. Court of Appeals,  the Court applied the dominancy test in
holding that "FLAVOR MASTER" is confusingly similar to "MASTER ROAST" and "MASTER BLEND." The
xxxx Court held:
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 that an ordinary purchaser While this Court agrees with the Court of Appeals' detailed enumeration of differences between the
can conclude an association or relation between the marks. respective trademarks of the two coffee products, this Court cannot agree that totality test is the one
applicable in this case. Rather, this Court believes that the dominancy test is more suitable to this case
To begin with, both marks use the corporate "M" design logo and the prefixes "Me" and/or "Mac" as in light of its peculiar factual milieu.
dominant features, x x x.
Moreover, the totality or holistic test is contrary to the elementary postulate of the law on trademarks
For sure, it is the prefix "Me," and abbreviation of "Mac," which visually and aurally catches the and unfair competition that confusing similarity is to be determined on the basis of visual, aural,
attention of the consuming public. Verily, the word "MACJOY" attracts attention the same way as did connotative comparisons and overall impressions engendered by the marks in controversy as they are
"McDonalds," "Mac Fries," "Me Spaghetti," "McDo," "Big Mac" and the rest of the MCDONALD'S marks encountered in the realities of the marketplace. The totality or holistic test only relies on visual
which all use the prefixes Me and/or Mac. comparison between two trademarks whereas the dominancy test relies not only on the visual but also
on the aural and connotative comparisons and overall impressions between the two trademarks.
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 For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and held that:
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 xxxx
marks in the Philippines covers goods which are similar if not identical to those covered by the
respondent's application.
The scope of protection afforded to registered trademark owners is not limited to protection
In McDonald's Corporation v. L.C. Big Mak Burger, Inc., the Court applied the dominancy test in holding from infringers with identical goods. The scope of protection extends to protection from
that "BIG MAK" is confusingly similar to "BIG MAC." The Court held:
 36

infringers with related goods, and to market areas that are the normal expansion of business the goods in question. Given greater consideration are the aural and visual impressions created by the
of the registered trademark owners. Section 138 of R.A. No. 8293 states: marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and market
segments. The test of dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No.
Certificates of Registration. — A certificate of registration of a mark shall be prima facie evidence of 8293 which provides —
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 155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
the certificate, x x x. 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
In  Mighty Corporation v. E. & J. Gallo Winery, the Court held that, "Non-competing goods may be those
confusion, or to cause mistake, or to deceive x x x.
which, though they are not in actual competition, are so related to each other that it can reasonably be
assumed that they originate from one manufacturer, in which case, confusion of business can arise out
xxxx
of the use of similar marks." In that case, the Court enumerated factors in determining whether goods
are related: (1) classification of the goods; (2) nature of the goods; (3) descriptive properties, physical
attributes or essential characteristics of the goods, with reference to their form, composition, texture or Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types
quality; and (4) style of distribution and marketing of the goods, including how the goods are displayed of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser
and sold. would be induced to purchase one product in the belief that he was purchasing the other; and (2)
confusion of business (source or origin confusion), where, although the goods of the parties are
xxxx different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an earlier product, and the public would then
xxx. However, as the registered owner of the "NAN" mark, Nestle should be free to use its be deceived either into that belief or into the belief that there is some connection between the two
mark on similar products, in different segments of the market, and at different price parties, though inexistent.
levels. In McDonald's Corporation v. L.C. Big Mak Burger, Inc., the Court held that the scope of
protection afforded to registered trademark owners extends to market areas that are the normal xxxx
expansion of business:
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while there are no
xxxx set rules that can be deduced as what constitutes a dominant feature with respect to trademarks
applied for registration; usually, what are taken into account are signs, color, design, peculiar shape or
Even respondent's use of the "Big Mak" mark on non-hamburger food products cannot excuse their name, or some special, easily remembered earmarks of the brand that readily attracts and catches the
infringement of petitioners' registered mark, otherwise registered marks will lose their protection under attention of the ordinary consumer.
the law.
xxxx
The registered trademark owner may use his mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the Further, Dermaline's stance that its product belongs to a separate and different classification from
products for specific segments of the market. The Court has recognized that the registered Myra's products with the registered trademark does not eradicate the possibility of mistake on the part
trademark owner enjoys protection in product and market areas that are the normal of the purchasing public to associate the former with the latter, especially considering that both
potential expansion of his business. Thus, the Court has declared: classifications pertain to treatments for the skin.

Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to Indeed, the registered trademark owner may use its mark on the same or similar products, in different
guarding his goods or business from actual market competition with identical or similar products of the segments of the market, and at different price levels depending on variations of the products for specific
parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade- segments of the market. The Court is cognizant that the registered trademark owner enjoys protection
name is likely to lead to a confusion of source, as where prospective purchasers would be misled into in product and market areas that are the normal potential expansion of his business. Thus, we have
thinking that the complaining party has extended his business into the field (see 148 ALR 56 et sq; 53 held —
Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the
normal potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577). (Emphases Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to
supplied, citations omitted.) guarding his goods or business from actual market competition with identical or similar products of the
parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-
name is likely to lead to a confusion of source, as where prospective purchasers would be
Again, this Court discussed the dominancy test and confusion of business in Dermaline, Inc. v. Myra
misled into thinking that the complaining party has extended his business into the field (see
Pharmaceuticals, Inc.,48 and we quote:
148 ALR 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or
when it forestalls the normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am.
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks Jur. 576, 577).
that might cause confusion or deception. It is applied when the trademark sought to be registered
contains the main, essential and dominant features of the earlier registered trademark, and confusion
or deception is likely to result. Duplication or imitation is not even required; neither is it necessary that Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such
the label of the applied mark for registration should suggest an effort to imitate. The important issue is that, considering the current proliferation of health and beauty products in the market, the purchasers
whether the use of the marks involved would likely cause confusion or mistake in the mind of or deceive would likely be misled that Myra has already expanded its business through Dermaline from merely
the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar with, carrying pharmaceutical topical applications for the skin to health and beauty services.
 37

registered mark, disregarding minor differences. The visual, aural, connotative, and overall comparisons
Verily, when one applies for the registration of a trademark or label which is almost the same or that and impressions engendered by the marks in controversy as they are encountered in the realities of the
very closely resembles one already used and registered by another, the application should be rejected marketplace are the main considerations (McDonald's Corporation, et al., v. L. C. Big Mak Burger, Inc.,
and dismissed outright, even without any opposition on the part of the owner and user of a previously et al., G. R. No. 143993, August 18, 2004; Societe Des Produits Nestle, S. A." et al. v. Court of Appeals,
registered label or trademark. This is intended not only to avoid confusion on the part of the public, but et al., G. R. No. 112012, April 4, 2001). If the competing trademark contains the main or essential or
also to protect an already used and registered trademark and an established goodwill. (Citations dominant features of another, and confusion and deception is likely to result, infringement takes place.
omitted.) (Lim Hoa v. Director of Patents, 100 Phil. 214 [1956]); Co Tiong Sa v. Director of Patents, et al., G. R.
No. L-5378, May 24, 1954). Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate (Lim Hoa v. Director of Patents, supra, and Co Liong
Section 123. l(d) of the IP Code provides:
Sa v. Director of Patents, supra). Actual confusion is not required: Only likelihood of confusion on the
part of the buying public is necessary so as to render two marks confusingly similar so as to deny the
A mark cannot be registered if it: registration of the junior mark (Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, 137 Phil. 838 [1969]).
xxxx
As to the first issue of whether PAPA BOY is confusingly similar to Opposer's PAPA mark, this Bureau
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing rules in the affirmative.
or priority date, in respect of:
The records bear the following:
i. The same goods or services, or
1. Registration No. 32416 issued for the mark "PAPA" under Class 29 goods was deemed expired as of
February 11, 2004 (Exhibit "A" attached to the VERIFIED NOTICE OF OPPOSITION). Application Serial
ii. Closely related goods or services, or No. 4- 2005-010788 was filed on October 28, 2005 for the same mark "PAPA" for Class 30 goods and
Registration No. 42005010788 was issued on March 19,2007;
iii. If it nearly resembles such a mark as to be likely to deceive or cause confusion[.]
2. Opposer was issued for the mark "PAPA BANANA CATSUP LABEL" on August 11, 1983 Registration
No. SR-6282 for Class 30 goods in the Supplemental Register, which registration expired in 2003.
Application Serial No. 4-2006-012364 was filed for the mark "PAPA LABEL DESIGN" for Class 30 goods
A scrutiny of petitioner's and respondent's respective marks would show that the IPO-BLA and the IPO
on November 15, 2006, and Registration No. 42006012364 was issued on April 30, 2007; and
Director General correctly found the word "PAPA" as the dominant feature of petitioner's mark "PAPA
KETSARAP." Contrary to respondent's contention, "KETSARAP" cannot be the dominant feature of the
3. Lastly, Registration No. 34681 for the mark "PAPA KETSARAP" for Class 30 goods was issued on
mark as it is merely descriptive of the product. Furthermore, it is the "PAPA" mark that has been in
August 23, 1985 and was renewed on August 23, 2005.
commercial use for decades and has established awareness and goodwill among consumers.
Though Respondent-applicant was first to file the subject application on April 04, 2002 vis-a-vis the
We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature of respondent's
mark "PAPA" the filing date of which is reckoned on October 28, 2005, and the mark "PAPA LABEL
"PAPA BOY & DEVICE" mark subject of the application, such that "the word 'PAPA' is written on top of
DESIGN" the filing date of which is reckoned on November 15, 2006, Opposer was able to secure a
and before the other words such that it is the first word/figure that catches the eyes."49 Furthermore, as
registration for the mark "PAPA KETSARAP" on August 23, 1985 considering that Opposer was the prior
the IPO Director General put it, the part of respondent's mark which appears prominently to the eyes
registrant and that its renewal application timely filed on August 23, 2005.
and ears is the phrase "PAPA BOY" and that is what a purchaser of respondent's product would
immediately recall, not the smiling hog.
xxxx
We quote the relevant portion of the IPO-BLA decision on this point below:
Pursuant to [Section 123.l(d) of the IP Code], the application for registration of the subject mark cannot
be allowed considering that Opposer was earlier registrant of the marks PAPA and PAPA KETSARAP
A careful examination of Opposer's and Respondent-applicant's respective marks shows that the word which registrations were timely renewed upon its expiration. Respondent-applicant's mark "PAPA BOY &
"PAPA" is the dominant feature: In Opposer's marks, the word "PAPA" is either the mark by itself or the DEVICE" is confusingly similar to Opposer's mark "PAPA KETSARAP" and is applied to goods that are
predominant word considering its stylized font and the conspicuous placement of the word "PAPA" related to Opposer's goods, but Opposer's mark "PAPA KETSARAP" was registered on August 23, 1985
before the other words. In Respondent-applicant's mark, the word "PAPA" is written on top of and per Certificate of Registration No. 34681, which registration was renewed for a period of 10 years
before the other words such that it is the first word figure that catches the eyes. The visual and aural counted from August 23, 2005 per Certificate of Renewal of Registration No. 34681 issued on August
impressions created by such dominant word "PAPA" at the least is that the respective goods of the 23, 2005. To repeat, Opposer has already registered a mark which Respondent-applicant's mark nearly
parties originated from the other, or that one party has permitted or has been given license to the other resembles as to likely deceive or cause confusion as to origin and which is applied to goods to which
to use the word "PAPA" for the other party's product, or that there is a relation/connection between the respondent-applicant's goods under Class 30 are closely related.
two parties when, in fact, there is none. This is especially true considering that the products of both
parties belong to the same class and are closely related: Catsup and lechon sauce or liver sauce are Section 138 of the IP Code provides that a certificate of registration of a mark is prima facie  evidence of
both gravy-like condiments used to spice up dishes. Thus, confusion of goods and of business may likely the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive
result. right to use the same in connection with the goods and those that are related thereto specified in the
certificate.
Under the Dominancy Test, the dominant features of the competing marks are considered in
determining whether these competing marks are confusingly similar. Greater weight is given to the
similarity of the appearance of the products arising from the adoption of the dominant features of the We agree that respondent's mark cannot be registered. Respondent's mark is related to a product,
 38

lechon sauce, an everyday all-purpose condiment and sauce, that is not subjected to great scrutiny and
care by the casual purchaser, who knows from regular visits to the grocery store under what aisle to
find it, in which bottle it is contained, and approximately how much it costs. Since petitioner's product,
catsup, is also a household product found on the same grocery aisle, in similar packaging, the public
could think that petitioner had expanded its product mix to include lechon sauce, and that the "PAPA
BOY" lechon sauce is now part of the "PAPA" family of sauces, which is not unlikely considering the
nature of business that petitioner is in. Thus, if allowed registration, confusion of business may set in,
and petitioner's hard-earned goodwill may be associated to the newer product introduced by
respondent, all because of the use of the dominant feature of petitioner's mark on respondent's mark,
which is the word "PAPA." The words "Barrio Fiesta" are not included in the mark, and although printed
on the label of respondent's lechon sauce packaging, still do not remove the impression that "PAPA
BOY" is a product owned by the manufacturer of "PAPA" catsup, by virtue of the use of the dominant
feature. It is possible that petitioner could expand its business to include lechon sauce, and that would
be well within petitioner's rights, but the existence of a "PAPA BOY" lechon sauce would already
eliminate this possibility and deprive petitioner of its rights as an owner of a valid mark included in the
Intellectual Property Code.

The Court of Appeals likewise erred in finding that "PAPA," being a common term of endearment for
one's father, is a word over which petitioner could not claim exclusive use and ownership. The Merriam-
Webster dictionary defines "Papa" simply as "a person's father." True, a person's father has no logical
connection with catsup products, and that precisely makes "PAPA" as an arbitrary mark capable of being
registered, as it is distinctive, coming from a family name that started the brand several decades ago.
What was registered was not the word "Papa" as defined in the dictionary, but the word "Papa" as the
last name of the original owner of the brand. In fact, being part of several of petitioner's marks, there is
no question that the IPO has found "PAPA" to be a registrable mark.

Respondent had an infinite field of words and combinations of words to choose from to coin a mark for
its lechon sauce. While its claim as to the origin of the term "PAPA BOY" is plausible, it is not a strong
enough claim to overrule the rights of the owner of an existing and valid mark. Furthermore, this Court
cannot equitably allow respondent to profit by the name and reputation carefully built by petitioner
without running afoul of the basic demands of fair play.51

WHEREFORE, we hereby GRANT the petition. We SET ASIDE the June 23, 2011 Decision and the
October 4, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 107570, and REINSTATE the
March 26, 2008 Decision of the Bureau of Legal Affairs of the Intellectual Property Office (IPO-BLA)
and the January 29, 2009 Decision of the Director General of the IPO.

SO ORDERED.
 39

G.R. No. 190706               July 21, 2014 for which it is intended to be used.7 This is because respondent’s as well as petitioners’ real estate
development projects are locatedalong the streets bearing the name "St. Francis," particularly, St.
FrancisAvenue and St. Francis Street (now known as Bank Drive),8 both within the vicinity of the Ortigas
SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG GRAND TOWER
Center.
CORPORATION) and SHANG PROPERTIES, INC. (formerly EDSA PROPERTIES HOLDINGS,
INC.), Petitioners,
vs. The BLA Rulings
ST. FRANCIS DEVELOPMENT CORPORATION, Respondent.
On December 19, 2006, the BLA rendered a Decision9 in the IPV Case, and found that petitioners
DECISION committed acts of unfair competition against respondent by its use of the mark "THE ST. FRANCIS
TOWERS" but not with its use of the mark "THE ST. FRANCIS SHANGRI-LA PLACE." It, however, refused
to award damages in the latter’s favor, considering that there was no evidence presented to
PERLAS-BERNABE, J.:
substantiate the amount of damages it suffered due to the former’s acts. The BLA found that "ST.
FRANCIS," being a name of a Catholic saint, may be considered as an arbitrary mark capable of
Assailed in this petition for review on certiorari1 is the Decision2 dated December 18, 2009 of the Court registration when used in real estate development projects as the name has no direct connection or
of Appeals (CA) in CA-G.R. SP No. 105425 which affirmed with modification the Decision3 dated significance when used in association with real estate. The BLA neither deemed "ST. FRANCIS" as a
September 3, 2008 of the Intellectual Property Office (IPO) Director-General. The CA: (a) affirmed the geographically descriptive mark, opiningthat there is no specific lifestyle, aura, quality or characteristic
denial of the application for registration of the mark "ST. FRANCIS TOWERS" filed by petitioners Shang that the real estate projects possess except for the fact that they are located along St. Francis
Properties Realty Corporation and Shang Properties, Inc. (petitioners); ( b) found petitioners to have Avenueand St. Francis Street (now known as Bank Drive), Ortigas Center. In this light, the BLA found
committed unfair competition for using the marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS that while respondent’s use of the mark "ST. FRANCIS" has not attained exclusivity considering that
SHANGRI-LA PLACE"; (c) ordered petitioners to cease and desist from using "ST. FRANCIS" singly or as there are other real estate development projects bearing the name "St. Francis" in other areas,10 it
part of a composite mark; and (d) ordered petitioners to jointly and severally pay respondent St. must nevertheless be pointed out that respondent has been known to be the only real estate firm to
Francis Square Development Corporation (respondent) a fine in the amount of ₱200,000.00. transact business using such name within the Ortigas Center vicinity. Accordingly, the BLA considered
respondent to have gained goodwill and reputation for its mark, which therefore entitles it to protection
against the use by other persons, at least, to those doing business within the Ortigas Center.11
The Facts

Meanwhile, on March 28, 2007, the BLA rendered a Decision12 in the St. Francis Towers IP Case,
Respondent – a domestic corporation engaged in the real estate business and the developer of the St. denying petitioners’ application for registration of the mark "THE ST. FRANCIS TOWERS." Excluding the
Francis Square Commercial Center, built sometime in 1992, located at Ortigas Center, Mandaluyong word "TOWERS" in view of petitioners’ disclaimer thereof, the BLA ruled that petitioners cannot register
City, Metro Manila (Ortigas Center)4 – filed separate complaints against petitioners before the IPO - the mark "THE ST. FRANCIS" since it is confusingly similar to respondent’s"ST. FRANCIS" marks which
Bureau of Legal Affairs (BLA), namely: (a) an intellectual property violation case for unfair competition, are registered with the Department of Trade and Industry(DTI). It held that respondent had a better
false or fraudulent declaration, and damages arising from petitioners’ use and filing of applications for right over the use of the mark "ST. FRANCIS" because of the latter’s appropriation and continuous
the registration of the marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE," usage thereof for a long period of time.13 A little over a year after, or on March 31, 2008, the BLA then
docketed as IPV Case No. 10-2005-00030 (IPV Case); and (b) an inter partes case opposing the rendered a Decision14 in the St. Francis Shangri-La IP Case, allowing petitioners’ application for
petitioners’ application for registration of the mark "THE ST. FRANCIS TOWERS" for use relative to the registration of the mark "THE ST. FRANCIS SHANGRI-LA PLACE." It found that respondent cannot
latter’s business, particularly the construction of permanent buildings or structures for residential and preclude petitioners from using the mark "ST. FRANCIS" as the records show that the former’s use
office purposes, docketed as Inter PartesCase No. 14-2006-00098 (St. Francis Towers IP Case); and (c) thereof had not been attended with exclusivity. More importantly, it found that petitioners had
an inter partes case opposing the petitioners’ application for registration of the mark "THE ST. FRANCIS adequately appended the word "Shangri-La" to its composite mark to distinguish it from that of
SHANGRI-LA PLACE," docketed as IPC No. 14-2007-00218 (St. Francis Shangri-La IP Case).5 respondent, in which case, the former had removed any likelihood of confusion that may arise from the
contemporaneous use by both parties of the mark "ST. FRANCIS."
In its complaints, respondent alleged that it has used the mark "ST. FRANCIS" to identify its numerous
property development projects located at Ortigas Center, such as the aforementioned St. Francis Both parties appealed the decision in the IPV Case, while petitioners appealed the decision in the St.
Square Commercial Center, a shopping mall called the "St. Francis Square," and a mixed-use realty Francis Towers IP Case. Due to the identity of the parties and issues involved, the IPO Director-General
project plan thatincludes the St. Francis Towers. Respondent added that as a result of its continuous ordered the consolidation of the separate appeals.15 Records are, however, bereft of any showing that
use of the mark "ST. FRANCIS" in its real estate business,it has gained substantial goodwill with the the decision in the St. Francis Shangri-La IP Casewas appealed by either party and, thus, is deemed to
public that consumers and traders closely identify the said mark with its property development projects. have lapsed into finality.
Accordingly, respondent claimed that petitioners could not have the mark "THE ST. FRANCIS TOWERS"
registered in their names, and that petitioners’ use of the marks "THE ST. FRANCIS TOWERS" and "THE
ST. FRANCIS SHANGRI-LA PLACE" in their own real estate development projects constitutes unfair The IPO Director-General Ruling
competition as well as false or fraudulent declaration.6
In a Decision16 dated September 3, 2008, then IPO Director-General Adrian S. Cristobal, Jr. affirmedthe
Petitioners denied committing unfair competition and false or fraudulent declaration, maintaining that rulings of the BLA that: (a) petitioners cannot register the mark "THEST. FRANCIS TOWERS"; and (b)
they could register the mark "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" petitioners are not guilty of unfair competition in its use of the mark "THE ST. FRANCIS SHANGRI-LA
under their names. They contended that respondent is barred from claiming ownership and exclusive PLACE." However, the IPO DirectorGeneral reversed the BLA’s findingthat petitioners committed unfair
use ofthe mark "ST. FRANCIS" because the same is geographically descriptive ofthe goods or services competition through their use of the mark "THE ST. FRANCIS TOWERS," thus dismissing such charge.
 40

He foundthat respondent could not be entitled to the exclusive use of the mark "ST. FRANCIS," even at To begin, Section 168.1 qualifies who is entitled to protection against unfair competition. It states that
least to the locality where it conducts its business, because it is a geographically descriptive mark, "[a]person who has identified in the mind of the public the goods he manufacturesor deals in, his
considering that it was petitioners’ as well as respondent’s intention to use the mark "ST. FRANCIS"in business or services from those of others, whether or not a registered mark is employed, has a property
order to identify, or at least associate, their real estate development projects/businesses with the place right in the goodwill of the said goods, business or services so identified, which will be protected inthe
or location where they are situated/conducted, particularly, St. Francis Avenue and St. Francis Street same manner as other property rights."
(now known as Bank Drive), Ortigas Center. He further opined that respondent’s registration of the
name "ST. FRANCIS" with the DTI is irrelevant since what should be controlling are the trademark
Section 168.2proceeds to the core of the provision, describing forthwith who may be found guilty of and
registrations with the IPO itself.17 Also, the IPO Director-General held that since the parties are both
subject to an action of unfair competition – that is, "[a]ny person who shall employ deception or any
engaged in the real estate business, it would be "hard to imagine that a prospective buyer will be
other means contrary to good faith by which he shall pass off the goods manufactured by him or in
enticed to buy, rent or purchase [petitioners’] goods or servicesbelieving that this is owned by
which he deals, or his business, or services for those of the one having established such goodwill, or
[respondent] simply because of the name ‘ST. FRANCIS.’ The prospective buyer would necessarily
who shall commit any acts calculated to produce said result x x x."
discuss things with the representatives of [petitioners] and would readily know that this does not belong
to [respondent]."18
Without limiting its generality, Section 168.3goes on to specify examples of acts which are considered
as constitutive of unfair competition, viz.:
Disagreeing solely with the IPO Director-General’s ruling on the issue of unfair competition (the bone of
contention in the IPV Case), respondent elevated the sameto the CA.
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:
In contrast, records do not show that either party appealed the IPO Director-General’s ruling on the
issue ofthe registrability of the mark "THE ST. FRANCIS TOWERS" (the bone of contention in the St.
Francis Towers IP Case). As such, said pronouncement isalso deemed to have lapsed into finality. (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
The CA Ruling
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
In a Decision19 dated December 18, 2009, the CA found petitioners guilty of unfair competition not only who otherwise clothes the goods with such appearance as shall deceive the public and defraud
withrespect to their use of the mark "THE ST. FRANCIS TOWERS" but alsoof the mark "THE ST. another of his legitimate trade, or any subsequent vendor ofsuch goods or any agent of any
FRANCIS SHANGRI-LA PLACE." Accordingly, itordered petitioners to cease and desist from using "ST. vendor engaged in selling such goods with a like purpose;
FRANCIS" singly or as part of a composite mark, as well as to jointly and severally pay respondent a
fine in the amount of ₱200,000.00.
(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 service of another who has identified
The CA did not adhere to the IPO Director-General’s finding that the mark "ST. FRANCIS" is such services in the mind of the public; or
geographically descriptive, and ruled that respondent – which has exclusively and continuously used the
mark "ST. FRANCIS" for more than a decade, and,hence, gained substantial goodwill and reputation
(c) Any person who shall make any false statement in the course of trade or who shall commit
thereby – is very muchentitled to be protected against the indiscriminate usage by other companies of
any other act contrary to good faith of a nature calculated to discredit the goods, business or
the trademark/name it has so painstakingly tried to establish and maintain. Further, the CA stated that
services of another.
even on the assumption that "ST. FRANCIS" was indeed a geographically descriptive mark,
adequateprotection must still begiven to respondent pursuant to the Doctrine of Secondary Meaning.20
Finally, Section 168.4 dwells on a matter of procedure by stating that the "[t]he remedies provided by
Sections 156,22 157,23 and 16124 shall apply mutatis mutandis."
Dissatisfied, petitioners filed the present petition.

The statutory attribution of the unfair competition concept is wellsupplemented by jurisprudential

The Issue Before the Court
pronouncements. In the recent case of Republic Gas Corporation v. Petron Corporation,25 the Court has
echoed the classic definition of the term which is "‘the passing off (or palming off) or attempting to pass
With the decisions in both Inter PartesCases having lapsed into finality, the sole issue thus left for the off upon the public of the goods or business of one person as the goods or business of another with the
Court’s resolution is whether or not petitioners are guilty of unfair competition in using the marks "THE end and probable effect of deceiving the public.’ Passing off (or palming off) takes place where the
ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE." defendant, by imitative devices on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that they are buying that of his
competitors. [In other words], the defendant gives his goods the general appearance of the goods of his
The Court’s Ruling
competitor with the intention of deceiving the publicthat the goods are those of his competitor."26 The
"true test" of unfair competition has thus been "whether the acts of the defendant have the intent of
The petition is meritorious. deceiving or are calculated to deceive the ordinary buyer making his purchases under the ordinary
conditions of theparticular trade to which the controversy relates." Based on the foregoing, it is
therefore essential to prove the existence of fraud, or the intent to deceive, actual or
Section 168 of Republic Act No. 8293,21 otherwise known as the "Intellectual Property Code of the probable,27 determined through a judicious scrutiny of the factual circumstances attendant to a
Philippines" (IP Code), provides for the rules and regulations on unfair competition. particular case.28
 41

Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair competition. FRANCIS" precisely because said circumstance, by and of itself, does not equateto fraud under the
The CA’scontrary conclusion was faultily premised on its impression that respondenthad the right to the parameters of Section 168 of the IP Code as above-cited. In fact, the records are bereft of any showing
exclusive use of the mark "ST. FRANCIS," for which the latter had purportedly established considerable thatpetitioners gave their goods/services the general appearance that it was respondent which was
goodwill. What the CA appears to have disregarded or been mistaken in its disquisition, however, is the offering the same to the public. Neither did petitioners employ any means to induce the public towards
geographicallydescriptive nature of the mark "ST. FRANCIS" which thus bars its exclusive a false belief that it was offering respondent’s goods/services. Nor did petitioners make any false
appropriability, unless a secondary meaning is acquired. As deftly explained in the U.S. case of Great statement or commit acts tending to discredit the goods/services offered by respondent. Accordingly,
Southern Bank v. First Southern Bank:29 "[d]escriptive geographical terms are inthe ‘public domain’ in the element of fraud which is the core of unfair competition had not been established.
the sense that every seller should have the right to inform customers of the geographical origin of his
goods. A ‘geographically descriptive term’ is any noun or adjective that designates geographical location
Besides, respondent was not able toprove its compliance with the requirements stated in Section 123.2
and would tend to be regarded by buyers as descriptive of the geographic location of origin of the goods
of the IP Code to be able to conclude that it acquired a secondary meaning – and, thereby, an exclusive
or services. A geographically descriptive term can indicate any geographic location on earth, such as
right – to the "ST. FRANCIS" mark, which is, as the IPO Director-General correctly pointed out,
continents, nations, regions, states, cities, streets and addresses, areas of cities, rivers, and any other
geographically-descriptive of the location in which its realty developments have been built, i.e., St.
location referred to by a recognized name. In order to determine whether or not the geographic term in
Francis Avenue and St. Francis Street (now known as "Bank Drive"). Verily, records would reveal that
question is descriptively used, the following question is relevant: (1) Is the mark the name of the place
while it is true that respondent had been using the mark "ST. FRANCIS" since 1992, its use thereof has
or region from which the goods actually come? If the answer is yes, then the geographic term is
been merely confined to its realty projects within the Ortigas Center, as specifically mentioned.As its
probably used in a descriptive sense, and secondary meaning is required for protection."30
use of the mark is clearly limited to a certain locality, it cannot be said thatthere was substantial
commercial use of the same recognizedall throughout the country. Neither is there any showing of a
In Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc.,31 it was held that secondary mental recognition in buyers’ and potential buyers’ minds that products connected with the mark "ST.
meaningis established when a descriptive mark no longer causes the public to associate the goods with FRANCIS" are associated with the same source35 – that is, the enterprise of respondent. Thus, absent
a particular place, but to associate the goods with a particular source.In other words, it is not enough any showing that there exists a clear goods/service-association between the realty projects located in
that a geographically-descriptive mark partakes of the name of a place known generally to the public to the aforesaid area and herein respondent as the developer thereof, the latter cannot besaid to have
be denied registration as it is also necessary to show that the public would make a goods/place acquired a secondary meaning as to its use of the "ST. FRANCIS" mark.
association – that is, to believe that the goods for which the mark is sought to be registered originatein
that place.1âwphi1 To hold sucha belief, it is necessary, of course, that the purchasers perceive the
In fact, even on the assumption that secondary meaning had been acquired, said finding only accords
mark as a place name, from which the question of obscurity or remoteness then comes to the
respondents protectional qualification under Section 168.1 of the IP Code as above quoted. Again, this
fore.32 The more a geographical area is obscure and remote, it becomes less likely that the public shall
does not automatically trigger the concurrence of the fraud element required under Section 168.2 of the
have a goods/place association with such area and thus, the mark may not be deemed as
IP Code, as exemplified by the acts mentioned in Section 168.3 of the same. Ultimately, as earlier
geographically descriptive. However, where there is no genuine issue that the geographical significance
stated, there can be no unfair competition without this element. In this respect, considering too the
of a term is its primary significanceand where the geographical place is neither obscure nor remote, a
notoriety of the Shangri-La brand in the real estate industry which dilutes petitioners' propensity to
public association of the goods with the place may ordinarily be presumed from the fact that the
merely ride on respondent's goodwill, the more reasonable conclusion is that the former's use of the
applicant’s own goods come from the geographical place named in the mark.33
marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" was meant only to
identify, or at least associate, their real estate project/s with its geographical location. As aptly
Under Section 123.234 of the IP Code, specific requirements have to be met in order to conclude that a observed by the IPO DirectorGeneral:36
geographically-descriptive mark has acquired secondary meaning, to wit: (a) the secondary meaning
must have arisen as a result of substantial commercial use of a mark in the Philippines; (b) such use
In the case at hand, the parties are business competitors engaged in real estate or property
must result in the distinctiveness of the mark insofar as the goods or theproducts are concerned; and
development, providing goods and services directly connected thereto. The "goods" or "products" or
(c) proof of substantially exclusive and continuous commercial use in the Philippines for five (5) years
"services" are real estate and the goods and the services attached to it or directly related to it, like sale
beforethe date on which the claim of distinctiveness is made. Unless secondary meaning has been
or lease of condominium units, offices, and commercial spaces, such as restaurants, and other
established, a geographically-descriptive mark, dueto its general public domain classification, is
businesses. For these kinds of goods or services there can be no description of its geographical origin as
perceptibly disqualified from trademark registration. Section 123.1(j) of the IP Code states this rule as
precise and accurate as that of the name of the place where they are situated. (Emphasis and
follows:
underscoring supplied)

SEC. 123. Registrability. –

Hence, for all the reasons above-discussed, the Court hereby grants the instant petition, and, thus,
exonerates petitioners from the charge of unfair competition in the IPV Case. As the decisions in the
123.1 A mark cannot be registered if it: Inter Partes Cases were not appealed, the registrability issues resolved therein are hereby deemed to
have attained finality and, therefore, are now executory.
xxxx
WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2009 of the Court of Appeals
in CA-G.R. SP No. 105425 is hereby REVERSED and SET ASIDE. Accordingly, the Decision dated
(j) Consists exclusively of signs orof indications that may serve in trade to designate the kind, quality,
September 3, 2008 of the Intellectual Property Office-Director General is REINSTATED.
quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of
the services, or other characteristics of the goods or services; (Emphasis supplied) x x x x
SO ORDERED.
Cognizant of the foregoing, the Court disagrees with the CA that petitioners committed unfair
competition due to the mistaken notion that petitioner had established goodwill for the mark "ST.
 42

G.R. No. 103543 July 5, 1993 (3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
(P2,000,000.00) as moral damages and Half a Million Pesos (P5,000,000.00) by way
of exemplary damages.
ASIA BREWERY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents. (4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
of P250,000.00 plus costs to this suit. (p. 90, Rollo.)
GRIÑO-AQUINO, J.:
Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was modified
by the separate opinions of the Special Sixth Division 1 so that it should read thus:
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 In the light of the foregoing analysis and under the plain language of the applicable
of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case. No. 56390, RTC rule and principle on the matter, We find the defendant Asia Brewery
Branch 166, Pasig, Metro Manila.). Incorporated GUILTY of infringement of trademark and unfair competition. The
decision of the trial court is hereby REVERSED, and a new judgment entered in favor
of the plaintiff and against the defendant as follows:
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 (p. 189, Rollo). (1) The defendant Asia Brewery Inc., its officers, agents, servants and employees
are hereby permanently enjoined and restrained from manufacturing, putting up,
selling, advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the Court of
any similar preparation, manufacture or beer in bottles and under labels substantially
Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and  ponente, and Justices
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court. The dispositive
employed for that purpose, or substantially identical with or like the bottles and
part of the decision reads as follows:
labels now employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief that the
In the light of the foregoing analysis and under the plain language of the applicable beer if the product of the plaintiff or which will enable others to substitute, sell or
rule and principle on the matter, We find the defendant Asia Brewery Incorporated palm off the said beer of the defendant as and for the beer of the plaintiff-
GUILTY of infringement of trademark and unfair competition. The decision of the trial complainant.
court is hereby REVERSED, and a new judgment entered in favor of the plaintiff and
against the defendant as follows:
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products
bearing the mark Beer Pale Pilsen from its retailers and deliver these as well as all
(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are labels, signs, prints, packages, wrappers, receptacles and advertisements bearing
hereby permanently enjoined and restrained from manufacturing, putting up, selling, the infringing mark and all plates, molds, materials and other means of making the
advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any same to the Court authorized to execute this judgment for destruction.
similar preparation, manufacture or beer in bottles and under labels substantially
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
employed for that purpose, or substantially identical with or like the bottles and
(P2,000,000.00) as moral damages and Half a Million Pesos (P500,000.00) by way of
labels now employed by the defendant for that purpose, or in bottles or under labels
exemplary damages.
which are calculated to deceive purchasers and consumers into the belief that the
beer is the product of the plaintiff or which will enable others to substitute, sell or
palm off the said beer of the defendant as and for the beer of the plaintiff- (4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
complainant. of P250,000.00 plus costs of this suit.

(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of Court.
pay the San Miguel Corporation double any and all the payments derived by The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel Pale Pilsen with
defendant from operations of its business and the sale of goods bearing the mark Rectangular Hops and Malt Design, and thereby commits unfair competition against the latter. It is a
"Beer Pale Pilsen" estimated at approximately Five Million Pesos (P5,000,000.00); to factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the
recall all its products bearing the mark "Beer Pale Pilsen" from its retailers and findings of the Court of Appeals upon factual questions are conclusive and ought not to be disturbed by
deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and us. However, there are exceptions to this general rule, and they are:
advertisements bearing the infringing mark and all plates, molds, materials and
other means of making the same to the Court authorized to execute this judgment
(1) When the conclusion is grounded entirely on speculation, surmises and
for destruction.
conjectures;
 43

(2) When the inference of the Court of Appeals from its findings of fact is manifestly or in connection with such goods, business or services, shall be liable to a civil action
mistaken, absurd and impossible; by the registrant for any or all of the remedies herein provided. (Emphasis supplied.)

(3) Where there is grave abuse of discretion; This definition implies that only registered trade marks, trade names and service marks are protected
against infringement or unauthorized use by another or others. The use of someone else's registered
trademark, trade name or service mark is unauthorized, hence, actionable, if it is done "without the
(4) When the judgment is based on a misapprehension of facts;
consent of the registrant." (Ibid.)

(5) When the appellate court, in making its findings, went beyond the issues of the
The registered trademark of SMC for its pale pilsen beer is:
case, and the same are contrary to the admissions of both the appellant and the
appellee;
San Miguel Pale Pilsen With Rectangular Hops and Malt Design.  (Philippine Bureau of
Patents, Trademarks and Technology Transfer Trademark Certificate of Registration
(6) When the findings of said court are contrary to those of the trial court;
No. 36103, dated 23 Oct. 1986,
(p. 174, Rollo.)
(7) When the findings are without citation of specific evidence on which they are
based;
As described by the trial court in its decision (Page 177, Rollo):

(8) When the facts set forth in the petition as well as in the petitioner's main and
. . . . a rectangular design [is] bordered by what appears to be minute grains
reply briefs are not disputed by the respondents; and
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
(9) When the findings of facts of the Court of Appeals are premised on the absence Contents: 320 Ml." The dominant feature is the phrase "San Miguel" written
of evidence and are contradicted on record. (Reynolds Philippine Corporation vs. horizontally at the upper portion. Below are the words "Pale Pilsen" written
Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156 diagonally across the middle of the rectangular design. In between is a coat of arms
SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay vs. Sandiganbayan, and the phrase "Expertly Brewed." The "S" in "San" and the "M" of "Miguel," "P" of
142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs. Court of Appeals, "Pale" and "Pilsen" are written in Gothic letters with fine strokes of serifs, the kind
198 SCRA 333, 336; also Apex Investment and Financing Corp. vs. IAC, 166 SCRA that first appeared in the 1780s in England and used for printing German as
458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS distinguished from Roman and Italic. Below "Pale Pilsen" is the statement "And
Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. Bottled by" (first line, "San Miguel Brewery" (second line), and "Philippines" (third
vs. CA, 133 SCRA 88].) line). (p. 177, Rollo; Emphasis supplied.)

Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct On the other hand, ABI's trademark, as described by the trial court, consists of:
findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.)
Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court
. . . a rectangular design bordered by what appear to be buds of flowers with leaves.
may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)
The dominant feature is "Beer" written across the upper portion of the rectangular
design. The phrase "Pale Pilsen" appears immediately below in smaller block letters.
The present case is one of the exceptions because there is no concurrence between the trial court and To the left is a hop design and to the right, written in small prints, is the phrase "Net
the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER Contents 320 ml." Immediately below "Pale Pilsen" is the statement written in three
PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted rectangular label lines "Especially brewed and bottled by" (first line), "Asia Brewery Incorporated"
has committed trademark infringement and unfair competition against SMC. (second line), and "Philippines" (third line), (p. 177, Rollo; Emphasis supplied.)

Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100, Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE PILSEN WITH
106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes RECTANGULAR MALT AND HOPS DESIGN? The answer is "No."
infringement:
Infringement is determined by the "test of dominancy" rather than by differences or variations in the
Sec. 22. Infringement, what constitutes. — Any person who shall use, without the details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217
of any registered mark or trade-name in connection with the sale, offering for sale, (1956), thus:
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
It has been consistently held that the question of infringement of a trademark is to
the source or origin of such goods or services, or identity of such business; or
be determined by the test of dominancy. Similarity in size, form and color, while
reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and
relevant, is not conclusive. If the competing trademark contains the main or
apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs,
essential or dominant features of another, and confusion and deception is likely to
prints, packages, wrappers, receptacles or advertisements intended to be used upon
 44

result, infringement takes place. Duplication or imitation is not necessary; nor it is (4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and leaves, its
necessary that the infringing label should suggest an effort to imitate. [C. Neilman copyrighted slogan:
Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead
Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of
"BEER NA BEER!"
trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis Whereas SMC's bottle carries no slogan.
supplied.)
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER PALE
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or "resemblance PILSEN bottle has no logo.
between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the
other. . . . [But] this is not such similitude as amounts to identity."
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words "San Miguel
Brewery Philippines" encircling the same.
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test
is "similarity in the dominant features of the trademarks."
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center, surrounded by the
words "Asia Brewery Incorporated Philippines."
What are the dominant features of the competing trademarks before us?
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25 per
There is hardly any dispute that the dominant feature of SMC's trademark is the name of the product: bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only P4.25 for a
SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end bottle of beer cannot expect to receive San Miguel Pale Pilsen from the storekeeper or bartender.
of the letters "S" and "M" on an amber background across the upper portion of the rectangular design.
The fact that the words pale pilsen are part of ABI's trademark does not constitute an infringement of
On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with the SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive of the color
word "Beer" written in large amber letters, larger than any of the letters found in the SMC label. ("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.
The trial court perceptively observed that the word "BEER" does not appear in SMC's trademark, just as
Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily geographically
the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there is absolutely no similarity in
descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638)
the dominant features of both trademarks.
hence, non-registerable and not appropriable by any beer manufacturer. The Trademark Law provides:

Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to SAN
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to
MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived that it is SAN
distinguish his goods, business or services from the goods, business or services of
MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving otherwise.
others shall have the right to register the same [on the principal register], unless it:

Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or
xxx xxx xxx
appearance of the competing products abound:

(e) Consists of a mark or trade-name which, when applied to or used in connection

(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
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
The BEER PALE PILSEN bottle has a fat, bulging neck. goods, business or services of the applicant is  primarily geographically descriptive or
deceptively misdescriptive of them, or is primarily merely a surname." (Emphasis
supplied.)
(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along a diagonal band,
whereas the words "pale pilsen" on ABI's bottle are half the size and printed in slender block letters on
a straight horizontal band. (See Exhibit "8-a".). The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of its
registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as "evaporated
milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be appropriated by any
(3) The names of the manufacturers are prominently printed on their respective bottles.
single manufacturer of these food products, for no other reason than that he was the first to use them
in his registered trademark. In Masso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953),
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas BEER PALE it was held that a dealer in shoes cannot register "Leather Shoes" as his trademark because that would
PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated, Philippines." be merely descriptive and it would be unjust to deprive other dealers in leather shoes of the right to use
the same words with reference to their merchandise. No one may appropriate generic or descriptive
words. They belong to the public domain (Ong Ai Gui vs. Director of Patents, 96 Phil. 673, 676 [1955]):
 45

A word or a combination of words which is merely descriptive of an article of trade, dealer other than the actual manufacturer or dealer, or who otherwise clothes the
or of its composition, characteristics, or qualities, cannot be appropriated and goods with such appearance as shall deceive the public and defraud another of his
protected as a trademark to the exclusion of its use by others. . . . inasmuch as all legitimate trade, or any subsequent vendor of such goods or any agent of any
persons have an equal right to produce and vend similar articles, they also have the vendor engaged in selling such goods with a like purpose.
right to describe them properly and to use any appropriate language or words for
that purpose, and no person can appropriate to himself exclusively any word or
(b) Any person who by any artifice, or device, or who employs any other means
expression, properly descriptive of the article, its qualities, ingredients or
calculated to induce the false belief that such person is offering the services of
characteristics, and thus limit other persons in the use of language appropriate to
another who has identified such services in the mind of the public; or
the description of their manufactures,  the right to the use of such language being
common to all. This rule excluding descriptive terms has also been held to apply to
trade-names. As to whether words employed fall within this prohibition, it is said that (c) Any person who shall make any false statement in the course of trade or who
the true test is not whether they are exhaustively descriptive of the article shall commit any other act contrary to good faith of a nature calculated to discredit
designated, but whether in themselves, and as they are commonly used by those the goods, business or services of another.
who understand their meaning, they are reasonably indicative and descriptive of the
thing intended. If they are thus descriptive, and not arbitrary, they cannot be
appropriated from general use and become the exclusive property of anyone. (52 In this case, the question to be determined is whether ABI is using a name or mark for its beer that has
Am. Jur. 542-543.) previously come to designate SMC's beer, or whether ABI is passing off its BEER PALE PILSEN as SMC's
SAN MIGUEL PALE PILSEN.

. . . . Others may use the same or similar descriptive word in connection with their
own wares, provided they take proper steps to prevent the public being deceived. . . ..The universal test question is whether the public is likely to be deceived. Nothing
(Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d] 598.) less than conduct tending to pass off one man's goods or business as that of another
will constitute unfair competition. Actual or probable deception and confusion on the
part of the customers by reason of defendant's practices must always appear. (Shell
. . . . A descriptive word may be admittedly distinctive, especially if the user is the Co., of the Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil.
first creator of the article. It will, however, be denied protection, not because it lacks 434, 439.)
distinctiveness, but rather because others are equally entitled to its use. (2 Callman.
Unfair Competition and Trademarks, pp. 869-870.)" (Emphasis supplied.)
The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle, is
not unlawful. As pointed out by ABI's counsel, SMC did not invent but merely borrowed the steinie
The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has printed bottle from abroad and it claims neither patent nor trademark protection for that bottle shape and
its name all over the bottle of its beer product: on the label, on the back of the bottle, as well as on the design. (See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen use the "steinie" bottle. (See
bottle cap, disproves SMC's charge that ABI dishonestly and fraudulently intends to palm off its BEER Exhibits 57-D, 57-E.) The trial court found no infringement of SMC's bottle —
PALE PILSEN as SMC's product. In view of the visible differences between the two products, the Court
believes it is quite unlikely that a customer of average intelligence would mistake a bottle of BEER PALE
PILSEN for SAN MIGUEL PALE PILSEN. The court agrees with defendant that there is no infringement of plaintiff's bottle,
firstly, because according to plaintiff's witness Deogracias Villadolid, it is a standard
type of bottle called steinie, and to witness Jose Antonio Garcia, it is not a San
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-colored steinie Miguel Corporation design but a design originally developed in the United States by
bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media, does not the Glass Container Manufacturer's Institute and therefore lacks exclusivity.
necessarily constitute unfair competition. Secondly, the shape was never registered as a trademark. Exhibit "C" is not a
registration of a beer bottle design required under Rep. Act 165 but the registration
of the name and other marks of ownership stamped on containers as required by
Unfair competition is the employment of deception or any other means contrary to good faith by which
Rep. Act 623. Thirdly, the neck of defendant's bottle is much larger and has a
a person shall pass off the goods manufactured by him or in which he deals, or his business, or
distinct bulge in its uppermost part. (p. 186, Rollo.)
services, for those of another who has already established goodwill for his similar goods, business or
services, or any acts calculated to produce the same result. (Sec. 29, Republic Act No. 166, as
amended.) The law further enumerates the more common ways of committing unfair competition, thus: The petitioner's contention that bottle size, shape and color may not be the exclusive property of any
one beer manufacturer is well taken. SMC's being the first to use the steinie bottle does not give SMC a
vested right to use it to the exclusion of everyone else. Being of functional or common use, and not the
Sec. 29. . . .
exclusive invention of any one, it is available to all who might need to use it within the industry. Nobody
can acquire any exclusive right to market articles supplying simple human needs in containers or
In particular, and without in any way limiting the scope of unfair competition, the wrappers of the general form, size and character commonly and immediately used in marketing such
following shall be deemed guilty of unfair competition: articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

(a) Any person, who in selling his goods shall give them the general appearance of . . . protection against imitation should be properly confined to nonfunctional
goods of another manufacturer or dealer, either as to the goods themselves or in the features. Even if purely functional elements are slavishly copied, the resemblance
wrapping of the packages in which they are contained, or the devices or words will not support an action for unfair competition, and the first user cannot claim
thereon, or in any other feature of their appearance, which would be likely to secondary meaning protection. Nor can the first user predicate his claim to
influence purchasers to believe that the goods offered are those of a manufacturer or protection on the argument that his business was established in reliance on any such
 46

unpatented nonfunctional feature, even "at large expenditure of money." (Callman However, when as in this case, the names of the competing products are clearly different and their
Unfair Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for respective sources are prominently printed on the label and on other parts of the bottle, mere similarity
Review, p. 28.) in the shape and size of the container and label, does not constitute unfair competition. The steinie
bottle is a standard bottle for beer and is universally used. SMC did not invent it nor patent it. The fact
that SMC's bottle is registered under R.A. No. 623 (as amended by RA 5700, An Act to Regulate the Use
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which
of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers) simply
has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a functional feature of
prohibits manufacturers of other foodstuffs from the unauthorized use of SMC's bottles by refilling these
the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is contained and sold
with their products. It was not uncommon then for products such as  patis (fish sauce) and toyo (soy
in amber-colored bottles because amber is the most effective color in preventing transmission of light
sauce) to be sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration of SMC's beer bottles did
and provides the maximum protection to beer. As was ruled in California Crushed Fruit Corporation vs.
not give SMC a patent on the steinie or on bottles of similar size, shape or color.
Taylor B. and Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or color of
bottle where the same has the useful purpose of protecting the contents from the deleterious effects of
light rays. Moreover, no one may have a monopoly of any color. Not only beer, but most medicines, Most containers are standardized because they are usually made by the same manufacturer. Milk,
whether in liquid or tablet form, are sold in amber-colored bottles. whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard
ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such as coffee,
mayonnaise, pickles and peanut butter are sold in standard glass jars. The manufacturers of these
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle because that
foodstuffs have equal right to use these standards tins, bottles and jars for their products. Only their
bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December 1979,
respective labels distinguish them from each other. Just as no milk producer may sue the others for
of the Department of Trade, Metric System Board.
unfair competition because they sell their milk in the same size and shape of milk can which he uses,
neither may SMC claim unfair competition arising from the fact that ABI's BEER PALE PILSEN is sold,
With regard to the white label of both beer bottles, ABI explained that it used the color white for its like SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.
label because white presents the strongest contrast to the amber color of ABI's bottle; it is also the
most economical to use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of September
The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed off as SAN
20, 1988). No one can have a monopoly of the color amber for bottles, nor of white for labels, nor of
MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally order their
the rectangular shape which is the usual configuration of labels. Needless to say, the shape of the bottle
beer by brand. As pointed out by ABI's counsel, in supermarkets and tiendas, beer is ordered by brand,
and of the label is unimportant. What is all important is the name of the product written on the label of
and the customer surrenders his empty replacement bottles or pays a deposit to guarantee the return
the bottle for that is how one beer may be distinguished form the others.
of the empties. If his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as
replacement. In sari-sari stores, beer is also ordered from the tindera by brand. The same is true in
In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both restaurants, pubs and beer gardens — beer is ordered from the waiters by brand. (Op. cit. page 50.)
labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of
conventional color, both with labels containing designs drawn in green ink and Chinese characters
Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer market
written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this
for the past hundred years, those who have been drinking no other beer but SAN MIGUEL PALE PILSEN
court found that the resemblances between the designs were not sufficient to mislead the ordinary
these many years certainly know their beer too well to be deceived by a newcomer in the market. If
intelligent buyer, hence, there was no unfair competition. The Court held:
they gravitate to ABI's cheaper beer, it will not be because they are confused or deceived, but because
they find the competing product to their taste.
. . . . In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a public
Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of Appeals and
accustomed to buy, and therefore to some extent familiar with, the goods in
Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that:
question. The test of fraudulent simulation is to be found in the likelihood of the
deception of persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been associated. . . . to determine whether a trademark has been infringed, we must consider the
The test is not found in the deception, or possibility of the deception, of the person mark as a whole and not as dissected. If the buyer is deceived, it is attributable to
who knows nothing about the design which has been counterfeited, and who must be the marks as a totality, not usually to any part of it.
indifferent as between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the ordinarily intelligent
That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases of
buyer who has a need to supply and is familiar with the article that he seeks to
infringement and unfair competition, the courts should "take into consideration several factors which
purchase.
would affect its conclusion, to wit: the age, training and education of the usual purchaser, the nature
and cost of the article, whether the article is bought for immediate consumption and also the conditions
The main thrust of SMC's complaint if not infringement of its trademark, but unfair competition arising under which it is usually purchased" (181 SCRA 410, 418-419).
form the allegedly "confusing similarity" in the general appearance or trade dress of ABI's BEER PALE
PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo)
The Del Monte case involved catsup, a common household item which is bought off the store shelves by
housewives and house help who, if they are illiterate and cannot identify the product by name or brand,
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN MIGUEL PALE would very likely identify it by mere recollection of its appearance. Since the competitor, Sunshine
PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles with white rectangular Sauce Mfg. Industries, not only used recycled Del Monte bottles for its catsup (despite the warning
labels. embossed on the bottles: "Del Monte Corporation. Not to be refilled.") but also used labels which were
 47

"a colorable imitation" of Del Monte's label, we held that there was infringement of Del Monte's The question is not whether the two articles are distinguishable by their labels when
trademark and unfair competition by Sunshine. set aside 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
Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf but
general impression of the ordinary purchaser, buying under the normally prevalent
ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.
conditions in trade and giving the attention such purchasers usually give in buying
that class of goods, is the touchstone.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by ABI's mark:
"BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a bulging neck to differentiate it
It has been held that in making purchases, the consumer must depend upon his
from SMC's bottle, and prints ABI's name in three (3) places on said bottle (front, back and bottle cap)
recollection of the appearance of the product which he intends to purchase. The
to prove that it has no intention to pass of its "BEER" as "SAN MIGUEL."
buyer having in mind the mark/label of the respondent must rely upon his memory
of the petitioner's mark. Unlike the judge who has ample time to minutely examine
There is no confusing similarity between the competing beers for the name of one is "SAN MIGUEL" the labels in question in the comfort of his sala, the ordinary shopper does not enjoy
while the competitor is plain "BEER" and the points of dissimilarity between the two outnumber their the same opportunity.
points of similarity.
A number of courts have held that to determine whether a trademark has been
Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the latter's infringed, we must consider the mark as a whole and not as dissected. If the buyer is
SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes with the latter in deceived, it is attributable to the marks as a totality, not usually to any part of it.
the open market, that competition is neither unfair nor fraudulent. Hence, we must deny SMC's prayer The court therefore should be guided by its first impression, for a buyer acts quickly
to suppress it. and is governed by a casual glance, the value of which may be dissipated as soon as
the court assumes to analyze carefully the respective features of the mark.
WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The decision and
resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set aside and that of the trial It has also been held that it is not the function of the court in cases of infringement
court is REINSTATED and AFFIRMED. Costs against the private respondent. and unfair competition to educate purchasers but rather to take their carelessness
for granted, and to be ever conscious of the fact that marks need not be identical. A
confusing similarity will justify the intervention of equity. The judge must also be
SO ORDERED. aware of the fact that usually a defendant in cases of infringement does not normally
copy but makes only colorable changes. Well has it been said that the most
Separate Opinion successful form of copying is to employ enough points of similarity to confuse the
public with enough points of difference to confuse the courts.

CRUZ, J., dissenting:
For the above reasons, and the other arguments stated in Del Monte, I dissent.

The present  ponencia stresses the specific similarities and differences of the two products to support
the conclusion that there is no infringement of trade marks or unfair competition. That test was rejected  
in my own  ponencia in Del Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by
Justices Narvasa, Gancayco, Griño-Aquino and Medialdea, where we declared:

While the Court does recognize these distinctions, it does not agree with the
conclusion that there was no infringement or unfair competition. It seems to us that
the lower courts have been so preoccupied with the details that they have not seen
the total picture.

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.
 48

G.R. No. 192294               November 21, 2012 degree that the overall impression it create [sic] is that the two competing marks are at least strikingly
similar to each another [sic], hence, the likelihood of confusion of goods is likely to occur. x x x x
GREAT WHITE SHARK ENTERPRISES, INC., Petitioner,
vs. Moreover, the goods of the competing marks falls [sic] under the same Class 25. Opposer's mark GREG
DANILO M. CARALDE, JR., Respondent. NORMAN LOGO, which was applied for registration on February 19, 2002, pertains to clothing apparel
particularly hats, shirts and pants. Respondent, on the other hand, later applied for the registration of
the mark SHARK & LOGO on July 3, 2002 (should be July 31, 2002) for footwear products particularly
DECISION
slippers, shoes, sandals. Clearly, the goods to which the parties use their marks belong to the same
class and are related to each other."8 (Italics ours)
PERLAS-BERNABE, J.:
The BLA Director, however, found no merit in Great White Shark's claim that its mark was famous and
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the December 14, well-known for insufficiency of evidence.
2009 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 105787, which reversed and set aside the
October 6, 2008 Decision2 of the Director General of the Intellectual Property Office (IPO), and directed
The Ruling of the IPO Director General
him to grant the application for the mark "SHARK & LOGO" filed by respondent Danilo M. Caralde, Jr.
(Caralde).
On appeal, the IPO Director General affirmed9 the final rejection of Caralde's application, ruling that the
competing marks are indeed confusingly similar. Great White Shark's mark is used in clothing and
The Factual Antecedents
footwear, among others, while Caralde's mark is used on similar goods like shoes and slippers.
Moreover, Great White Shark was first in applying for registration of the mark on February 19, 2002,
On July 31, 2002, Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark application followed by Caralde on July 31, 2002. Furthermore, Great White Shark’s mark consisted of an
seeking to register the mark "SHARK & LOGO" for his manufactured goods under Class 25, such as illustration of a shark while Caralde's mark had a composite figure forming a silhouette of a shark. Thus,
slippers, shoes and sandals. Petitioner Great White Shark Enterprises, Inc. (Great White Shark), a as to content, word, sound and meaning, both marks are similar, barring the registration of Caralde's
foreign corporation domiciled in Florida, USA, opposed3 the application claiming to be the owner of the mark under Section 123.1(d) of Republic Act No. 8293, otherwise known as the Intellectual Property
mark consisting of a representation of a shark in color, known as "GREG NORMAN LOGO" (associated Code (IP Code). Nonetheless, while Great White Shark submitted evidence of the registration of its
with apparel worn and promoted by Australian golfer Greg Norman). It alleged that, being a world mark in several other countries, the IPO Director General considered its mark as not well-known for
famous mark which is pending registration before the BLA since February 19, 2002,4 the confusing failing to meet the other criteria laid down under Rule 10210 of the Rules and Regulations on
similarity between the two (2) marks is likely to deceive or confuse the purchasing public into believing Trademarks, Service Marks, Trade Names and Marked or Stamped Containers.
that Caralde's goods are produced by or originated from it, or are under its sponsorship, to its damage
and prejudice.
The Ruling of the Court of Appeals

In his Answer,5 Caralde explained that the subject marks are distinctively different from one another
However, on petition for review, the CA reversed and set aside the foregoing Decision and directed the
and easily distinguishable. When compared, the only similarity in the marks is in the word "shark"
IPO to grant Caralde's application for registration of the mark "SHARK & LOGO." The CA found no
alone, differing in other factors such as appearance, style, shape, size, format, color, ideas counted by
confusing similarity between the subject marks notwithstanding that both contained the shape of a
marks, and even in the goods carried by the parties.
shark as their dominant feature. It observed that Caralde's mark is more fanciful and colorful, and
contains several elements which are easily distinguishable from that of the Great White Shark. It further
Pending the inter partes proceedings, Great White Shark’s trademark application was granted and it was opined that considering their price disparity, there is no likelihood of confusion as they travel in different
issued Certificate of Registration No. 4-2002-001478 on October 23, 2006 for clothing, headgear and channels of trade.11
footwear, including socks, shoes and its components.6
Issues Before The Court
The Ruling of the BLA Director
THE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT'S MARK SUBJECT OF THE
On June 14, 2007, the BLA Director rendered a Decision7 rejecting Caralde's application, ratiocinating, APPLICATION BEING OPPOSED BY THE PETITIONER IS NOT CONFUSINGLY SIMILAR TO PETITIONER'S
as follows: REGISTERED MARK THE COURT OF APPEALS ERRED IN RULING THAT THE COST OF GOODS COULD
NEGATE LIKELIHOOD OF CONFUSION THE COURT OF APPEALS ERRED IN REVERSING THE PREVIOUS
RESOLUTIONS OF THE DIRECTOR GENERAL AND THE BLA12
Prominent in both competing marks is the illustration of a shark.1âwphi1 The dominant feature in
opposer's mark is the illustration of a shark drawn plainly. On the other hand, the dominant feature in
respondent's mark is a depiction of shark shaded darkly, with its body designed in a way to contain the The Court's Ruling
letters "A" and "R" with the tail suggestive of the letter "K." Admittedly, there are some differences
between the competing marks. Respondent's mark contains additional features which are absent in
In the instant petition for review on certiorari, Great White Shark maintains that the two (2) competing
opposer's mark. Their dominant features, i.e., that of an illustration of a shark, however, are of such
marks are confusingly similar in appearance, shape and color scheme because of the dominant feature
of a shark which is likely to deceive or cause confusion to the purchasing public, suggesting an intention
 49

on Caralde's part to pass-off his goods as that of Great White Shark and to ride on its goodwill. This,
notwithstanding the price difference, targets market and channels of trade between the competing
products. Hence, the CA erred in reversing the rulings of the IPO Director General and the BLA Director
who are the experts in the implementation of the IP Code.

The petition lacks merit.

A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is capable of

identifying and distinguishing the goods of one manufacturer or seller from those of another. Apart from
its commercial utility, the benchmark of trademark registrability is distinctiveness.13 Thus, a generic
figure, as that of a shark in this case, if employed and designed in a distinctive manner, can be a
registrable trademark device, subject to the provisions of the IP Code.

Corollarily, Section 123.1(d) of the IP Code provides that a mark cannot be registered if it is identical
with a registered mark belonging to a different proprietor with an earlier filing or priority date, with
respect to the same or closely related goods or services, or has a near resemblance to such mark as to
likely deceive or cause confusion.
As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are evident
and significant, negating the possibility of confusion in the minds of the ordinary purchaser, especially
In determining similarity and likelihood of confusion, case law has developed the Dominancy Test and considering the distinct aural difference between the marks.
the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the dominant features of
the competing trademarks that might cause confusion, mistake, and deception in the mind of the
ordinary purchaser, and gives more consideration to the aural and visual impressions created by the Finally, there being no confusing similarity between the subject marks, the matter of whether Great
marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and White Shark’s mark has gained recognition and acquired becomes unnecessary.19 Besides, both the BLA
market segments. In contrast, the Holistic or Totality Test considers the entirety of the marks as applied Director and the IPO Director General have ruled that Great White Shark failed to meet the criteria
to the products, including the labels and packaging, and focuses not only on the predominant words but under Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked
also on the other features appearing on both labels to determine whether one is confusingly similar to or Stamped Containers to establish that its mark is well-known, and the latter failed to show otherwise.
the other14 as to mislead the ordinary purchaser. The "ordinary purchaser" refers to one "accustomed to
buy, and therefore to some extent familiar with, the goods in question."15 WHEREFORE, the Court resolves to DENY the instant petition and AFFIRM the assailed December 14,
2009 Decision of the Court of Appeals (CA) for failure to show that the CA committed reversible error in
Irrespective of both tests, the Court finds no confusing similarity between the subject marks. While both setting aside the Decision of the IPO Director General and allowing the registration of the mark "SHARK
marks use the shape of a shark, the Court noted distinct visual and aural differences between them. In & LOGO" by respondent Danilo M. Caralde, Jr.
Great White Shark's "GREG NORMAN LOGO," there is an outline of a shark formed with the use of
green, yellow, blue and red16 lines/strokes, to wit: SO ORDERED.

In contrast, the shark in Caralde's "SHARK & LOGO" mark17 is illustrated in l et t er s outlined in the
form of a shark with the letter "S" forming the head, the letter "H" forming the fins, the letters "A" and
"R" forming the body, and the letter "K" forming the tail. In addition, the latter mark includes several
more elements such as the word "SHARK" in a different font underneath the shark outline, layers of
waves, and a tree on the right side, and liberally used the color blue with some parts in red, yellow,
green and white.18 The whole design is enclosed in an elliptical shape with two linings, thus:
 50

G.R. No. 138900 September 20, 2005 1. That upon the filing of this complaint, a temporary restraining order be immediately issued
restraining defendants, their officers, employees, agents, representatives, dealers, retailers or assigns
from committing the acts herein complained of, and, specifically, for the defendants, their officers,
LEVI STRAUSS & CO., & LEVI STRAUSS (PHILS.), INC., Petitioners,
employees, agents, representatives, dealers and retailers or assigns, to cease and desist from
vs.
manufacturing, distributing, selling, offering for sale, advertising, or otherwise using denims, jeans or
CLINTON APPARELLE, INC., Respondent.
pants with the design herein complained of as substantially, if not exactly similar, to plaintiffs’ "Dockers
and Design" trademark.
DECISION
2. That after notice and hearing, and pending trial on the merits, a writ of preliminary injunction be
Tinga, J.: issued enjoining defendants, their officers, employees, agents, dealers, retailers, or assigns from
manufacturing, distributing, selling, offering for sale, advertising, jeans the design herein complained of
as substantially, if not exactly similar, to plaintiffs’ "Dockers and Design" trademark.
Before us is a petition for review on certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure filed
by Levi Strauss & Co. (LS & Co.) and Levi Strauss (Philippines), Inc. (LSPI) assailing the Court of
Appeals’ Decision2  and Resolution3  respectively dated 21 December 1998 and 10 May 1999. The 3. That after trial on the merits, judgment be rendered as follows:
questioned Decision  granted respondent’s prayer for a writ of preliminary injunction in its Petition4 and
set aside the trial court’s orders dated 15 May 19985 and 4 June 19986 which respectively granted
a. Affirming and making permanent the writ of preliminary injunction;
petitioners’ prayer for the issuance of a temporary restraining order (TRO) and application for the
issuance of a writ of preliminary injunction.
b. Ordering that all infringing jeans in the possession of either or both defendants as the evidence may
warrant, their officers, employees, agents, retailers, dealers or assigns, be delivered to the Honorable
This case stemmed from the Complaint7 for Trademark Infringement, Injunction and Damages filed by
Court of plaintiffs, and be accordingly destroyed;13
petitioners LS & Co. and LSPI against respondent Clinton Apparelle, Inc.* (Clinton Aparelle) together
with an alternative defendant, Olympian Garments, Inc. (Olympian Garments), before the Regional Trial
Court of Quezon City, Branch 90.8 The Complaint  was docketed as Civil Case No. Q-98-34252, entitled Acting on the prayer for the issuance of a TRO, the trial court issued an Order14  setting it for hearing on
"Levi Strauss & Co. and Levi Strauss (Phils.), Inc. v. Clinton Aparelle, Inc. and/or Olympian Garments, 5 May 1998. On said date, as respondent failed to appear despite notice and the other defendant,
Inc." Olympian Garments, had yet to be notified, the hearing was re-scheduled on 14 May 1998.15

The Complaint alleged that LS & Co., a foreign corporation duly organized and existing under the laws On 14 May 1998, neither Clinton Apparelle nor Olympian Garments appeared. Clinton Apparelle claimed
of the State of Delaware, U.S.A., and engaged in the apparel business, is the owner by prior adoption that it was not notified of such hearing. Only Olympian Garments allegedly had been issued with
and use since 1986 of the internationally famous "Dockers and Design" trademark. This ownership is summons. Despite the absence of the defendants, the hearing on the application for the issuance of a
evidenced by its valid and existing registrations in various member countries of the Paris Convention. In TRO continued.16
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 25.9
The following day, the trial court issued an Order17  granting the TRO applied for, the pertinent portions
of which state:
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
…Considering the absence of counsel/s for the defendant/s during the summary hearing scheduled on
trademarks owned by LS & Co. To date, LSPI continues to manufacture and sell Dockers Pants with the
May 5, 1998 and also during the re-scheduled summary hearing held on May 14, 1998 set for the
"Dockers and Design" trademark.10
purpose of determining whether or not a Temporary Restraining Order shall be issued, this Court
allowed the counsel for the plaintiffs to present on May 14, 1998 their arguments/evidences in support
LS & Co. and LSPI further alleged that they discovered the presence in the local market of jeans under of their application. After hearing the arguments presented by the counsel for the plaintiffs during the
the brand name "Paddocks" using a device which is substantially, if not exactly, similar to the "Dockers summary hearing, this Court is of the considered and humble view that grave injustice and irreparable
and Design" trademark owned by and registered in the name of LS & Co., without its consent. Based on injury to the plaintiffs would arise before the matter of whether or not the application for the issuance of
their information and belief, they added, Clinton Apparelle manufactured and continues to manufacture a Writ of Preliminary Injunction can be heard, and that, in the interest of justice, and in the meantime,
such "Paddocks" jeans and other apparel. a Temporary Restraining Order be issued.

However, since LS & Co. and LSPI are unsure if both, or just one of impleaded defendants are behind WHEREFORE, let this Temporary Restraining Order be issued restraining the defendants, their officers,
the manufacture and sale of the "Paddocks" jeans complained of, they brought this suit under Section employees, agents, representatives, dealers, retailers or assigns from committing the acts complained
13, Rule 311 of the 1997 Rules of Civil Procedure.12 of in the verified Complaint, and specifically, for the defendants, their officers, employees, agents,
representatives, dealers and retailers or assigns, to cease and desist from manufacturing, distributing,
selling, offering for sale, advertising or otherwise using denims, jeans or pants with the design
The Complaint contained a prayer that reads as follows:
complained of in the verified Complaint as substantially, if not exactly similar, to plaintiffs’ "Dockers and
Design" trademark; until after the application/prayer for the issuance of a Writ of Preliminary Injunction
is heard/resolved, or until further orders from this Court.
 51

The hearing on the application for the issuance of a Writ of Preliminary Injunction as embodied in the On 2 October 1998, the trial court denied Clinton Apparelle’s Motion to Dismiss  and Motion for
verified Complaint is set on May 26, 1998 (Tuesday) at 2:00 P.M. which setting is intransferable in Reconsideration in an Omnibus Order,26 the pertinent portions of which provide:
character considering that the lifetime of this Temporary Restraining Order is twenty (20) days from
date hereof.18
After carefully going over the contents of the pleadings in relation to pertinent portions of the records,
this Court is of the considered and humble view that:
19
On 4 June 1998, the trial court issued another Order  granting the writ of preliminary injunction, to wit:
On the first motion, the arguments raised in the plaintiffs’ aforecited Consolidated Opposition appears to
O R D E R be meritorious. Be that as it may, this Court would like to emphasize, among other things, that the
complaint states a cause of action as provided under paragraphs 1 to 18 thereof.
This resolves the plaintiffs’ application or prayer for the issuance of a writ of preliminary injunction as
embodied in the verified complaint in this case. Parenthetically, this Court earlier issued a temporary On the second motion, the arguments raised in the plaintiffs’ aforecited Consolidated Opposition
restraining order. (see Order dated May 15, 1998; see also Order dated May 26, 1998) likewise appear to be impressed with merit. Besides, there appears to be no strong and cogent reason
to reconsider and set aside this Court’s Order dated June 4, 1998 as it has been shown so far that the
trademark or logo of defendants is substantially, if not exactly, similar to plaintiffs’ "DOCKERS and
After a careful perusal of the contents of the pleadings and documents on record insofar as they are
DESIGN" trademark or logo as covered by BPTTT Certificate of Registration No. 46619 even as the
pertinent to the issue under consideration, this Court finds that at this point in time, the plaintiffs
BPTTT Certificate of Registration No. 49579 of Clinton Apparelle, Inc. is only for the mark or word
appear to be entitled to the relief prayed for and this Court is of the considered belief and humble view
"PADDOCKS" (see Records, p. 377) In any event, this Court had issued an Order dated June 18, 1998
that, without necessarily delving on the merits, the paramount interest of justice will be better served if
for the issuance of the writ of preliminary injunction after the plaintiffs filed the required bond of
the status quo shall be maintained and that an injunction bond of ₱2,500,000.00 appears to be in order.
₱2,500,000.00.
(see Sections 3 and 4, Rule 58, 1997 Rules of Civil Procedure)

IN VIEW OF THE FOREGOING, the aforecited Motion To Dismiss and Motion For Reconsideration are
IN VIEW OF THE FOREGOING, the plaintiffs’ prayer for the issuance of a writ of preliminary injunction is
both DENIED for lack of merit, and accordingly, this Court’s Order dated June 18, 1998 for the issuance
GRANTED. Accordingly, upon the plaintiffs’ filing, within ten (10) days from their receipt hereof, an
of the writ of preliminary injunction is REITERATED so the writ of preliminary injunction could be
injunction bond of ₱2,500,000.00 executed to the defendants to the effect that the plaintiffs will pay all
implemented unless the implementation thereof is restrained by the Honorable Court of Appeals or
damages the defendants may sustain by reason of this injunction in case the Court should finally decide
Supreme Court.
that the plaintiffs are not entitled thereto, let a writ of preliminary injunction issue enjoining or
restraining the commission of the acts complained of in the verified Complaint in this case, and
specifically, for the defendants, their officers, employees, agents, representatives, dealers and retailers The writ of preliminary injunction was thereafter issued on 8 October 1998.27
or assigns or persons acting in their behalf to cease and desist from manufacturing, distributing, selling,
offering for sale, advertising, or otherwise using, denims, jeans or pants with the design complained of
Thus, Clinton Apparelle filed with the Court of Appeals a Petition28 for certiorari, prohibition and
in the verified Complaint in this case, which is substantially, if not exactly, similar to plaintiffs’
mandamus with prayer for the issuance of a temporary restraining order and/or writ of preliminary
"DOCKERS and DESIGN" trademark or logo as covered by the Bureau of Patents, Trademarks and
injunction, assailing the orders of the trial court dated 15 May 1998, 4 June 1998 and 2 October 1998.
Technology Transfer Certificate of Registration No. 46619, until after this case shall have been decided
on the merits and/or until further orders from this Court.20
On 20 October 1998, the Court of Appeals issued a Resolution29 requiring herein petitioners to file their
comment on the Petition  and at the same time issued the prayed-for temporary restraining order.
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 "Dockers and Design" trademark; (3) a pair of "Paddocks" pants bearing respondent’s The appellate court rendered on 21 December 1998 its now assailed Decision  granting Clinton
assailed logo; (4) the Trends MBL Survey Report purportedly proving that there was confusing similarity Apparelle’s petition. The Court of Appeals held that the trial court did not follow the procedure required
between two marks; (5) the affidavit of one Bernabe Alajar which recounted petitioners’ prior adoption, by law for the issuance of a temporary restraining order as Clinton Apparelle was not duly notified of the
use and registration of the "Dockers and Design" trademark; and (6) the affidavit of one Mercedes Abad date of the summary hearing for its issuance. Thus, the Court of Appeals ruled that the TRO had been
of Trends MBL, Inc. which detailed the methodology and procedure used in their survey and the results improperly issued.30
thereof.21
The Court of Appeals also held that the issuance of the writ of preliminary injunction is questionable. In
Clinton Apparelle thereafter filed a Motion to Dismiss22 and a Motion for Reconsideration23 of its opinion, herein petitioners failed to sufficiently establish its material and substantial right to have the
the Order  granting the writ of preliminary injunction. Meantime, the trial court issued writ issued. Secondly, the Court of Appeals observed that the survey presented by petitioners to
an Order24  approving the bond filed by petitioners. support their contentions was commissioned by petitioners. The Court of Appeals remarked that
affidavits taken ex-parte  are generally considered to be inferior to testimony given in open court. The
appellate court also considered that the injury petitioners have suffered or are currently suffering may
On 22 June 1998, the trial court required25  the parties to file their "respective citation of authorities/
be compensated in terms of monetary consideration, if after trial, a final judgment shall be rendered in
jurisprudence/Supreme Court decisions" on whether or not the trial court may issue the writ of
their favor.31
preliminary injunction pending the resolution of the Motion for Reconsideration and the Motion to
Dismiss filed by respondent.
 52

In addition, the Court of Appeals strongly believed that the implementation of the questioned writ would (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring
effectively shut down respondent’s business, which in its opinion should not be sanctioned. The Court of or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting
Appeals thus set aside the orders of the trial court dated 15 May 1998 and 4 June 1998, respectively the subject of the action or proceeding, and tending to render the judgment ineffectual.
issuing a temporary restraining order and granting the issuance of a writ of preliminary injunction.
Under the cited provision, a clear and positive right especially calling for judicial protection must be
With the denial of their Motion for Reconsideration,32 petitioners are now before this Court seeking a shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not
review of the appellate court’s Decision  and Resolution. LS & Co. and LSPI claim that the Court of issue to protect a right not in esse  and which may never arise, or to restrain an act which does not give
Appeals committed serious error in: (1) disregarding the well-defined limits of the writ of certiorari that rise to a cause of action. There must exist an actual right.37 There must be a patent showing by the
questions on the sufficiency of evidence are not to be resolved in such a petition; (2) in holding that complaint that there exists a right to be protected and that the acts against which the writ is to be
there was no confusion between the two marks; (3) in ruling that the erosion of petitioners’ trademark directed are violative of said right.38
is not protectable by injunction; (4) in ignoring the procedure previously agreed on by the parties and
which was adopted by the trial court; and (5) in declaring that the preliminary injunction issued by the
There are generally two kinds of preliminary injunction: (1) a prohibitory injunction which commands a
trial court will lead to the closure of respondent’s business.
party to refrain from doing a particular act; and (2) a mandatory injunction which commands the
performance of some positive act to correct a wrong in the past.39
In its Comment,33 Clinton Apparelle maintains that only questions of law may be raised in an appeal by
certiorari under Rule 45 of the Rules of Court. It asserts that the question of whether the Court of
The Court of Appeals did not err in reviewing proof adduced by petitioners to support its application for
Appeals erred in: (1) disregarding the survey evidence; (2) ruling that there was no confusion between
the issuance of the writ. While the matter of the issuance of a writ of preliminary injunction is addressed
the two marks; and (c) finding that the erosion of petitioners’ trademark may not be protected by
to the sound discretion of the trial court, this discretion must be exercised based upon the grounds and
injunction, are issues not within the ambit of a petition for review on certiorari under Rule 45. Clinton
in the manner provided by law. The exercise of discretion by the trial court in injunctive matters is
Apparelle also contends that the Court of Appeals acted correctly when it overturned the writ of
generally not interfered with save in cases of manifest abuse.40 And to determine whether there was
preliminary injunction issued by the trial court. It believes that the issued writ in effect disturbed
abuse of discretion, a scrutiny must be made of the bases, if any, considered by the trial court in
the status quo  and disposed of the main case without trial.
granting injunctive relief. Be it stressed that injunction is the strong arm of equity which must be issued
with great caution and deliberation, and only in cases of great injury where there is no commensurate
There is no merit in the petition. remedy in damages.41

At issue is whether the issuance of the writ of preliminary injunction by the trial court was proper and In the present case, we find that there was scant justification for the issuance of the writ of preliminary
whether the Court of Appeals erred in setting aside the orders of the trial court. injunction.

Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at any Petitioners anchor their legal right to "Dockers and Design" trademark on the Certificate of Registration
stage of an action prior to the judgment or final order requiring a party or a court, agency or a person issued in their favor by the Bureau of Patents, Trademarks and Technology Transfer.* According to
to refrain from a particular act or acts. Injunction is accepted as the strong arm of equity or a Section 138 of Republic Act No. 8293,42 this Certificate of Registration is prima facie  evidence of the
transcendent remedy to be used cautiously as it affects the respective rights of the parties, and only validity of the registration, the registrant’s ownership of the mark and of the exclusive right to use the
upon full conviction on the part of the court of its extreme necessity. An extraordinary remedy, same in connection with the goods or services and those that are related thereto specified in the
injunction is designed to preserve or maintain the status quo  of things and is generally availed of to certificate. Section 147.1 of said law likewise grants the owner of the registered mark the exclusive
prevent actual or threatened acts until the merits of the case can be heard.34 It may be resorted to only right to prevent all third parties not having the owner’s consent from using in the course of trade
by a litigant for the preservation or protection of his rights or interests and for no other purpose during identical or similar signs for goods or services which are identical or similar to those in respect of which
the pendency of the principal action.35 It is resorted to only when there is a pressing necessity to avoid the trademark is registered if such use results in a likelihood of confusion.
injurious consequences, which cannot be remedied under any standard compensation. The resolution of
an application for a writ of preliminary injunction rests upon the existence of an emergency or of a
However, attention should be given to the fact that petitioners’ registered trademark consists of two
special recourse before the main case can be heard in due course of proceedings.36
elements: (1) the word mark "Dockers" and (2) the wing-shaped design or logo. Notably, there is only
one registration for both features of the trademark giving the impression that the two should be
Section 3, Rule 58, of the Rules of Court enumerates the grounds for the issuance of a preliminary considered as a single unit. Clinton Apparelle’s trademark, on the other hand, uses the "Paddocks" word
injunction: mark on top of a logo which according to petitioners is a slavish imitation of the "Dockers" design. The
two trademarks apparently differ in their word marks ("Dockers" and "Paddocks"), but again according
to petitioners, they employ similar or identical logos. It could thus be said that respondent only
SEC. 3. Grounds for issuance of preliminary injunction.  – A preliminary injunction may be granted when
"appropriates" petitioners’ logo and not the word mark "Dockers"; it uses only a portion of the
it is established:
registered trademark and not the whole.

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance, or non-performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
 53

Given the single registration of the trademark "Dockers and Design" and considering that respondent the above-quoted case. Similarly, in Developers Group of Companies, Inc. v. Court of Appeals,47 we held
only uses the assailed device but a different word mark, the right to prevent the latter from using the that it was "not enough" for the trial court, in its order granting the writ, to simply say that it appeared
challenged "Paddocks" device is far from clear. Stated otherwise, it is not evident whether the single "after hearing that plaintiff is entitled to the relief prayed for."
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
In addition, we agree with the Court of Appeals in its holding that the damages the petitioners had
of a portion of a trademark registered in its entirety constitutes material or substantial invasion of the
suffered or continue to suffer may be compensated in terms of monetary consideration. As held
owner’s right.
in Government Service Insurance System v. Florendo:48

It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant
…a writ of injunction should never have been issued when an action for damages would adequately
or central feature of petitioners’ trademark—the feature that prevails or is retained in the minds of the
compensate the injuries caused. The very foundation of the jurisdiction to issue the writ of injunction
public—an imitation of which creates the likelihood of deceiving the public and constitutes trademark
rests in the probability of irreparable injury, inadequacy of pecuniary estimation and the prevention of
infringement.43 In sum, there are vital matters which have yet and may only be established through a
the multiplicity of suits, and where facts are not shown to bring the case within these conditions, the
full-blown trial.
relief of injunction should be refused.49

From the above discussion, we find that petitioners’ right to injunctive relief has not been clearly and
We also believe that the issued injunctive writ, if allowed, would dispose of the case on the merits as it
unmistakably demonstrated. The right has yet to be determined. Petitioners also failed to show proof
would effectively enjoin the use of the "Paddocks" device without proof that there is basis for such
that there is material and substantial invasion of their right to warrant the issuance of an injunctive
action. The prevailing rule is that courts should avoid issuing a writ of preliminary injunction that would
writ. Neither were petitioners able to show any urgent and permanent necessity for the writ to prevent
in effect dispose of the main case without trial.50 There would be a prejudgment of the main case and a
serious damage.
reversal of the rule on the burden of proof since it would assume the proposition which petitioners are
inceptively bound to prove.51
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
Parenthetically, we find no flaw in the Court of Appeals’ disquisition on the consequences of the issued
to wait until the mark loses its distinctiveness to obtain injunctive relief, and that the mere use by an
injunction. An exercise of caution, we believe that such reflection is necessary to weigh the alleged
infringer of a registered mark is already actionable even if he has not yet profited thereby or has
entitlement to the writ vis-à-vis its possible effects. The injunction issued in the instant case is of a
damaged the trademark owner.
serious nature as it tends to do more than to maintain the status quo. In fact, the assailed injunction if
sustained would bring about the result desired by petitioners without a trial on the merits.
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
Then again, we believe the Court of Appeals overstepped its authority when it declared that the "alleged
mark and other parties; or (2) likelihood of confusion, mistake or deception. Subject to the principles of
similarity as to the two logos is hardly confusing to the public." The only issue brought before the Court
equity, the owner of a famous mark is entitled to an injunction "against another person’s commercial
of Appeals through respondent’s Petition  under Rule 65 of the Rules of Court involved the grave abuse
use in commerce of a mark or trade name, if such use begins after the mark has become famous and
of discretion allegedly committed by the trial court in granting the TRO and the writ of preliminary
causes dilution of the distinctive quality of the mark." This is intended to protect famous marks from
injunction. The appellate court in making such a statement went beyond that issue and touched on the
subsequent uses that blur distinctiveness of the mark or tarnish or disparage it.44
merits of the infringement case, which remains to be decided by the trial court. In our view, it was
premature for the Court of Appeals to declare that there is no confusion between the two devices or
Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that: (1) the logos. That matter remains to be decided on by the trial court.
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
Finally, we have no contention against the procedure adopted by the trial court in resolving the
petitioners’ mark. In the case at bar, petitioners have yet to establish whether "Dockers and Design"
application for an injunctive writ and we believe that respondent was accorded due process. Due
has acquired a strong degree of distinctiveness and whether the other two elements are present for
process, in essence, is simply an opportunity to be heard. And in applications for preliminary injunction,
their cause to fall within the ambit of the invoked protection. The Trends MBL Survey Report which
the requirement of hearing and prior notice before injunction may issue has been relaxed to the point
petitioners presented in a bid to establish that there was confusing similarity between two marks is not
that not all petitions for preliminary injunction must undergo a trial-type hearing, it being a hornbook
sufficient proof of any dilution that the trial court must enjoin.
doctrine that a formal or trial-type hearing is not at all times and in all instances essential to due
process. Due process simply means giving every contending party the opportunity to be heard and the
The Court also finds that the trial court’s order granting the writ did not adequately detail the reasons court to consider every piece of evidence presented in their favor. Accordingly, this Court has in the
for the grant, contrary to our ruling in University of the Philippines v. Hon. Catungal Jr., 45 wherein we case of Co v. Calimag, Jr.,52  rejected a claim of denial of due process where such claimant was given
held that: the opportunity to be heard, having submitted his counter-affidavit and memorandum in support of his
position.53
The trial court must state its own findings of fact and cite particular law to justify grant of preliminary
injunction. Utmost care in this regard is demanded.46 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
The trial court in granting the injunctive relief tersely ratiocinated that "the plaintiffs appear to be
injunctive writ will be set aside for having been issued with grave abuse of discretion.54 Conformably,
entitled to the relief prayed for and this Court is of the considered belief and humble view that, without
the Court of Appeals was correct in setting aside the assailed orders of the trial court.
necessarily delving on the merits, the paramount interest of justice will be better served if
the status quo shall be maintained." Clearly, this statement falls short of the requirement laid down by
 54

WHEREFORE, the instant petition is DENIED. The Decision  of the Court of Appeals dated 21 December
1998 and its Resolution  dated 10 May 1999 are AFFIRMED. Costs against petitioners.

SO ORDERED.
 55

SECOND DIVISION The BLA Ruling

G.R. No. 222366, December 04, 2017 In a Decision28 dated May 11, 2012, the BLA ruled in W Land's favor, and accordingly ordered the
cancellation of Starwood's registration for the "W" mark. The BLA found that the DAU and the
attachments thereto submitted by Starwood did not prove actual use of the "W" mark in the Philippines,
W LAND HOLDINGS, INC., Petitioner, v. STARWOOD HOTELS AND RESORTS WORLDWIDE,
considering that the "evidences of use" attached to the DAU refer to hotel or establishments that are
INC., Respondent.
located abroad.29 In this regard, the BLA opined that "the use of a trademark as a business tool and as
contemplated under [Section 151.1 (c) of RA 8293] refers to the actual attachment thereof to goods
DECISION and services that are sold or availed of and located in the Philippines."30

PERLAS-BERNABE, J.: Dissatisfied, Starwood appealed31 to the IPO DG.

Assailed in this petition for review on certiorari1 are the Decision2 dated June 22, 2015 and the The IPO DG Ruling
Resolution3 dated January 7, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 133825 affirming the
Decision4 dated January 10, 2014 of the Intellectual Property Office (IPO) - Director General (IPO DG),
In a Decision32 dated January 10, 2014, the IPO DG granted Starwood's appeal,33 thereby dismissing W
which, in turn, reversed the Decision5 dated May 11, 2012 of the IPO Bureau of Legal Affairs (BLA) in
Land's Petition for Cancellation. Contrary to the BLA's findings, the IPO DG found that Starwood's
Inter Partes Case No. 14-2009-00143, and accordingly, dismissed petitioner W Land Holdings, Inc.'s (W
submission of its DAU and attachments, coupled by the acceptance thereof by the IPO Bureau of
Land) petition for cancellation of the trademark "W" registered in the name of respondent Starwood
Trademarks, shows that the "W" mark still bears a "registered" status. Therefore, there is a
Hotels and Resorts, Worldwide, Inc. (Starwood).
presumption that Starwood sufficiently complied with the registration requirements for its mark.34 The
IPO DG likewise held that the absence of any hotel or establishment owned by Starwood in the
The Facts Philippines bearing the "W" mark should not be equated to the absence of its use in the country, opining
that Starwood's pieces of evidence, particularly its interactive website, indicate actual use in the
Philippines,35 citing Rule 20536 of the Trademark Regulations, as amended by IPO Office Order No. 056-
On December 2, 2005, Starwood filed before the IPO an application for registration of the trademark 13.37 Finally, the IPO DG stressed that since Starwood is the undisputed owner of the "W" mark for use
"W" for Classes 436 and 447 of the International Classification of Goods and Services for the Purposes of in hotel and hotel-related services, any perceived damage on the part of W Land in this case should be
the Registration of Marks8 (Nice Classification).9 On February 26, 2007, Starwood's application was subordinated to the essence of protecting Starwood's intellectual property rights. To rule otherwise is to
granted and thus, the "W" mark was registered in its name.10 However, on April 20, 2006, W Land undermine the intellectual property system.38
applied11 for the registration of its own "W" mark for Class 36,12 which thereby prompted Starwood to
oppose the same.13 In a Decision14 dated April 23, 2008, the BLA found merit in Starwood's opposition,
and ruled that W Land's "W" mark is confusingly similar with Starwood's mark,15 which had an earlier Aggrieved, W Land filed a petition for review39 under Rule 43 of the Rules of Court before the CA.
filing date. W Land filed a motion for reconsideration16 on June 11, 2008, which was denied by the BLA
in a Resolution17 dated July 23, 2010.
The CA Ruling

On May 29, 2009, W Land filed a Petition for Cancellation18 of Starwood's mark for non-use under
In a Decision40 dated June 22, 2015, the CA affirmed the IPO DG ruling. At the onset, the CA observed
Section 151.119 of Republic Act No. 8293 or the "Intellectual Property Code of the Philippines" (IP
that the hotel business is peculiar in nature in that the offer, as well as the acceptance of room
Code),20 claiming that Starwood has failed to use its mark in the Philippines because it has no hotel or
reservations or bookings wherever in the world is an indispensable element. As such, the actual
establishment in the Philippines rendering the services covered by its registration; and that Starwood's
existence or presence of a hotel in one place is not necessary before it can be considered as doing
"W" mark application and registration barred its own "'W" mark application and registration for use on
business therein.41 In this regard, the CA recognized that the internet has become a powerful tool in
real estate.21
allowing businesses to reach out to consumers in a given market without being physically present
thereat; thus, the IPO DG correctly held that Starwood's interactive websites already indicate its actual
In its defense,22 Starwood denied having abandoned the subject mark on the ground of non-use, use in the Philippines of the "W" mark.42 Finally, the CA echoed the IPO DG's finding that since Starwood
asserting that it filed with the Director of Trademarks a notarized Declaration of Actual is the true owner of the "W" mark - as shown by the fact that Starwood had already applied for the
Use23 (DAU)24 with evidence of use on December 2, 2008,25 which was not rejected. In this relation, registration of this mark even before W Land was incorporated - its registration over the same should
Starwood argued that it conducts hotel and leisure business both directly and indirectly through remain valid, absent any showing that it has abandoned the use thereof.43
subsidiaries and franchisees, and operates interactive websites for its W Hotels in order to
accommodate its potential clients worldwide.26 According to Starwood, apart from viewing agents,
Unperturbed, W Land moved for reconsideration,44 but was denied in a Resolution45 dated January 7,
discounts, promotions, and other marketing fields being offered by it, these interactive websites allow
2016; hence, this petition.
Philippine residents to make reservations and bookings, which presuppose clear and convincing use of
the "W'' mark in the Philippines.27

The Issue Before the Court

 56

The essential issue for the Court's resolution is whether or not the CA correctly affirmed the IPO DG's shall attach five labels as actually used on the goods or the picture of the stamped or marked container
dismissal of W Land's Petition for Cancellation of Starwood's "W'' mark. visibly and legibly showing the mark as well as proof of payment of the prescribed fee. [As amended by
Office Order No. 08 (2000)] (Emphases supplied)
The Court's Ruling
The Trademark Regulations was amended by Office Order No. 056-13. Particularly, Rule 205 now
mentions certain items which "shall be accepted as proof of actual use of the mark:"
The petition is without merit.

RULE 205. Contents of the Declaration and Evidence of Actual Use.—

The IP Code defines a "mark" as "any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise."46 Case law explains that "[t]rademarks deal with the
psychological function of symbols and the effect of these symbols on the public at large."47 It is a (a) The declaration shall be under oath and filed by the applicant or registrant (or the authorized officer
merchandising short-cut, and, "[w]hatever the means employed, the aim is the same to convey through in case of a juridical entity) or the attorney or authorized representative of the applicant or registrant.
the mark, in the minds of potential customers, the desirability of the commodity upon which it The declaration must refer to only one application or registration, shall contain the name and address of
appears."48 Thus, the protection of trademarks as intellectual property is intended not only to preserve the applicant or registrant declaring that the mark is in actual use in the Philippines, the list of goods or
the goodwill and reputation of the business established on the goods or services bearing the mark services where the mark is used, the name/s of the establishment and address where the products are
through actual use over a period of time, but also to safeguard the public as consumers against being sold or where the services are being rendered. If the goods or services are available only by
confusion on these goods or services.49 As viewed by modern authorities on trademark law, trademarks online purchase, the website must be indicated on the form in lieu of name or address of the
perform three (3) distinct functions: (1) they indicate origin or ownership of the articles to which they establishment or outlet. The applicant or registrant may include other facts to show that the mark
are attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) described in the application or registration is actually being used in the Philippines. The date of first use
they advertise the articles they symbolize.50 shall not be required.

In Berris Agricultural Co., Inc. v. Abyadang,51 this Court explained that "[t]he ownership of a trademark (b) Actual use for some of the goods and services in the same class shall constitute use for the entire
is acquired by its registration and its actual use by the manufacturer or distributor of the goods made class of goods and services. Actual use for one class shall be considered use for related classes. In the
available to the purchasing public. x x x. A certificate of registration of a mark, once issued, event that some classes are not covered in the declaration, a subsequent declaration of actual use may
constitutes prima facie evidence of the validity of the registration, of the registrant's ownership of the be filed for the other classes of goods or services not included in the first declaration, provided that the
mark, and of the registrant's exclusive right to use the same in connection with the goods or services subsequent declaration is filed within the three year period or the extension period, in case an extension
and those that are related thereto specified in the certificate."52 However, "the  prima facie presumption of time to file the declaration was timely made. In the event that no subsequent declaration of actual
brought about by the registration of a mark may be challenged and overcome, in an appropriate use for the other classes of goods and services is filed within the prescribed period, the classes shall be
action, by proof of[, among others,] non- use of the mark, except when excused."53 automatically dropped from the application or registration without need of notice to the applicant or
registrant.
The actual use of the mark representing the goods or services introduced and transacted in commerce
over a period of time creates that goodwill which the law seeks to protect. For this reason, the IP Code, (c) The following shall be accepted as proof of actual use of the mark: (1) labels of the mark as
under Section 124.2,54 requires the registrant or owner of a registered mark to declare "actual use of these are used; (2) downloaded pages from the website of the applicant or registrant clearly
the mark" (DAU) and present evidence of such use within the prescribed period. Failing in which, the showing that the goods are being sold or the services are being rendered in the Philippines;
IPO DG may cause the motu propio removal from the register of the mark's registration.55 Also, any (3) photographs (including digital photographs printed on ordinary paper) of goods bearing the marks
person, believing that "he or she will be damaged by the registration of a mark," which has not been as these are actually used or of the stamped or marked container of goods and of the establishment/s
used within the Philippines, may file a petition for cancellation.56 Following the basic rule that he who where the services are being rendered; (4) brochures or advertising materials showing the actual use of
alleges must prove his case,57 the burden lies on the petitioner to show damage and non-use. the mark on the goods being sold or services being rendered in the Philippines; (5) for online sale,
receipts of sale of the goods or services rendered or other similar evidence of use, showing
that the goods are placed on the market or the services are available in the Philippines or
The IP Code and the Trademark Regulations have not specifically defined "use." However, it is
that the transaction took place in the Philippines; (6) copies of contracts for services showing the
understood that the "use" which the law requires to maintain the registration of a mark must
use of the mark. Computer printouts of the drawing or reproduction of marks will not be accepted as
be genuine, and not merely token. Based on foreign authorities,58 genuine use may be
evidence of use.
characterized as a bona fide use which results or tends to result, in one way or another, into a
commercial interaction or transaction "in the ordinary course of trade."59
(d) The Director may, from time to time, issue a list of acceptable evidence of use and those
that will not be accepted by the Office. (Emphases and underscoring supplied)
What specific act or acts would constitute use of the mark sufficient to keep its registration in force may
be gleaned from the Trademark Regulations, Rule 205 of which reads:
Office Order No. 056-13 was issued by the IPO DG on April 5, 2013, pursuant to his delegated rule-
making authority under Section 7 of the IP Code.60 The rationale for this issuance, per its whereas
RULE 205. Contents of the Declaration and Evidence of Actual Use. — The declaration shall be under
clauses, is to further "the policy of the [IPO] to streamline administrative procedures in registering
oath, must refer to only one application or registration, must contain the name and address of the
trademarks" and in so doing, address the need "to clarify what will be accepted as proof of use." In this
applicant or registrant declaring that the mark is in actual use in the Philippines, list of goods
regard, the parameters and list of evidence introduced under the amended Trademark Regulations are
where the mark is attached; list the name or names and the exact location or locations of the
thus mere administrative guidelines which are only meant to flesh out the types of acceptable evidence
outlet or outlets where the products are being sold or where the services are being rendered,
necessary to prove what the law already provides, i.e., the requirement of actual use. As such, contrary
recite sufficient facts to show that the mark described in the application or registration is
to W Land's postulation,61 the same does not diminish or modify any substantive right and hence, may
being actually used in the Philippines and, specifying the nature of such use. The declarant
 57

be properly applied to "all pending and registered marks,"62 as in Starwood's "W" mark for hotel / hotel It must be emphasized, however, that the mere exhibition of goods or services over the internet,
reservation services being rendered or, at the very least, made available in the Philippines. without more, is not enough to constitute actual use. To reiterate, the "use" contemplated by law is
genuine use - that is, a bona fide kind of use tending towards a commercial transaction in the ordinary
course of trade. Since the internet creates a borderless marketplace, it must be shown that the
Based on the amended Trademark Regulations, it is apparent that the IPO has now given due regard to
owner has actually transacted, or at the very least, intentionally targeted customers of a
the advent of commerce on the internet. Specifically, it now recognizes, among others, "downloaded
particular jurisdiction in order to be considered as having used the trade mark in the ordinary
pages from the website of the applicant or registrant clearly showing that the goods are being sold or
course of his trade in that country. A showing of an actual commercial link to the country is
the services are being rendered in the Philippines," as well as "for online sale, receipts of sale of the
therefore imperative. Otherwise, an unscrupulous registrant would be able to maintain his mark by
goods or services rendered or other similar evidence of use, showing that the goods are placed on the
the mere expedient of setting up a website, or by posting his goods or services on another's site,
market or the services are available in the Philippines or that the transaction took place in the
although no commercial activity is intended to be pursued in the Philippines. This type of token use
Philippines,"63 as acceptable proof of actual use. Truly, the Court discerns that these amendments are
renders inutile the commercial purpose of the mark, and hence, negates the reason to keep its
but an inevitable reflection of the realities of the times. In Mirpuri v. CA,64 this Court noted that
registration active. As the IP Code expressly requires, the use of the mark must be "within the
"[a]dvertising on the Net and cybershopping are turning the Internet into a commercial marketplace:"65
Philippines." This is embedded in Section 151 of the IP Code on cancellation, which reads:

The Internet is a decentralized computer network linked together through routers and communications
SECTION 151.  Cancellation. — 151.1. A petition to cancel a registration of a mark under this Act may
protocols that enable anyone connected to it to communicate with others likewise connected, regardless
be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by
of physical location. Users of the Internet have a wide variety of communication methods available to
the registration of a mark under this Act as follows:
them and a tremendous wealth of information that they may access. The growing popularity of the Net
has been driven in large part by the World Wide Web,  i.e., a system that facilitates use of the Net by
sorting through the great mass of information available on it. Advertising on the Net and (a) Within five (5) years from the date of the registration of the mark under this Act.
cybershopping are turning the Internet into a commercial marketplace. 66 (Emphasis and
underscoring supplied) (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
Thus, as modes of advertising and acquisition have now permeated into virtual zones over cyberspace,
used by, or with the permission of, the registrant so as to misrepresent the source of the goods
the concept of commercial goodwill has indeed evolved:
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
In the last half century, the unparalleled growth of industry and the rapid development of cancel the registration for only those goods or services may be filed. A registered mark shall not
communications technology have enabled trademarks, tradenames and other distinctive signs of a be deemed to be the generic name of goods or services solely because such mark is also used
product to penetrate regions where the owner does not actually manufacture or sell the product as a name of or to identify a unique product or service. The primary significance of the
itself. Goodwill is no longer confined to the territory of actual market penetration; it extends registered mark to the relevant public rather than purchaser motivation shall be the test for
to zones where the marked article has been fixed in the public mind through advertising. determining whether the registered mark has become the generic name of goods or services on
Whether in the print, broadcast or electronic communications medium, particularly on the or in connection with which it has been used.
Internet, advertising has paved the way for growth and expansion of the product by creating
(c) At any time, if the registered owner of the mark without legitimate reason fails to use
and earning a reputation that crosses over borders, virtually turning the whole world into
the mark within the Philippines, or to cause it to be used in the Philippines by virtue of
one vast marketplace.67 (Emphasis and underscoring supplied)
a license during an uninterrupted period of three (3) years or longer. (Emphasis and
underscoring supplied)
Cognizant of this current state of affairs, the Court therefore agrees with the IPO DG, as affirmed by the
CA, that the use of a registered mark representing the owner's goods or services by means of an
interactive website may constitute proof of actual use that is sufficient to maintain the registration of The hotel industry is no stranger to the developments and advances in technology. Like most
the same. Since the internet has turned the world into one vast marketplace, the owner of a registered businesses nowadays, hotels are utilizing the internet to drive almost every aspect of their operations,
mark is clearly entitled to generate and further strengthen his commercial goodwill by actively most especially the offering and accepting of room reservations or bookings, regardless of the client or
marketing and commercially transacting his wares or services throughout multiple platforms on the customer base. The CA explained this booking process in that the "business transactions commence
internet. The facilities and avenues present in the internet are, in fact, more prominent nowadays as with the placing of room reservations, usually by or through a travel agent who acts for or in behalf of
they conveniently cater to the modern-day consumer who desires to procure goods or services at any his principal, the hotel establishment. [The] reservation is first communicated to the reservations and
place and at any time, through the simple click of a mouse, or the tap of a screen. Multitudinous booking assistant tasked to handle the transaction. After the reservation is made, the specific room
commercial transactions are accessed, brokered, and consummated everyday over websites. These reserved for the guest will be blocked and will not be offered to another guest. As such, on the specified
websites carry the mark which represents the goods or services sought to be transacted. For the owner, date of arrival, the room reserved will be available to the guest."68
he intentionally exhibits his mark to attract the customers' interest in his goods or services. The mark
displayed over the website no less serves its functions of indicating the goods or services' origin and
In this accord, a hotel's website has now become an integral element of a hotel business. Especially
symbolizing the owner's goodwill than a mark displayed in the physical market. Therefore, there is no
with the uptrend of international travel and tourism, the hotel's website is now recognized as an
less premium to recognize actual use of marks through websites than their actual use through
efficient and necessary tool in advertising and promoting its brand in almost every part of the world.
traditional means. Indeed, as our world evolves, so too should our appreciation of the law. Legal
More so, interactive websites that allow customers or clients to instantaneously book and pay for, in
interpretation - as it largely affects the lives of people in the here and now - never happens in a
advance, accommodations and other services of a hotel anywhere in the world, regardless of the hotel's
vacuum. As such, it should not be stagnant but dynamic; it should not be ensnared in the obsolete but
actual location, dispense with the need for travel agents or hotel employees to transact the reservations
rather, sensitive to surrounding social realities.
for them. In effect, the hotel's website acts as a bridge or portal through which the hotel reaches out
and provides its services to the client/customer anywhere in the world, with the booking transaction
 58

completed at the client/customer's own convenience. It is in this sense that the CA noted that the Finally, it deserves pointing out that Starwood submitted in 2008 its DAU with evidence of use which
"actual existence or presence of a hotel in one place is not necessary before it can be considered as the IPO, through its Director of Trademarks and later by the IPO DG in the January 10, 2014 Decision,
doing business therein."69 had accepted and recognized as valid. The Court finds no reason to disturb this recognition. According
to jurisprudence, administrative agencies, such as the IPO, by means of their special knowledge and
expertise over matters falling within their jurisdiction are in a better position to pass judgment on this
As earlier intimated, mere use of a mark on a website which can be accessed anywhere in the world will
issue.81 Thus, their findings are generally accorded respect and finality, as long as they are supported
not automatically mean that the mark has been used in the ordinary course of trade of a particular
by substantial evidence. In this case, there is no compelling basis to reverse the IPO DG's findings - to
country. Thus, the use of mark on the internet must be shown to result into a within-State sale, or at
keep Starwood's registration for the "W" mark in force - as they are well supported by the facts and the
the very least, discernibly intended to target customers that reside in that country. This being so, the
law and thus, deserve respect from this Court.
use of the mark on an interactive website, for instance, may be said to target local customers
when they contain specific details regarding or pertaining to the target State, sufficiently
showing an intent towards realizing a within-State commercial activity or interaction. These WHEREFORE, the petition is DENIED. The Decision dated June 22, 2015 and the Resolution dated
details may constitute a local contact phone number, specific reference being available to local January 7, 2016 of the Court of Appeals in CA-G.R. SP No. 133825 are hereby AFFIRMED. SO
customers, a specific local webpage, whether domestic language and currency is used on the website, ORDERED.
and/or whether domestic payment methods are accepted.70 Notably, this paradigm of ascertaining local
details to evince within-state commercial intent is subscribed to by a number of jurisdictions, namely,
the European Union, Hong Kong, Singapore, Malaysia, Japan, Australia, Germany, France, Russia, and
the United Kingdom.71 As for the U.S. - where most of our intellectual property laws have been
patterned72 - there have been no decisions to date coming from its Trademark Trial and Appeal Board
involving cases challenging the validity of mark registrations through a cancellation action based on the
mark's internet use. However, in  International Bancorp LLC v. Societe des Bains de Mer et du Cercle
des Etrangers a Monaco,73 it was ruled that mere advertising in the U.S. combined with rendering of
services to American customers in a foreign country constituted "use" for the purpose of establishing
trademark rights in the U.S.

In this case, Starwood has proven that it owns Philippine registered domain
names,74 i.e., www.whotels.ph, www.wreservations.ph, www.whotel.ph, www.wreservation.ph, for its
website that showcase its mark. The website is readily accessible to Philippine citizens and residents,
where they can avail and book amenities and other services in any of Starwood's W Hotels worldwide.
Its website also readily provides a phone number75 for Philippine consumers to call for information or
other concerns. The website further uses the English language76 - considered as an official language in
this country77 - which the relevant market in the Philippines understands and often uses in the daily
conduct of affairs. In addition, the prices for its hotel accommodations and/or services can be converted
into the local currency or the Philippine Peso.78 Amidst all of these features, Starwood's "W" mark is
prominently displayed in the website through which consumers in the Philippines can instantaneously
book and pay for their accommodations, with immediate confirmation, in any of its W Hotels.
Furthermore, it has presented data showing a considerably growing number of internet users in the
Philippines visiting its website since 2003, which is enough to conclude that Starwood has established
commercially-motivated relationships with Philippine consumers.79

Taken together, these facts and circumstances show that Starwood's use of its "W" mark through its
interactive website is intended to produce a discernable commercial effect or activity within the
Philippines, or at the very least, seeks to establish commercial interaction with local consumers.
Accordingly, Starwood's use of the "W" mark in its reservation services through its website constitutes
use of the mark sufficient to keep its registration in force.

To be sure, Starwood's "W" mark is registered for Classes 43,  i.e., for hotel, motel, resort and motor
inn services, hotel reservation services, restaurant, bar and catering services, food and beverage
preparation services, cafe and cafeteria services, provision of conference, meeting and social function
facilities, under the Nice Classification.80 Under Section 152.3 of the IP Code, "[t]he 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." Thus, Starwood's use of the "W" mark for reservation services through its website
constitutes use of the mark which is already sufficient to protect its registration under the entire subject
classification from non-use cancellation. This, notwithstanding the absence of a Starwood hotel or
establishment in the Philippines.
 59

G.R. No. 143993             August 18, 2004 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.
MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners,
vs. Having received no reply from respondent Dy, petitioners on 6 June 1990 sued respondents in the
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY, JESUS Regional Trial Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair competition.
AYCARDO, ARACELI AYCARDO, and GRACE HUERTO, respondents. In its Order of 11 July 1990, the RTC issued a temporary restraining order ("TRO") against respondents
enjoining them from using the "Big Mak" mark in the operation of their business in the National Capital
Region.15 On 16 August 1990, the RTC issued a writ of preliminary injunction replacing the TRO.16
DECISION

CARPIO, J.: In their Answer, respondents admitted that they have been using the name "Big Mak Burger" for their
fast-food business. Respondents claimed, however, that McDonald's does not have an exclusive right to
the "Big Mac" mark or to any other similar mark. Respondents point out that the Isaiyas Group of
The Case
Corporations ("Isaiyas Group") registered the same mark for hamburger sandwiches with the PBPTT on
31 March 1979. One Rodolfo Topacio ("Topacio") similarly registered the same mark on 24 June
This is a petition for review1 of the Decision dated 26 November 1999 of the Court of Appeals2 finding 1983, prior to McDonald's registration on 18 July 1985. Alternatively, respondents claimed that they are
respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement and unfair competition and not liable for trademark infringement or for unfair competition, as the "Big Mak" mark they sought to
ordering petitioners to pay respondents P1,900,000 in damages, and of its Resolution dated 11 July register does not constitute a colorable imitation of the "Big Mac" mark. Respondents asserted that they
2000 denying reconsideration. The Court of Appeals' Decision reversed the 5 September 1994 did not fraudulently pass off their hamburger sandwiches as those of petitioners' Big Mac
Decision3 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak Burger, Inc. hamburgers.17 Respondents sought damages in their counterclaim.
liable for trademark infringement and unfair competition.
In their Reply, petitioners denied respondents' claim that McDonald's is not the exclusive owner of the
The Facts "Big Mac" mark. Petitioners asserted that while the Isaiyas Group and Topacio did register the "Big Mac"
mark ahead of McDonald's, the Isaiyas Group did so only in the Supplemental Register of the PBPTT and
such registration does not provide any protection. McDonald's disclosed that it had acquired Topacio's
Petitioner McDonald's Corporation ("McDonald's") is a corporation organized under the laws of rights to his registration in a Deed of Assignment dated 18 May 1981.18
Delaware, United States. McDonald's operates, by itself or through its franchisees, a global chain of
fast-food restaurants. McDonald's4 owns a family of marks5 including the "Big Mac" mark for its "double-
decker hamburger sandwich."6 McDonald's registered this trademark with the United States Trademark The Trial Court's Ruling
Registry on 16 October 1979.7 Based on this Home Registration, McDonald's applied for the registration
of the same mark in the Principal Register of the then Philippine Bureau of Patents, Trademarks and
On 5 September 1994, the RTC rendered judgment ("RTC Decision") finding respondent corporation
Technology ("PBPTT"), now the Intellectual Property Office ("IPO"). Pending approval of its application,
liable for trademark infringement and unfair competition. However, the RTC dismissed the complaint
McDonald's introduced its "Big Mac" hamburger sandwiches in the Philippine market in September 1981.
against private respondents and the counterclaim against petitioners for lack of merit and insufficiency
On 18 July 1985, the PBPTT allowed registration of the "Big Mac" mark in the Principal Register based
of evidence. The RTC held:
on its Home Registration in the United States.

Undeniably, the mark "B[ig] M[ac]" is a registered trademark for plaintiff McDonald's, and as
Like its other marks, McDonald's displays the "Big Mac" mark in items8 and paraphernalia9 in its
such, it is entitled [to] protection against infringement.
restaurants, and in its outdoor and indoor signages. From 1982 to 1990, McDonald's spent P10.5 million
in advertisement for "Big Mac" hamburger sandwiches alone.10
xxxx
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic corporation, is McDonald's
Philippine franchisee.11 There exist some distinctions between the names "B[ig] M[ac]" and "B[ig] M[ak]" as
appearing in the respective signages, wrappers and containers of the food products of the
parties. But infringement goes beyond the physical features of the questioned name and the
Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is a domestic corporation which
original name. There are still other factors to be considered.
operates fast-food outlets and snack vans in Metro Manila and nearby provinces.12 Respondent
corporation's menu includes hamburger sandwiches and other food items.13 Respondents Francis B. Dy,
Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huerto ("private xxxx
respondents") are the incorporators, stockholders and directors of respondent corporation.14
Significantly, the contending parties are both in the business of fast-food chains and
On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the "Big restaurants. An average person who is hungry and wants to eat a hamburger sandwich may
Mak" mark for its hamburger sandwiches. McDonald's opposed respondent corporation's application on not be discriminating enough to look for a McDonald's restaurant and buy a "B[ig] M[ac]"
the ground that "Big Mak" was a colorable imitation of its registered "Big Mac" mark for the same food hamburger. Once he sees a stall selling hamburger sandwich, in all likelihood, he will dip into
products. McDonald's also informed respondent Francis Dy ("respondent Dy"), the chairman of the his pocket and order a "B[ig] M[ak]" hamburger sandwich. Plaintiff McDonald's fast-food chain
has attained wide popularity and acceptance by the consuming public so much so that its air-
 60

conditioned food outlets and restaurants will perhaps not be mistaken by many to be the same 3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy, Wiliam B. Dy,
as defendant corporation's mobile snack vans located along busy streets or highways. But the Jesus Aycardo, Araceli Aycardo and Grace Huerto, as well as all counter-claims, are dismissed
thing is that what is being sold by both contending parties is a food item – a hamburger for lack of merit as well as for insufficiency of evidence.20
sandwich which is for immediate consumption, so that a buyer may easily be confused or
deceived into thinking that the "B[ig] M[ak]" hamburger sandwich he bought is a food-product
Respondents appealed to the Court of Appeals.
of plaintiff McDonald's, or a subsidiary or allied outlet thereof. Surely, defendant corporation
has its own secret ingredients to make its hamburger sandwiches as palatable and as tasty as
the other brands in the market, considering the keen competition among mushrooming
hamburger stands and multinational fast-food chains and restaurants. Hence, the trademark
"B[ig] M[ac]" has been infringed by defendant corporation when it used the name "B[ig]
M[ak]" in its signages, wrappers, and containers in connection with its food business. xxxx The Ruling of the Court of Appeals

Did the same acts of defendants in using the name "B[ig] M[ak]" as a trademark or tradename On 26 November 1999, the Court of Appeals rendered judgment ("Court of Appeals' Decision")
in their signages, or in causing the name "B[ig] M[ak]" to be printed on the wrappers and reversing the RTC Decision and ordering McDonald's to pay respondents P1,600,000 as actual and
containers of their food products also constitute an act of unfair competition under Section 29 compensatory damages and P300,000 as moral damages. The Court of Appeals held:
of the Trademark Law?
Plaintiffs-appellees in the instant case would like to impress on this Court that the use
The answer is in the affirmative. xxxx of defendants-appellants of its corporate name – the whole "L.C. B[ig] M[ak] B[urger], I[nc]."
which appears on their food packages, signages and advertisements is an infringement of their
trademark "B[ig] M[ac]" which they use to identify [their] double decker sandwich, sold in a
The xxx provision of the law concerning unfair competition is broader and more inclusive than Styrofoam box packaging material with the McDonald's logo of umbrella "M" stamped
the law concerning the infringement of trademark, which is of more limited range, but within thereon, together with the printed mark in red bl[o]ck capital letters, the words being
its narrower range recognizes a more exclusive right derived by the adoption and registration separated by a single space. Specifically, plaintiffs-appellees argue that defendants-appellants'
of the trademark by the person whose goods or services are first associated therewith. use of their corporate name is a colorable imitation of their trademark "Big Mac".
xxx Notwithstanding the distinction between an action for trademark infringement and an
action for unfair competition, however, the law extends substantially the same relief to the
injured party for both cases. (See Sections 23 and 29 of Republic Act No. 166) xxxx

Any conduct may be said to constitute unfair competition if the effect is to pass off on the To Our mind, however, this Court is fully convinced that no colorable imitation exists. As the
public the goods of one man as the goods of another. The choice of "B[ig] M[ak]" as definition dictates, it is not sufficient that a similarity exists in both names, but that more
tradename by defendant corporation is not merely for sentimental reasons but was clearly importantly, the over-all presentation, or in their essential, substantive and distinctive parts is
made to take advantage of the reputation, popularity and the established goodwill of plaintiff such as would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing the
McDonald's. For, as stated in Section 29, a person is guilty of unfair competition who in selling genuine article. A careful comparison of the way the trademark "B[ig] M[ac]" is being used by
his goods shall give them the general appearance, of goods of another manufacturer or dealer, plaintiffs-appellees and corporate name L.C. Big Mak Burger, Inc. by defendants-appellants,
either as to the goods themselves or in the wrapping of the packages in which they are would readily reveal that no confusion could take place, or that the ordinary purchasers would
contained, or the devices or words thereon, or in any other feature of their appearance, which be misled by it. As pointed out by defendants-appellants, the plaintiffs-appellees' trademark is
would likely influence purchasers to believe that the goods offered are those of a manufacturer used to designate only one product, a double decker sandwich sold in a Styrofoam box with
or dealer other than the actual manufacturer or dealer. Thus, plaintiffs have established their the "McDonalds" logo. On the other hand, what the defendants-appellants corporation is using
valid cause of action against the defendants for trademark infringement and unfair competition is not a trademark for its food product but a business or corporate name. They use the
and for damages.19 business name "L.C. Big Mak Burger, Inc." in their restaurant business which serves diversified
food items such as siopao, noodles, pizza, and sandwiches such as hotdog, ham, fish burger
and hamburger. Secondly, defendants-appellants' corporate or business name appearing in
The dispositive portion of the RTC Decision provides: the food packages and signages are written in silhouette red-orange letters with the "b" and
"m" in upper case letters. Above the words "Big Mak" are the upper case letter "L.C.". Below
the words "Big Mak" are the words "Burger, Inc." spelled out in upper case
WHEREFORE, judgment is rendered in favor of plaintiffs McDonald's Corporation and McGeorge
letters. Furthermore, said corporate or business name appearing in such food packages and
Food Industries, Inc. and against defendant L.C. Big Mak Burger, Inc., as follows:
signages is always accompanied by the company mascot, a young chubby boy named Maky
who wears a red T-shirt with the upper case "m" appearing therein and a blue lower
1. The writ of preliminary injunction issued in this case on [16 August 1990] is made garment. Finally, the defendants-appellants' food packages are made of plastic material.
permanent;
xxxx
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual damages in
the amount of P400,000.00, exemplary damages in the amount of P100,000.00, and
xxx [I]t is readily apparent to the naked eye that there appears a vast difference in the
attorney's fees and expenses of litigation in the amount of P100,000.00;
appearance of the product and the manner that the tradename "Big Mak" is being used and
presented to the public. As earlier noted, there are glaring dissimilarities between plaintiffs-
appellees' trademark and defendants-appellants' corporate name. Plaintiffs-appellees' product
 61

carrying the trademark "B[ig] M[ac]" is a double decker sandwich (depicted in the tray mat B. As a trademark, respondents' "Big Mak" is undeniably and unquestionably similar
containing photographs of the various food products xxx sold in a Styrofoam box with the to petitioners' "Big Mac" trademark based on the dominancy test and the idem
"McDonald's" logo and trademark in red, bl[o]ck capital letters printed thereon xxx at a price sonans test resulting inexorably in confusion on the part of the consuming public.
which is more expensive than the defendants-appellants' comparable food products. In order
to buy a "Big Mac", a customer needs to visit an air-conditioned "McDonald's" restaurant
II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE INHERENT SIMILARITY
usually located in a nearby commercial center, advertised and identified by its logo - the
BETWEEN THE MARK "BIG MAK" AND THE WORD MARK "BIG MAC" AS AN INDICATION OF
umbrella "M", and its mascot – "Ronald McDonald". A typical McDonald's restaurant boasts of
RESPONDENTS' INTENT TO DECEIVE OR DEFRAUD FOR PURPOSES OF ESTABLISHING UNFAIR
a playground for kids, a second floor to accommodate additional customers, a drive-thru to
COMPETITION.22
allow customers with cars to make orders without alighting from their vehicles, the interiors of
the building are well-lighted, distinctly decorated and painted with pastel colors xxx. In buying
a "B[ig] M[ac]", it is necessary to specify it by its trademark. Thus, a customer needs to look Petitioners pray that we set aside the Court of Appeals' Decision and reinstate the RTC Decision.
for a "McDonald's" and enter it first before he can find a hamburger sandwich which carry the
mark "Big Mac". On the other hand, defendants-appellants sell their goods through snack vans
xxxx In their Comment to the petition, respondents question the propriety of this petition as it allegedly
raises only questions of fact. On the merits, respondents contend that the Court of Appeals committed
no reversible error in finding them not liable for trademark infringement and unfair competition and in
Anent the allegation that defendants-appellants are guilty of unfair competition, ordering petitioners to pay damages.
We likewise find the same untenable.
The Issues
Unfair competition is defined as "the employment of deception or any other means contrary to
good faith by which a person shall pass off the goods manufactured by him or in which he
deals, or his business, or service, for those of another who has already established good will The issues are:
for his similar good, business or services, or any acts calculated to produce the same result"
(Sec. 29, Rep. Act No. 166, as amended). 1. Procedurally, whether the questions raised in this petition are proper for a petition for review under
Rule 45.
To constitute unfair competition therefore it must necessarily follow that there was malice and
that the entity concerned was in bad faith. 2. On the merits, (a) whether respondents used the words "Big Mak" not only as part of the corporate
name "L.C. Big Mak Burger, Inc." but also as a trademark for their hamburger products, and (b)
In the case at bar, We find no sufficient evidence adduced by plaintiffs-appellees that whether respondent corporation is liable for trademark infringement and unfair competition.23
defendants-appellants deliberately tried to pass off the goods manufactured by them for those
of plaintiffs-appellees. The mere suspected similarity in the sound of the defendants- The Court's Ruling
appellants' corporate name with the plaintiffs-appellees' trademark is not sufficient evidence
to conclude unfair competition. Defendants-appellants explained that the name "M[ak]" in
their corporate name was derived from both the first names of the mother and father of The petition has merit.
defendant Francis Dy, whose names are Maxima and Kimsoy. With this explanation, it is up to
the plaintiffs-appellees to prove bad faith on the part of defendants-appellants. It is a settled On Whether the Questions Raised in the Petition are Proper for a Petition for Review
rule that the law always presumes good faith such that any person who seeks to be awarded
damages due to acts of another has the burden of proving that the latter acted in bad faith or
with ill motive. 21 A party intending to appeal from a judgment of the Court of Appeals may file with this Court a petition
for review under Section 1 of Rule 45 ("Section 1")24 raising only questions of law. A question of law
exists when the doubt or difference arises on what the law is on a certain state of facts. There is a
Petitioners sought reconsideration of the Court of Appeals' Decision but the appellate court denied their question of fact when the doubt or difference arises on the truth or falsity of the alleged facts. 25
motion in its Resolution of 11 July 2000.

Here, petitioners raise questions of fact and law in assailing the Court of Appeals' findings on
Hence, this petition for review. respondent corporation's non-liability for trademark infringement and unfair competition. Ordinarily, the
Court can deny due course to such a petition. In view, however, of the contradictory findings of fact of
Petitioners raise the following grounds for their petition: the RTC and Court of Appeals, the Court opts to accept the petition, this being one of the recognized
exceptions to Section 1.26 We took a similar course of action in Asia Brewery, Inc. v. Court of
Appeals27 which also involved a suit for trademark infringement and unfair competition in which the
I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS' CORPORATE NAME "L.C. trial court and the Court of Appeals arrived at conflicting findings.
BIG MAK BURGER, INC." IS NOT A COLORABLE IMITATION OF THE MCDONALD'S TRADEMARK
"BIG MAC", SUCH COLORABLE IMITATION BEING AN ELEMENT OF TRADEMARK
INFRINGEMENT. On the Manner Respondents Used
"Big Mak" in their Business

A. Respondents use the words "Big Mak" as trademark for their products and not
merely as their business or corporate name.
 62

Petitioners contend that the Court of Appeals erred in ruling that the corporate name "L.C. Big Mak A mark is valid if it is "distinctive" and thus not barred from registration under Section 436 of RA 166
Burger, Inc." appears in the packaging for respondents' hamburger products and not the words "Big ("Section 4"). However, once registered, not only the mark's validity but also the registrant's ownership
Mak" only. of the mark is prima facie presumed.37

The contention has merit. Respondents contend that of the two words in the "Big Mac" mark, it is only the word "Mac" that is valid
because the word "Big" is generic and descriptive (proscribed under Section 4[e]), and thus "incapable
of exclusive appropriation."38
The evidence presented during the hearings on petitioners' motion for the issuance of a writ of
preliminary injunction shows that the plastic wrappings and plastic bags used by respondents for their
hamburger sandwiches bore the words "Big Mak." The other descriptive words "burger" and "100% pure The contention has no merit. The "Big Mac" mark, which should be treated in its entirety and not
beef" were set in smaller type, along with the locations of branches.28 Respondents' cash invoices simply dissected word for word,39 is neither generic nor descriptive. Generic marks are commonly used as the
refer to their hamburger sandwiches as "Big Mak."29 It is respondents' snack vans that carry the words name or description of a kind  of goods,40 such as "Lite" for beer41 or "Chocolate Fudge" for chocolate
"L.C. Big Mak Burger, Inc."30 soda drink.42 Descriptive marks, on the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not know it exists,43 such as "Arthriticare"
for arthritis medication.44 On the contrary, "Big Mac" falls under the class  of fanciful or arbitrary marks
It was only during the trial that respondents presented in evidence the plastic wrappers and bags for
as it bears no logical relation to the actual characteristics of the product it represents.45 As such, it is
their hamburger sandwiches relied on by the Court of Appeals.31 Respondents' plastic wrappers and bags
highly distinctive and thus valid. Significantly, the trademark "Little Debbie" for snack cakes was found
were identical with those petitioners presented during the hearings for the injunctive writ except that
arbitrary or fanciful.46
the letters "L.C." and the words "Burger, Inc." in respondents' evidence were added above and below
the words "Big Mak," respectively. Since petitioners' complaint was based on facts existing before and
during the hearings on the injunctive writ, the facts established during those hearings are the proper The Court also finds that petitioners have duly established McDonald's exclusive ownership of the "Big
factual bases for the disposition of the issues raised in this petition. Mac" mark. Although Topacio and the Isaiyas Group registered the "Big Mac" mark ahead of
McDonald's, Topacio, as petitioners disclosed, had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark only in the Supplemental Register. A mark
On the Issue of Trademark Infringement
which is not registered in the Principal Register, and thus not distinctive, has no real
protection.47 Indeed, we have held that registration in the Supplemental Register is not even a prima
Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA 166"), the law applicable to this facie evidence of the validity of the registrant's exclusive right to use the mark on the goods specified in
case,32 defines trademark infringement as follows: the certificate.48

Infringement, what constitutes. — Any person who [1] shall use, without the consent of the On Types of Confusion
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or
trade-name in connection with the sale, offering for sale, or advertising of any goods, business
Section 22 covers two types of confusion arising from the use of similar or colorable imitation
or services on or in connection with which such use is likely to cause confusion or mistake or
marks, namely, confusion of goods (product confusion) and confusion of business (source or origin
to deceive purchasers or others as to the source or origin of such goods or services, or identity
confusion). In Sterling Products International, Incorporated v. Farbenfabriken Bayer
of such business; or [2] reproduce, counterfeit, copy, or colorably imitate any such mark or
Aktiengesellschaft, et al.,49 the Court distinguished these two types of confusion, thus:
trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or services, shall be liable to a civil [Rudolf] Callman notes two types of confusion. The first is the confusion of goods "in which
action by the registrant for any or all of the remedies herein provided.33 event the ordinarily prudent purchaser would be induced to purchase one product in the belief
that he was purchasing the other." xxx The other is the confusion of business: "Here though
the goods of the parties are different, the defendant's product is such as might reasonably be
Petitioners base their cause of action under the first part of Section 22, i.e. respondents allegedly used,
assumed to originate with the plaintiff, and the public would then be deceived either into that
without petitioners' consent, a colorable imitation of the "Big Mac" mark in advertising and selling
belief or into the belief that there is some connection between the plaintiff and defendant
respondents' hamburger sandwiches. This likely caused confusion in the mind of the purchasing public
which, in fact, does not exist."
on the source of the hamburgers or the identity of the business.

Under Act No. 666,50 the first trademark law, infringement was limited to confusion of goods only, when
To establish trademark infringement, the following elements must be shown: (1) the validity of
the infringing mark is used on "goods of a similar kind."51 Thus, no relief was afforded to the party
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable
whose registered mark or its colorable imitation is used on different although related goods. To remedy
imitation by the alleged infringer results in "likelihood of confusion."34 Of these, it is the element
this situation, Congress enacted RA 166 on 20 June 1947. In defining trademark infringement, Section
of likelihood of confusion that is the gravamen of trademark infringement.35
22 of RA 166 deleted the requirement in question and expanded its scope to include such use of the
mark or its colorable imitation that is likely to result in confusion on "the source or origin of such goods
On the Validity of the "Big Mac"Mark or services, or identity of such business."52 Thus, while there is confusion of goods when the products
and McDonald's Ownership of such Mark are competing, confusion of business exists when the products are non-competing but related enough
to produce confusion of affiliation.53

On Whether Confusion of Goods and

Confusion of Business are Applicable
 63

Petitioners claim that respondents' use of the "Big Mak" mark on respondents' hamburgers results in styrofoam box with the "McDonald's" logo and trademark in red, block letters at a price more expensive
confusion of goods, particularly with respect to petitioners' hamburgers labeled "Big Mac." Thus, than the hamburgers of respondents. In contrast, respondents sell their Big Mak hamburgers in plastic
petitioners alleged in their complaint: wrappers and plastic bags. Respondents further point out that petitioners' restaurants are air-
conditioned buildings with drive-thru service, compared to respondents' mobile vans.
1.15. Defendants have unduly prejudiced and clearly infringed upon the property rights of
plaintiffs in the McDonald's Marks, particularly the mark "B[ig] M[ac]". Defendants' These and other factors respondents cite cannot negate the undisputed fact that respondents use their
unauthorized acts are likely, and calculated, to confuse, mislead or deceive the public into "Big Mak" mark on hamburgers, the same food product that petitioners' sell with the use of their
believing that the products and services offered by defendant Big Mak Burger, and the registered mark "Big Mac." Whether a hamburger is single, double or triple-decker, and whether
business it is engaged in, are approved and sponsored by, or affiliated with, wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents' use of
plaintiffs.54 (Emphasis supplied) the "Big Mak" mark on non-hamburger food products cannot excuse their infringement of petitioners'
registered mark, otherwise registered marks will lose their protection under the law.
Since respondents used the "Big Mak" mark on the same goods, i.e. hamburger sandwiches, that
petitioners' "Big Mac" mark is used, trademark infringement through confusion of goods is a proper The registered trademark owner may use his mark on the same or similar products, in different
issue in this case. segments of the market, and at different price levels depending on variations of the products for specific
segments of the market. The Court has recognized that the registered trademark owner enjoys
protection in product and market areas that are the normal potential expansion of his
Petitioners also claim that respondents' use of the "Big Mak" mark in the sale of hamburgers, the same
business. Thus, the Court has declared:
business that petitioners are engaged in, results in confusion of business. Petitioners alleged in their
complaint:
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
1.10. For some period of time, and without the consent of plaintiff McDonald's nor its
similar products of the parties, but extends to all cases in which the use by a junior
licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs' exclusive right to
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where
use and/or appropriate the McDonald's marks, defendant Big Mak Burger acting through
prospective purchasers would be misled into thinking that the complaining party has extended
individual defendants, has been operating "Big Mak Burger", a fast food restaurant business
his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is in any way connected
dealing in the sale of hamburger and cheeseburger sandwiches, french fries and other food
with the activities of the infringer; or when it forestalls the normal potential expansion of his
products, and has caused to be printed on the wrapper of defendant's food products and
business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).56 (Emphasis supplied)
incorporated in its signages the name "Big Mak Burger", which is confusingly similar
to and/or is a colorable imitation of the plaintiff McDonald's mark "B[ig] M[ac]",
xxx. Defendant Big Mak Burger has thus unjustly created the impression that its On Whether Respondents' Use of the "Big Mak"
business is approved and sponsored by, or affiliated with, plaintiffs. xxxx Mark Results in Likelihood of Confusion

2.2 As a consequence of the acts committed by defendants, which unduly prejudice and In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test and
infringe upon the property rights of plaintiffs McDonald's and McGeorge as the real owner and the holistic test.57 The dominancy test focuses on the similarity of the prevalent features of the
rightful proprietor, and the licensee/franchisee, respectively, of the McDonald's marks, and competing trademarks that might cause confusion. In contrast, the holistic test requires the court to
which are likely to have caused confusion or deceived the public as to the true source, consider the entirety of the marks as applied to the products, including the labels and packaging,
sponsorship or affiliation of defendants' food products and restaurant business, in determining confusing similarity.
plaintiffs have suffered and continue to suffer actual damages in the form of injury to their
business reputation and goodwill, and of the dilution of the distinctive quality of the
The Court of Appeals, in finding that there is no likelihood of confusion that could arise in the use
McDonald's marks, in particular, the mark "B[ig] M[ac]".55 (Emphasis supplied)
of respondents' "Big Mak" mark on hamburgers, relied on the holistic test. Thus, the Court of Appeals
ruled that "it is not sufficient that a similarity exists in both name(s), but that more importantly,
Respondents admit that their business includes selling hamburger sandwiches, the same food product the overall presentation, or in their essential, substantive and distinctive parts is such as would likely
that petitioners sell using the "Big Mac" mark. Thus, trademark infringement through confusion of MISLEAD or CONFUSE persons in the ordinary course of purchasing the genuine article." The holistic
business is also a proper issue in this case. test considers the two marks in their entirety, as they appear on the goods with their labels and
packaging. It is not enough to consider their words and compare the spelling and pronunciation of the
words.58
Respondents assert that their "Big Mak" hamburgers cater mainly to the low-income group while
petitioners' "Big Mac" hamburgers cater to the middle and upper income groups. Even if this is true, the
likelihood of confusion of business remains, since the low-income group might be led to believe that the Respondents now vigorously argue that the Court of Appeals' application of the holistic test to this case
"Big Mak" hamburgers are the low-end hamburgers marketed by petitioners. After all, petitioners have is correct and in accord with prevailing jurisprudence.
the exclusive right to use the "Big Mac" mark. On the other hand, respondents would benefit by
associating their low-end hamburgers, through the use of the "Big Mak" mark, with petitioners' high-
This Court, however, has relied on the dominancy test rather than the holistic test. The dominancy test
end "Big Mac" hamburgers, leading to likelihood of confusion in the identity of business.
considers the dominant features in the competing marks in determining whether they are confusingly
similar. Under the dominancy test, courts give greater weight to the similarity of the appearance of the
Respondents further claim that petitioners use the "Big Mac" mark only on petitioners' double-decker product arising from the adoption of the dominant features of the registered mark,
hamburgers, while respondents use the "Big Mak" mark on hamburgers and other products like siopao, disregarding minor differences.59 Courts will consider more the aural and visual impressions created by
noodles and pizza. Respondents also point out that petitioners sell their Big Mac double-deckers in a
 64

the marks in the public mind, giving little weight to factors like prices, quality, sales outlets and market The following random list of confusingly similar sounds in the matter of trademarks, culled
segments. from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop";
"Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper Flash"; "Cascarete" and "Celborite";
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60 the Court ruled:
"Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe"
and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon Amdur, in his book "Trade-
xxx It has been consistently held that the question of infringement of a trademark is to Mark Law and Practice", pp. 419-421, cities, as coming within the purview of the idem
be determined by the test of dominancy. Similarity in size, form and color, while relevant, is sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and "Seven-Up"
not conclusive. If the competing trademark contains the main or essential or dominant and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally said that
features of another, and confusion and deception is likely to result, infringement "Celdura" and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs.
takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement of the trademark
label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing "Sapolin", as the sound of the two names is almost the same. (Emphasis supplied)
Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The question
at issue in cases of infringement of trademarks is whether the use of the marks involved
Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater confusion, not only aurally but
would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers.
also visually.
(Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; xxx) (Emphasis
supplied.)
Indeed, a person cannot distinguish "Big Mac" from "Big Mak" by their sound. When one hears a "Big
61  Mac" or "Big Mak" hamburger advertisement over the radio, one would not know whether the "Mac" or
The Court reiterated the dominancy test in Lim Hoa v. Director of Patents, Phil. Nut Industry,
"Mak" ends with a "c" or a "k."
Inc. v. Standard Brands Inc.,62 Converse Rubber Corporation v. Universal Rubber Products,
Inc.,63 and Asia Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des Produits
Nestlé, S.A. v. Court of Appeals,65 the Court explicitly rejected the holistic test in this wise: Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their advertisement expenses, has
built goodwill and reputation for such mark making it one of the easily recognizable marks in the market
today. This increases the likelihood that consumers will mistakenly associate petitioners' hamburgers
[T]he totality or holistic test is contrary to the elementary postulate of the law on
and business with those of respondents'.
trademarks and unfair competition that confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons and overall impressions engendered by the
marks in controversy as they are encountered in the realities of the marketplace. (Emphasis Respondents' inability to explain sufficiently how and why they came to choose "Big Mak" for their
supplied) hamburger sandwiches indicates their intent to imitate petitioners' "Big Mac" mark. Contrary to the
Court of Appeals' finding, respondents' claim that their "Big Mak" mark was inspired by the first names
of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As petitioners well noted:
The test of dominancy 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." [R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at a more creative
choice for a corporate name by using the names of his parents, especially since he was
allegedly driven by sentimental reasons. For one, he could have put his father's name ahead
Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark results in
of his mother's, as is usually done in this patriarchal society, and derived letters from said
likelihood of confusion. First, "Big Mak" sounds exactly the same as "Big Mac." Second, the first word in
names in that order. Or, he could have taken an equal number of letters (i.e., two) from each
"Big Mak" is exactly the same as the first word in "Big Mac." Third, the first two letters in "Mak" are the
name, as is the more usual thing done. Surely, the more plausible reason behind Respondents'
same as the first two letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds the same as "c"
choice of the word "M[ak]", especially when taken in conjunction with the word "B[ig]", was
when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in spelling, thus
their intent to take advantage of Petitioners' xxx "B[ig] M[ac]" trademark, with
"Caloocan" is spelled "Kalookan."
their alleged sentiment-focused "explanation" merely thought of as a
convenient, albeit unavailing, excuse or defense for such an unfair choice of name.67
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
Absent proof that respondents' adoption of the "Big Mak" mark was due to honest mistake or was
words and six letters, with the first word of both marks having the same letters and the second word
fortuitous,68 the inescapable conclusion is that respondents adopted the "Big Mak" mark to "ride on the
having the same first two letters. In spelling, considering the Filipino language, even the last letters
coattails" of the more established "Big Mac" mark.69 This saves respondents much of the expense in
of both marks are the same.
advertising to create market recognition of their mark and hamburgers.70

Clearly, respondents have adopted in "Big Mak" not only the dominant but also almost all the
Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners' claim of
features of "Big Mac." Applied to the same food product of hamburgers, the two marks will likely
trademark infringement.
result in confusion in the public mind.

On the Lack of Proof of

The Court has taken into account the aural effects of the words and letters contained in the marks
Actual Confusion
in determining the issue of confusing similarity. Thus, in Marvex Commercial Co., Inc. v. Petra
Hawpia & Co., et al.,66 the Court held:
 65

Petitioners' failure to present proof of actual confusion does not negate their claim of trademark To support their claim of unfair competition, petitioners allege that respondents fraudulently passed off
infringement. As noted in American Wire & Cable Co. v. Director of Patents,71 Section their hamburgers as "Big Mac" hamburgers. Petitioners add that respondents' fraudulent intent can be
22 requires the less stringent standard of "likelihood of confusion" only. While proof of actual confusion inferred from the similarity of the marks in question.79
is the best evidence of infringement, its absence is inconsequential.72
Passing off (or palming off) takes place where the defendant, by imitative devices on the general
On the Issue of Unfair Competition appearance of the goods, misleads prospective purchasers into buying his merchandise under the
impression that they are buying that of his competitors.80 Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of deceiving the public that the
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
goods are those of his competitor.

xxxx
The RTC described the respective marks and the goods of petitioners and respondents in this wise:

Any person who will employ deception or any other means contrary to good faith by which
The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
he shall pass off the goods manufactured by him or in which he deals, or his business, or
sandwich. The packaging material is a styrofoam box with the McDonald's logo and trademark
services for those of the one having established such goodwill, or who shall commit any acts
in red with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are also
calculated to produce said result, shall be guilty of unfair competition, and shall be subject to
in red and block capital letters. On the other hand, defendants' "B[ig] M[ak]" script print is
an action therefor.
in orange with only the letter "B" and "M" being capitalized and the packaging material
is plastic wrapper. xxxx Further, plaintiffs' logo and mascot are the umbrella "M" and "Ronald
In particular, and without in any way limiting the scope of unfair competition, the McDonald's", respectively, compared to the mascot of defendant Corporation which is a
following shall be deemed guilty of unfair competition: chubby boy called "Macky" displayed or printed between the words "Big" and
"Mak."81 (Emphasis supplied)
(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the Respondents point to these dissimilarities as proof that they did not give their hamburgers the general
wrapping of the packages in which they are contained, or the devices or words thereon, or appearance of petitioners' "Big Mac" hamburgers.
in any 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
The dissimilarities in the packaging are minor compared to the stark similarities in the words that
than the actual manufacturer or dealer, or who otherwise clothes the goods with such
give respondents' "Big Mak" hamburgers the general appearance of petitioners' "Big Mac" hamburgers.
appearance as shall deceive the public and defraud another of his legitimate trade,
Section 29(a) expressly provides that the similarity in the general appearance of the goods may be in
or any subsequent vendor of such goods or any agent of any vendor engaged in selling such
the "devices or words" used on the wrappings. Respondents have applied on their plastic wrappers and
goods with a like purpose;
bags almost the same words that petitioners use on their styrofoam box. What attracts the attention
of the buying public are the words "Big Mak" which are almost the same, aurally and visually, as the
(b) Any person who by any artifice, or device, or who employs any other means calculated to words "Big Mac." The dissimilarities in the material and other devices are insignificant compared to the
induce the false belief that such person is offering the services of another who has identified glaring similarity in the words used in the wrappings.
such services in the mind of the public; or
Section 29(a) also provides that the defendant gives "his goods the general appearance of goods of
(c) Any person who shall make any false statement in the course of trade or another manufacturer." Respondents' goods are hamburgers which are also the goods of petitioners. If
who shall commit any other act contrary to good faith of a nature calculated to discredit the respondents sold egg sandwiches only instead of hamburger sandwiches, their use of the "Big Mak"
goods, business or services of another. (Emphasis supplied) mark would not give their goods the general appearance of petitioners' "Big Mac" hamburgers. In such
case, there is only trademark infringement but no unfair competition. However, since respondents chose
to apply the "Big Mak" mark on hamburgers, just like petitioner's use of the "Big Mac" mark on
The essential elements of an action for unfair competition are (1) confusing similarity in the general hamburgers, respondents have obviously clothed their goods with the general appearance of petitioners'
appearance of the goods, and (2) intent to deceive the public and defraud a competitor.74 The confusing goods.
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.75 Actual fraudulent intent Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big Mak
need not be shown.76 Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with the words "L.C.
Big Mak Burger, Inc." to inform the public of the name of the seller of the hamburgers. However,
petitioners introduced during the injunctive hearings plastic wrappers and bags with the "Big Mak"
Unfair competition is broader than trademark infringement and includes passing off goods with or mark without the name "L.C. Big Mak Burger, Inc." Respondents' belated presentation of plastic
without trademark infringement. Trademark infringement is a form of unfair competition.77 Trademark wrappers and bags bearing the name of "L.C. Big Mak Burger, Inc." as the seller of the hamburgers is
infringement constitutes unfair competition when there is not merely likelihood of confusion, but an after-thought designed to exculpate them from their unfair business conduct. As earlier stated, we
also actual or probable deception on the public because of the general appearance of the goods. There cannot consider respondents' evidence since petitioners' complaint was based on facts existing before
can be trademark infringement without unfair competition as when the infringer discloses on the labels and during the injunctive hearings.
containing the mark that he manufactures the goods, thus preventing the public from being deceived
that the goods originate from the trademark owner.78
 66

Thus, there is actually no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big Petitioner (Microsoft Corporation) is the copyright and trademark owner of all rights relating to all
Mak Burger, Inc." and not those of petitioners who have the exclusive right to the "Big Mac" mark. This versions and editions of Microsoft software (computer programs) such as, but not limited to, MS-DOS
clearly shows respondents' intent to deceive the public. Had respondents' placed a notice on their (disk operating system), Microsoft Encarta, Microsoft Windows, Microsoft Word, Microsoft Excel,
plastic wrappers and bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.", then they could Microsoft Access, Microsoft Works, Microsoft Powerpoint, Microsoft Office, Microsoft Flight Simulator and
validly claim that they did not intend to deceive the public. In such case, there is only trademark Microsoft FoxPro, among others, and their user's guide/manuals.
infringement but no unfair competition.82 Respondents, however, did not give such notice. We hold that
as found by the RTC, respondent corporation is liable for unfair competition. Private Respondent-Rolando Manansala is doing business under the name of DATAMAN TRADING
COMPANY and/or COMIC ALLEY with business address at 3rd Floor, University Mall Building, Tail Avc,
Manila.
The Remedies Available to Petitioners
Private Respondent Manansala, without authority from petitioner, was engaged in distributing and
Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a plaintiff who successfully selling Microsoft computer software programs.
maintains trademark infringement and unfair competition claims is entitled to injunctive and monetary
reliefs. Here, the RTC did not err in issuing the injunctive writ of 16 August 1990 (made permanent in On November 3, 1997, Mr. John Benedict A. Sacriz, a private investigator accompanied by an agent
its Decision of 5 September 1994) and in ordering the payment of P400,000 actual damages in favor of from the National Bureau of Investigation (NBI) was able to purchase six (6) CD-ROMs containing
petitioners. The injunctive writ is indispensable to prevent further acts of infringement by respondent various computer programs belonging to petitioner.
corporation. Also, the amount of actual damages is a reasonable percentage (11.9%) of respondent
corporation's gross sales for three (1988-1989 and 1991) of the six years (1984-1990) respondents As a result of the test-purchase, the agent from the NBI applied for a search warrant to search the
have used the "Big Mak" mark.84 premises of the private respondent.

On November 17, 1997, a Search Warrant was issued against the premises of the private respondent.
The RTC also did not err in awarding exemplary damages by way of correction for the public good85 in
view of the finding of unfair competition where intent to deceive the public is essential. The award of On November 19, 1997, the search warrant was served on the private respondent's premises and
attorney's fees and expenses of litigation is also in order.86 yielded several illegal copies of Microsoft programs.

WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision dated 26 November 1999 of Subsequently, petitioner, through Atty. Teodoro Kalaw IV tiled an Affidavit-Complaint in the DOJ based
the Court of Appeals and its Resolution dated 11 July 2000 and REINSTATE the Decision dated 5 on the results of the search and seizure operation conducted on private respondent's premises.
September 1994 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak
Burger, Inc. liable for trademark infringement and unfair competition.SO ORDERED. However, in a Resolution dated March 20, 2000, public respondent State Prosecutor dismissed the
charge against private respondent for violation of Section 29 P.D. 49 in this wise, to quote:
'The evidence is extant in the records to show that respondent is selling Microsoft computer software
programs bearing the copyrights and trademarks owned by Microsoft Corporation. There is, however, no
proof that respondent was the one who really printed or copied the products of complainant for sale in
FIRST DIVISION his store.

WHEREFORE, it is hereby, recommended that respondent be charged for violation of Article 189 of the
G.R. No. 166391, October 21, 2015 Revised Penal Code. The charge for violation of Section 29 of PD No. 49 is recommended dismissed for
lack of evidence.'
MICROSOFT CORPORATION, Petitioner, v. ROLANDO D. MANANSALA AND/OR MEL Petitioner filed a Motion for Partial Reconsideration arguing that printing or copying is not essential in
MANANSALA, DOING BUSINESS AS DATAMAN TRADING COMPANY AND/OR COMIC the crime of copyright infringement under Section 29 of PD No. 49.
ALLEY, Respondent.
On May 15, 2001, the public respondent issued a Resolution denying the Motion for Partial
DECISION Reconsideration.

Thereafter, petitioner filed a Petition for Review with the DOJ, which denied the petition for review.6
BERSAMIN, J.:
Dissatisfied with the outcome of its appeal, the petitioner filed its petition for certiorari in the CA to
annul the DOJ's dismissal of its petition for review on the ground of grave abuse of discretion amounting
1
This appeal seeks to overturn the decision promulgated on February 27, 2004,  whereby the Court of to lack or excess of jurisdiction on the part of the DOJ.
Appeals (CA) dismissed the petition for certiorari filed by petitioner to annul the orders of the
Department of Justice (DOJ) dated March 20, 2000,2 May 15, 2001,3 and January 27, 20034 dismissing On February 27, 2004, the CA rendered the assailed decision affirming the dismissal by the
the criminal charge of violation of Section 29 of Presidential Decree No. 49 (Decree on Intellectual DOJ,7 disposing as follows:
Property) it had instituted against the respondents; and the resolution promulgated on December 6, WHEREFORE, premises considered, the instant petition is DENIED. Consequently, the Orders dated
2004 denying its motion for reconsideration.5 March 20, 2000, May 15, 2001 and January 27, 2003 respectively are hereby AFFIRMED.

Antecedents SO ORDERED.8
Issue
The CA summarized the factual and procedural antecedents thusly:
 67

along with the first'. Stated differently, the word 'and' is a conjunction pertinently defined as meaning
The petitioner insists that printing or copying was not essential in the commission of the crime of 'together with', 'joined with', 'along or together with', 'added to or linked to' used to conjoin 'word with
copyright infringement under Section 29 of Presidential Decree No. 49; hence, contrary to the holding of word', 'phrase with phrase', 'clause with clause'. The word 'and' does not mean 'or', it is a conjunction
the DOJ, as upheld by the CA, the mere selling of pirated computer software constituted copyright used to denote a joinder or union, 'binding together', relating the one to the other.
infringement.9
Hence the key to interpret and understand Section 5 (a) of P.D. 49 is the word 'and'. From the
Ruling of the Court foregoing definitions of the word 'and' it is unmistakable that to hold a person liable under the said
provision of law, all the acts enumerated therein must be present and proven. As such, it is not correct
The appeal is meritorious. to construe the acts enumerated therein as being separate or independent from one another.

Although the general rule is that the determination of the existence of probable cause by the public In the case at bar, petitioner failed to allege and adduce evidence showing that the private respondent
prosecutor is not to be judicially scrutinized because it is an executive function, an exception exists is the one who copied, replicated or reproduced the software programs of the petitioner. In other words,
when the determination is tainted with grave abuse of discretion.10 Bearing this in mind, we hold that 'sale' alone of pirated copies of Microsoft software programs does not constitute copyright infringement
the DOJ committed grave abuse of discretion in sustaining the public prosecutor's dismissal of the punishable under P.D. 49.15
charge of copyright infringement under Section 29 of Presidential Decree No. 49 on the ground of lack The CA erred in its reading and interpretation of Section 5 of Presidential Decree No. 49. Under the
of evidence because the public prosecutor thereby flagrantly disregarded the existence of acts sufficient rules on syntax, the conjunctive word "and" denotes a "joinder or union" of words, phrases, or
to engender the well-founded belief that the crime of copyright infringement had been committed, and clause;16 it is different from the disjunctive word "or" that signals disassociation or
that the respondent was probably guilty thereof.11 independence.17 However, a more important rule of statutory construction dictates that laws should be
construed in a manner that avoids absurdity or unreasonableness.18 As the Court pointed out
Section 5 of Presidential Decree No. 49 specifically defined copyright as an exclusive right in the in Automotive Parts & Equipment Company, Inc. v. Lingad:19
following manner: Nothing is better settled then that courts are not to give words a meaning which would lead to absurd
Section 5. Copyright shall consist in the exclusive right; or unreasonable consequence. That is a principle that goes back to In re Allen decided on October 29,
1903, where it was held that a literal interpretation is to be rejected if it would be unjust or lead to
(A) To print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo-engravings, absurd results. That is a strong argument against its adoption. The words of Justice Laurel are
and pictorial illustrations of the works; particularly apt. Thus: 'The fact that the construction placed upon the statute by the appellants would
lead to an absurdity is another argument for rejecting it x x x.'
(B) To make any translation or other version or extracts or arrangements or adaptations thereof; to
dramatize it if it be a non-dramatic work; to convert it into a non-dramatic work if it be a drama; to It is of the essence of judicial duty to construe statutes so as to avoid such a deplorable result. That has
complete or execute if it be a model or design; long been a judicial function. A literal reading of a legislative act which could be thus characterized is to
be avoided if the language thereof can be given a reasonable application consistent with the legislative
(C) To exhibit, perform, represent, produce, or reproduce, the work in any manner or by any method purpose. In the apt language of Frankfurter: A decent respect for the policy of Congress must save us
whatever for profit or otherwise; it not reproduced in copies for sale, to sell any manuscript or any from imputing to it a self-defeating, if not disingenuous purpose. Certainly, we must reject a
record whatsoever thereof; construction that at best amounts to a manifestation of verbal ingenuity but hardly satisfies the test of
rationality on which law must be based.20
(D) To make any other use or disposition of the work consistent with the laws of the land.
The conjunctive "and" should not be taken in its ordinary acceptation, but should be construed like the
Accordingly, the commission of any of the acts mentioned in Section 5 of Presidential Decree No. 49 disjunctive "or" if the literal interpretation of the law would pervert or obscure the legislative intent.21 To
without the copyright owner's consent constituted actionable copyright infringement. In Columbia accept the CA's reading and interpretation is to accept absurd results because the violations listed in
Pictures, Inc. v. Court of Appeals,12 the Court has emphatically declared: Section 5(a) of Presidential Decree No. 49 - "To print, reprint, publish, copy, distribute, multiply, sell,
Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the and make photographs, photo-engravings, and pictorial illustrations of the works" — cannot be carried
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a out on all of the classes of works enumerated in Section 2 of Presidential Decree No. 49, viz.:
synonymous term in this connection, consists in the doing by any person, without the consent of the Section 2. - The Rights granted by this Decree shall, from the moment of creation, subsist with respect
owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of to any of the following classes of works:
the copyright.
The "gravamen of copyright infringement," according to NBI-Microsoft Corporation v. Hwang:13 (A) Books, including composite and encyclopedic works, manuscripts, directories, and gazetteers;
is not merely the unauthorized manufacturing of intellectual works but rather the unauthorized
performance of any of the acts covered by Section 5. Hence, any person who performs any of the acts (B) Periodicals, including pamphlets and newspapers;
under Section 5 without obtaining the copyright owners prior consent renders himself civilly and
criminally liable for copyright infringement.14 (C) Lectures, sermons, addresses, dissertations prepared for oral delivery;

The CA stated in the assailed decision as follows: (D) Letters;

A reading of Section 5 (a) of the Copyright Law shows that the acts enumerated therein are punctuated
by commas and the last phrase is conjoined by the words 'and'. Clearly, the same should be interpreted (E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in dumb
to mean as 'relating to one another' because it is basic in legal hermeneutics that the word 'and' is not shows, the acting form of which is fixed in writing or otherwise;
meant to separate words but is a conjunction used to denote a 'joinder' or 'union'.
(F) Musical compositions, with or without words;
In the book of Noli C. Diaz entitled as STATUTORY CONSTRUCTION, the word 'and' was defined as a
'conjunction connecting words or phrases expressing the idea that the latter is to be added to or taken (G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other works of art;
 68

models or designs for works of art;

(H) Reproductions of a work of art;

(I) Original ornamental designs or models for articles of manufacture, whether or not patentable, and
other works of applied art;

(J) Maps, plans, sketches, and charts;

(K) Drawings, or plastic works of a scientific or technical character;

(L) Photographic works and works produced by a process analogous to photography; lantern slides;

(M) Cinematographic works and works produced by a process analogous to cinematography or any
process for making audio-visual recordings;

(N) Computer programs;

(O) Prints, pictorial, illustration, advertising copies, labels, tags, and box wraps;

(P) Dramatization, translations, adaptations, abridgements, arrangements and other alterations of

literary, musical or artistic works or of works of the Philippine Government as herein defined, which
shall be protected as provided in Section 8 of this Decree.

(Q) Collection of literary, scholarly, or artistic works or of works referred to in Section 9 of this Decree
which by reason of the selection and arrangement of their contents constitute intellectual creations, the
same to be protected as such in accordance with Section 8 of this Decree.

(R) Other literary, scholarly, scientific and artistic works.

Presidential Decree No. 49 thereby already acknowledged the existence of computer programs as works
or creations protected by copyright.22 To hold, as the CA incorrectly did, that the legislative intent was
to require that the computer programs be first photographed, photo-engraved, or pictorially illustrated
as a condition for the commission of copyright infringement invites ridicule. Such interpretation of
Section 5(a) of Presidential Decree No. 49 defied logic and common sense because it focused on terms
like "copy," "multiply," and "sell," but blatantly ignored terms like "photographs," "photo-engravings,"
and "pictorial illustrations." Had the CA taken the latter words into proper account, it would have quickly
seen the absurdity of its interpretation.

The mere sale of the illicit copies of the software programs was enough by itself to show the existence
of probable cause for copyright infringement. There was no need for the petitioner to still prove who
copied, replicated or reproduced the software programs. Indeed, the public prosecutor and the DOJ
gravely abused their discretion in dismissing the petitioner's charge for copyright infringement against
the respondents for lack of evidence. There was grave abuse of discretion because the public prosecutor
and the DOJ acted whimsically or arbitrarily in disregarding the settled jurisprudential rules on finding
the existence of probable cause to charge the offender in court. Accordingly, the CA erred in upholding
the dismissal by the DOJ of the petitioner's petition for review. We reverse.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS

ASIDE the decision promulgated on February 27, 2004 in C.A.-G.R. SP No. 76402; DIRECTS the
Department of Justice to render the proper resolution to charge respondent ROLANDO D.
MANANSALA and/or MEL MANANSALA, doing business as DATAMAN TRADING COMPANY
and/or COMIC ALLEY in accordance with this decision; and ORDERS the respondents to pay the costs
of suit.
 69

FIRST DIVISION infringement and for respondent to recall DEP from the market, respondents refused. Petitioners asked
the court to order the submission of all copies of the book DEP, together with the molds, plates and
[G.R. No. 131522. July 19, 1999.] films and other materials used in its printing destroyed, and for respondents to render an accounting of
the proceeds of all sales and profits since the time of its publication and sale.
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO, Petitioners, v. FELICIDAD C.
ROBLES and GOODWILL TRADING CO., INC., Respondents. Respondent Robles was impleaded in the suit because she authored and directly committed the acts of
infringement complained of, while respondent Goodwill Trading Co., Inc. was impleaded as the publisher
DECISION and joint co-owner of the copyright certificates of registration covering the two books authored and
caused to be published by respondent Robles with obvious connivance with one another.

On July 27, 1988, respondent Robles filed a motion for a bill of particulars 6 which the trial court
PARDO, J.:
approved on August 17, 1988. Petitioners complied with the desired particularization, and furnished
respondent Robles the specific portions, inclusive of pages and lines, of the published and copyrighted
books of the petitioners which were transposed, lifted, copied and plagiarized and/or otherwise found
The case before us is a petition for review on certiorari 1 to set aside the (a) decision of the Court of their way into respondent’s book.chanrobles lawlibrary : rednad
Appeals 2 , and (b) the resolution denying petitioners’ motion for reconsideration, 3 in which the
appellate court affirmed the trial court’s dismissal of the complaint for infringement and/or unfair On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its answer to the complaint 7 and
competition and damages but deleted the award for attorney’s fees.chanrobles.com : virtual law library alleged that petitioners had no cause of action against Goodwill Trading Co., Inc. since it was not privy
to the misrepresentation, plagiarism, incorporation and reproduction of the portions of the book of
The facts are as follows:chanrob1es virtual 1aw library petitioners; that there was an agreement between Goodwill and the respondent Robles that Robles
guaranteed Goodwill that the materials utilized in the manuscript were her own or that she had secured
Petitioners are authors and copyright owners of duly issued certificates of copyright registration the necessary permission from contributors and sources; that the author assumed sole responsibility
covering their published works, produced through their combined resources and efforts, entitled and held the publisher without any liability.
COLLEGE ENGLISH FOR TODAY (CET for brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE
FRESHMAN ENGLISH, Series 1. On November 28, 1988, respondent Robles filed her answer 8 , and denied the allegations of plagiarism
and copying that petitioners claimed. Respondent stressed that (1) the book DEP is the product of her
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the author/publisher and independent researches, studies and experiences, and was not a copy of any existing valid copyrighted
distributor/seller of another published work entitled "DEVELOPING ENGLISH PROFICIENCY" (DEP for book; (2) DEP followed the scope and sequence or syllabus which are common to all English grammar
brevity), Books 1 and 2 (1985 edition) which book was covered by copyrights issued to them. writers as recommended by the Association of Philippine Colleges of Arts and Sciences (APCAS), so any
similarity between the respondents book and that of the petitioners was due to the orientation of the
In the course of revising their published works, petitioners scouted and looked around various authors to both works and standards and syllabus; and (3) the similarities may be due to the authors’
bookstores to check on other textbooks dealing with the same subject matter. By chance they came exercise of the "right to fair use of copyrighted materials, as guides."
upon the book of respondent Robles and upon perusal of said book they were surprised to see that the
book was strikingly similar to the contents, scheme of presentation, illustrations and illustrative Respondent interposed a counterclaim for damages on the ground that bad faith and malice attended
examples in their own book, CET. the filing of the complaint, because petitioner Habana was professionally jealous and the book DEP
replaced CET as the official textbook of the graduate studies department of the Far Eastern University. 9
After an itemized examination and comparison of the two books (CET and DEP), petitioners found that library
several pages of the respondent’s book are similar, if not all together a copy of petitioners’ book, which
is a case of plagiarism and copyright infringement. During the pre-trial conference, the parties agreed to a stipulation of facts 10 and for the trial court to
first resolve the issue of infringement before disposing of the claim for damages.
Petitioners then made demands for damages against respondents and also demanded that they cease
and desist from further selling and distributing to the general public the infringed copies of respondent After the trial on the merits, on April 23, 1993, the trial court rendered its judgment finding thus:
Robles’ works.
"WHEREFORE, premises considered, the court hereby orders that the complaint filed against defendants
However, respondents ignored the demands, hence, on July 7, 1988, petitioners filed with the Regional Felicidad Robles and Goodwill Trading Co., Inc. shall be DISMISSED; that said plaintiffs solidarily
Trial Court, Makati, a complaint for "Infringement and/or unfair competition with damages" 4 against reimburse defendant Robles for P20,000.00 attorney’s fees and defendant Goodwill for P5,000.00
private respondents. 5 attorney’s fees. Plaintiffs are liable for cost of suit.

In the complaint, petitioners alleged that in 1985, respondent Felicidad C. Robles being substantially IT IS SO ORDERED.
familiar with the contents of petitioners’ works, and without securing their permission, lifted, copied,
plagiarized and/or transposed certain portions of their book CET. The textual contents and illustrations "Done in the City of Manila this 23rd day of April, 1993.
of CET were literally reproduced in the book DEP. The plagiarism, incorporation and reproduction of
particular portions of the book CET in the book DEP, without the authority or consent of petitioners, and "(s/t) MARVIE R. ABRAHAM SINGSON
the misrepresentations of respondent Robles that the same was her original work and concept adversely
affected and substantially diminished the sale of the petitioners’ book and caused them actual damages "Assisting Judge
by way of unrealized income.
"S.C. Adm. Order No. 124-92" 11
Despite the demands of the petitioners for respondents to desist from committing further acts of
 70

On May 14, 1993, petitioners filed their notice of appeal with the trial court 12, and on July 19, 1993,
the court directed its branch clerk of court to forward all the records of the case to the Court of Appeals. 177.1 Reproduction of the work or substantial portion of the work;
13
177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the
In the appeal, petitioners argued that the trial court completely disregarded their evidence and fully work; :red
subscribed to the arguments of respondent Robles that the books in issue were purely the product of
her researches and studies and that the copied portions were inspired by foreign authors and as such 177.3 The first public distribution of the original and each copy of the work by sale or other forms of
not subject to copyright. Petitioners also assailed the findings of the trial court that they were animated transfer of ownership;
by bad faith in instituting the complaint. 14
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a
On June 27, 1997, the Court of Appeals rendered judgment in favor of respondents Robles and Goodwill sound recording, a computer program, a compilation of data and other materials or a musical work in
Trading Co., Inc. The relevant portions of the decision state: library graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental;
(n)
"It must be noted, however, that similarity of the allegedly infringed work to the author’s or proprietor’s
copyrighted work does not of itself establish copyright infringement, especially if the similarity results 177.5 Public display of the original or copy of the work;
from the fact that both works deal with the same subject or have the same common source, as in this
case. 177.6 Public performance of the work; and

Appellee Robles has fully explained that the portion or material of the book claimed by appellants to 177.7 Other communication to the public of the work" 19
have been copied or lifted from foreign books. She has duly proven that most of the topics or materials
contained in her book, with particular reference to those matters claimed by appellants to have been The law also provided for the limitations on copyright, thus:
plagiarized were topics or matters appearing not only in appellants and her books but also in earlier
books on College English, including foreign books, i.e. Edmund Burke’s "Speech on Conciliation", "SECTION 184.1 Limitations on copyright. — Notwithstanding the provisions of Chapter V, the following
Boerigs’ "Competence in English" and Broughton’s, "Edmund Burke’s Collection."  acts shall not constitute infringement of copyright:chanrob1es virtual 1aw library

x              x              x (a) the recitation or performance of a work, once it has been lawfully made accessible to the public, if
done privately and free of charge or if made strictly for a charitable or religious institution or society;
[Sec. 10(1), P.D. No. 49]
"Appellant’s reliance on the last paragraph on Section 11 is misplaced. It must be emphasized that they
failed to prove that their books were made sources by appellee." 15 (b) The making of quotations from a published work if they are compatible with fair use and only to the
extent justified for the purpose, including quotations from newspaper articles and periodicals in the
The Court of Appeals was of the view that the award of attorneys’ fees was not proper, since there was form of press summaries; Provided, that the source and the name of the author, if appearing on the
no bad faith on the part of petitioners Habana Et. Al. in instituting the action against respondents. work are mentioned; (Sec. 11 third par. P.D. 49)chanrobles.com.ph : virtual law library

On July 12, 1997, petitioners filed a motion for reconsideration, 16 however, the Court of Appeals x              x              x
denied the same in a Resolution 17 dated November 25, 1997.

Hence, this petition. (e) The inclusion of a work in a publication, broadcast, or other communication to the public, sound
recording of film, if such inclusion is made by way of illustration for teaching purposes and is compatible
In this appeal, petitioners submit that the appellate court erred in affirming the trial court’s decision. with fair use: Provided, That the source and the name of the author, if appearing in the work is
mentioned; 20
Petitioners raised the following issues: (1) whether or not, despite the apparent textual, thematic and
sequential similarity between DEP and CET, respondents committed no copyright infringement; (2) In the above quoted provisions, "work" has reference to literary and artistic creations and this includes
whether or not there was animus furandi on the part of respondent when they refused to withdraw the books and other literary, scholarly and scientific works. 21
copies of CET from the market despite notice to withdraw the same; and (3) whether or not respondent
Robles abused a writer’s right to fair use, in violation of Section 11 of Presidential Decree No. 49. 18 A perusal of the records yields several pages of the book DEP that are similar if not identical with the
text of CET.
We find the petition impressed with merit.chanrobles.com : virtual law library
On page 404 of petitioners’ Book 1 of College English for Today, the authors wrote:chanrob1es virtual
The complaint for copyright infringement was filed at the time that Presidential Decree No. 49 was in 1aw library
force. At present, all laws dealing with the protection of intellectual property rights have been
consolidated and as the law now stands, the protection of copyrights is governed by Republic Act No. Items in dates and addresses:chanrob1es virtual 1aw library
8293. Notwithstanding the change in the law, the same principles are reiterated in the new law under
Section 177. It provides for the copy or economic rights of an owner of a copyright as follows: He died on Monday, April 15, 1975.

"SECTION 177. Copy or Economic rights. — Subject to the provisions of chapter VIII, copyright or Miss Reyes lives in 214 Taft Avenue,
economic rights shall consist of the exclusive right to carry out, authorize or prevent the following
acts:chanrob1es virtual 1aw library Manila 22
 71

extent justified for the purpose, including quotations from newspaper articles and periodicals in the
On page 73 of respondents Book 1 Developing English Today, they wrote: form of press summaries: Provided, That the source and the name of the author, if appearing on the
work, are mentioned.
He died on Monday, April 25, 1975.
A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases,
Miss Reyes address is 214 Taft Avenue Manila 23 did not know whether or not he was infringing any copyright; he at least knew that what he was
copying was not his, and he copied at his peril. 30
On Page 250 of CET, there is this example on parallelism or repetition of sentence structures, thus:
The next question to resolve is to what extent can copying be injurious to the author of the book being
"The proposition is peace. Not peace through the medium of war; not peace to be hunted through the copied. Is it enough that there are similarities in some sections of the books or large segments of the
labyrinth of intricate and endless negotiations; not peace to arise out of universal discord, fomented books are the same?
from principle, in all parts of the empire; not peace to depend on the juridical determination of
perplexing questions, or the precise marking of the boundary of a complex government. It is simple In the case at bar, there is no question that petitioners presented several pages of the books CET and
peace; sought in its natural course, and in its ordinary haunts. It is peace sought in the spirit of peace, DEP that more or less had the same contents. It may be correct that the books being grammar books
and laid in principles purely pacific. may contain materials similar as to some technical contents with other grammar books, such as the
segment about the "Author Card." However, the numerous pages that the petitioners presented
— Edmund Burke, "Speech on Criticism." 24 showing similarity in the style and the manner the books were presented and the identical examples
can not pass as similarities merely because of technical consideration.chanrobles.com.ph : virtual law
On page 100 of the book DEP 25 , also in the topic of parallel structure and repetition, the same library
example is found in toto. The only difference is that petitioners acknowledged the author Edmund
Burke, and respondents did not. The respondents claim that their similarity in style can be attributed to the fact that both of them were
exposed to the APCAS syllabus and their respective academic experience, teaching approach and
In several other pages 26 the treatment and manner of presentation of the topics of DEP are similar if methodology are almost identical because they were of the same background.
not a rehash of that contained in CET.
We believe that respondent Robles’ act of lifting from the book of petitioners substantial portions of However, we believe that even if petitioners and respondent Robles were of the same background in
discussions and examples, and her failure to acknowledge the same in her book is an infringement of terms of teaching experience and orientation, it is not an excuse for them to be identical even in
petitioners’ copyrights. examples contained in their books. The similarities in examples and material contents are so obviously
present in this case. How can similar/identical examples not be considered as a mark of copying?
When is there a substantial reproduction of a book? It does not necessarily require that the entire
copyrighted work, or even a large portion of it, be copied. If so much is taken that the value of the We consider as an indicia of guilt or wrongdoing the act of respondent Robles of pulling out from
original work is substantially diminished, there is an infringement of copyright and to an injurious Goodwill bookstores the book DEP upon learning of petitioners’ complaint while pharisaically denying
extent, the work is appropriated. 27 petitioners’ demand. It was further noted that when the book DEP was re-issued as a revised version,
all the pages cited by petitioners to contain portion of their book College English for Today were
In determining the question of infringement, the amount of matter copied from the copyrighted work is eliminated.
an important consideration. To constitute infringement, it is not necessary that the whole or even a
large portion of the work shall have been copied. If so much is taken that the value of the original is In cases of infringement, copying alone is not what is prohibited. The copying must produce an
sensibly diminished, or the labors of the original author are substantially and to an injurious extent "injurious effect." Here, the injury consists in that respondent Robles lifted from petitioners’ book
appropriated by another, that is sufficient in point of law to constitute piracy. 28 materials that were the result of the latter’s research work and compilation and misrepresented them as
her own. She circulated the book DEP for commercial use and did not acknowledge petitioners as her
The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its source.
gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private
domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles
infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the committed. Petitioners’ work as authors is the product of their long and assiduous research and for
doing by any person, without the consent of the owner of the copyright, of anything the sole right to do another to represent it as her own is injury enough In copyrighting books the purpose is to give
which is conferred by statute on the owner of the copyright. 29 protection to the intellectual product of an author. This is precisely what the law on copyright protected,
under Section 184.1 (b). Quotations from a published work if they are compatible with fair use and only
The respondents’ claim that the copied portions of the book CET are also found in foreign books and to the extent justified by the purpose, including quotations from newspaper articles and periodicals in
other grammar books, and that the similarity between her style and that of petitioners can not be the form of press summaries are allowed provided that the source and the name of the author, if
avoided since they come from the same background and orientation may be true. However, in this appearing on the work, are mentioned.
jurisdiction under Sec 184 of Republic Act 8293 it is provided that:chanrob1es virtual 1aw library
In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the following shall not constitute Habana Et. Al. as the source of the portions of DEP. The final product of an author’s toil is her book. To
infringement of copyright:chanrobles lawlibrary : rednad allow another to copy the book without appropriate acknowledgment is injury enough.

x              x              x WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of Appeals in
CA-G.R. CV No. 44053 are SET ASIDE. The case is ordered remanded to the trial court for further
proceedings to receive evidence of the parties to ascertain the damages caused and sustained by
(c) The making of quotations from a published work if they are compatible with fair use and only to the petitioners and to render decision in accordance with the evidence submitted to it. library : red
 72

professional activities in general education, language and literature, as well as her teaching experience
SO ORDERED. in graduate and post graduate education would obviate the remotest possibility of plagiarism.

Kapunan and Ynares-Santiago, JJ., concur. ROBLES likewise suggested that any similarity between DEP and CET as regards scope and sequence
could be attributed to "the orientation of the authors to the scope and sequence or syllabus — which
Melo, J., took no part; personal reasons. incorporates standards known among English grammar book writers — of the subject-matter for Basic
Communication Arts recommended by the Association of Philippine Colleges of Arts and Sciences
(APCAS)." While the syllabus was admittedly adopted in DEP, she claimed to have treated quite
Separate Opinions differently in DEP the very ideas, techniques or principles expressed in CET such that neither textbook
could be considered a copy or plagiarism of the other.

DAVIDE, JR., C.J., dissenting:chanrob1es virtual 1aw library At the pre-trial conference, the parties agreed to a stipulation of facts 2 and for the court to first resolve
the issue of infringement before disposing of the claims for damages. After trial on the merits, the trial
I am unable to join the majority view. court rendered its decision in favor of defendants, the dispositive portion of which reads:

From the following factual and procedural antecedents; I find no alternative but to sustain both the trial WHEREFORE, premises considered, the Court hereby orders that the complaint filed against defendants
court and the Court of Appeals. Felicidad Robles and Goodwill Trading Co. Inc. shall be DISMISSED: that said plaintiffs solidarily
On 12 July 1988, HABANA, Et. Al. filed with the trial court a complaint for infringement and unfair reimburse defendant Robles for P20,000.00 attorney’s fees and defendant Goodwill for P5,000.00
competition, with damages against private respondent Felicidad C. Robles (hereafter ROBLES) and her attorney’s fees. Plaintiffs are liable for costs of suit.
publisher and distributor, Goodwill Trading Co., Inc. (hereafter GOODWILL). The case was docketed as
Civil Case No. 88-1317. IT IS SO ORDERED. 3

HABANA, Et. Al. averred in their complaint that they were the co-authors and joint copyright owners of Noting that the law applicable to the case was Presidential Decree No. 49, 4 the trial court found that
their published works College English for Today, Books 1 and 2 (hereafter CET) and Workbook for HABANA, Et. Al. failed to discharge their onus of proving that ROBLES and GOODWILL committed acts
College Freshmen English, Series 1 1; they discovered that ROBLES’ own published works, Developing constituting copyright infringement. Moreover, the trial court found that "the cause of action or acts
English Proficiency, Books 1 and 2, (hereafter DEP), published and distributed in 1985, exhibited an complained of [were] not covered by said decree" as Section 10 thereof barred authors of works already
uncanny resemblance, if not outright physical similarity, to CET as to content, scheme, sequence of lawfully made accessible to the public from prohibiting the reproductions, translations, adaptations,
topics and ideas, manner of presentation and illustrative examples; the plagiarism, incorporation and recitation and performance of the same, while Section 11 allowed the utilization of reproductions,
reproduction of particular portions of CET into DEP could not be gainsaid since ROBLES was quotations and excerpts of such works. The trial court thus agreed with ROBLES that "the complained
substantially familiar with CET and the textual asportation was accomplished without their authority acts [were] of general and universal knowledge and use which plaintiffs cannot claim originality or seek
and/or consent; ROBLES and GOODWILL Jointly misrepresented DEP (over which they shared copyright redress to the law for protection" and observed that DEP and CET had the same sources, consisting
ownership) "as the former’s original published works and concept;" and "notwithstanding formal chiefly of earlier works, mostly foreign books. GOODWILL’s crossclaim against ROBLES, counterclaim
demands made . . . to cease and desist from the sale and distribution of DEP, [ROBLES and GOODWILL] against HABANA, Et. Al. as well as ROBLES’ compulsory counterclaim against GOODWILL were all
persistently failed and refused to comply therewith." HABANA Et. Al. then prayed for the court to: (1) dismissed for lack of factual and legal bases.
order the submission and thereafter the destruction of all copies of DEP, together with the molds,
plates, films and other materials used in the printing thereof; (2) require ROBLES and GOODWILL to HABANA, Et. Al. appealed to the Court of Appeals. The case was docketed as CA-G.R. CV No. 44053.
render an accounting of the sales of the "infringing works from the time of its (sic) inceptive publication Before said court HABANA, Et Al., in the main, argued that the trial court totally disregarded their
up to the time of judgment, as well as the amount of sales and profits . . . derived;" and (3) to enjoin evidence and merely subscribed to ROBLES’ arguments. The Court of Appeals, however, likewise
ROBLES and GOODWILL to solidarily pay actual, moral and exemplary damages, as well as attorney’s disposed of the controversy in favor of ROBLES and GOODWILL. 5
fees and expenses of litigation.
However, the Court of Appeals modified the trial court’s decision by reversing the award for attorney’s
In its Answer, GOODWILL denied culpability since "it had no knowledge or information sufficient to form fees. It held that the good faith and sincerity of HABANA, et al in commencing the action negated the
a belief as to the allegations of plagiarism, incorporation and reproduction" and hence "could not be basis therefor. Their motion for reconsideration having been denied for want of cogent reasons,
privy to the same, if (there were) any;" and that in an Agreement with co-defendant ROBLES, the latter HABANA, Et Al., instituted this petition. They claim that the Court of Appeals committed reversible error
would be solely responsible for acts of plagiarism or violations of copyright or any other law, to the in failing to appreciate: (1) the insuperable evidence and facts admitted and proved demonstrating
extent of answering for any and all damages GOODWILL may suffer. GOODWILL also interposed a plagiarism or piracy and instead afforded full weight and credit to ROBLES’ matrix of general,
compulsory counterclaim against PACITA, Et. Al. and a crossclaim against its co-defendant anchored on hypothetical and sweeping statements and/or defenses; (2) ROBLES’ and GOODWILL’s animo furandi or
the aforementioned Agreement. intent to appropriate or copy CET with the non-removal of the damaging copies of DEP from the
bookstores despite notice to withdraw the same; and (3) the fact that ROBLES abused a writer’s right to
In her answer, ROBLES asserted that: (1) DEP was the exclusive product of her independent research, fair use, in violation of Section 11 of P.D. No. 49. 6 They invoke Laktaw v. Paglinawan 7 which, they
studies and experience; (2) DEP, particularly the segments where the alleged literal similitude theorize is on all fours with the case at bar. ROBLES contends that appeal by certiorari does not lie in
appeared, were admittedly influenced or inspired by earlier treatises, mostly by foreign authors; but this case for the challenged decision and the trial court’s judgment were amply supported by evidence,
that "influences and/or inspirations from other writers" like the methodology and techniques as to pertinent laws and jurisprudence. Hence, her counterclaim for moral damages should, therefore, be
presentation, teaching concept and design, research and orientation which she employed, fell within the granted or for us to order the remand of the case to the trial court for reception of evidence on
ambit of general information, ideas, principles of general or universal knowledge which were commonly damages. GOODWILL, on its part, stood pat on its disclaimer, with the assertion that no proof was ever
and customarily understood as incapable of private and exclusive use, appropriation or copyright; and introduced that it co-authored DEP or that it singly or in cabal with ROBLES committed any act
(3) her works were the result of the legitimate and reasonable exercise of an author’s "right to fair use constituting copyright infringement.
of even copyrighted materials as [a] guide." She further claimed that her various national and regional
 73

The core issue then is whether or not the Court of Appeals erred in affirming the trial court’s judgment The execution, therefore, of any one or more of the exclusive rights conferred by law on a copyright
that despite the apparent textual, thematic and sequential similarity between DEP and CET, no owner, without his consent, constitutes copyright infringement. In essence, copyright infringement,
copyright was committed by ROBLES and GOODWILL. known in general as "piracy," is a trespass on a domain owned and occupied by a copyright owner; it is
violation of a private right protected by law. 14 With the invasion of his property rights, a copyright
While the complaint, in Civil Case No. 88-1317 was filed during the effectivity of P.D. No. 49, the owner is naturally entitled to seek redress, enforce and hold accountable the defrauder or usurper of
provisions of the new intellectual property law, R.A. No. 8293, 8 nevertheless bears significance here. It said economic rights.
took effect on 1 January 1998, but its Section 239.3 clearly states that its provisions shall apply to
works in which copyright protection obtained prior to the effectivity of the Act subsists, provided, Now, did ROBLES and GOODWILL infringe upon the copyright of HABANA Et. Al. by publishing DEP;
however, that the application of the Act shall not result in the diminution of such protection. Also, the which the latter alleged to be a reproduction, or in the least, a substantial reproduction of CET? Both the
philosophy behind both statutes as well as the essential principles of copyright protection and copyright trial court and respondent court found in the negative. I submit they were correct.
infringement have, to a certain extent, remained the same.
To constitute infringement, the usurper must have copied or appropriated the "original" work of an
A copyright may be accurately defined as the right granted by statute to the proprietor of an intellectual author or copyright proprietor; 15 absent copying, there can be no infringement of copyright. 16 In
production to its exclusive use and enjoyment to the extent specified in the statute. 9 Under Section turn, a work is deemed by law an original if the author created it by his own skill, labor and judgment.
177 of R.A. No. 8293, 10 the copy or economic right (copyright and economic right are used 17 On its part, a copy is that which comes so near to the original so as to give to every person seeing it
interchangeably in the statute) consists of the exclusive right to carry out, authorize or prevent the the idea created by the original. It has been held that the test of copyright infringement is whether an
following acts: ordinary observer comparing the works can readily see that one has been copied from the other. 18 A
177.1 Reproduction of the work or substantial portion of the work; visual comparison of the portions of CET 19 juxtaposed against certain pages of DEP, 20 would
inescapably lead to a conclusion that there is a discernible similarity between the two; however, as
177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the correctly assessed by respondent court and the lower court, no conclusion, can be drawn that DEP, in
work; legal contemplation, is a copy of CET.

177.3 The first public distribution of the original and each copy of the work by sale or other forms of Was DEP a substantial reproduction of CET? To constitute a substantial reproduction, it is not necessary
transfer of ownership; that the entire copyrighted work, or even a large portion of it, be copied, if so much is taken that the
value of the original is substantially diminished, or if the labors of the original author are substantially,
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a and to an injurious extent, appropriated. 21 But the similarity of the books here does not amount to an
sound recording, a computer program, a compilation of data and other materials or a musical work in appropriation of a substantial portion of CET. If the existence of substantial similarities does not of itself
graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; establish infringement, 22 mere similarities (not substantial similarities) in some sections of the books
in question decisively militate against a claim for infringement where the similarities had been
177.5 Public display of the original or a copy of the work; convincingly established as proceeding from a number of reasons and/or factors.

177.6 Public performance of the work; and 1. As both books are grammar books, they inevitably deal with the same subjects typically and
ordinarily treated by writers of such genre, 23 e.g., system of book classification, the different kinds of
177.7 Other communication to the public of the work. :red card catalogs and their entries, use of punctuation marks, paragraphs, the characteristics of an effective
paragraph, language structure, different parts of a book, etc. These standard subjects fall within the
"The work," as repeatedly mentioned, refers to the literary and artistic works defined as original domain of ideas, concepts, universal and general knowledge that have, as admitted by the protagonists
intellectual creations in the literary and artistic domain protected from the moment of their creation and here, been in existence for quite a long time. 24 As such, HABANA, Et. Al. cannot demand monopoly, by
enumerated in Section 172.1, which includes books and other literary, scholarly, scientific and artistic way of example, in the use of the recognized library classification systems (Dewey Decimal System and
works. 11 the Library of Congress System), or how a book can be divided into parts (frontispiece, title page,
copyright page, preface, table of contents, etc.) or to the different headings used in a card catalogue
Stripped in the meantime of its indisputable social and beneficial functions, 12 the use of intellectual (title card, author card and subject card), since these are of common or general knowledge. Even in this
property or creations should basically promote the creator or author’s personal and economic gain. jurisdiction, no protection can be extended to such an idea, procedure, system method or operation,
Hence, the copyright protection extended to the creator should ensure his attainment of some form of concept, principle, discovery or mere data, even if expressed, explained, illustrated or embodied in a
personal satisfaction and economic reward from the work he produced. Without conceding the suitability work.25cralaw:red
of Laktaw as precedent, the Court there quoted Manresa and explained:
2. As found by respondent court, CET and DEP had common sources and materials, 26 such that the
He who writes a book, or carves a statue, or makes an invention, has the absolute right to reproduce or particular portions claim to have been lifted and literally reproduced also appeared in earlier works,
sell it, just as the owner of the land has the absolute right to sell it or its fruits. But while the owner of mostly by foreign authors. This is clear from the testimony of petitioner Dr. Pacita
the land, by selling it and its fruits, perhaps fully realizes all its economic value, by receiving its benefits Habana:chanrobles.com : virtual law library
and utilities, which are represented for example, by the price, on the other hand the author of a book,
statue or invention does not reap all the benefits and advantages of his own property by disposing of it, Q Let’s clarify your position Dra. Habana. When defendants test (sic) showed 10 words similar to yours,
for the most important form of realizing the economic advantages of a book, statue or invention, you so concluded it was (sic) copied from yours but when I pointed out to you same (sic) words
consists in the right to reproduce it in similar or like copies, everyone of which serves to give to the contained in the earlier book of Wills then you earlier in your test in your book (sic) you refused to
person reproducing them all the conditions which the original requires in order to give the author the admit that it was copied from Wills.
full enjoyment thereof. If the author of a book, after its publication, cannot prevent its reproduction by
any person who may want to reproduce it, then the property right granted him is reduced to a very A Yes, sir. We have never — all 35 words were copied from there.
insignificant thing and the effort made in the production of the book is in no way rewarded. 13
Q But what I am asking how could you conclude that by just similarity of 10 words of defendants words
 74

that was copied from yours [sic] and when I point out to you the similarity of that same words from the 3. the edition, if it is not the first;
words earlier than yours (sic) you refused to admit that you copied?
4. the translator or illustrator, if any;
A I would like to change the final statement now that in the case of defendant Robles you pointed out
her source very clear. She copied it from that book by Wills. 5. the imprint which includes the publisher, the place and date of publication;

Q So, she did not copy it from yours? 6. the collation, composed of the number of pages, volume, illustrations, and the size of the book;

A Alright, maybe she did not copy it but definitely it is a pattern of plagerism [sic]. 27 7. the subject with which the book deals; and

3. Similarity in orientation and style can likewise be attributed to the exposure of the authors to the 8. the call number on the upper-left hand corner. library
APCAS syllabus and their respective academic experience, teaching approaches and methodology. It is
not farfetched that they could have even influenced each other as textbook writers. ROBLES and Dr. Names beginning with MC, or M are filed in the card catalog considered spelled out as MAC, for
Pacita Habana were faculty members of the Institute of English of the Far Eastern University from 1964 example: Mcleod-Macleod. This is true also of St. and Saint.
to 1974. 28 Both were ardent students, researchers, lecturers, textbook writers and teachers of English
and grammar. They even used to be on friendly terms with each other, to the extent that Dr. Habana The entries found in an author card, having been developed over quite some time, are expectedly
admitted that ROBLES assisted the former in the preparation of her doctoral dissertation. Given their uniform. Hence, HABANA Et. Al. and ROBLES would have no choice but to articulate the terms particular
near-identical academic and professional background, it is natural they would use many expressions to the entries in an identical manner.
and definitions peculiar to teaching English grammar. It comes therefore with no surprise that there are
similarities in some parts of the rival books. Indeed, it is difficult to conceive how writers on the same I thus find that the ruling of the respondent court is totally supported by the evidence on record. Of
subject matter can very well avoid resorting to common sources of information and materials and doctrinal persuasion is the principle that factual determinations of the Court of Appeals and the trial
employing similar expressions and terms peculiar to the subject they are treating. 29 library court are conclusive and binding upon this Court, and the latter will not, as a rule, disturb these findings
unless compelling and cogent reasons necessitate a reexamination, if not a reversal, of the same. 30
To illustrate, an excerpt from page 21 of CET reads:chanrob1es virtual 1aw library Tested against this jurisprudential canon, to subject the challenged decision of the Court of Appeals to
further scrutiny would be superfluous, if not, improvident.
Author Card
I am not persuaded by the claim of HABANA, Et. Al. that Laktaw is on all fours with and hence
The author card is the main entry card. It contains applicable to the case at bar. There, this Court disposed that defendant, without the consent of and
causing irreparable damage to Laktaw, reproduced the latter’s literary work Diccionario Hispano-
1. the author’s complete name on the first line, surname first, which may be followed by the date of his Tagalog, and improperly copied the greater part thereof in the work Diccionariong Kastila-Tagalog
birth and death if he is no longer living; published by defendant, in violation of Article 7 of the Law of 10 January 1879 on Intellectual Property.
This Court anchored its decision on the following observations:
2. the title of the book, and the subtitle, if there is one;
(1) [O]f the 23,560 Spanish words in the defendant’s dictionary . . . only 3,108 words are the
3. the edition, if it is not the first; defendant’s own, or, what is the same thing, the defendant has added only this number of words to
those that are in the plaintiff’s dictionary, he having reproduced or copied the remaining 20,452 words;
4. the translator or illustrator, if there is any;
(2) [T]he defendant also literally reproduced and copied for the Spanish words in his dictionary, the
5. the imprint which includes the publisher, the place and date of publication; equivalents, definitions and different meanings in Tagalog, given in plaintiff’s dictionary, having
reproduced, as to some words, everything that appears in the plaintiff’s dictionary for similar Spanish
6. the collation composed of the number of pages, volume, illustrations, and the size of the book; words, although as to some he made some additions of his own. Said copies and reproductions are
numerous . . .;
7. the subjects with which the book deals [sic];
(3) [T]he printer’s errors in the plaintiffs dictionary as to the expression of some words in Spanish as
8. the call number on the upper left-hand corner. well as their equivalents in Tagalog are also reproduced, a fact which shows that the defendant, in
preparing his dictionary, literally copied those Spanish words and their meanings and equivalents in
Names beginning with Mc, or M are filed in the card catalog as though spelled out as MAC, for example Tagalog from the plaintiff’s dictionary. 31
Mc Graw-MacGraw. The same is true of St. and Saint.
Plainly, the rationale in Laktaw does not apply in this case. First, aside from an isolated accounting of
While a portion of DEP found on page 18 which discusses the author card provides:chanrob1es virtual the number of words supposedly usurped in a segment of DEP from CET, 32 the records do not disclose
1aw library that all the words allegedly copied were tallied and that the words thus tallied were numerous enough
to support a finding of copying. Second, as already conceded, while there is an identity in the manner
The author card is the main entry card containing:chanrob1es virtual 1aw library by which some of the ideas and concepts were articulated, this prescinded from various factors already
elucidated. Besides, ROBLES’ testimony that she made an independent investigation or research of the
1. the author’s complete name on the first line, surname first, which may be followed by the date of his original works or authors she consulted was unrebutted; 33 for germane here is the question of whether
birth and death if he is no longer living; the alleged infringer could have obtained the same information by going to the same source by her own
2. the title of the book, and the subtitle if there is one; independent research. 34 ROBLES convinced the trial court and the Court of Appeals on this; thus, we
are bound by this factual determination, as likewise explained earlier. Third, reproduction of the
 75

printer’s errors or the author’s blunders and inaccuracies in the infringing copy does not ipso facto
constitute copying or plagiarism or infringement, but it is conceded that they are telltale signs that
infringement might have been committed. 35 However, the records do not reveal this to be the case.
Fourth, the law on intellectual property violated in Laktaw was a world and time apart from R.A. No.
8293 or even P.D. No. 49. Thus, under Article 7 of the Law of 10 January 1879, the Court ruled that
nobody could reproduce another person’s work without the owner’s consent, even merely to annotate or
add anything to it, or improve any edition thereof. The more recent laws on intellectual property,
however, recognize recent advancements in technology transfer and information dissemination. They
thus allow the use of copyrighted materials if compatible with fair use and to the extent justified for the
purpose. In particular, the new laws sanction the fair use of copyrighted work for criticism, comment,
news reporting, teaching including multiple copies for classroom use, scholarship, research and similar
purposes. 36 Further, the limitations of the exclusive use of copyrighted materials under Sections 10
and 11 of P.D. No. 49 in consonance with the principle of fair use have been reproduced and
incorporated in the new law. 37 All told, Laktaw is inapplicable. library

Fair use has been defined as a privilege to use the copyrighted material in a reasonable manner without
the consent of the copyright owner or as copying the theme or ideas rather than their expression. 38 No
question of fair or unfair use arises however, if no copying is proved to begin with. This is in consonance
with the principle that there can be no infringement if there was no copying. 39 It is only where some
form of copying has been shown that it becomes necessary to determine whether it has been carried to
an "unfair," that is, illegal, extent. 40 Consequently, there is no reason to address the issue of whether
ROBLES abused a writer’s right to fair use with the ascertainment that DEP was not a copy or a
substantial copy of CET.

WHEREFORE, I vote to DENY the petition and to AFFIRM the challenged decision of 27 June 1997 of the
Court of Appeals.
 76

SECOND DIVISION Bureau Director's decision.

According to the ODG; there is no merit in the petitioner's appeal because (1) the applicant and cited
G.R. No. 217916, June 20, 2018
marks are identical and confusingly similar,13 (2) the petitioner's mark was deemed abandoned under
the old Trademark Law, and thus, petitioner's prior use of the same did not create a vested
ABS-CBN PUBLISHING, INC., Petitioner, v. DIRECTOR OF THE BUREAU OF right14 under the IPC,15 and (3) the applicant mark has not acquired secondary meaning.16 The fallo of
TRADEMARKS, Respondent. the ODG decision reads:
Wherefore, premises considered, the appeal is hereby DENIED and the Decision dated 29 March 2010
and the Order denying the Appellant's Motion for Reconsideration, of the Director of the Bureau of
DECISION Trademarks, are hereby SUSTAINED. The Appellant's Trademark Application No. 4-2004-004507 for
METRO is likewise DENIED.
REYES, JR., J.:
Let a copy of this Decision as well as the trademark application and records be furnished and returned
to the Director of the Bureau of Trademarks. Let a copy of this Decision be furnished also the library of
The Case the Documentation, Information and Technology Transfer Bureau for its information and records
purposes.
Challenged before the Court via this Petition for Review on Certiorari under Rule 45 of the Rules of
Court is the Resolution1 of the Court of Appeals promulgated on May 20, 2014, which denied ABS-CBN SO ORDERED.17
Publishing, Inc.'s (petitioner) "Motion for Extension of Time [To File Petition for Review]." Likewise
challenged is the subsequent Resolution2 of the Court of Appeals promulgated on April 15, 2015, which The petitioner received a copy of the ODG decision only on October 9, 2013. On the same day, the
upheld the earlier Resolution. petitioner filed before the Court of Appeals its "Motion for Extension of Time (To File Petition for
Review)" which requested for an extension of fifteen (15) days from October 24, 2013, or until
November 8, 2013, to file its petition for review.18 On October 25, 2013, the petitioner once more filed a
The Antecedent Facts
motion for extension of time. In the second motion, the petitioner asked the appellate court for another
extension of the deadline from November 8, 2013 to November 23, 2013.19
In 2004,3 the petitioner filed with the Intellectual Property Office of the Philippines (IPO) its application
for the registration of its trademark "METRO" (applicant mark) under class 16 of the Nice classification,
Meanwhile, on October 25, 2013, the Court of Appeals issued a Resolution which granted the
with specific reference to "magazines."4 The case was assigned to Examiner Arlene M. Icban (Examiner
petitioner's first motion praying for an extension of time to file its petition for review, subject to the
Icban), who, after a judicious examination of the application, refused the applicant mark's registration.
"warning against further extension." Thus, the Court of Appeals extended the deadline only until
November 8, 2013.20
According to Examiner Icban, the applicant mark is identical with three other cited marks, and is
therefore unregistrable according to Section 123.1(d) of the Intellectual Property Code of the Philippines
Relying on the appellate court's favorable response to its second motion for extension (which was not
(IPC).5 The cited marks were identified as (1) "Metro" (word) by applicant Metro International S.A. with
acted upon by the Court of Appeals), the petitioner failed to file its petition for review on the deadline
Application No. 42000002584,6 (2) "Metro" (logo) also by applicant Metro International S.A. with
set in the Resolution dated October 25, 2013. Instead, the petitioner filed its petition for review only on
Application No. 42000002585,7 and (3) "Inquirer Metro" by applicant Philippine Daily Inquirer, Inc. with
November 11, 2013-three (3) days after the deadline.21
Application No. 42000003811.8
To justify this delay in filing, the petitioner stated that: (1) it received a copy of the October 25, 2013
On August 16, 2005, the petitioner wrote a letter9 in response to Examiner Icban's assessment, and the
Resolution only on November 8, 2013 at 11:30 in the morning; (2) on that same day, this Court,
latter, through Official Action Paper No. 04, subsequently reiterated her earlier finding which denied the
through its Public Information Office, suspended offices in the National Capital Judicial Region in view of
registration of the applicant mark. Eventually, in the "Final Rejection"10 of the petitioner's application,
Typhoon Yolanda; and (3) November 9 and 10, 2013 fell on a Saturday and Sunday, respectively.22
Examiner Icban "determined that the mark subject of the application cannot be registered because it is
identical with the cited marks METRO with Regn. No. 42000002584 ['Metro' (word)] and Regn. No.
On May 20, 2014, the Court of Appeals rendered the assailed Resolution. It ruled that the petitioner
42000003811 ['Inquirer Metro']."11
violated its October 25, 2013 Resolution, as well as Section 4, Rule 43 of the Rules of Court, which
provides for the period of appeal.23
The petitioner appealed the assessment of Examiner Icban before the Director of the Bureau of
Trademarks of the IPO, who eventually affirmed Examiner Icban's findings. The decision averred that
On the basis of the foregoing, and the prevailing jurisprudence, the Court of Appeals consequently
the applicant and cited marks were indeed confusingly similar, so much so that there may not only be a
denied the petitioner's second motion for extension of time, and dismissed the petition for the
confusion as to the goods but also a confusion as to the source or origin of the goods. The fallo of the
petitioner's failure to file its petition for review within the deadline.24
Bureau Director's decision reads:
WHEREFORE, premises considered, the instant appeal is hereby DENIED and the Final Rejection
On April 15, 2015, the appellate court denied the petitioner's motion for reconsideration.25
contained in Official Action Paper No. 04, SUSTAINED. Serve copies of this Decision to [petitioner] and
herein Examiner Arlene M. Icban.
Hence, this petition.
SO ORDERED.12
Upon the denial of the petitioner's motion for reconsideration, the petitioner appealed to the Office of The Issues
the Director General (ODG) of the IPO. After the submission of the memoranda from the parties, the
ODG, on September 19, 2013, rendered a Decision which upheld Examiner Icban's assessment and the
 77

appellate court. Otherwise, the Court will be setting a dangerous precedent where all litigants will
The ground upon which the petitioner prays for the reversal of the ruling of the Court of Appeals is two- assume a favorable outcome of a motion which is addressed to the discretion of the courts based on the
fold: first is on procedural law-whether or not the Court of Appeals erred in dismissing the petition prevailing circumstances of the case.
outright for the petitioner's failure to file its petition for review within the time prescribed by the Court
of Appeals; and second is on substantive law-whether or not the ODG was correct in refusing to register To be sure, there is a dearth of jurisprudence that upholds the Court of Appeals' power of discretion in
the applicant mark for being identical and confusingly similar with the cited marks already registered disallowing a second extension of fifteen (15) days. As correctly cited by the appellate court, Spouses
with the IPO. Dycoco vs. Court of Appeals37 explains that the Court of Appeals could not be faulted for merely
applying the rules, and that a dismissal of a petition in accordance therewith is discretion duly
The Court's Ruling exercised, and not misused or abused.38

After a careful perusal of the arguments presented and the evidence submitted, the Court finds no merit Based on the foregoing, and for the guidance of both the bench and the bar, the rule as it currently
in the petition. stands is that, in the absence of, or in the event of a party's failure to receive, any resolution from the
courts which specifically grants a motion for extension of time to file the necessary pleading, the parties
First, on the procedural issue: are required to abide by the reglementary period provided for in the Rules of Court. Failure to comply
thereto would result to a dismissal or denial of the pleadings for being filed beyond the reglementary
In Bañez vs. Social Security System,26 the Court had occasion to reiterate that appeal is not a period.
constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of it
must comply with the statutes or rules allowing it.27 The rule is that failure to file or perfect an appeal In the case at hand, the Court of Appeals was correct in dismissing the petition. The petitioner could not
within the reglementary period will make the judgment final and executory by operation of law. assume that its motion would be granted, especially in light of its flimsy excuse for asking the second
Perfection of an appeal within the statutory or reglementary period is not only mandatory but also extension of time to file its petition for review.
jurisdictional; failure to do so renders the questioned decision/resolution final and executory, and
deprives the appellate court of jurisdiction to alter the decision/resolution, much less to entertain the On this ground alone, the dismissal of the current petition for review is justifiable. The Court reiterates
appeal.28 its warning in the case of Hernandez vs. Agoncillo:39
Time and again, this Court has cautioned lawyers to handle only as many cases as they can efficiently
In connection herewith, Section 4, Rule 43 of the Rules of Court is clear. The appeal shall be taken handle. The zeal and fidelity demanded of a lawyer to his client's cause require that not only should he
within fifteen (15) days from the notice of the award, judgment, final order or resolution, or from the be qualified to handle a legal matter, he must also prepare adequately and give appropriate attention to
date of its last publication, if publication is required by law for its effectivity, or of the denial of his legal work. Since a client is, as a rule, bound by the acts of his counsel, a lawyer, once he agrees to
petitioner's motion for new trial or reconsideration duly filed in accordance with the governing law of the take a case, should undertake the task with dedication and care. This Court frowns upon a lawyer's
court or agency a quo.29 practice of repeatedly seeking extensions of time to file pleadings and thereafter simply letting the
period lapse without submitting any pleading or even any explanation or manifestation for his
More, a litigant is allowed to file only one (1) motion for reconsideration, subject to the payment of the omission. Failure of a lawyer to seasonably file a pleading constitutes inexcusable negligence
full amount of the docket fee prior to the expiration of the reglementary period. Beyond this, another on his part.40 (Emphasis and underscoring supplied)
motion for extension of time may be granted but only for the most compelling reasons.30 That said, however, even on the merits, the petition still fails to convince.

Again, in Bañez, the Court ruled that filing of an appeal beyond the reglementary period may, under Second, on the substantive issue:
meritorious cases, be excused if the barring of the appeal would be inequitable and unjust in light of
certain circumstances therein.31 While there are instances when the Court has relaxed the governing According to Section 123.1(d) of the Intellectual Property Code of the Philippines (IPC),41 a mark cannot
periods of appeal in order to serve substantial justice, this was done only in exceptional cases.32 be registered if it is "identical with a registered mark belonging to a different proprietor or a mark with
an earlier filing or priority date," in respect of the following: (i) the same goods or services, or (ii)
In this case, no exceptional circumstance exists. closely related goods or services, or (iii) if it nearly resembles such a mark as to be likely to deceive or
cause confusion.42
In asking the Court of Appeals for a second extension to file its petition for review, the petitioner merely
cited as its excuse the following: (1) heavy pressure of other professional work; and (2) attendance of To determine whether a mark is to be considered as "identical" or that which is confusingly similar with
the lawyers in charge in an international lawyers' conference. It said: that of another, the Court has developed two (2) tests: the dominancy and holistic tests. While the
However, due to the heavy pressure of other equally important professional work coupled with Court has time and again ruled that the application of the tests is on a case to case basis, upon the
intervening delays and the fact of the necessary attendance of the lawyers in charge of the case in an passage of the IPC, the trend has been to veer away from the usage of the holistic test and to focus
international lawyer's (sic) conference, the undersigned counsel will need more time to review and more on the usage of the dominancy test. As stated by the Court in the case of McDonald's Corporation
finalize petitioner ABS-CBN Publishing, Inc.'s Petition for Review.33 vs. L.C. Big Mak Burger, Inc.,43 the "test of dominancy is now explicitly incorporated into law in Section
As the Court has ruled upon in a number of cases, a lawyer has the responsibility of monitoring and 155.1 of the Intellectual Property Code which defines infringement as the 'colorable imitation of a
keeping track of the period of time left to file pleadings, and to see to it that said pleadings are filed registered mark x x x or a dominant feature thereof.'"44 This is rightly so because Sec. 155.1 provides
before the lapse of the period.34 Personal obligations and heavy workload do not excuse a lawyer from that:
complying with his obligations particularly in timely filing the pleadings required by the Court.35 Indeed, SECTION 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the
if the failure of the petitioner's counsel to cope with his heavy workload should be considered a valid registered mark:
justification to sidestep the reglementary period, there would be no end to litigations so long as counsel
had not been sufficiently diligent or experienced.36 155.1. 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,
Further, the petitioner should not assume that its motion for extension of time would be granted by the distribution, advertising of any goods or services including other preparatory steps necessary to carry
 78

out the sale of any goods or services on or in connection with which such use is likely to cause Icban.
confusion, or to cause mistake, or to deceive; or x x x. (Emphasis and underscoring supplied)
This ruling stands despite the specious arguments presented by the petitioner in the current petition.
In using this test, focus is to be given to the dominant features of the marks in question. In the 1954
case of Co Tiong Sa vs. Director of Patents,45 the Court, in using the dominancy test, taught that:
The petitioner asserts that it has a vested right over the applicant mark because Metro Media
But differences of variations in the details of one trademark and of another are not the legal!y accepted
Publishers, Inc. (Metro Media), the corporation from which the petitioner acquired the applicant mark,
tests of similarity in trademarks. It has been consistently held that the question of infringement of a
first applied for the registration of the same under the old Trademark Law,55 and since then, actually
trademark is to be determined by the test of dominancy. Similarity in size, form, and color, while
used the applicant mark in commerce. The petitioner belabors the point that under the old Trademark
relevant, is not conclusive. If the competing trademark contains the main or essential or
law, actual use in commerce is a prerequisite to the acquisition of ownership over a trademark and a
dominant features of another, and confusion and deception is likely to result, infringement
trade name.56 The petitioner even went on further in asserting that its actual use of the applicant mark
takes place.46 (Emphasis and underscoring supplied)
enabled it to automatically acquire trademark rights, which should have extended even upon the
The Court, in Skechers, U.S.A., Inc. vs. Inter Pacific Industrial Trading Corp.,47 and in once again using promulgation of the IPC in 1998.
the dominancy test, reiterated Del Monte Corporation vs. Court of Appeals48 in saying that "the
defendants in cases of infringement do not normally copy but only make colorable changes."49 The Two things must be said of this argument.
Court emphasized that "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."50 First, there is no question that the petitioner's predecessor already applied for the registration of the
applicant mark "METRO" on November 3, 1994 under Class 16 of the Nice classification. It was docketed
In other words, in committing the infringing act, the infringer merely introduces negligible changes in an as Application No. 4-1994-096162.57 There is likewise no question that as early as 1989, Metro Media
already registered mark, and then banks on these slight differences to state that there was no identity has already used the applicant mark "METRO" in its magazine publication. At that point, Metro Media
or confusing similarity, which would result in no infringement. This kind of act, which leads to confusion exercised all the rights conferred by law to a trademark applicant.
in the eyes of the public, is exactly the evil that the dominancy test refuses to accept. The small
deviations from a registered mark are insufficient to remove the applicant mark from the ambit of Second, however, the petitioner itself admitted in its petition that its application/registration with the
infringement. IPO under Application No. 4-1994-096162 was already "deemed abandoned."58

In the present case, the dominant feature of the applicant mark is the word "METRO" which is While it is quite noticeable that the petitioner failed to discuss the implications of this abandonment, it
identical, both visually and aurally, to the cited marks already registered with the IPO. As held by the remains a fact that once a trademark is considered abandoned, the protection accorded by the IPC, or
ODG-and correctly at that - in this case the old Trademark Law, is also withdrawn. The petitioner, in allowing this abandonment,
x x x there is no dispute that the subject and cited marks share the same dominant word, cannot now come before the Court to cry foul if another entity has, in the time that it has abandoned its
"Metro". (sic) Even if, as the Appellant (petitioner herein) points out, the second cited mark owned by trademark and in full cognizance of the IPC and the IPO rules, registered its own.
Metro International contains an accompanying device, and the third cited mark contains the terms
"Philippine Daily Inquirer", (sic) the dominant feature of the subject and cited marks is still In fact, in Birkenstock Orthopaedie GMBH and Co. KG. vs. Philippine Shoe Expo Marketing
clearly the word "Metro", (sic) spelled and pronounced in exactly the same way. The identity Corporation,59 the Court accorded no right at all to a trademark owner whose trademark was abandoned
between the marks would indubitably result in confusion of origin as well as goods.51 (Emphasis and for failure to file the declaration of actual use as required by Sec. 12 of the old Trademark
underscoring supplied, citations omitted) Law.60 In Mattel, Inc. vs. Francisco,61 the Court rendered a petition as moot and academic because the
cited mark has effectively been abandoned for the non-filing of a declaration of actual use, and thus
Also, greater relevance is to be accorded to the finding of Examiner Icban on the confusing similarity presents no hindrance to the registration of the applicant mark.
between, if not the total identity of, the applicant and cited marks. Examiner Icban, in reiterating with
finality her earlier findings, said that the applicant and cited marks are "the same in sound, spelling, Also, as correctly pointed out by the ODG, this abandonment is the very reason why the petitioner lost
meaning, overall commercial impression, covers substantially the same goods and flows through the its rights over its trademark, and that it is also the reason why, after twenty years (20) from the initial
same channel of trade," which leads to no other conclusion than that "confusion as to the source of application and after actual use of the applicant mark, the petitioner once again came before the IPO to
origin is likely to occur."52 This is also the tenor of Examiner Icban's "Final Rejection" of the application, apply for registration. The ODG said:
which stated that: Records show that this is the very situation the [petitioner] finds itself in. It has acquired no right
After an examination of the application, the undersigned IPRS has determined that the mark subject of under the old trademark law since its original application way back 1994 has been deemed
the application cannot be registered because it is identical with the cited marks METRO with Regn. No. abandoned, which is the reason why it filed the current application in 2004 under the new
42000002584 and Regn. No. 42000003811. METRO being dominant word (sic) among the marks causes law. Clearly, then, if [petitioner] has acquired no right under R.A. 166, it possesses no existing right
remarkable similarity in sound, spelling, meaning, connotation, overall commercial impression, covers that ought to be preserved by virtue of Section 236 of the IP Code.62 (Emphasis and underscoring
identical goods and flows through the same channel of trade. The concurrent use by the parties of supplied)
the word METRO is likely to cause confusion among purchasers as well as confusion of
business or origin hence, registration of this subject application is proscribed under R.A. Anent the petitioner's argument that "confusion between the marks is highly unlikely,"63 the petitioner
8293, Sec. 123.1(d).53 (Emphasis and underscoring supplied) asserts that the applicant mark "METRO" (word) is covered by class 16 of the Nice classification under
"magazines," the copies of which are sold in "numerous retail outlets in the Philippines,"64 whereas the
The findings of Examiner Icban, reviewed first by the Director of the Bureau of Trademarks, and again cited mark "METRO" (word) is used in the Philippines only in the internet through its website and does
by the Director General of the IPO, are the result of a judicious study of the case by no less than the not have any printed circulation.65
government agency duly empowered to examine applications for the registration of marks.54 These
findings deserve great respect from the Court. Absent any strong justification for the reversal thereof-as But like the petitioner's earlier argument, this does not hold water. Section 3, Rule 18 of the Rules of
in this case-the Court shall not reverse and set aside the same. As such, the prior findings remain: the Procedure for Intellectual Property Cases66 provides for the legal presumption that there is likelihood of
applicant mark, "METRO," is identical to and confusingly similar with the other cited marks already confusion if an identical mark is used for identical goods. The provision states:
registered. By authority of the Sec. 123.l(d) of the IPC, the applicant mark cannot be registered. The
ODG is correct in upholding the Decision of both the Director of the Bureau of Trademarks and Examiner
 79

SEC. 3. Presumption of likelihood of confusion. - Likelihood of confusion shall be presumed in case

an identical sign or mark is used for identical goods or services.
In the present case, the applicant mark is classified under "magazines," which is found in class 16 of the
Nice classification. A perusal of the records would reveal, however, that the cited marks "METRO"
(word) and "METRO" (logo) are also both classified under magazines. In fact, Examiner Icban found that
the cited marks were used on the following classification of goods:
Paper, cardboard and goods made from these materials, not included in other classes;
newspapers, magazines, printed matter and other printed publications; bookbinding material;
photographs; stationery; adhesives for stationery or household purposes; artists materials; paint
brushes; typewriters and office requisites (except furniture); instructional and teaching material (except
apparatus); plastics materials for packaging (not included in other classes); playing cards; printers
types; printing blocks.67 (Emphasis and underscoring supplied)
Thus, the presumption arises.

Even then, it must be emphasized that absolute certainty of confusion or even actual confusion is not
required to refuse registration. Indeed, it is the mere likelihood of confusion that provides the impetus
to accord protection to trademarks already registered with the IPO. The Court cannot emphasize
enough that the cited marks "METRO" (word) and "METRO" (logo) are identical with the registrant mark
"METRO" both in spelling and in sound. In fact, it is the same exact word. Considering that both marks
are used in goods which are classified as magazines, it requires no stretch of imagination that a
likelihood of confusion may occur. Again, the Court points to the finding of Examiner Icban which was
reviewed and upheld twice: one by the Director of the Bureau of Trademarks and another by the
Director General of the IPO.

As a final point, the petitioner, in the pleadings submitted, manifested that the cited marks are no
longer valid. It said that: (1) the cited mark "METRO" (logo) was removed from the IPO register for
non-use, citing the IPO online database,68 (2) the cited mark "INQUIRER METRO," while valid according
to the IPO online database, was cancelled according to a certain certification from the Bureau of
Trademarks of the IPO; and (3) the cited mark "METRO" (word) already expired on June 26, 2016
according to yet another certification from the IPO.

A perusal of the records, however, would reveal that these alleged de-registration and cancellation all
allegedly occurred after the ODG has already ruled on the instant case. Considering that the Court is not
a trier of facts, the Court could therefore not make a determination of the validity and accuracy of the
statements made in the petitioner's manifestation. As such, the Court, through the limited facts extant
in the records, could not give weight and credence thereto.

Nonetheless, not all is lost for the petitioner. Should it be true that the cited marks, which were the
basis of the IPO in refusing to register the applicant mark, were already de-registered and cancelled,
nothing prevents the petitioner from once again applying for the registration of the applicant mark
before the IPO.

WHEREFORE, premises considered, the Resolutions of the Court of Appeals dated May 20, 2014 and
April 15, 2015, are hereby AFFIRMED without prejudice to the petitioner's refiling of its application for
the registration of the trademark "METRO" before the Intellectual Property Office.

SO ORDERED.