PHILIPPINE GROUP REPORT

(to the APAA Trademark Committee)

By: PABLO M. GANCAYCO

From the middle of the year 2006 up to September 2007, there has
been no significant change or development in the laws, rules and
regulations on Trademarks, Tradename and Service Name in the
Philippines, and in the legal practice related thereto.
However, in the area of jurisprudence, there are five (5) noteworthy
cases which are accordingly summarized hereunder for your guidance:
(1) McDonalds Corporation vs. MacJoy Fastfood Corporation
G.R. No. 166115
2 February 2007
Facts:
Respondent filed with the then Bureau of Patents Trademarks and
Technology Transfer, now the Intellectual Property Office (IPO), an
application for the registration of the trademark MACJOY & DEVICE for
fried chicken, chicken barbecue burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo and steaks under classes 29 and 30 of the
International Classification of Goods.
Petitioner opposed said application, claiming that the trademark
MACJOY & DEVICE so resembles its corporate logo, otherwise known as
the Golden Arches or M design and its marks McDonalds,
McChicken, MacFries, BigMac, McDo, McSpaghetti, McSnack,
and Mc, such that when used on identical or related goods, the
trademark applied for would confuse or deceive purchasers into believing
that the goods originate from the same source or origin. Petitioner also
alleged that the respondents use and adoption in bad faith of the MACJOY
& DEVICE mark would falsely tend to suggest a connection or affiliation
with petitioners restaurant services and food products, thus, constituting
a fraud upon the general public and further cause the dilution of the
distinctiveness of petitioners registered and internationally recognized
MCDONALDS marks to its prejudice and irreparable damage.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

The IPO, ratiocinating that the predominance of the letter M, and

the prefixes Mac/Mc in both the MACJOY and the MCDONALDS marks
lead to the conclusion that there is confusing similarity between them
especially since both are used on almost the same products falling under
classes 29 and 30, i.e., food and ingredients of food, sustained the
petitioners opposition and rejected the respondents application.
Issue:
Whether or not there is confusing similarity between the contending
marks.
Held:
1.
In determining the similarity and likelihood of confusion,
jurisprudence has developed two tests the dominancy test and the
holistic test; The dominancy test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion or
deception; The holistic test requires the court to consider the entirety of
the marks as applied to the products, including the labels and packaging,
in determining confusing similarity. Under the latter test, a comparison of
the words is not the only determinant factor.
2. In trademark cases, particularly in ascertaining whether one
trademark is confusingly similar to another, no set of rules can be
deduced because each case must be decided on its merits in such cases,
even more than in any other litigation, precedent must be studied in the
light of the facts of the particular case. That is the reason why in
trademark cases, jurisprudential precedents should be applied only to a
case if they are specifically in point.
3. While the Supreme Court agreed with the Court of Appeals
detailed enumeration of differences between the two (2) competing
trademarks herein involved, it ruled that the holistic test is not the one
applicable in this case, the dominancy test being the one more suitable.
4. Applying the dominancy test, the Supreme Court found that
petitioners and respondents marks are confusingly similar with each
other such that an ordinary purchaser can conclude an association or
relation between the marks. Both marks use the M design logo and the

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

prefixes Mc and /or Mac as dominant features. The first letter M in

both marks puts emphasis on the prefixes Mc and/or Mac by the
similar way in which they are depicted.
It is the prefix Mc, an
abbreviation of Mac, which visually and aurally catches the attention of
the consuming public. The word MCJOY attracts attention the same way
as MCDONALDS, MacFries, McSpaghetti, McDo, Big Mac and the
rest of the McDonaldss marks which all use the prefixes Mc and/or Mac.
Most importantly, both trademarks are used in the sale of fastfood
products.
5. A mark is valid if it is distinctive and hence not barred from
registration under the Trademark Law; However, once registered, not only
the marks validity but also the registrants ownership thereof is prima
facie presumed. Pursuant to Trademark Law, as well as the provision
regarding the protection of industrial property of foreign nationals in this
country as embodied in the Paris Convention under which the Philippines
and the petitioners domicile, the United States, are adherent members,
the petitioner was able to register its MCDONALDS marks successively
since 1971.
6. The Respondents contention that it was the first user of the
mark in the Philippines having used MACJOY & DEVICE on its restaurant
business and food products since December, 1987 at Cebu City while the
first McDonalds outlet of the petitioner thereat was opened only in 1992,
is downright unmeritorious. For the requirement of actual use in
commerce in the Philippines before one may register a trademark, trade
name and service mark under the Trademark Law pertains to the
territorial jurisdiction of the Philippines and is not only confined to a
certain region, province, city or barangay.

(2) Skechers U.S.A. vs. Inter Pacific Industrial Trading Corp. et al.
G.R. No. 164321 30 November 2006
Facts:
Petitioner engaged the services of a private investigation firm to
check if respondents are indeed engaged in the importation, distribution
and sale of unauthorized products bearing counterfeit or unauthorized
trademarks owned by petitioner. An investigator went to respondents

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

warehouse and saw different kinds and models of rubber shoes including
shoes bearing the S logo. He found that the shoes bearing the Strong
name with the S logo have the same style as petitioners shoes.
Petitioner filed a complaint with the National Bureau of Investigation
(NBI) requesting assistance in stopping the illegal importation,
manufacture and sale of counterfeit products bearing the trademarks it
owns and in prosecuting the owners of the establishments engaged
therein. NBI representatives bought 24 pairs of rubber shoes bearing the
Strong name and the S logo. They then applied for search warrants
with the court, which eventually issued the same.
After seizure of their goods, respondents sought to quash the search
warrants on the ground that there is no confusing similarity between the
petitioners Skechers rubber shoes and respondents Strong rubber shoes.
The court eventually issued an order quashing the search warrants.
Issue:
Whether or not the court erred in concluding that the respondent is
not liable for trademark infringement where the sole issue is the existence
of probable cause for the issuance of a search warrant.
Held:
1. The power to issue search warrants is exclusively vested with the
trial judges in the exercise of their judicial function. And inherent in the
courts power to issue search warrants is the power to quash warrants
already issued. After the judge has issued a warrant, he is not precluded
to subsequently quash the same, if he finds upon re-evaluation of the
evidence that no probable cause exists. Though there is no fixed rule for
the determination of the existence of probable cause since the existence
depends to a large degree upon the finding or opinion of the judge
conducting the examination, however, the findings of the judge should not
disregard the facts before him nor run counter to the clear dictates of
reason.
2. The court was acting reasonably when it went into a discussion
of whether or not there was trademark infringement, this is so because in
the determination of the existence of probable cause for the issuance or

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

quashal of a warrant, it is inevitable that the court may touch on issues

properly threshed out in a regular proceeding. This finding that there was
no colorable imitation of petitioners trademark is merely preliminary and
did not finally determine the merits of the possible criminal proceedings
that may be instituted by petitioner. When the court, in determining
probable cause for issuing or quashing a search warrant, finds that no
offense has been committed, it does not interfere with or encroach upon
the proceedings in the preliminary investigation being or to be conducted
by the investigating officer. The court does not oblige the investigating
officer not to file an information, for the courts ruling that no crime exists
is only for the purposes of issuing or quashing the warrant.

(3) Sony Computer Entertainment, Inc. vs. Supergreen, Inc.

G.R. NO. 161823 22 MARCH 2007
Facts:
The petitioner filed a complaint against respondent with the
National Bureau of Investigation (NBI) for engaging in the reproduction
and distribution of counterfeit Playstation game software, consoles and
accessories. The NBI applied for, and was granted, search warrants by the
court in Manila to search respondents premises in Paraaque City and
Cavite. The NBI simultaneously served the search warrants and seized a
replicating machine and several units of counterfeit Playstation consoles,
joy pads, housing, labels, and game software.
The respondents filed a motion to quash the search warrants,
questioning the propriety of the venue. The court granted the motion and
quashed the warrants.
Issue:
Whether or not the quashal of the search warrants was valid.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

Held:
The Supreme Court agreed with petitioner that this case involves a
transitory or continuing offense of unfair competition. Pertinent too is the
Penal Code provision that enumerates the elements of unfair competition,
to wit: (a) That the offender gives his goods the general appearance of the
goods of another manufacturer or dealer; (b) That the general appearance
is shown in the (1) goods themselves, or in the (2) wrapping of their
packages, or in the (3) device or words therein, or in (4) any other feature
of their appearance; (c) That the offender offers to sell or sells those
goods or gives other persons a chance or opportunity to do the same with
a like purpose; and (d) That there is actual intent to deceive the public or
defraud a competitor.
Respondents imitation of the general appearance of petitioners
goods was done allegedly in Cavite. It sold the goods allegedly in
Mandaluyong City, Metro Manila. The alleged acts would constitute a
transitory or continuing offense. Thus, clearly, under the IP Code and
Penal Code, petitioner may apply for a search warrant in any court where
any element of the alleged offense was committed, including any of the
courts within the National Capital Region (Metro Manila).

(4) Manolo P. Samson vs. Caterpillar, Inc.

G.R. 169882
12 September 2007
Facts:
Petitioner is the owner of retail outlets within the Philippines, which
sell, among other things, footwear, clothing, bags and other similar items,
bearing the mark Caterpillar and Cat.
Petitioner registered the
aforementioned marks for shoes, slippers, sandals and boots with the
Bureau of Patents, Trademarks and Technology Transfer, now the
Intellectual Property Office (IPO) in 1997.
Respondent is a foreign corporation, primarily in the business of
manufacturing equipment used in construction, mining, road building
and agricultural industries. Since the 1960s, however, respondent had
expanded its product line to clothing and, since 1988, to footwear.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

Respondent alleges that it is a widely known brand name and that its
products are being internationally distributed.
The court issued search warrants against the establishments owned
by petitioner. This led to the seizure of various retail items such as
footwear, clothing, accessories, and leatherware for unfair competition.
Respondent filed the corresponding criminal complaints before the
Department of Justice (DOJ). In addition, respondent filed a separate civil
action for unfair competition, etc.
Since petitioner allegedly continued to sell and distribute
merchandise which bore the disputed marks, respondent later filed more
criminal complaints against petitioner before the DOJ for unfair
competition. But, before the issuance of a resolution by the DOJ, the
court issued an order quashing the search warrants.
The DOJ
subsequently issued a resolution recommending the filing of criminal
charges against petitioner. On appeal with the Secretary of Justice,
however, said resolution was reversed, and the criminal informations filed
against petitioner were withdrawn.
Issue:
Whether or not it was proper for the DOJ to recommend the
withdrawal of the informations filed due to the quashal of the search
warrants.
Held:
In its decision, the Court of Appeals held that the withdrawal
of the informations against petitioner, predicated on the quashal of the
search warrants, was a manifest error. The appellate court ruled that the
earlier finding of probable cause against petitioner was not affected by the
quashal of the warrants since independent evidence gathered by the NBI
from the test-buy operations it conducted in 1999 is sufficient to support
such finding.
By sustaining the decision of the Court of Appeals in said case, the
Supreme Court, ruled that probable cause exists for the re-filing of a
criminal case against petitioner for unfair competition under the IP Code.
The repeated confirmation of the finding of probable cause against
petitioner, which the Supreme Court cannot now overturn, effectively and
decisively determines the issues in this petition.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

(5) Summerville General Merchandising Co. vs. Hon. Court of

Appeals , Hon. Judge Antonio Eugenio, Vhang Yu Shui and
Juliet Lopez
G.R. No. 158767
26 June 2007
Facts:
Petitioner is a holder of a Deed of Assignment executed in its favor
by the owner/holder of several copyrights and patents over the Royal
playing cards, Royal brand playing cards case, design for the case and
packaging of a deck of Royal playing cards.
Petitioner filed a complaint against several persons or
establishments engaged in the unauthorized manufacturing, distribution
and sale of Royal brand playing cards, the design and mark of which are
claimed to have been duly patented/copyrighted and registered. Among
those establishments identified to be manufacturing and selling playing
cards using petitioners patented Joker design and plastic container was
that owned by the private respondents. A search warrant was issued in
favor of petitioner, by virtue of which the police seized the subject goods.
On motion by the private respondents, the court ordered that the seized
Crown brand playing cards and three printing machines be released and
returned to private respondents; hence only the containers of the playing
cards were left in the custody of the petitioner.
Issue:
Whether the seized playing cards inside the infringing plastic
container cases may be considered subject of the offense for infringement
and unfair competition, and hence, subject to siezure.
Held:
Petitioners assertion that the Crown brand playing cards are
subject of the offense is erroneous, bearing in mind the distinctive
circumstances of this case, i.e., that private respondents are the owners of
the registered Crown brand playing cards. The articles seized had little, if
any, evidentiary value for the criminal action of trademark infringement
relating to the use of the plastic containers, which petitioner filed before
the court; or even one for unfair competition also respecting the use of
such plastic containers.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

Petitioner does not dispute that the design and/or mark of such
Crown brand playing cards is owned by private respondents. In fact, there
is no allegation that the design and/or mark of such Crown brand playing
cards is a reproduction, counterfeit, copy, or colorable imitation of another
registered mark legally owned by another; hence, no crime of trademark
infringement appears to have been committed or perpetrated to warrant
the inference that the Crown brand playing cards are subject of the
offense as contemplated by the Rules of Court. All the more telling is the
contention of petitioner that it is the plastic container/case and its
marking that bear the reproduction, counterfeit, copy, or colorable
imitation of its registered mark. In other words, it is the design of the
plastic container/case that is alleged to have been utilized by private
respondents to deceive the public into believing that their Crown brand
playing cards are the same as those manufactured by petitioner.

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco

10

Trademark Usage Infringement versus Non-Use

- How Do They Compare?
Country: Philippines
Under Philippine law, there is infringement when a person, without
the consent of the owner of the registered mark, use in commerce any
reproduction, counterfeit, copy, or colorable imitation of a registered mark,
or reproduce, counterfeit , copy or colorably imitate a registered mark and
apply the same to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce, in connection with the
sale, distribution, advertising of goods, or in connection with which such
use is likely to cause confusion or mistake.
There is non-use as a ground for cancellation of a trademark when
the registered owner of the mark without legitimate reason fails to use the
mark within the Philippines, or to cause it to be used in the Philippines by
virtue of a license during an uninterrupted period of three (3) years or
longer. The non-use must be permanent and not ephemera; it must be
intentional and voluntary, and not involuntary or even compulsory.
In answering the sample matrix below, the following assumptions
were used:
(1) The trademarks are identical.
(2) The trademark registration belongs to one party and the other
party is not authorized to use it.
(3) The class of goods covered by the registered trademark is
different from or is not related to the class of the goods of the
other party.

Features
Indication
1.

of

Trademark

Use of CD records title

Infringemen
t

Proper Use
In Non-Use
Cancellation
Action

Remarks

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco
identical to another persons
registered trademark.
2. Use of a design mark o the
whole front of T-shirts which is
identical to another persons
registered mark
3. Use of a mark on free gifts
such as tissue which is identical
to another persons registered
mark.
4.
Use of another persons
registered trademark for the
purpose of notifying the usage of
the goods (e.g. Ink jet for
CANON)
5. Use on recycled and revived
goods without removing its
original registered mark.
6. Use of a mark in the case
where the mark is used not as a
trademark but as a name of
ingredients of food.
7.
Use of another persons
trademark as a back ground
scenery
of
his/her
own
advertisement.
8. Operating a website using the
domain
name
with
the
indication of the mark on the
relevant goods and services on
the website.
9.
Trademark use on the
Internet on the case the server
exists outside of the jurisdiction
while the purchasing of the
goods and services are available
in the relevant jurisdiction on
the Internet.
10.
Indication of another

11

Philippine Group Report (to the APAA Trademark Committee)

By: Pablo M. Gancayco
persons mark in a comparative
advertisement

12
N