1

IPL Digest Compilation (PART I)

Pearl and Dean Inc. v Shoemart (2003)

Facts:

Pearl and Dean (Phil.), Inc. (P&D) is engaged in the manufacture of

advertising display units simply referred to as light boxes., which
utilize specially printed posters sandwiched between plastic sheets
and illuminated with back lights.
1981 P&Dsecured a Certificate of Copyright Registration over
these illuminated display units. The advertising light boxes were
marketed under the trademark Poster Ads.
1988 The application for registration of the trademark was
approved.
1981-1988 P&D employed the services of Metro Industrial Services
to manufacture its advertising displays.
P&D negotiated with, Inc. (SMI) for the lease and installation of the
light boxes. Only the contract for SM Makati but was later on
rescinded after SMI insisted that SM Cubao is also covered.
Two years later, Metro Industrial Services, the company formerly
contracted by P&D to fabricate its display units, engaged in contract
to construct light boxes for SMIs chain of stores. After this was
terminated, SMI engaged the services of EYD Rainbow Advertising
Corporation to make the light boxes.
1989 P&D found out that exact copies of its light boxes were
installed at SM City and2 more SM branches. It further discovered
that Edsa Marketing Inc. (NEMI) was set up primarily to sell
advertising space in lighted display units located in SMIs different
branches.
1991 P&D sent letter to both SMI and NEMI enjoining them to
cease using the subject light boxes and to remove the same from
SMIs establishments. It also demanded the discontinued use of the
trademark Poster Ads, and the payment to Pearl and Dean of
compensatory damages (P20M).
Claiming that both SMI and NEMI failed to meet all its demands,
P&Dfiled this instant case for infringement of trademark and
copyright, unfair competition and damages.

Answer:
SMI maintained that it independently developed its poster panels
using commonly known techniques and available technology, without
notice of or reference to P&D copyright.

The registration of the mark Poster Ads was only for stationeries
such as letterheads, envelopes, and the like.
Word Poster Ads is a generic term which cannot be appropriated
as a trademark
Pearl and Dean is not entitled to the reliefs prayed for in its complaint
since its advertising display units contained no copyright notice
Prayed for the dismissal of the case and counterclaimed for moral,
actual and exemplary damages and for the cancellation of Pearl and
Deans Certification of Copyright Registration
NEMI repleaded SMIs averments.

Court Ruling:
RTC: In favor of P&D.
CA: Reversed RTC. In favor of SMI.Since the light boxes cannotbe
considered as either prints, pictorial illustrations, advertising copies,
labels, tags or box wraps, to be properly classified as a copyrightable
class O work, what was copyrighted were the technical drawings
only, and not the light boxes themselves.
Issues: WON SMI should be held liable. (No)
Held/Ratio:
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
P&Ds application as well as Copyright Certificate issued by the
National Library 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. Said Section 2 expressly enumerated the
works subject to copyright:
SEC. 2. The rights granted by this Decree
shall, from the moment of creation, subsist
with respect to any of the following works:
xxxxxx xxx
(O) Prints, pictorial illustrations, advertising
copies, labels, tags, and box wraps;
xxxxxx xxx

Copyright, in the strict sense of the term, is purely a statutory

right. Accordingly, it can cover only the works falling within the
statutory enumeration or description.
P & D secured its copyright under the classification class O
work. This being so, petitioners copyright protection extended only
to the technical drawings and not to the light box itself because the

latter was not at all in the category of prints, pictorial illustrations,

advertising copies, labels, tags and box wraps.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale
to the public without license from P & D, then no doubt they would
have been guilty of copyright infringement. But this was not the
case.
Court reminds again that copyrights, patents and trademarks are
completely distinct and separate from one another, citing Kho case.

ON THE ISSUE OF PATENT INFRINGEMENT

P&D 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 patent, petitioner could not legally
prevent anyone from manufacturing or commercially using the
contraption
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
community must be fairly dealt with and effectively guarded.
Such scrutiny is not present in the case of copyrights nor any notice
published before its grant to the effect that a person is claiming the
creation of a work.
Therefore, not having gone through the arduous examination for
patents, the petitioner cannot exclude others from the manufacture,
sale or commercial use of the light boxes on the sole basis of its
copyright certificate over the technical drawings.
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark Poster
Ads which petitioners 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 newsletters.Petitioner
admitted it did not commercially engage in or market these goods.
On the 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.
One who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for
products which are of a different description.
Assuming arguendo that Poster Ads could validly qualify as a
trademark, the failure of P & D to secure a trademark registration for
specific use on the light boxes meant that there could not have been

any trademark infringement since registration was an essential

element thereof.
ON THE ISSUE OF UNFAIR COMPETITION
The trial court did not find private respondents liable therefor.
Petitioner did not appeal
But even disregarding procedural issues, we nevertheless cannot
hold respondents guilty of unfair competition.
There was no evidence that P & Ds use of Poster Ads was
distinctive or well-known. The crucial admission by its own expert
witness that Poster Ads could not be associated with P & D showed
that, in the mind of the public, the goods and services carrying the
trademark Poster Ads could not be distinguished from the goods
and services of other entities.
This fact also prevented the application of the doctrine of secondary
meaning.
Secondary meaning means that a word or phrase originally
incapable of exclusive appropriation with reference to an article in
the market (because it is geographically or otherwise descriptive)
might nevertheless have been used for so long and so exclusively by
one producer with reference to his article that, in the trade and to that
branch of the purchasing public, the word or phrase has come to
mean that the article was his property.
Poster Ads with petitioner P & D because it was too generic
definitely precluded the application of this exception.
PETITION DENIED.

Mirpuri v CA
[GR No. 114508 | 19 November 1999 | Puno | Nature of Case]
Petitioner: Pribhdas Mirpuri
Respondent: CA; Director of Patents; Barbizon Corporation (corporation
organized and doing business under the laws of New York, U.S.A.)
Quick Summary
Facts Lolita Escobar had earlier filed an application for registration
opposed by Barbizon Corporation before the Bureau of Patents for the use of
BARBIZON in brassieres & ladies undergarments. The opposition of
Barbizon Corp was based on confusing similarity, damage in business, and
violation of the Trademark Law. The Director of Patents dismissed the

3
Patents cancelled the certificate of registration. She applied for
registration of the cancelled mark.

opposition and gave due course to the petition. This registration was later
cancelled due to failure to file an Affidavit of Use of Trademark.
Mirpuri, assignee of the trademark, filed his own application for registration of
BARBIZON, opposed by Barbizon Corp alleging prior use and registration in
the US and in different countries, prior international recognition & reputation
of the trademark through use and ads, with heavy reliance on the Paris
Convention and its implementing Memoranda in the Phils (the Villafuerte
Memo & the Ongpin Memo) and Art 189 RPC. Mirpuri raised the defense of
res judicata. The Dir of Patents declared the opposition barred and thus gave
due course to Mirpuris application. The CA reversed the Director of Patents
decision & ordered a remand. MR was denied.
Held Barbizon Corps opposition is barred by res judicata. The 2 cases
didnt involve the same causes of action and the same laws. The rest of the
case dealt with the ff: Trademarks & Trademark Law (purpose & history), The
Paris Convention, and Intellectual Property Rights in the Phils in general.
Facts:
FIRST REGISTRATION CASE: On 15 June 1970, Lolita Escobar filed
an application (Inter Partes Case No. 686 or IPC No. 686) with the
Bureau of Patents for the registration of the trademark BARBIZON for
use in brassieres and ladies undergarments. She alleged that she had
been manufacturing and selling these products under the firm name "L &
BM Commercial" since March 3, 1970.
Barbizon Corp opposed this application claiming that:
o Escobars mark BARBIZON is confusingly similar to the trademark
BARBIZON w/c the Corporation owns & hasnt abandoned.
o The corp. will be damaged, and its business reputation and goodwill
will suffer great & irreparable injury by the registration of the said
mark.
o The use of the said mark by Escobar constitutes an unlawful
appropriation of a mark previously used in the Phils and not
abandoned and thus a statutory violation of Section 4d of RA 166
(Trademark Law), as amended.
After filing pleadings, the parties submitted the case for decision. The
Director of Patents dismissed the opposition & gave due course to
Escobars application on 18 June 1974. The decision became final on 11
Sept 1974 when Lolita Escobar was issued a certificate of registration.
She assigned all her rights & interest over the trademark to MirpurI under
his then firm name Bonito Enterprises.
She failed to file w/ the Bureau of Patents the Affidavit of Use of the
Trademark required under Section 12 of RA 166. Thus, the Bureau of

SECOND REGISTRATION CASE: Mirpuri filed his own application for

registration of Escobars trademark. Escobar assigned her application to
Mirpuri & this was opposed by Barbizon Corporation (IPC NO. 2049)
where the latter alleged that:
o The corporation adopted and registered the trademark BARBIZON,
Barbizon & its Bee design, and then Barbizon & a representation of a
woman in 1933, 1934, 1949, 1977, 1983. These registrations are
subsisting & in force, and their use hasnt been abandoned.
o The Corp., through a wholly-owned Phil subsidiary, has been
manufacturing the goods covered herein and selling them to various
countries.. The trademark has been used in countries such as
Australia, France, Greece, HK, Norway, Sweden, etc.
o The trademark was fraudulently registered by Escobar and the rights
to the said mark was assigned to Mirpuri thus Mirpuris title is vitiated
by fraud & crime.
o Barbizon, Barbizon and Bee Design, and Barbizon & representation
of a woman trademarks are well-known trademarks well entitled to
1
protection under Article 6bis
of the Paris Convention, further
amplified by the Memoranda of the Ministers of Trade to the Dir of
Patents (Villafuerte & Ongpin Memoranda).
o The trademark applied for by Mirpuri is identical to the corporations
trademark and constitutes the dominant part of the corporations 2
other marks. The contd use by Mirpuri of the trademark on goods
belonging to Class 25 constitutes a clear case of commercial &

Article 6bis
(1) The countries of the Union undertake, either administratively if their legislation
so permits, or at the request of an interested party, to refuse or to cancel the
registration and to prohibit the use, of a trademark which constitutes a
reproduction, an imitation, or a translation, liable to create confusion, of a mark
considered by the competent authority of the country of registration or use to be
well-known in that country as being already the mark of a person entitled to the
benefits of this Convention and used for identical or similar goods. These
provisions shall also apply when the essential part of the mark constitutes a
reproduction of any such well-known mark or an imitation liable to create confusion
therewith.
(2) A period of at least five years from the date of registration shall be allowed for seeking
the cancellation of such a mark. The countries of the Union may provide for a period within
which the prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the cancellation or the prohibition of the use of
marks registered or used in bad faith.

4
criminal piracy. Its registration will violate the Trademark Law and
also Art 189 RPC.
Mirpuri raised the defense of res judicata.
The Director rendered a decision declared Barbizon Corps opposition
barred by res judicata and giving due course to Mirpuris application for
registration. The corporation appealed before the CA. The CA reversed
the findings of the Director of Patents regarding res judicata and ordered
a remand of the case. CA denied MR.
Escobar assigned to Mirpuri the use of the business name Barbizon
International. He registered the name with the DTI for which he was
issued a certificate of registration in 1987. Barbizon Corp filed a petition
for cancellation of Mirpuris business name before the Office of Legal
Affairs. The DTI Office of Legal Affairs cancelled Mirpuris certificate of
registration & declared Barbizon Corp the owner and prior user of the
business name Barbizon International.
st

Issues: WON Barbizon Corps opposition is barred by res judicata in the 1

registration case [YES]

Ratio:
Trademarks & Trademark Law
A trademark is defined under R.A. 166, the Trademark Law, as
including "any word, name, symbol, emblem, sign or device or any
combination thereof adopted and used by a manufacturer or merchant to
identify his goods and distinguish them from those manufactured, sold or
dealt in by others." The Intellectual Property Code defined it as "any
visible sign capable of distinguishing goods."
In Phil. Jurisprudence, the function of a trademark is to point out
distinctly the origin or ownership of the goods to which it is affixed; to
secure to him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill; to
assure the public that they are procuring the genuine article; to prevent
fraud and imposition; and to protect the manufacturer against substitution
and sale of an inferior and different article as his product.
Modern authorities on trademark law say that 3 distinct functions:
a) indicate origin or ownership of the articles to w/c they are attached
b) guarantee that those articles come up to a certain standard of quality
c) advertise the articles they symbolize
As early as 5,000 BC markings on pottery have been found by
archaeologists. Cave drawings of bisons in Europe show symbols on
their flanks. Greek & Roman inscriptions on works reveal features
thought to be marks or symbols. These were affixed by the makers or by
public authorities to indicate payment of tax, to disclose state monopoly,

or devices to settle accounts between the entrepreneur and his

workmen.
In the Middle Ages, marks on goods was common. In England,
identifying marks were used in certain trades by every guild so that the
public would know that the goods were not foreign goods smuggled into
an area where a guild has a monopoly. Merchants also used marks so
they could identify & reclaim their goods after recovery from shipwreck or
piracy.
During the industrial revolution, trademarks identified goods, indicated
good quality, and thus stimulated further purchases by the consuming
public. They came to symbolize goodwill & business reputation of the
owner and thus became property right protected by law. The common
law developed the doctrine of trademarks & tradenames. England & US
created laws on trademarks to regulate unfair trade. Trademark owners
can now exclude others from using his mark or using confusingly similar
marks where confusion resulted in diversion of trade. It also warned
against fake products.
Today, trademark is a symbol of origin & goodwill, and also an agent for
the actual creation & protection of goodwill. It creates an impersonal
guaranty of satisfaction, creating a desire for further satisfaction. Thus,
the mark became the silent salesman. Now, goodwill is no longer
confined to the territory of actual market penetration but also where the
marked article has been fixed in the public mind thru advertising.
Paris Convention
Paris Convention, is a multilateral treaty that seeks to protect industrial
property consisting of patents, utility models, industrial designs,
trademarks, service marks, trade names and indications of source or
appellations of origin, and at the same time aims to repress unfair
competition. It is a compact by the members of the Union w/c pledged to
accord to citizens of other Union members trademark and other rights
comparable to those accorded their own citizens by their domestic laws.
Nationals of the various member nations are thus assured of a certain
minimum of international protection of their industrial property.
It was signed in Paris on 20 March 1883, underwent several revisions.
The US acceded on 30 May 1997 while the Phils concurred on 10 May
1965 becoming effective 27 Sept 1965.
Art 6bis of the convention governs protection of well-known trademarks.
Under paragraph 1, each country of the Union bound itself to undertake
to refuse or cancel the registration, and prohibit the use of a trademark
which is a reproduction, imitation or translation, or any essential part of
which trademark constitutes a reproduction, liable to create confusion, of
a mark considered by the competent authority of the country where
protection is sought, to be well-known in the country as being already the

5
mark of a person entitled to the benefits of the Convention, and used for
identical or similar goods. This Article was introduced in Hague in 1925
and amended in Lisbon in 1952. IT is a self-executing provision. The
requirement is that the trademark is well known in the country where
protection is sought. The determination of WON it is well-known lies in
the competent authority of the country of registration or use either the
registering authority or the courts.
The Memorandum (Villafuerte Memo) implementing the Convention
required the Director of Patents to reject pending applications for Phil reg
of signature & world-famous trademarks by applicants other than its
original owners or users, and if warranted, Phil registrants should be
asked to surrender their cert of reg to avoid suits for damages & other
legal actions. The Memo enumerated several internationally-known
trademarks.
Another Memorandum (Ongpin Memo) was issued which required the
Director of Patents to honor the Phils commitment under 6bis of the
Paris Convention. The Minister of Trade & Industry enumerated
guidelines to observe in determining WON a trademark is entitled to
protection. The Phil Patent Office was ordered to refuse or cancel reg of
trademarks w/c are reproductions, translations or imitations of
trademarks owned by a person who is a citizen of a Union-member.
Pending applications by other persons other than the original owners
were rejected.
Both Memos were sustained by the SC in 1984 in the La Chemise
Lacoste, S.A. v Fernandez case where it was ruled that the Minister of
Trade & Industry was the competent authority to determine WON a
trademark is well-known in the Phils.
The Villafuerte Memo was issued 15 yrs after the adoption of the Paris
st
Convention. The 1 registration case involving Barbizon was filed before
the Villafuerte Memo but 5 yrs after the effectivity of the Convention. The
Paris Convention was never mentioned at all by the corporation. It was
nd
only in the 2 registration case where the corporation invoked the
Convention & the Memos.
Intellectual property rights
Intellectual and industrial property rights cases are not simple property
cases. Trademarks deal with the psychological function of symbols and
the effect of these symbols on the public at large. Trademarks play a
significant role in communication, commerce and trade, and serve
valuable and interrelated business functions, both nationally and
internationally. Thus agreements concerning industrial property are
intimately connected with economic development. Industrial property
encourages investments in new ideas and inventions and stimulates
creative efforts for the satisfaction of human needs. They speed up

transfer of technology and industrialization, and thereby bring about

social and economic progress.
The WTO is a common institutional framework for the conduct of trade
relations among its members in matters related to the multilateral and
plurilateral trade agreements annexed to the WTO Agreement. Among
those annexed is the Agreement on Trade-Related Aspects of
Intellectual Property Rights or TRIPs. Members to this Agreement "desire
to reduce distortions and impediments to international trade, taking into
account the need to promote effective and adequate protection of
intellectual property rights, and to ensure that measures and procedures
to enforce intellectual property rights do not themselves become barriers
to legitimate trade." To fulfill these objectives, the members have agreed
to adhere to minimum standards of protection set by several
Conventions (Berne Convention, Rome Convention, reaty on
Intellectualy Property in Respect of Integrated Circuits, and the Paris
Convention as revised).
A major proportion of international trade depends on the protection of
intellectual property rights
On res judicata
st
The decision in the 1 registration case (IPC No. 686, wherein Barbizon
Corps opposition was dismissed and the application of Escobar for
BARBIZON was given due course) was a judgment on the merits, as it
determine the right of the parties based on disclosed facts. Although no
hearing was conducted, the parties filed respective pleadings and had
the right to present evidence but they waived their right to do so &
submitted the case for decision based on pleadings. The lack of
evidence didnt deter the Director of Patents from ruling on the issue of
prior use which is the main issue.
The decision also involves the same parties (the corporation and Mirpuri
as assignee of Escobar), the same subject matter (BARBIZON
trademark), and the same causes of action.
On similarity of cause of action: The corporation however alleges that the
nd
cause of action in the 2 registration case (IPC 2049) involved prior use
and registration in foreign countries, prior use in the Phil, and fraudulent
registration of mark in violation of Art 189 RPC. The corporation cited the
Paris convention and the implementing Memorandum.
st

1 registration case
The issue of ownership
of trademark BARBIZON
st
wasnt raised in the 1
registration case but it
was
anchored
on

nd

2 registration case
The issues raised were
ownership
of
the
trademark,
1st
registration and use of
the trademark in the US

6
confusing
similarity,
probable damage, and
unlawful appropriation of
a mark previously used
in the Phils which is
penalized under Sec 4d
of the Trademark Law
Based on the Trademark
Law

and other countries, and

international recognition
and reputation of the
trademark
established
by extensive use & ads
of
the
corporations
products for over 40
years
Paris Convention, EO
913, and the 2 Memos;
Art 189 of the RPC

Causes of action which are distinct and independent from each other,
although arising out of the same contract, transaction, or state of facts,
may be sued on separately, recovery on one being no bar to subsequent
actions on other.
PETITION DENIED. CA DECISION & RESOLUTION AFFIRMED.
Ching v Salinas
[GR No. 161295 | 29 June 2005 | Callejo, Sr | PetRev R45]
Petitioner: Jessie G. Ching (owner of Jeshicris Manufacturing Co)
Respondent: William M. Salinas Sr; William M Salinas Jr; Josephine L
Salinas; Jennifer Y Salinas; Alonto Solaiman Salle; John Eric I Salinas; Noel
M Yabut (Board of Directors & Oficers of Wilaware Product Corporation)
Quick Summary
Facts Ching & Joseph Yu held Copyright Registration over Leaf Spring Eye
Bushing for Automobile and Vehicle Bearing Cushions. Ching requested aid
from the NBI for police assistance to apprehend & prosecute illegal
manufacturers, producers, and/or distributors of the above works. The NBI
filed applications for search warrants in Manila RTC against respondents.
The RTC granted the same. An inventory was submitted by the NBI. The
respondents filed a motion to quash, alleging that the works covered in the
certificates of registration are not artistic in nature thus not subject of a
copyright. The Trial Court quashed the search warrant. MR was denied. The
CA dismissed the petition for certiorari and the MR. Thus this petition.
Held The RTC has jurisdiction to determine WON the works are
copyrightable and WON Ching owns a copyright. For the RTC to determine

whether the crime for infringement under the IP Code as alleged in an

application is committed, Ching was burdened to prove that (a) Ching and
Joseph Yu were the owners of copyrighted material; and (b) the copyrighted
material was being copied and distributed by the respondents. Thus, the
ownership of a valid copyright is essential.
The Bushing and the Bearing Cushions are merely utility models. These are
not literary or artistic works. These are useful articles w/o artistic value since
they must conform to the shape & design of the materials which they intend
to replace (because the items are automobile spare parts). No copyright
granted by law can arise in favor of Ching despite the issuance of the
certificates. Being a statutory grant, the rights are only such as the statute
confers. It can cover only works falling w/in the statutory enumeration or
description.
Facts:
Jeshicris is the maker & manufacturer of a Utility Model, described as
Leaf Spring Eye Bushing for Automobile made up of plastic. Ching &
Joseph Yu were issued by the National Library Certificates of
Copyright Registration and Deposit of the said work described therein
as Leaf Spring Eye Bushing for Automobile on 4 Sept 2001.
Ching requested the NBI for police/investigative assistance for
apprehension & prosecution of illegal manufacturers, producers and/or
2
distributors of the works. The NBI filed applications for search warrants
in Manila RTC against William Salinas Sr and the officers and Directors
of Wilaware, alleging that they reproduced & distributed the models
penalized under Sec 177.1 & 177.3 of the IP Code.
The RTC granted the application. An inventory was submitted by the NBI
agents. The respondents filed a motion to quash the search
warrants because the works covered in the certificates issued by
the National Library are not artistic in nature but are automotive
spare parts which pertain to technology. Thus, the models are not
original and not proper subjects of a patent, not copyright. Ching
says that the issuing Court is not the proper forum before which to
articulate the issue of the validity of the arguments and that until the
copyright is nullified, he enjoys rights of a registered owner/holder
thereof.

The applications sought seizure of Leaf spring eye busing made of polyvinyl chloride
plastic and plastic polypropylene, vehicle bearing cushion made up of polyvinyl chloride
plastic, items used to manufacture or fabricate the items above, and evidences of sale of
the items above

7
The trial court quashed the search warrant on finding that there was no
probable cause for its issuance and adopting the argument of the
respondents. The MR of Ching was denied. The CA dismissed the
petition for certiorari since there can be no violation of the copyright since
the objects are not copyrightable in the first place. CA denied MR thus
this petition.
Ching contends that the revocation of copyright certificates should be
raised in a direct action. He further argues that the law gives a noninclusive definition of work and thus includes ornamental designs or
models for articles of manufacture WON registrable as an industrial
design and other works of applied art, as they are works w/c may have a
bearing on the utility aspect to w/c Chings utility designs were classified.
He also says that the fact that his utility designs or models for articles of
manufacture have been expressed in the field of automotive parts, or
based on something already in the public domain does not automatically
remove them from the protection of the Law on Copyright. He says that
he enjoys the presumption that his copyright is valid. The issue of
probable cause, according to Ching, should be resolved w/o invalidating
his copyright.
Respondents aver that the work of Ching is a technical solution to the
problem of wear & tear in automobiles, the substitution of materials (from
rubber to plastic matter of polyvinyl chloride, an oil resistant soft texture
plastic material strong enough to endure pressure brought about by the
vibration of the counter bearing and thus brings bushings). They say that
a technical solution in any field of human activity which is novel may be
the subject of a patent, not of a copyright. The registration of copyrights
over the items doesnt provide automatic protection. The registration and
deposit of work is not conclusive as to copyright outlay or the time of
copyright. Respondents say that copyright only exists when the work is
covered by the protection of the IP Code.
Issues:
1. WON the RTC has jurisdiction to resolve the issue of on whether the
utility models of Ching are copyrightable [Yes]
2. WON Ching owns copyright over the models. [No, the items are not
copyrightable]
Ratio:
1. RTC has jurisdiction to determine WON the utility models are
copyrightable
In Solid Triangle Sales v Sheriff of RTC QC Br 93, in the
determination of probable cause, the court must necessarily resolve
WON an offense exists to justify the issuance of a search warrant or
the quashal of one already issued by the court. In Sec 3 Rule 126 of
the CrimPro Rules, a search warrant may be issued for search &

seizure of property (a) subject of the offense; (b) stolen or embezzled

and other proceeds or fruits of the offense; or (c) used or intended to
be used as the means of committing an offense.
For the RTC to determine whether the crime for infringement under
the IP Code as alleged in an application is committed, Ching was
burdened to prove that (a) Ching and Joseph Yu were the owners of
copyrighted material; and (b) the copyrighted material was being
copied and distributed by the respondents. Thus, the ownership of a
valid copyright is essential.
By requesting the NBI to investigate and to file an application for
search warrant for IP Code infringement versus the repsondents,
Ching authorized the RTC to delve into & determine the validity of
the copyright w/c he claims he had over the utility model. Ching cant
seek relief based on this claim and then repudiate the courts
jurisdiction to ascertain validity of his claim w/o running afoul to the
doctrine of estoppel.
To discharge his burden of probable cause for the issuance of a
search warrant for violation of the IP Code, Ching submitted his
Certificate of Copyright Registration issued by the National Library
for the Leaf Spring Eye Bushing for Automobile and Vehicle Bearing
3
Cushion classified under Sec 172.1(h) as Literary and Artistic
Works. Sec 171.10 provides that a work of applied art is an artistic
creation with utilitarian functions or incorporated in a useful article,
whether made by hand or produced on an industrial scale. The
Bushing and the Bearing Cushions are merely utility models. These
are not literary or artistic works.
2. Ownership of copyright
Ownership of copyrighted material is shown by proof of originality
and copyrightability. By originality is meant that the material was not
copied, and evidences at least minimal creativity; that it was
independently created by the author and that it possesses at least
same minimal degree of creativity. Copying is shown by proof of
access to copyrighted material and substantial similarity between the
two works.
A copyright certificate provides prima facie evidence of originality
which is one element of copyright validity. It constitutes prima facie
evidence of both validity and ownership and the validity of the facts
stated in the certificate. The presumption of validity to a certificate of
copyright registration merely orders the burden of proof. The
applicant should not ordinarily be forced, in the first instance, to
3

Original ornamental designs or models for articles of manufacture, whether or not

registrable as an industrial design, and other works of applied art.

8
prove all the multiple facts that underline the validity of the copyright
unless the validity of the respondent shifts the burden of doing so to
the applicant. A certificate of registration creates no rebuttable
presumption of copyright validity where other evidence in the record
4
casts doubt on the question.
The Bushing and the Bearing Cushions are merely utility models.
These are not literary or artistic works. These are useful articles
which are defined as one having an intrinsic utilitarian function that is
not merely to portray the appearance of the article or to convey
information. A useful article may be copyrightable only if and only to
the extent that such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are
capable of existing independently of the utilitarian aspects of the
article.
An authors intellectual creation, WON it is a creation w/ utilitarian
functions or incorporated in a useful article produced on an industrial
scale, is protected by copyright law. However, the law refers to a
work of applied art which is an artistic creation. There is no
copyright protection for works of applied art or industrial design w/c
have aesthetic or artistic features that cant be identified separately
from the utilitarian aspects of the article.
The models herein are not works of applied art, nor artistic works.
They are utility models, useful articles but w/o artistic design or
value. A utility model is a technical solution to a problem in any field
of human activity which is new and industrially applicable. It may be,
or may relate to, a product, or process, or an improvement of any of
the aforesaid. A utility model refers to an invention in the
mechanical field. A utility model varies from an invention, for which a
patent for invention is, likewise, available, on at least 3 aspects:
Utility Model
Invention
Inventive step required
Not required
7 yrs of protection
20 yrs of protection
Dispenses
w/
the Need for a substantive
substantive exam
exam

218.2. In an action under this Chapter:

(a)
Copyright shall be presumed to subsist in the work or other subject matter to which
the action relates if the defendant does not put in issue the question whether copyright
subsists in the work or other subject matter; and
(b)
Where the subsistence of the copyright is established, the plaintiff shall be
presumed to be the owner of the copyright if he claims to be the owner of the copyright
and the defendant does not put in issue the question of his ownership.

The automotive spare parts here conform to the original structural

design of the components w/c they seek to replace thus they are not
ornamental lacking in decorative quality or value characterizing
authentic works of applied art. They are mechanical works of utility
sans any aesthetic embellishment. They do not fall under other
literary, scholarly, scientific and artistic works under the application
of ejusdem generis.
No copyright granted by law can arise in favor of Ching despite
the issuance of the certificates. Being a statutory grant, the
rights are only such as the statute confers. It can cover only
works falling w/in the statutory enumeration or description
(Joaquin Jr v Drilon; Pearl & Dean v Shoemart). Copyright and
patent rights are completely distinct and separate from another thus
the protection afforded by one cant be used interchangeably to
cover items or works that exclusively pertain to the others. (Kho v
CA).
In the US case of Mazer v Stein (where statuettes of dancing male &
female figures made of semi-vitreous china were copyrighted as
works of art but the items were intended for use as bases for table
lamps, with electric wiring etc), the US SC declared that the
statuettes were copyrightable works of art or models or designs for
works of art since they are works of artistic craftsmanship as far as
their form, not their mechanical or utilitarian aspects, are concerned.
The US SC also held that the dichotomy of protection for the
aesthetic is not beauty and utility but art for the copyright and
the invention of original and ornamental design for design
patents thus if the sole intrinsic function of an article is its
utility, the fact that the work is unique and attractively shaped
will not qualify it as a work of art.
The bushing & cushion are not works of art. They are utility models
w/c may be subject of a patent.

Petition denied for lack of merit. CA decision & resolution affirmed. Search
Warrants annulled & set aside. Costs against Ching.
Hoffman v. Le Traunik
(Dec 8, 1913)
Facts:
This is a suit brought by Aaron Hoffman against Sam Le Traunik for
infringement of copyright in the use of monologues.

9
Hoffman copyrighted his monologues entitled The German Senator and the
German Politician. Each of the 14 parts are separate and distinct. The
moving papers describe it as gags or jokes. The monologues come under
the head of light literature which is said to be books or writings such as can
be understood and enjoyed without much mental exertion. Hoffman alleges
that he is the author of all the expressions in the monologue. He claims that
Le Traunik has substantially reproduced his monologues by publicly reciting
the most valuable parts of the monologues.
Le Traunik denies this and alleges that these expressions and ideas were old
and well known when Hoffman made his monologues. He further asserts that
they were originated from others and they were common property.
The monologues of the parties are not similar except for the following
expressions:
Hoffman

Le Traunik

My dear friends and people workers

My dear friends and people workers

I am overstewed with pleasure to

have the honor to stand here and
undress myself before you

It gives me great pleasure and joy to

stand and undress myself before this
large aggravation

Le Traunik did not copy substantially the plan, arrangement, or combination

of materials found in Hoffmans monologue. Conceding artistic merit in
Hoffmans monologues, defendants do not infringe as they have not used the
plan, arrangement, or combination unless they have abstracted so much of it
as to authorize a finding of copying or taking.
Copying the whole or substantial part of a copyrighted work is an essential
element of infringement. It is not only literal reproduction but also includes
various modes in which the matter may be adopted, imitated, transferred, or
reproduced with colorable alteration to disguise piracy. But on the principle of
De Minimis Non Curat Lex, it is necessary that a substantial part of the
work be taken.
If there is piracy, it constitutes in taking of isolated expressions. To constitute
infringement, Hoffman must prove that they were original of him.

Air Philippines Corp. v. Pennswell, Inc.

(G.R. No. 172835 | December 13, 2007 | Chico-Nazario, J.)

It affords me pleasure to be disabled

to stand up here and distress such a
large congregated aggravation
I come before you as a sterilized
citizen

A poor, honest, sterilized citizen

They want to elect an Indian to

misrepresent them in the House of
Misrepresentatives

Look at the great men we got in the

House of Misrepresentatives

Issue: WON Le Traunik infringed upon Hoffmans copyright.

Held/Ratio: No, denied.

To be entitled to copyright, the composition must be original, meritorious, and

free from illegality or immorality. It must be original in that the author has
created it by his own skill and labor without directly copying or evasively
imitating the work of another. A new and original plan, arrangement, or
combination of materials will entitle the author with copyright.

Facts:
Petitioner Air Philippines Corporation is a domestic corporation
engaged in the business of air transportation services.
Respondent
Pennswell, Inc. was organized to engage in the business of manufacturing
and selling industrial chemicals, solvents, and special lubricants. On various
dates, respondent Pennswell delivered and sold to petitioner sundry goods in
trade. Under the contracts, petitioners total outstanding obligation amounted
to P449,864.98 with interest at 14% per annum until the amount would be
fully paid. For failure of the petitioner Air Philippines to comply with its
obligation under said contracts, respondent filed a Complaint for a Sum of
Money on 28 April 2000 with the RTC.

10
In its Answer, Air Philippines contended that its refusal to pay was not
without valid and justifiable reasons, and alleged that it was defrauded in the
amount of P592,000.00 by respondent for its previous sale of four items,
covered by Purchase Order No. 6626. Said items (Anti-friction Fluid, Contact
Grease, Trixohtropic Grease, Dry Lubricant) were misrepresented by
respondent as belonging to a new line, but were in truth and in fact, identical
with products petitioner had previously purchased from respondent.
Petitioner asserted that it was deceived by respondent which merely altered
the names and labels of such goods.
According to Air Philippines, respondent Pennswells products,
namely Excellent Rust Corrosion, Connector Grease, Electric Strength
Protective Coating, and Anti-Seize Compound, are identical with its
Anti-Friction Fluid, Contact Grease, Thixohtropic Grease, and Dry
Lubricant, respectively. Air Philippines asseverated that had Pennswell
been forthright about the identical character of the products, it would not
have purchased the items complained of. Moreover, petitioner alleged that
when the purported fraud was discovered, a conference was held between
petitioner and respondent whereby the parties agreed that respondent would
return to petitioner the amount it previously paid. However, petitioner was
surprised when it received a letter from the respondent, demanding payment
of the amount of P449,864.94, which later became the subject of
respondents Complaint for Collection of a Sum of Money against petitioner.
During the pendency of the trial, petitioner filed a Motion to Compel
respondent to give a detailed list of the ingredients and chemical components
of the following products, to wit: (a) Contact Grease and Connector Grease;
(b) Thixohtropic Grease and Di-Electric Strength Protective Coating; and (c)
Dry Lubricant and Anti-Seize Compound. Petitioner had earlier requested the
Philippine Institute of Pure and Applied Chemistry (PIPAC) for the latter to
conduct a comparison of respondents goods.
The RTC granted the Motion. Pennswell, Inc. sought
reconsideration of the foregoing Order, contending that it cannot be
compelled to disclose the chemical components sought because the
matter is confidential. It argued that what petitioner endeavored to
inquire upon constituted a trade secret which respondent cannot be
forced to divulge. Respondent maintained that its products are specialized
lubricants, and if their components were revealed, its business competitors
may easily imitate and market the same types of products, in violation of its
proprietary rights and to its serious damage and prejudice.
The RTC gave credence to Pennswells reasoning, and stated that
aside from national security matters and intelligence information, trade or

industrial secrets (pursuant to the Intellectual Property Code and other

related laws) as well as banking transactions (pursuant to the Secrecy of
Bank Deposit Act) are also exempted from compulsory disclosure. Thus,
petitioner filed a Petition for Certiorari with the CA, which denied the petition.
The CA, in denying the petition and the subsequent MR, ruled that
Pennswell had a proprietary or economic right over the ingredients or
components of its lubricant products. The formulation thereof was not known
to the general public and was peculiar only to Pennswell. It had a right to
guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information against the public. Otherwise,
such information could be illegally and unfairly utilized by business
competitors who, through their access to Pennswells business secrets, may
use the same for their own private gain and to the irreparable prejudice of the
latter.
Issue:
1. WON the chemical components or ingredients of Pennswells
products are trade secrets or industrial secrets that are not
subject to compulsory disclosure. [YES]
2. WON Rule 27, Sec. 1 of the Rules of Court is applicable to the case.
[NO.]
3. WON petitioner can rely on R.A. 7394 (Consumer Act of the
Philippines), RA. 8203 (Special Law on Counterfeit Drugs), and the
Toxic Substances and Hazardous and Nuclear Wastes Control Act of
1990 to compel disclosure of the components of Pennswells
products. [NO.]
Held/Ratio:
1. YES. The components of Pennswells products are considered
trade secrets and are not subject to compulsory disclosure.
A trade secret is defined as a plan or process, tool, mechanism or
compound known only to its owner and those of his employees to whom it is
necessary to confide it. The definition also extends to a secret formula or
process not patented, but known only to certain individuals using it in
compounding some article of trade having a commercial value.
A trade secret may consist of any formula, pattern, device, or
compilation of information that: (1) is used in one's business; and (2) gives
the employer an opportunity to obtain an advantage over competitors who do
not possess the information. Generally, a trade secret is a process or device

11
intended for continuous use in the operation of the business, for example, a
machine or formula, but can be a price list or catalogue or specialized
customer list.
It is indubitable that trade secrets constitute proprietary rights. The
inventor, discoverer, or possessor of a trade secret or similar innovation has
rights therein which may be treated as property, and ordinarily an injunction
will be granted to prevent the disclosure of the trade secret by one who
obtained the information "in confidence" or through a "confidential
relationship." American jurisprudence has utilized the following factors to
determine if an information is a trade secret, to wit:
(1)

the extent to which the information is known outside of the

employer's business;

(2)

the extent to which the information is known by employees

and others involved in the business;

(3)

the extent of measures taken by the employer to guard the

secrecy of the information;

(4)

the value of the information to the employer and to

competitors;

(5)

the amount of effort or money expended by the company in

developing the information; and

(6)

the extent to which the information could be easily or readily

obtained through an independent source.

The chemical composition, formulation, and ingredients of

respondents special lubricants are trade secrets within the
contemplation of the law. Respondent was established to engage in the
business of general manufacturing and selling of, and to deal in, distribute,
sell or otherwise dispose of goods, wares, merchandise, products, including
but not limited to industrial chemicals, solvents, lubricants, acids, alkalies,
salts, paints, oils, varnishes, colors, pigments and similar preparations,
among others. It is unmistakable to our minds that the manufacture and
production of respondents products proceed from a formulation of a secret
list of ingredients.
In the creation of its lubricants, respondent expended efforts, skills,
research, and resources. What it had achieved by virtue of its investments
may not be wrested from respondent on the mere pretext that it is necessary

for petitioners defense against a collection for a sum of money. By and

large, the value of the information to respondent is crystal clear. The
ingredients constitute the very fabric of respondents production and
business.
No doubt, the information is also valuable to respondents
competitors. To compel its disclosure is to cripple respondents business,
and to place it at an undue disadvantage. If the chemical composition of
respondents lubricants is opened to public scrutiny, it will stand to lose the
backbone on which its business is founded. This would result in nothing less
than the probable demise of respondents business. Respondents
proprietary interest over the ingredients which it had developed and
expended money and effort on is incontrovertible. Our conclusion is that the
detailed ingredients sought to be revealed have a commercial value to
respondent. Not only do we acknowledge the fact that the information grants
it a competitive advantage; we also find that there is clearly a glaring intent
on the part of respondent to keep the information confidential and not
available to the prying public.
2. NO. Rule 27, Sec. 1 applies only to documents, papers, books,
things, etc. that are not privileged.
Rule 27 of the ROC states: SECTION 1. Motion for production
or inspection order. Upon motion of any party showing good cause
therefore, the court in which an action is pending may (a) order any party to
produce and permit the inspection and copying or photographing, by or on
behalf of the moving party, of any designated documents, papers, books,
accounts, letters, photographs, objects or tangible things, not privileged,
which constitute or contain evidence material to any matter involved in the
action and which are in his possession, custody or control; or (b) order any
party to permit entry upon designated land or other property in his
possession or control for the purpose of inspecting, measuring, surveying, or
photographing the property or any designated relevant object or operation
thereon. The order shall specify the time, place and manner of making the
inspection and taking copies and photographs, and may prescribe such
terms and conditions as are just.
Rule 27 sets an unequivocal proviso that the documents,
papers, books, accounts, letters, photographs, objects or tangible
things that may be produced and inspected should not be privileged.
The documents must not be privileged against disclosure. On the ground of
public policy, the rules providing for production and inspection of books and
papers do not authorize the production or inspection of privileged matter; that
is, books and papers which, because of their confidential and privileged

12
character, could not be received in evidence. Such a condition is in addition
to the requisite that the items be specifically described, and must constitute
or contain evidence material to any matter involved in the action and which
are in the partys possession, custody or control.
3. NO. None of the provisions of the Acts invoked by the petitioner
are applicable to the case at bar.
Petitioner cannot rely on Section 77 of Republic Act 7394, or the
Consumer Act of the Philippines, in order to compel respondent to reveal the
chemical components of its products. While it is true that all consumer
products domestically sold, whether manufactured locally or imported, shall
indicate their general make or active ingredients in their respective labels of
packaging, the law does not apply to respondent. Respondents specialized
lubricants -- namely, Contact Grease, Connector Grease, Thixohtropic
Grease, Di-Electric Strength Protective Coating, Dry Lubricant and Anti-Seize
Compound -- are not consumer products. Consumer products, as it is
defined in Article 4(q), refers to goods, services and credits, debts or
obligations which are primarily for personal, family, household or agricultural
purposes, which shall include, but not be limited to, food, drugs, cosmetics,
and devices. This is not the nature of respondents products. Its products
are not intended for personal, family, household or agricultural purposes.
Rather, they are for industrial use, specifically for the use of aircraft
propellers and engines.
Petitioners argument that Republic Act No. 8203, or the Special Law
on Counterfeit Drugs, requires the disclosure of the active ingredients of a
drug is also on faulty ground. Respondents products are outside the scope
of the cited law, as they are not drugs.
We do not find merit or applicability in petitioners invocation of
Section 12 of the Toxic Substances and Hazardous and Nuclear Wastes
Control Act of 1990, which grants the public access to records, reports or
information concerning chemical substances and mixtures, including safety
data submitted, and data on emission or discharge into the environment. To
reiterate, Section 12[50] of said Act deems as confidential matters, which
may not be made public, those that would divulge trade secrets, including
production or sales figures or methods; production or processes unique to
such manufacturer, processor or distributor, or would otherwise tend to affect
adversely the competitive position of such manufacturer, processor or
distributor.
Dispositive Portion: WHEREFORE, the Petition is DENIED. CA affirmed.

ELIDAD KHO vs. COURT OF APPEALS

Facts:
Elidad Kho, doing business under the name and style of KEC Cosmetics
Laboratory, is the registered owner of the copyrights Chin Chun
Su and Oval Facial Cream Container/Case. She also has patent rights
on Chin Chun Su & Device and Chin Chun Su for medicated cream after
purchasing the same from Quintin Cheng, the registered owner thereof in
the Supplemental Register of the Philippine Patent Office on February 7,
1980.
Kho alleged that Summerville advertised and sold petitioner's cream
products under the brand name Chin Chun Su, in similar containers that
petitioner uses, thereby misleading the public, and resulting in the
decline in the petitioner's business sales and income; and, that the
respondents should be enjoined from allegedly infringing on the
copyrights and patents of the petitioner.
Summerville alleged as their defense that:
o Summerville is the exclusive and authorized importer, re-packer
and distributor of Chin Chun Su products manufactured by Shun
Yi Factory of Taiwan;
o The said Taiwanese manufacturing company authorized
Summerville to register its trade name Chin Chun Su Medicated
Cream with the Philippine Patent Office and other appropriate
governmental agencies;
o KEC Cosmetics Laboratory of the petitioner obtained the
copyrights through misrepresentation and falsification; and, that
the authority of Quintin Cheng, assignee of the patent
registration certificate, to distribute and market Chin Chun
Su products in the Philippines had already been terminated by
the said Taiwanese Manufacturing Company.
Elidad C. Kho filed a complaint for injunction and damages with a prayer
for the issuance of a writ of preliminary injunction against Summerville
which the Trial Court granted.
On appeal via Petition for Certiorari, the CA reversed the Order of the
Trial Court. In granting the Petition, the CA ruled:
The registration of the trademark or brandname "Chin Chun Su" by
KEC with the supplemental register of the Bureau of Patents,
Trademarks and Technology Transfer cannot be equated with
registration in the principal register, which is duly protected by the
Trademark Law.
La Chemise Lacoste, S.S. vs. Fernandez:
"Registration in the Supplemental Register, therefore, serves as
notice that the registrant is using or has appropriated the trademark.

13
By the very fact that the trademark cannot as yet be on guard and
there are certain defects, some obstacles which the use must still
overcome before he can claim legal ownership of the mark or ask the
courts to vindicate his claims of an exclusive right to the use of the
same. It would be deceptive for a party with nothing more than a
registration in the Supplemental Register to posture before courts of
justice as if the registration is in the Principal Register.
After hearing on the final injunction and damages, the trial court rendered
a decision barring the petitioner from using the trademark Chin Chun Su
and upholding the right of the respondents to use the same, but
recognizing the copyright of the petitioner over the oval shaped container
of her beauty cream.
Issue: whether the copyright and patent over the name and container of a
beauty cream product would entitle the Kho as registrant to the use and
ownership over the same to the exclusion of others.
Held: NO
Trademark, copyright and patents are different intellectual property rights
that cannot be interchanged with one another. A trademark is any visible
sign capable of distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked container
of goods. In relation thereto.
A trade name means the name or designation identifying or
distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic
domain protected from the moment of their creation.
Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.
Petitioner has no right to support her claim for the exclusive use of the
subject trade name and its container. The name and container of a
beauty cream product are proper subjects of a trademark inasmuch as
the same falls squarely within its definition.
In order to be entitled to exclusively use the same in the sale of the
beauty cream product, the user must sufficiently prove that she
registered or used it before anybody else did.
The petitioner's copyright and patent registration of the name and
container would not guarantee her the right to the exclusive use of the
same for the reason that they are not appropriate subjects of the said
intellectual rights.
Consequently, a preliminary injunction order cannot be issued for the
reason that the petitioner has not proven that she has a clear right over

the said name and container to the exclusion of others, not having
proven that she has registered a trademark thereto or used the same
before anyone did.
The dispositive portion of said decision held that the petitioner does not
have trademark rights on the name and container of the beauty cream
product. The said decision on the merits of the trial court rendered the
issuance of the writ of a preliminary injunction moot and academic
notwithstanding the fact that the same has been appealed in the Court of
Appeals.

9. Berris Agricultural Company Inc., v Norvy Abyadang

Facts: Respondent Abyadang, proprietor of NS Northern Organic Fertilizer,
filed with the IPO a trademark application for the mark NS D-10 PLUS for
use in connection with Fungicide with active ingredient 80% Mancozeb.
Petitioner Berris Agricultural Co., Inc opposed the application, because NS
D-10 PLUS is similar or confusingly similar to its registered trademark D-10
80 WP, which is also a fungicide with the same active ingredient, and used
for the same group of crops, ornamental plants, fruits and vegetables, in the
same dosage and same manner of application.
The IPO Bureau of Legal Affairs (IPO-BLA) held that the mark was
confusingly similar to Berris and rejected the application. Abyadang
appealed, first with the Office of the Director General, Intellectual Property
Philippines (IPPDG), and then to the CA. The CA reversed the IPPDGs
decision and held that
1. NS D-10 PLUS was not confusingly similar to D-10 80 WP;
2. Berris failed to establish its ownership of the mark D-10 80 WP;
3. And that Berris trademark D-10 WP may be cancelled to avoid
multiplicity of suits.
Issue:
marks

Whether or not there was a confusing similarity between the two

Held: YES. CA decision reversed.

Ratio: 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.

14
R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol,
emblem, 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 trademark, being a special
property, is afforded protection by law. But for one to enjoy this legal
protection, legal protection ownership of the trademark should rightly be
established.
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 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.
R.A. No. 8293, however, requires the applicant for registration or the
registrant to file a declaration of actual use (DAU) of the mark, with evidence
to that effect, within three (3) years from the filing of the application for
registration; otherwise, the application shall be refused or the mark shall be
removed from the register. In other words, the prima facie presumption
brought about by the registration of a mark may be challenged and
overcome, in an appropriate action, by proof of the nullity of the registration
or of non-use of the mark, except when excused. Moreover, the presumption
may likewise be defeated 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.
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 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 customers, or orders of buyers, best prove the
actual use of a mark in trade and commerce during a certain period of time.
Berris presented its trademark application dated Nov 29, 2002; its IPO
certificate of registration dated Oct 25, 2004; its photocopies of packaging,
sales invoices and official receipts using the mark; and its notarized

declaration of actual use (DAU) dated Apr 23, 2003, stating that the mark
was first used on June 20, 2002.
Abdayang presented a photocopy of the packaging for his fungicide bearing
the mark NS D-10 PLUS; an affidavit stating that the mark was his own
creation, derived from his and his wifes name, his birth month and the month
of his business name registration, and that he did not know of the existence
of Berris or any of his products; a certification issued by the Fertilizer
Pesticide Authority (FPA) that NS D-10 PLUS had been in the market since
July 30, 2003; whereas, as of Oct 2005, based on monitoring by the FPA, the
Regional Officer had not encountered D-10 80 WP in the market, nor did
FPA provincial officers receive any report as to the presence or sale of
Berris fungicide in the market; a certification dated March 2006 issued by the
FPA, certifying that all pesticides must be registered with the said office
pursuant to PD 1144, and Section 1, Article II of FPA Rules and Regulations
No. 1, Series of 1977; and a Certification dated March 2006, issued by the
FPA, certifying that pesticide D-10 80 WP was registered by Berris only in
November 2004.
Berris was able to establish that it has been using the mark D-10 80 WP
since June 2002, even before it filed for its registration with the IPO in
November 2002. The DAU, being a notarized document, is evidence of the
facts it stated and has the presumption of regularity, entitled to full faith and
credit upon its face. It is buttressed by the Certification dated April 2006,
issued by the Bureau of Trademarks that Berris mark is still valid and
existing.
We cannot subscribe to the contention of Abyadang that Berris Dau is
fraudulent, based on his assumption that Berris could not have legally used
the mark in the sale of its goods in June 2002 because the product was
registered with the FPA only in November 2004. As held by the IPPDG in its
decision on Abyadangs appeal, the question of whether or not Berris
violated PD 1144, because it sold its product without prior registration with
the FPA, is a distinct and separate matter from the jurisdiction and concern of
the IPO. Even a determination of violation by Berris of PD 1144 would not
controvert the fact that it did submit evidence that it had used the mark D-10
80 WP earlier than its FPA registration in 2004.
Neither could the FPA certification that the office had neither encountered
nor received reports about the sale of the fungicide in Region I and the
Cordillera Administrative Region negate the fact that Berris was selling the
product using the mark in 2002, especially considering that it first traded its

15
goods in Calauan, Laguna, where its business office is located.
According to Section 123.1(d) of R.A. No. 8293, 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: (1) the same goods or
services; (2) closely related goods or services; or (3) near resemblance of
such mark as to likely deceive or cause confusion.
In determining similarity and likelihood of confusion, jurisprudence has
developed tests the Dominancy Test and the Holistic or Totality Test. The
Dominancy Test focuses on the similarity of the prevalent or dominant
features of the competing trademarks that might cause confusion, mistake,
and deception in the mind of the purchasing public. Duplication or imitation is
not necessary; neither is it required that the mark sought to be registered
suggests an effort to imitate. Given more consideration are the aural and
visual impressions created by the marks on the buyers of goods, giving little
weight to factors like prices, quality, sales outlets, and market segments.
In contrast, the Holistic or Totality Test necessitates a consideration of the
entirety of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity. The discerning eye of the
observer must focus not only on the predominant words but also on the other
features appearing on both labels so that the observer may draw conclusion
on whether one is confusingly similar to the other.
Berris' and Abyadang's mark both have a common component, "D-10." On
Berris' package, the "D-10" is the dominant feature of the mark. Applying the
Dominancy Test, it cannot be gainsaid that Abyadang's "NS D-10 PLUS" is
similar to Berris' "D-10 80 WP," that confusion or mistake is more likely to
occur. Both marks pertain to the same type of goods and belong to the same
classification of goods under R.A. No. 8293. Both depictions of "D-10," as
found in both marks, are similar in size, such that this portion is what catches
the eye of the purchaser. The likelihood of confusion is present.
This likelihood of confusion and mistake is made more manifest when the
Holistic Test is applied, taking into consideration the packaging, for both use
the same type of material (foil type) and have identical color schemes (red,
green, and white); and the marks are both predominantly red in color, with
the same phrase "BROAD SPECTRUM FUNGICIDE" written underneath.
Considering these striking similarities, predominantly the "D-10," the buyers

of both products, mainly farmers, may be misled into thinking that "NS D-10
PLUS" could be an upgraded formulation of the "D-10 80 WP."
Moreover, notwithstanding the finding of the IPPDG that the "D-10" is a
fanciful component of the trademark, created for the sole purpose of
functioning as a trademark, and does not give the name, quality, or
description of the product for which it is used, nor does it describe the place
of origin, such that the degree of exclusiveness given to the mark is closely
restricted, and considering its challenge by Abyadang with respect to the
meaning he has given to it, what remains is the fact that Berris is the owner
of the mark "D-10 80 WP," inclusive of its dominant feature "D-10," as
established by its prior use, and prior registration with the IPO. Therefore,
Berris properly opposed and the IPO correctly rejected Abyadang's
application for registration of the mark "NS D-10 PLUS."
ANGELITA MANZANO v. CA, and MELECIA MADOLARIA, as Assignor
to NEW UNITED FOUNDRY MANUFACTURING CORP.
(G.R. No. 113388 | Date: September 5, 1997 | Ponente: Bellosillo)
Facts:
Letters Patent (LP) No. UM-4609 pertaining to an LPG gas burner was
issued to Melecia Madolaria (Melecia). Later, she assigned the LP to New
United Foundry Manufacturing Corp. (New United). On February 19, 1982,
Angelita Manzano (Angelita) filed with the Philippine Patent Office, filed an
action for cancellation of the said LP.
Allegations of Angelita:
a. the utility model covered by the LP was not inventive, new or useful;
b. the specification of the LP did not comply with the requirements of
Sec. 14, RA No. 165, as amended;
c. Melecia was not the original, true and actual inventor nor did she
derive her rights from the original, true and actual inventor of the
utility model, and
d. the LP was secured by means of fraud or misrepresentation.

According to Angelita, the utility model covered by the LP had been known or
used by others in the Philippines for more than 1 year before she filed her

16

application for letters patent in December 1979 and the products which were
produced with the utility model had been in public use or on sale in the
Philippines for more than 1 year before the filing of application for patent.
Evidence of Angelita:
a. Angelitas affidavit alleging the existence of prior art
b. brochure distributed by Manila Gas Corporation (Manila Gas)
disclosing a pictorial representation of Ransome Burner made by
Ransome Torch and Burner Company, USA,
c. brochure distributed by Esso Gasul or Esso Standard Eastern, Inc.,
showing a picture of another similar burner with top elevation view
and another perspective view of the same burner
d. Angelitas testimony, claiming the following:
i.
her husband Ong Bun Tua (Ong) worked as a helper in New
United where Melecia was affiliated with from 1965-1970
ii.
Ong helped in the casting of an LPG burner which was the
same utility model as LP
iii.
After Ong left New United, Angelita organized Besco Metal
Manufacturing (Besco) for the casting of LPG burners, one
of which had the configuration, form and component parts
similar to those manufactured by New United.
iv.
Angelita presented in evidence that in 1982, one of her
customers showed her an alleged model of an LPG burner
from New United covered by the LP. Next, she presented
her own model of an LPG burner called Ransome allegedly
manufactured in 1974 or 1975 and sold in the regular course
of Bescos business operation.
Angelita claimed that the Ransome burner had the
same configuration and mechanism as with the
model patented by Melecia.
e. Ongs testimony corroborating Angelitas testimony of his
employment
f. Fidel Franciscos (Fidel) testimony stating that he was employed by
Manila Gas from 1930-1941 and from 1952-1969 and that Manila
Gas imported Ransome burners way back in 1965 which were
advertised through brochures.

in his early years with the company, New United engaged in the
manufacture of different kinds of gas stoves as well as burners
based on sketches and specifications furnished by customers
early models of single-piece types of burners where the mouth
and throat were not detachable;
in 1978 Melecia told him that there were complaints with the
early models being manufactured. Then, Melecia instructed him
to make several experimental models based on revised sketches
and specifications, in which Melecia made some innovations.
After a few months, Melecia discovered that the solution to all
the defects of the earlier models, hence Rolando was able to
make several models incorporating the finding. Melecia later
decided to file for application in December 1979.

Director of Patents: Petition for cancellation DISMISSED for failure to

establish convincingly that the patented utility model of was anticipated, nor
was there any indication that the LP was acquired through fraud.
CA: Affirmed Director of Patents
Issue: WON LP should be cancelled on the ground that the utility model on
which it was based already existed prior to its application.
Held: No. Petition dismissed.
Ratio:
The issuance of the LP creates a presumption that the patentee was the
original and first inventor. The burden of proving want of novelty is on the
person disclaiming it. The burden is met only by clear and satisfactory proof
which overcomes every reasonable doubt. Hence, a utility model shall not be
considered "new" if before the application for a patent it has been publicly
known or publicly used in this country or has been described in a printed
publication or publications circulated within the country, or if it is substantially
similar to any other utility model so known, used or described within the
country.

Evidence of Melecia:
a. Testimony of Rolando Madolaria (Rolando) stating the following:
that he was the General Supervisor of New United in the
foundry, machine and buffing section;

The standard of evidence was not met by Angelita. As found by the Director
of Patents:

17
a. The pictorial representations of burners did not clearly and
convincingly show that the device shown therein is identical or
substantially identical in construction with the utility model. In
determining whether novelty or newness is negatived by any
prior art, only one item of the prior art may be used at a time.
For anticipation to occur, the prior art must show that each
element is found either expressly or described or under
principles of inherency in a single prior art reference or that the
claimed invention was probably known in a single prior art
device or practice.
b. Even if the brochures depict clearly that each and every element of
the patented gas burner device and the prior art are identical, they
cannot serve as anticipatory bars for the reason that they are
undated. The dates when they were distributed to the public were not
indicated and, therefore, they are useless prior art references.
c. A careful examination of the LPG burner allegedly manufactured in
1974 or 1975 (see Angelitas testimony) showed that it did not bear
the word Ransome, without any indication of the time or date it was
manufactured.
d. As to the imported Ransome burner from Esso, there was no date
indicated therein as to when it was manufactured and/or imported
before the filing of the application for issuance of patent of the
subject utility model. Also, some parts are missing, as only the cup
was presented so that the same could not be compared to the utility
model (subject matter of this case) which consists of several other
detachable parts in combination to form the complete LPG burner.

The validity of the patent issued by the Philippine Patent Office in favor
of private respondent and the question over the inventiveness, novelty
and usefulness of the improved model of the LPG burner are matters
which are better determined by the Patent Office. The technical staff of
the Philippine Patent Office composed of experts in their field has by the
issuance of the patent in question accepted private respondent's model
of gas burner as a discovery. There is a presumption that the Office has
correctly determined the patentability of the model 8 and such action
must not be interfered with in the absence of competent evidence to the
contrary.

The rule is settled that the findings of fact of the Director of Patents,
especially when affirmed by the Court of Appeals, are conclusive on this

Court when supported by substantial evidence. Angelita has failed to

show compelling grounds for a reversal of the findings and conclusions
of the Patent Office and the Court of Appeals.

Pursuant to the requirement of clear and convincing evidence to

overthrow the presumption of validity of a patent, the oral testimony to
show anticipation is open to suspicion and if uncorroborated by cogent
evidence, as what occurred in this case, it may be held insufficient.
RUBBER TIRE WHEEL COMPANY, and Consolidated Rubber Tire
Company, Petitioners, v. GOODYEAR TIRE & RUBBER COMPANY.
(Decided February 24, 1914 | Mr. Justice Hughes)
Doctrine:
The immunity given by a provision in a decree to a specified party
manufacturing and selling an article as a patentable combination producing
new results is not transferable, and such party, although immune himself,
cannot enjoin the prosecution of suit against another as an infringer because
the latter purchases from him one of the elements used in manufacturing the
article.
Facts:
The petitioners Rubber Tire Wheel Company and Consolidated
Rubber Tire Company are the owners of the Grant patent (No. 554,675)
issued February 18, 1896, for an improvement in rubber-tired wheels. In a
suit for infringement brought by the petitioners against the Goodyear Tire &
Rubber Company (the respondent) it was held by the circuit court of
th
appeals for the 6 circuit that the patent was void for want of novelty.
Upon the basis of the decree entered upon that decision, the
respondent Goodyear instituted the present suit in the southern district of
Ohio, to restrain the petitioners from prosecuting suits for infringement
against Goodyear's customers. The circuit court granted a preliminary
th
injunction. Upon appeal, the circuit court of appeals for the 6 circuit
sustained the injunction so far as it applied to the prosecution of a suit which
the petitioners had brought against John Doherty in the circuit court for the
southern district of New York. This writ of certiorari was then granted.
The Grant tire is composed of three elements: (1) a channel or
groove with tapered or inclined sides, (2) a rubber tire with a described
shape, adapted to fit into the channel, and (3) a fastening device consisting

18
of independent retaining wires, which pass through the rubber tire and are
th
placed in a particular position. It was held in the 6 circuit that both the
elements and the results were old, and hence patentability was denied. In
nd
the 2 circuit, and in the circuit court for the northern district of Georgia, the
patent was sustained.
The controversy came to this court upon certiorari to review the
nd
decision of the circuit court of appeals for the 2 circuit in the case last
mentioned, and it was finally determined that the patent was valid. The
patented structure was held to be not a mere aggregation of elements, but a
new combination of parts, co-acting so as to produce a new and useful
result. It was found that the Grant tire possessed a distinctive characteristic;
that is, a 'tipping and reseating power.' There was thus a patentable
combination, the patentability of which did not depend on the novelty of any
of the elements entering into it, whether rubber, iron, or wires.
Doherty, against whom suit was enjoined, had a shop in New York
city, where he was engaged in the business of applying rubber tires to
vehicle wheels. It appeared that having purchased the rubber from the
respondent Goodyear, and the wire and channel from other parties, he
combined these elements and fitted them to a carriage wheel, thus
constructing a complete tire.
Issue:
1. WON the decree in favor of Goodyear Company affords Doherty a
defense against the charge of infringement in making the patented
structure. [NO]
2. WON Goodyear can enjoin the prosecution of the suit/ charge of
infringement against Doherty, because Doherty purchased (from
Goodyear) one of the elements used in manufacturing the tire. [NO]
Held/Ratio:
It is at once apparent that the decree in favor of the Goodyear
Company in the former suit does not work an estoppel in favor of Doherty, so
as to afford him a defense against the charge of infringement in making the
patented structure. Doherty was not a party to the suit in which that decree
was rendered; nor, at least with respect to tires made by him, can he be
regarded as a privy to that decree. We may lay on one side the question as
to the rights of one purchasing from the respondent the completed article.
Doherty did not purchase it; he made it himself, assembling its various
elements for that purpose and effecting the combination. On no possible
theory can it be said that, if the tire thus constructed was covered by the
patent, Doherty was entitled to immunity simply because he bought one
element of the time from the Goodyear Company.

The respondent Goodyear, however, is asserting its own right, and

not that of Doherty. It insists that, by virtue of the decree in its favor in the
infringement suit, it should have the injunction in order to protect its trade. It
contends that it has an equitable right to this protection by restraining suits
not only against those who buy from it the structure which is the subject of
the patent, but also against those who buy its rubber and themselves make
the patented tire. In urging this contention the respondent relies upon the
doctrine of Kessler v. Eldred.
There, Kessler and Eldred were rival manufacturers of electric cigar
lighters. Eldred, being the owner of the Chambers patent, sued Kessler in the
northern distirict of Indiana for infringement. The circuit court, finding
noninfringement, dismissed the bill; and this decree was affirmed by the
circuit court of appeals for the seventh circuit. Subsequently, Eldred brought
suit on the same patent in the northern district of New York against Kirkland,
who was selling a similar cigar lighter, but not of Kessler's make. The circuit
court of appeals for the second circuit held the Kirkland lighter to be an
infringement. Eldred then began a suit for infringement in the western district
of New York against Breitwieser, a user of Kessler's lighters. Thus Kessler
filed his bill in the circuit court for the northern district of Illinois to enjoin
Eldred from prosecuting suit against anyone for alleged infringement of the
Chambers patent by purchase, use, or sale of any electric cigar lighter
manufactured by Kessler, and identical with the lighter before the court in the
suit of Eldred v. Kessler. Kessler, being defeated in the circuit court,
appealed to the circuit court of appeals for the seventh circuit. Answering
questions certified by that court, this court held that the decree in the suit of
Eldred v. Kessler had the effect of entitling Kessler to continue the business
of manufacturing and selling throughout the United States, the same lighter
he had theretofore been manufacturing and selling, without molestation by
Eldred through the patent which he held; and that the decree also had the
effect of making a suit by Eldred against any customer of Kessler for the
alleged infringement of the patent by use or sale of Kessler's lighters a
wrongful interference with Kessler's business, with respect to which he was
without adequate remedy at law.
It will be observed that the equity thus sustained sprang from the
decree in the former suit between the parties, and that the decision went no
further than to hold it to be a wrongful interference with Kessler's business to
sue his customers for using and selling the lighter which Kessler had made
and sold to them, and which was the same as that passed upon by the court
in the previous suit. His right to make and sell the particular article, the
making of which Eldred had unsuccessfully challenged as an infringement,
was deemed to include the right to have others secure in buying that article,

19
and in its use and resale. But the present question was in no way involved. It
was not held that Kessler would have been entitled to restrain Eldred from
suing other manufacturers of lighters who might buy from Kessler some of
the materials used in such manufacture.
The distinction is controlling. Under the doctrine of Kessler v. Eldred,
the respondent Goodyearby reason of the final adjudication in its favor
was entitled to make and sell the Grant structure, and to have those who
bought that structure from it unmolested in taking title and in enjoying the
rights of ownership. It may also be assumed that the respondent had the
right to make and sell its rubber without hindrance by the petitioners claiming
under the patent. The trade right of the respondent, however, whether with
respect to the complete structure or its separate parts, is merely the right to
have that which it lawfully produces freely bought and sold without restraint
or interference. It is a right which attaches to its productto a particular
thingas an article of lawful commerce, and it continues only so long as the
commodity to which the right applies retains its separate identity.
If that commodity is combined with other things in the process of the
manufacture of a new commodity, the trade right in the original part as an
article of commerce is necessarily gone. So that when other persons become
manufacturers on their own behalf, assembling the various elements and
uniting them so as to produce the patented device,a new article,it is
manifest that the respondent Goodyear cannot insist upon their being
protected from suit for infringement by reason merely of its right to make and
sell, and the fact of its having made and sold, some component part of that
article. It must be able to go beyond a mere trade right in that element, and to
show itself to be entitled to have its customers manufacture the patented
structure. Thus the fallacy in the respondent's contention becomes apparent.
The decree gave the respondent no right to have others make Grant tires. It
could make and sell them, and it could make and sell rubber; it could
demand protection for its trade rights in the commodities it produced. But it
had no transferable immunity in manufacture. The decree gave it no privilege
to demand that others should be allowed to make and sell the patented
structure in order that it might have a market for its rubber.
The suit against Doherty was based upon his conduct in constructing
Grant tires. The fact that the respondent could not be charged with liability as
a participant in the infringement thus alleged did not excuse him; and the
petitioners, in bringing the suit, did not violate any right of the respondent.

Gorham v. Company v. White, 81 U.S. 14 Wall. 511 511 (1871)

Facts:
The Patent Act of August 29, 1842, enacts: "That any citizen or citizens &c.,
who by his, her, or their own industry, genius, efforts, and expense may have
invented or produced any new and original design for a manufacture,
whether of metal or other material or materials, or any new and original
design for the printing of woolen, silk, cotton, or other fabrics, or any new and
original design for a bust, statue, or bas relief, or composition in alto or basso
relievo, or any new and original impression or ornament, or to be placed on
any article of manufacture, the same being formed in marble or other
material, or any new and useful pattern, or print, or picture to be either
worked into or worked on, or printed, or painted, or cast, or otherwise fixed
on any article of manufacture, or any new and original shape or configuration
of any article of manufacture not known or used by others before his, her, or
their invention or production thereof and prior to the time of his, her, or their
application for a patent therefor, and who shall desire to obtain an exclusive
property or right therein to make, use, and sell, and vend the same or copies
of the same to others.
Gorham & Co., in July, 1861, obtained a patent for a new design for the
handles of tablespoons and forks, which under the name of the "cottage
pattern" became extremely popular -- the most successful plain pattern,
indeed, that had been in the market for many years. Gorham & Co.
subsequently transferred their patent to the Gorham Manufacturing
Company.
In 1867, one White obtained a patent for a design which he alleged to be
original with him for the same things -- the handles, namely, of forks and
spoons -- and in 1868 a patent for still another design. Both of his designs
are shown on the page already mentioned, alongside of the cottage pattern
and to its right hand on the page.
Manufacturing and selling quantities of spoons and forks of these last two
patterns, White interfered largely with the interests of the Gorham
Manufacturing Company, and that company accordingly filed a bill in the
court below to enjoin his making and selling spoons and forks under either of
his patents. The validity of the patent held by the Gorham Company was not
denied, nor was it controverted that the defendant had sold spoons and forks
which had upon them designs bearing some resemblance to the design
described in the patent held by the company.

20

Gorthams Contention: The design was substantially preserved because the

main features of the figure were unaltered and the minor portion were
changed (examples: as the substitution of a ring of flowers for a ring of stars,
or quatrefoil for a trefoil ornament). Ordinary observer is misled.
Whites contention: None of the designs on these articles thus sold was
substantially the same as the design covered by the patent held by the
company.
Lower Court: No infringement.
Issue: WON there was infringement. (YES)
Held:
1. The acts of Congress which authorize the grant of a patent for designs
contemplate not so much utility as appearance, and the thing invented or
produced for which a patent is given is that which gives a peculiar or
distinctive appearance to the manufacture or article to which it is applied.
2. It is the appearance to the eye that constitutes mainly, if not entirely, the
contribution to the public which the law deems worthy of recompense, and
identity of appearance or sameness of effect upon the eye is the main test of
substantial identity of design.
3. It is not essential to identity of design that the appearance should be the
same to the eye of an expert. If, in the eye of an ordinary observer, giving
such attention as a purchaser usually gives, two designs are substantially the
same -- if the resemblance is such as to deceive such an observer and
sufficient to induce him to purchase one supposing it to be the other -- the
one first patented is infringed by the other.
Jessie Ching v. William Salinas
G.R. 161295, June 29, 2005
Facts: Jessie G. Ching is the owner and general manager of Jeshicris
Manufacturing Co., the maker and manufacturer of a Utility Model, described
as "Leaf Spring Eye Bushing for Automobile" made up of plastic.

On September 4, 2001, Ching and Joseph Yu were issued by the National

Library Certificates of Copyright Registration and Deposit of the said
work described therein as "Leaf Spring Eye Bushing for Automobile.
On September 20, 2001, Ching requested the NBI) for police/investigative
assistance for the apprehension and prosecution of illegal manufacturers,
producers and/or distributors of the works.
After due investigation, the NBI filed applications for search warrants in the
RTC, which the RTC granted.
The respondents filed a motion to quash the search warrants on the following
grounds:
2. The copyright registrations were issued in violation of the
Intellectual Property Code on the ground that:
a) the subject matter of the registrations are not artistic or
literary;
b) the subject matter of the registrations are spare parts of
automobiles meaning there (sic) are original parts that they
are designed to replace. Hence, they are not original.
The respondents averred that the works covered by the certificates issued by
the National Library are not artistic in nature; they are considered automotive
spare parts and pertain to technology. They aver that the models are not
original, and as such are the proper subject of a patent, not copyright.
RTC: granted the motion and quashed the search warrant on its finding that
there was no probable cause for its issuance. The court ruled that the work
covered by the certificates issued to the petitioner pertained to solutions to
technical problems, not literary and artistic as provided in Article 172 of the
Intellectual Property Code.
CA: RTC did not commit any grave abuse of its discretion in issuing the
assailed order. It is worthy to state that the works protected under the Law on
Copyright are: literary or artistic works (Sec. 172) and derivative works (Sec.
173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on
neither classification. Accordingly, if, in the first place, the item subject of the
petition is not entitled to be protected by the law on copyright, how can there
be any violation?

21
Issue/Held: Whether Spring Eye Bushing and Vehicle Bearing Cushion are
protected by copyrights.-NO

Automobile and Vehicle Bearing Cushion both classified under Section

172.1(h) of R.A. No. 8293, to wit:

Ratio: The petitioner cannot seek relief from the RTC based on his claim that
he was the copyright owner over the utility models and, at the same time,
repudiate the courts jurisdiction to ascertain the validity of his claim without
running afoul to the doctrine of estoppel.

SEC. 172. Literary and Artistic Works. 172.1. Literary and

artistic works, hereinafter referred to as "works," are original
intellectual creations in the literary and artistic domain
protected from the moment of their creation and shall include
in particular:

To discharge his burden, the applicant may present the certificate of

registration covering the work or, in its absence, other evidence. A copyright
certificate provides prima facie evidence of originality which is one element of
copyright validity. It constitutes prima facie evidence of both validity and
ownership and the validity of the facts stated in the certificate. The
presumption of validity to a certificate of copyright registration merely orders
the burden of proof. The applicant should not ordinarily be forced, in the first
instance, to prove all the multiple facts that underline the validity of the
copyright unless the respondent, effectively challenging them, shifts the
burden of doing so to the applicant. Indeed, Section 218.2 of R.A. No. 8293
provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or
other subject matter to which the action relates if the
defendant does not put in issue the question whether
copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established,
the plaintiff shall be presumed to be the owner of the
copyright if he claims to be the owner of the copyright and
the defendant does not put in issue the question of his
ownership.
A certificate of registration creates no rebuttable presumption of copyright
validity where other evidence in the record casts doubt on the question. In
such a case, validity will not be presumed.
To discharge his burden of probable cause for the issuance of a search
warrant for violation of R.A. No. 8293, the petitioner-applicant submitted to
the RTC Certificate of Copyright Registration Nos. 2001-197 and 2001-204
dated September 3, 2001 and September 4, 2001, respectively, issued by
the National Library covering work identified as Leaf Spring Eye Bushing for

...
(h) Original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial
design, and other works of applied art.
Related to the provision is Section 171.10, which provides that a "work of
applied art" is an artistic creation with utilitarian functions or incorporated in a
useful article, whether made by hand or produced on an industrial scale.
It bears stressing that the focus of copyright is the usefulness of the artistic
design, and not its marketability. The central inquiry is whether the article is a
work of art. Works for applied art include all original pictorials, graphics, and
sculptural works that are intended to be or have been embodied in useful
article regardless of factors such as mass production, commercial
exploitation, and the potential availability of design patent protection.
As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic
utilitarian function that is not merely to portray the appearance of the article
or to convey information. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and
works of industrial design are not. A useful article may be copyrightable only
if and only to the extent that such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are capable of
existing independently of the utilitarian aspects of the article.
We agree with the contention of the petitioner (citing Section 171.10 of R.A.
No. 8293), that the authors intellectual creation, regardless of whether it is a
creation with utilitarian functions or incorporated in a useful article produced
on an industrial scale, is protected by copyright law. However, the law refers
to a "work of applied art which is an artistic creation." It bears stressing that
there is no copyright protection for works of applied art or industrial design

22
which have aesthetic or artistic features that cannot be identified separately
from the utilitarian aspects of the article. Functional components of useful
articles, no matter how artistically designed, have generally been denied
copyright protection unless they are separable from the useful article.
In this case, the petitioners models are not works of applied art, nor artistic
works. They are utility models, useful articles, albeit with no artistic design or
value.
A utility model is a technical solution to a problem in any field of human
activity which is new and industrially applicable. It may be, or may relate to, a
product, or process, or an improvement of any of the aforesaid. Essentially, a
utility model refers to an invention in the mechanical field. This is the reason
why its object is sometimes described as a device or useful object. A utility
model varies from an invention, for which a patent for invention is, likewise,
available, on at least three aspects: first, the requisite of "inventive step" in a
patent for invention is not required; second, the maximum term of protection
is only seven years compared to a patent which is twenty years, both
reckoned from the date of the application; and third, the provisions on utility
model dispense with its substantive examination and prefer for a less
complicated system.
Feist Pubs., Inc. V. Rural Tel. SVC. Co., Inc.
INC., 499 U. S. 340 (1991)
Facts: Respondent Rural Telephone Service Company is a certified public
utility providing telephone service to several communities in Kansas.
Pursuant to state regulation, Rural publishes a typical telephone directory,
consisting of white pages and yellow pages. It obtains data for the directory
from subscribers, who must provide their names and addresses to obtain
telephone service. Petitioner Feist Publications, Inc., is a publishing company
that specializes in area-wide telephone directories covering a much larger
geographic range than directories such as Rural's. When Rural refused to
license its white pages listings to Feist for a directory covering 11 different
telephone service areas, Feist extracted the listings it needed from Rural's
directory without Rural's consent. Although Feist altered many of Rural's
listings, several were identical to listings in Rural's white pages.
Rural sued for copyright infringement in the District Court for the District of
Kansas, taking the position that Feist, in compiling its own directory, could

not use the information contained in Rural's white pages. Rural asserted that
Feist's employees were obliged to travel door-to-door or conduct a telephone
survey to discover the same information for themselves. Feist responded that
such efforts were economically impractical and, in any event, unnecessary,
because the information copied was beyond the scope of copyright
protection.
The District Court granted summary judgment to Rural in its copyright
infringement suit, holding that telephone directories are copyrightable. The
Court of Appeals affirmed.
Issue/Held: Whether Rurals white pages are entitled to copyright.- NO,
Rural's white pages are not entitled to copyright, and therefore Feist's use of
them does not constitute infringement.
Ratio:
The key to resolving the tension lies in understanding why facts are not
copyrightable. The sine qua non of copyright is originality. To qualify for
copyright protection, a work must be original to the author. Original, as the
term is used in copyright, means only that the work was independently
created by the author (as opposed to copied from other works), and that it
possesses at least some minimal degree of creativity. To be sure, the
requisite level of creativity is extremely low; even a slight amount will suffice.
The vast majority of works make the grade quite easily, as they possess
some creative spark, "no matter how crude, humble or obvious" it might be.
Originality does not signify novelty; a work may be original even though it
closely resembles other works, so long as the similarity is fortuitous, not the
result of copying.
(a) Article I, 8, cl. 8, of the Constitution mandates originality as a
prerequisite for copyright protection. The constitutional requirement
necessitates independent creation plus a modicum of creativity. Since facts
do not owe their origin to an act of authorship, they are not original, and thus
are not copyrightable. Although a compilation of facts may possess the
requisite originality because the author typically chooses which facts to
include, in what order to place them, and how to arrange the data so that
readers may use them effectively, copyright protection extends only to those
components of the work that are original to the author, not to the facts
themselves. This fact/expression dichotomy severely limits the scope of
protection in fact-based works.

23
(b) The Copyright Act of 1976 and its predecessor, the Copyright Act of
1909, leave no doubt that originality is the touchstone of copyright protection
in directories and other fact-based works. The 1976 Act explains that
copyright extends to "original works of authorship," 17 U.S.C. 102(a), and
that there can be no copyright in facts, 102(b).
A compilation is not copyrightable per se, but is copyrightable only if its facts
have been "selected, coordinated, or arranged in such a way that the
resulting work as a whole constitutes an original work of authorship." 101
(emphasis added). Thus, the statute envisions that some ways of selecting,
coordinating, and arranging data are not sufficiently original to trigger
copyright protection. Even a compilation that is copyrightable receives only
limited protection, for the copyright does not extend to facts contained in the
compilation. 103(b). Lower courts that adopted a "sweat of the brow" or
"industrious collection" test -- which extended a compilation's copyright
protection beyond selection and arrangement to the facts themselves -misconstrued the 1909 Act and eschewed the fundamental axiom of
copyright law that no one may copyright facts or ideas.
(c) Rural's white pages do not meet the constitutional or statutory
requirements for copyright protection. While Rural has a valid copyright in the
directory as a whole because it contains some forward text and some original
material in the yellow pages, there is nothing original in Rural's white pages.
The raw data are uncopyrightable facts, and the way in which Rural selected,
coordinated, and arranged those facts is not original in any way. Rural's
selection of listings -- subscribers' names, towns, and telephone numbers -could not be more obvious, and lacks the modicum of creativity necessary to
transform mere selection into copyrightable expression. In fact, it is plausible
to conclude that Rural did not truly "select" to publish its subscribers' names
and telephone numbers, since it was required to do so by state law.
Moreover, there is nothing remotely creative about arranging names
alphabetically in a white pages directory. It is an age-old practice, firmly
rooted in tradition and so commonplace that it has come to be expected as a
matter of course.
AMF Inc. v. Sleekcraft Boats
1979
Facts:

The parties manufacture recreational boats. AMF's predecessor used the

name Slickcraft Boat Company until 1969 when it became a division of AMF.
The mark Slickcraft was registered 1969.
Nescher organized Nescher Boats in 1962 but failed in 1967. In 1968
Nescher adopted the name Sleekcraft. The name Sleekcraft was selected
without knowledge of appellant's use. After AMF notified him of the alleged
trademark infringement, Nescher adopted a distinctive logo. The Sleekcraft
venture succeeded. Gross sales reached $6,000,000 in 1975.
The district court found no trademark infringement.
Issue:
WON AMF Inc.s trademark infringed
Held:
Yes, reversed.
Ratio:
The two lines are not competitive
When the goods produced by the infringer compete with those of the
trademark owner, infringement usually will be found if the marks are
sufficiently similar that confusion can be expected. When they are related but
not competitive, several other factors are added. If the goods are totally
unrelated, there can be no infringement because confusion is unlikely.
AMF contends these boat lines are competitive. Both lines are comprised of
fiberglass boats used for water skiing; the sizes of the boats are similar as
are the prices. Nescher contends otherwise as Slickcraft boats are high
performance boats intended for racing enthusiasts.
The boats "appeal to separate sub- markets." Slickcraft boats are for general
family recreation, and Sleekcraft boats are for persons who want high speed
recreation; thus competition between the lines is negligible. The Slickcraft
line is designed for fishing, water skiing, pleasure cruises. Sleekcraft boats
are racing boats designed for racing, high speed cruises, and water skiing.

24
The two lines are not competitive. Accordingly, we must consider all the
relevant circumstances in assessing the likelihood of confusion.

(2) Whether granting the trademark owner a limited monopoly will in fact
inhibit legitimate use of the mark by other sellers.

Factors to determine confusion

In determining whether confusion between related goods is likely, the
following factors are relevant:
1. strength of the mark;
2. proximity of the goods;
3. similarity of the marks;
4. evidence of actual confusion;
5. marketing channels used;
6. type of goods and the degree of care likely to be exercised by the
purchaser;
7. defendant's intent in selecting the mark; and
8. likelihood of expansion of the product lines.

There is no evidence here that others have used or desire to use

Slickcraft in describing their goods.

Strength of the mark

A strong mark is inherently distinctive; it will be afforded the widest ambit of
protection from infringing uses.
A descriptive mark tells something about the product; it will be protected only
when secondary meaning is shown.
In between lie suggestive marks which subtly connote something about the
products. Although less distinctive than an arbitrary or fanciful mark and
therefore a comparatively weak mark, a suggestive mark will be protected
without proof of secondary meaning.
The distinction between descriptive and suggestive marks may be
inarticulable. But several criteria offer guidance:
(1) "the imaginativeness involved in the suggestion," - that is, how
immediate is the thought process from the mark to the particular
product.
From the word Slickcraft one might readily conjure up the image of
appellant's boats.

(3) Whether the mark is actually viewed by the public as an indication of

the product's origin or as a self-serving description.
Buyers will understand that Slickcraft is a trademark, particularly
since it is generally used in conjunction with the mark AMF.
Based on the above criteria, Slickcraft is a suggestive mark when applied to
boats. Although appellant's mark is protectible it is a weak mark entitled to a
restricted range of protection. Thus, only if the marks are quite similar, and
the goods closely related, will infringement be found.
Proximity of the goods
For related goods, the danger presented is that the public will mistakenly
assume there is an association between the producers. The more likely the
public is to make such an association, the less similarity in the marks is
requisite to a finding of likelihood of confusion.
Although non-competing, they are extremely close in use and function. Both
are for recreational boating. Both are designed for water skiing and speedy
cruises. Their functional features are also similar: fiberglass bodies, outboard
motors, and open seating. They are so closely related that a diminished
standard of similarity must be applied.
Similarity of the marks
Similarity is tested on three levels: sight, sound, and meaning. Although
similarity is measured by the marks as entities, similarities weigh more
heavily than differences.
Standing alone the words Sleekcraft and Slickcraft are the same except for
letters in the first syllable. To the eye, the words are similar. The difference
between Slick and Sleek is insufficient to overcome the overall visual
similarity.

25
Sound is also important because reputation is often conveyed word-ofmouth. The two sounds can be distinguished, but the difference is only in a
small part of one syllable. Slight differences in the sound of trademarks will
not protect the infringer.
Closeness in meaning can substantiate a claim of similarity of trademarks.
The words are virtual synonyms.
Evidence of actual confusion
Evidence that use of the two marks has led to confusion is persuasive proof
that future confusion is likely. Proving actual confusion is difficult, however,
and the courts have often discounted such evidence because it was unclear
or insubstantial.
The district judge found that in light of the number of sales and the extent of
the parties' advertising, the amount of past confusion was negligible. We
cannot say this finding is clearly erroneous though we might have viewed the
evidence more generously.
Because of the difficulty in garnering such evidence, the failure to prove
instances of actual confusion is not dispositive. Consequently, this factor is
weighed heavily only when there is evidence of past confusion or, perhaps,
when the particular circumstances indicate such evidence should have been
available.
Marketing channels
Convergent marketing channels increase the likelihood of confusion.
There is no evidence that both lines were sold under the same roof except at
boat shows; the normal marketing channels are, however, parallel. Each
sells through authorized retail dealers. The price ranges are almost identical.
Each line is advertised extensively though different national magazines are
used. Although different submarkets are involved, the general class of boat
purchasers exposed to the products overlap.
Type of goods and purchaser care

In assessing the likelihood of confusion to the public, the standard used by

the courts is the typical buyer exercising ordinary caution. When the buyer
has expertise, a higher standard is proper though it will not preclude a finding
that confusion is likely. Similarly, when the goods are expensive, the buyer
can be expected to exercise greater care in his purchases; again, though,
confusion may still be likely
The care exercised by the typical purchaser of a boat, though it might
virtually eliminate mistaken purchases, does not guarantee that confusion as
to association or sponsorship is unlikely.
The high quality of defendant's boats is also relevant. When the alleged
infringer's goods are of equal quality, there is little harm to the reputation
earned by the trademarked goods. Yet this is no defense, for present quality
is no assurance of continued quality. Finally, equivalence in quality may
actually contribute to the assumption of a common connection.
Intent
There was no evidence that anyone attempted to palm off the latter boats for
the former. And after notification of the purported infringement, Nescher
designed a distinctive logo.
When the alleged infringer knowingly adopts a mark similar to another's, it is
presumed that the defendant can deceive the public. Good faith is less
probative of the likelihood of confusion, yet may be given considerable
weight in fashioning a remedy.
Likelihood of expansion
A "strong possibility" that either party may expand his business to compete
with the other will weigh in favor of finding that the present use is infringing.
When goods are closely related, any expansion is likely to result in direct
competition.
Both parties are diversifying their model lines. The potential that one or both
of the parties will enter the other's submarket with a competing model is
strong.

26
Based on the preceding analysis, Nescher has infringed the Slickcraft
mark.
Emerald Garment Manufacturing Corp. v. CA
(G.R. No. 100098 | December 29, 1995 | Kapunan, J.)
Facts:
Private respondent H.D. Lee Co., Inc., a foreign corporation
organized under the laws of Delaware, U.S.A., filed with the Bureau of
Patents, Trademarks & Technology Transfer (BPTTT) a Petition for
Cancellation of Registration No. SR 5054 (Supplemental Register) for the
trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks,
briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class
25, issued in the name of petitioner Emerald Garment Manufacturing
Corporation, a domestic corporation.
Private respondent H.D. Lee Co., invoking Sec. 37 of R.A. No. 166
(Trademark Law) and Art. VIII of the Paris Convention for the Protection of
Industrial Property, averred that petitioner's trademark "so closely resembled
its own trademark, 'LEE' as previously registered and used in the Philippines,
as to be likely, when applied to or used in connection with petitioner's goods,
to cause confusion, mistake and deception on the part of the purchasing
public as to the origin of the goods."
Petitioner Emerald Garment contended that its trademark was
entirely and unmistakably different from that of private respondent and that
its certificate of registration was legally and validly granted. It caused the
publication of its application for registration of the trademark "STYLISTIC
MR. LEE" in the Principal Register.

Petitioner Emerald appealed to the Court of Appeals and filed with

the BPTTT a Motion to Stay Execution of the decision of the Director of
Patents on grounds that the same would cause it great and irreparable
damage and injury, which the BPTT granted. The Court of Appeals affirmed
the decision of the Director of Patents.
Issue:
1. WON private respondent H.D. Lee is estopped from instituting an
action for infringement before the BPTTT. [NO.]
2. WON Emerald Garment's trademark "STYLISTIC MR. LEE" is
confusingly similar with the H.D. Lee's trademarks "LEE or
LEERIDERS, LEE-LEENS and LEE-SURES." [NO.]
Held/Ratio:
1. NO.
Petitioner contends that private respondent is estopped from
instituting an action for infringement before the BPTTT under the equitable
principle of laches pursuant to Sec. 9-A of R.A. No. 166, otherwise known as
the Law on Trade-marks, Trade-names and Unfair Competition: Sec. 9-A.
Equitable principles to govern proceedings. In opposition proceedings and
in all other inter partes proceedings in the patent office under this act,
equitable principles of laches, estoppel, and acquiescence, where applicable,
may be considered and applied.

Private respondent filed a notice of opposition to petitioner's

application for registration also on grounds that petitioner's trademark was
confusingly similar to its "LEE" trademark.

Petitioner alleges that it has been using its trademark "STYLISTIC

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

The Director of Patents rendered a decision GRANTING private

respondent's petition for cancellation and opposition to registration, finding
private respondent to be the prior registrant of the trademark "LEE" in the
Philippines and that it had been using said mark in the Philippines.
Moreover, the Director, using the test of dominancy, declared that petitioner's
trademark was confusingly similar to private respondent's mark because "it is
the word 'Lee' which draws the attention of the buyer and leads him to
conclude that the goods originated from the same manufacturer. It is
undeniably the dominant feature of the mark."

We reject petitioner's contention. Petitioner's trademark is registered

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

27
private respondent may be considered "officially" put on notice that petitioner
has appropriated or is using said mark, which, after all, is the function and
purpose of registration in the supplemental register. The record is bereft of
evidence that private respondent was aware of petitioner's trademark before
the date of said publication and issuance. Hence, when private respondent
instituted cancellation proceedings on 18 September 1981, less than a year
had passed.
2. NO.
The pertinent provision of R.A. No. 166 (Trademark Law) states thus:
Sec. 22. Infringement, what constitutes. Any person who shall use,
without the consent of the registrant, any reproduction, counterfeit, copy or
colorable imitation of any registered mark or trade-name in connection with
the sale, offering for sale, or advertising of any goods, business or services
on or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin of such
goods or services, or identity of such business; or reproduce, counterfeit,
copy or colorably imitable any such mark or trade-name and apply such
reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used
upon or in connection with such goods, business or services; shall be liable
to a civil action by the registrant for any or all of the remedies herein
provided.
In Esso Standard Eastern, Inc. v. Court of Appeals, we held: In
determining whether a particular name or mark is a "colorable imitation" of
another, no all-embracing rule seems possible in view of the great number of
factors which must necessarily be considered in resolving this question of
fact. Proceeding to the task at hand, the essential element of infringement is
colorable imitation. This term has been defined as "such a close or ingenious
imitation as to be calculated to deceive ordinary purchasers, or such
resemblance of the infringing mark to the original as to deceive an ordinary
purchaser giving such attention as a purchaser usually gives, and to cause
him to purchase the one supposing it to be the other."
Colorable imitation does not mean such similitude as amounts to
identity. Nor does it require that all the details be literally copied.
Colorable imitation refers to such similarity in form, content, words,
sound, meaning, special arrangement, or general appearance of the
trademark or tradename with that of the other mark or tradename in
their over-all presentation or in their essential, substantive and
distinctive parts as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article.

In determining whether colorable imitation exists, jurisprudence has

developed two kinds of tests the Dominancy Test applied in Asia Brewery,
Inc. v. Court of Appeals and other cases and the Holistic Test developed in
Del Monte Corporation v. Court of Appeals and its proponent cases.
As its title implies, the test of dominancy focuses on the similarity of the
prevalent features of the competing trademarks which might cause confusion
or deception and thus constitutes infringement. If the competing trademark
contains the main or essential or dominant features of another, and
confusion and deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor it is necessary that the infringing
label should suggest an effort to imitate. The question at issue in cases of
infringement of trademarks is whether the use of the marks involved would
be likely to cause confusion or mistakes in the mind of the public or deceive
purchasers.
On the other hand, the holistic test mandates that the entirety of the
marks in question must be considered in determining confusing similarity. In
determining whether the trademarks are confusingly similar, a comparison of
the words is not the only determinant factor. The trademarks in their entirety
as they appear in their respective labels or hang tags must also be
considered in relation to the goods to which they are attached. The
discerning eye of the observer must focus not only on the predominant words
but also on the other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the other.
Applying the foregoing tenets to the present controversy and taking
into account the factual circumstances of this case, we considered the
trademarks involved as a whole and rule that petitioner's "STYLISTIC
MR. LEE" is not confusingly similar to private respondent's "LEE"
trademark.
Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although on its
label the word "LEE" is prominent, the trademark should be considered as a
whole and not piecemeal. The dissimilarities between the two marks become
conspicuous, noticeable and substantial enough to matter especially in the
light of the following variables that must be factored in.
First, the products involved in the case at bar are, in the main,
various kinds of jeans. These are not your ordinary household items like
catsup, soysauce or soap which are of minimal cost. Maong pants or jeans
are not inexpensive. Accordingly, the casual buyer is predisposed to be more

28
cautious and discriminating in and would prefer to mull over his purchase.
Confusion and deception, then, is less likely.
Second, like his beer, the average Filipino consumer generally buys
his jeans by brand. He does not ask the sales clerk for generic jeans but for,
say, a Levis, Guess, Wrangler or even an Armani. He is, therefore, more or
less knowledgeable and familiar with his preference and will not easily be
distracted.
Finally, more credit should be given to the "ordinary purchaser." Cast
in this particular controversy, the ordinary purchaser is not the "completely
unwary consumer" but is the "ordinarily intelligent buyer" considering the type
of product involved. In Dy Buncio v. Tan Tiao Bok, the "ordinary purchaser"
was defined as one "accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of fraudulent simulation is to be
found in the likelihood of the deception of some persons in some measure
acquainted with an established design and desirous of purchasing the
commodity with which that design has been associated. The test is not found
in the deception, or the possibility of deception, of the person who knows
nothing about the design which has been counterfeited, and who must be
indifferent between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the ordinary
intelligent buyer who has a need to supply and is familiar with the article that
he seeks to purchase."
There is no cause for the Court of Appeal's apprehension that
petitioner's products might be mistaken as "another variation or line of
garments under private respondent's 'LEE' trademark". As one would readily
observe, private respondent's variation follows a standard format
"LEERIDERS," "LEESURES" and "LEELEENS." It is, therefore, improbable
that the public would immediately and naturally conclude that petitioner's
"STYLISTIC MR. LEE" is but another variation under private respondent's
"LEE" mark.

4 of R.A. No. 166, particularly paragraph 4 (e) . "LEE" is primarily a surname.

Private respondent cannot, therefore, acquire exclusive ownership over and
singular use of said term. It has been held that a personal name or surname
may not be monopolized as a trademark or tradename as against others of
the same name or surname. For in the absence of contract, fraud, or
estoppel, any man may use his name or surname in all legitimate ways.
Thus, "Wellington" is a surname, and its first user has no cause of action
against the junior user of "Wellington" as it is incapable of exclusive
appropriation.
In addition to the foregoing, we are constrained to agree with
petitioner's contention that private respondent failed to prove prior actual
commercial use of its "LEE" trademark in the Philippines before filing its
application for registration with the BPTTT and hence, has not acquired
ownership over said mark. Actual use in commerce in the Philippines is an
essential prerequisite for the acquisition of ownership over a trademark
6
pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166).
5

CHAPTER II-A. The Principal Register

(Inserted by Sec. 2, Rep. Act No. 638.)
Sec. 4. Registration of trade-marks, trade-names and service-marks on the principal
register. There is hereby established a register of trade-marks, trade-names and
service-marks which shall be known as the principal register. The owner of a trade-mark,
trade-name or service-mark used to distinguish his goods, business or services from the
goods, business or services of others shall have the right to register the same on the
principal register, unless it:
xxx

Another way of resolving the conflict is to consider the marks

involved from the point of view of what marks are registrable pursuant to Sec.

xxx

(e) Consists of a mark or trade-name which, when applied to or used in connection with
the goods, business or services of the applicant is merely descriptive or deceptively
misdescriptive of them, or when applied to or used in connection with the goods, business
or services of the applicant is primarily geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a surname;
6

As we have previously intimated the issue of confusing similarity

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

xxx

CHAPTER II.

Registration of Marks and Trade-names.

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

29
As stated in the case of Philip Morris, Inc. v. Court of Appeals, a
foreign corporation may have the capacity to sue for infringement irrespective
of lack of business activity in the Philippines on account of Section 21-A of
the Trademark Law but the question of whether they have an exclusive right
over their symbol as to justify issuance of the controversial writ will depend
on actual use of their trademarks in the Philippines in line with Sections 2
and 2-A of the same law. It is thus incongruous for petitioners to claim that
when a foreign corporation not licensed to do business in the Philippines files
a complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a foreign corporation may
have the personality to file a suit for infringement but it may not necessarily
be entitled to protection due to absence of actual use of the emblem in the
local market.
Undisputably, private respondent is the senior registrant, having
obtained several registration certificates for its various trademarks "LEE,"
"LEERIDERS," and "LEESURES" in both the supplemental and principal
registers, as early as 1969 to 1973. However, registration alone will not
suffice. A rule widely accepted and firmly entrenched because it has come
down through the years is that actual use in commerce or business is a
prerequisite in the acquisition of the right of ownership over a trademark.
To augment its arguments that it was, not only the prior registrant,
but also the prior user, private respondent invokes Sec. 20 of the Trademark
Law, thus: Sec. 20. Certificate of registration prima facie evidence of validity.
A certificate of registration of a mark or tradename shall be a prima facie
evidence of the validity of the registration, the registrant's ownership of the
mark or trade-name, and of the registrant's exclusive right to use the same in
connection with the goods, business or services specified in the certificate,
subject to any conditions and limitations stated therein.
The credibility placed on a certificate of registration of one's
trademark, or its weight as evidence of validity, ownership and exclusive use,

Sec. 2-A. Ownership of trade-marks, trade-names and service-marks; how acquired.

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

is qualified. A registration certificate serves merely as prima facie evidence. It

is not conclusive but can and may be rebutted by controverting evidence.
Dispositive Portion: WHEREFORE, premises considered, the questioned
decision and resolution are hereby REVERSED and SET ASIDE.
Separate Opinions
PADILLA, J., dissenting:
I dissent. I vote deny the petition; I agree with BPTTT and the CA that
petitioner's trademark "STYLISTIC MR. LEE" is confusingly similar to private
respondent's earlier registered trademarks "LEE" or "LEE RIDER, LEELEENS and LEE-SURES" such that the trademark "STYLISTIC MR. LEE" is
an infringement of the earlier registered trademarks.

Shangri-la v. Developers Group of Companies, Inc. (DGCI)

Facts:
DGCI claims ownership of said mark and logo in the Philippines on
the strength of its prior use thereof within the country. It filed on
October 18, 1982 with the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT) an application for registration covering
the subject mark and logo. On May 31, 1983, the BPTTT issued in
favor of DGCI the corresponding certificate of registration therefor.
Since then, DGCI started using the "Shangri-La" mark and "S" logo
in its restaurant business.
Kuok family owns and operates a chain of hotels with interest in
hotels and hotel-related transactions since 1969. As far back as
1962, it adopted the name "Shangri-La" as part of the corporate
names of all companies organized under the aegis of the Kuok
Group of Companies (the Kuok Group). The Kuok Group has used
the name "Shangri-La" in all Shangri-La hotels and hotel-related
establishments around the world which the Kuok Family owned.
To centralize the operations of all Shangri-la hotels and the
ownership of the "Shangri-La" mark and "S" logo, the Kuok Group
had incorporated in Hong Kong and Singapore, among other places,
several companies that form part of the Shangri-La International
Hotel Management Ltd. Group of Companies. EDSA Shangri-La
Hotel and Resort, Inc., and Makati Shangri-La Hotel and Resort, Inc.
were incorporated in the Philippines beginning 1987 to own and
operate the two (2) hotels put up by the Kuok Group in Mandaluyong
and Makati, Metro Manila.

30
All hotels owned, operated and managed by the aforesaid SLIHM
Group of Companies adopted and used the distinctive lettering of the
name "Shangri-La" as part of their trade names.
Shangri-La Hotel Singapore commissioned a Singaporean design
artist, a certain Mr. William Lee, to conceptualize and design the logo
of the Shangri-La hotels.During the launching of the stylized "S"
Logo in February 1975, Mr. Lee explained that the logo which is
shaped like a "S" represents the uniquely Asean architectural
structures as well as keep to the legendary Shangri-la theme with the
mountains on top being reflected on waters below and the
connecting centre [sic] line serving as the horizon. This logo, which is
a bold, striking definitive design, embodies both modernity and
sophistication in balance and thought.
Since 1975 and up to the present, the "Shangri-La" mark and "S"
logo have been used consistently and continuously by all Shangri-La
hotels and companies in their paraphernalia, such as stationeries,
envelopes, business forms, menus, displays and receipts.
The Kuok Group and/or petitioner SLIHM caused the registration of,
and in fact registered, the "Shangri-La" mark and "S" logo in the
patent offices in different countries around the world.
Until 1987 or 1988, the petitioners did not operate any establishment
in the Philippines, albeit they advertised their hotels abroad since
1972 in numerous business, news, and/or travel magazines widely
circulated around the world, all readily available in Philippine
magazines and newsstands. They, too, maintained reservations and
booking agents in airline companies, hotel organizations, tour
operators, tour promotion organizations, and in other allied fields in
the Philippines.
On June 21, 1988, the petitioners filed with the BPTTT a petition
praying for the cancellation of the registration of the "Shangri-La"
mark and "S" logo issued to respondent DGCI on the ground that the
same were illegally and fraudulently obtained and appropriated for
the latter's restaurant business. They also filed in the same office
Inter Partes Case, praying for the registration of the same mark and
logo in their own names.
DGCI filed a complaint for Infringement and Damages with the RTC
of Quezon City petitioners SLIHM, Shangri-La Properties, Inc.,
Makati Shangri-La Hotel & Resort, Inc., and Kuok Philippine
Properties, Inc., The complaint with prayer for injunctive relief and
damages alleged that DGCI has, for the last eight (8) years, been the
prior exclusive user in the Philippines of the mark and logo in
question and the registered owner thereof for its restaurant and allied
services.

DGCI alleged in its complaint, SLIHM, et al., in promoting and

advertising their hotel and other allied projects then under
construction in the country, had been using a mark and logo
confusingly similar, if not identical, with its mark and "S" logo.
Accordingly, DGCI sought to prohibit the petitioners, as defendants a
quo, from using the "Shangri-La" mark and "S" logo in their hotels in
the Philippines.
SLIHM: accused DGCI of appropriating and illegally using the
"Shangri-La" mark and "S" logo, adding that the legal and beneficial
ownership thereof pertained to SLIHM and that the Kuok Group and
its related companies had been using this mark and logo since
March 1962 for all their corporate names and affairs. In this regard,
they point to the Paris Convention for the Protection of Industrial
Property as affording security and protection to SLIHM's exclusive
right to said mark and logo. They further claimed having used, since
late 1975, the internationally-known and specially-designed "ShangriLa" mark and "S" logo for all the hotels in their hotel chain
RTC ruled upholding the validity of the registration of the service
mark "Shangri-la" and "S-Logo" in the name of DGCI and declared
Shnagri-las use of said mark and logo as infringement of DGCIs
right thereto
CA upheld TC decision with modifications based on the following:
1. Albeit the Kuok Group used the mark and logo since 1962,
the evidence presented shows that the bulk use of the
tradename was abroad and not in the Philippines (until
1987). Since the Kuok Group does not have proof of actual
use in commerce in the Philippines (in accordance with
Section 2 of R.A. No. 166), it cannot claim ownership of the
mark and logo in accordance with the holding in Kabushi
Kaisha Isetan v. IAC, as reiterated in Philip Morris, Inc. v.
9
Court of Appeals.
2. DGCI has a right to the mark and logo by virtue of its prior
use in the Philippines and the issuance of Certificate of
Registration No. 31904.
3. The use of the mark or logo in commerce through the
bookings made by travel agencies is unavailing since the
Kuok Group did not establish any branch or regional office in
the Philippines. As it were, the Kuok Group was not engaged
in commerce in the Philippines inasmuch as the bookings
were made through travel agents not owned, controlled or
managed by the Kuok Group.
4. While the Paris Convention protects internationally known
marks, R.A. No. 166 still requires use in commerce in the
Philippines. Accordingly, and on the premise that

31
international agreements, such as Paris Convention, must
yield to a municipal law, the question on the exclusive right
over the mark and logo would still depend on actual use in
commerce in the Philippines.
Issues:
1. Whether a certificate of registration of a mark, and the presumption of
regularity in the performance of official functions in the issuance thereof, are
sufficient to establish prior actual use by the registrant?
2. Whether prior actual use is required before there may be a valid
registration of a mark?
Held/Ratio:
1. NO
R.A. No. 166, the law in force at the time of respondent's application for
registration of trademark, the root of ownership of a trademark is actual
use in commerce. Section 2 of said law requires that before a trademark
can be registered, it must have been actually used in commerce and
service for not less than two months in the Philippines prior to the filing of
an application for its registration.
Registration, without more, does not confer upon the registrant an
absolute right to the registered mark. The certificate of registration is
merely a prima facie proof that the registrant is the owner of the
registered mark or trade name. Evidence of prior and continuous use of
the mark or trade name by another can overcome the presumptive
ownership of the registrant and may very well entitle the former to be
declared owner in an appropriate case.
Lorenzana v. Macagba: effects of registration of a mark: 1) Registration
in the Principal Register gives rise to a presumption of the validity of the
registration, the registrant's ownership of the mark, and his right to the
exclusive use thereof; 2) Registration in the Principal Register is limited
to the actual owner of the trademark and proceedings therein pass on
the issue of ownership, which may be contested through opposition
or interference proceedings, or, after registration, in a petition for
cancellation.
Ownership of a mark or trade name may be acquired not necessarily by
registration but by adoption and use in trade or commerce. As between
actual use of a mark without registration, and registration of the mark
without actual use thereof, the former prevails over the latter. For a rule
widely accepted and firmly entrenched, because it has come down
through the years, is that actual use in commerce or business is a prerequisite to the acquisition of the right of ownership.
While the present law on trademarks has dispensed with the requirement
of prior actual use at the time of registration, the law in force at the time

of registration must be applied, and thereunder it was held that as a

condition precedent to registration of trademark, trade name or service
mark, the same must have been in actual use in the Philippines before
the filing of the application for registration. Trademark is a creation of use
and therefore actual use is a pre-requisite to exclusive ownership and its
registration with the Philippine Patent Office is a mere administrative
confirmation of the existence of such right.
By itself, registration is not a mode of acquiring ownership. When the
applicant is not the owner of the trademark being applied for, he has no
right to apply for registration of the same. Registration merely creates
a prima faciepresumption of the validity of the registration, of the
registrant's ownership of the trademark and of the exclusive right to the
use thereof.Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to
evidence to the contrary
At the time (October 18, 1982) the respondent filed its application for
trademark registration of the "Shangri-La" mark and "S" logo, respondent
was not using these in the Philippines commercially, the registration is
void.
Despite the admission that the mark and logo must have been copied,
the CA tries to make it appear that the adoption of the same mark and
logo could have been coincidental:The word or name "Shangri-la" and
the S-logo, are not uncommon. The word "Shangri-la" refers to a (a)
remote beautiful imaginary place where life approaches perfection or (b)
imaginary mountain land depicted as a utopia in the novel Lost Horizon
by James Hilton. The Lost Horizon was a well-read and popular novel
written in 1976. It is not impossible that the parties, inspired by the novel,
both adopted the mark for their business to conjure [a] place of beauty
and pleasure
When a trademark copycat adopts the word portion of another's
trademark as his own, there may still be some doubt that the adoption is
intentional. But if he copies not only the word but also the word's exact
font and lettering style and in addition, he copies also the logo portion of
the trademark, the slightest doubt vanishes. It is then replaced by the
certainty that the adoption was deliberate, malicious and in bad faith
One who has imitated the trademark of another cannot bring an action
for infringement, particularly against the true owner of the mark, because
he would be coming to court with unclean hands. Priority is of no avail to
the bad faith plaintiff. Good faith is required in order to ensure that a
second user may not merely take advantage of the goodwill established
by the true owner.
2. NO

32
It has already been established in the two courts below, and admitted by
the respondent's president himself, that petitioners had prior widespread
use of the mark and logo abroad. The CA did note petitioners' use of the
mark and logo but held that such use did not confer to them ownership or
exclusive right to use them in the Philippines."
R.A. No. 166, as amended, under which this case was heard and
decided provides:
Section 2. What are registrable. - Trademarks, trade names and
service marks owned by persons, corporations, partnerships or
associations domiciled in the Philippines and by persons,
corporations, partnerships or associations domiciled in any
foreign country may be registered in accordance with the
provisions of this Act: Provided, That said trademarks trade
names, or service marks are actually in use in commerce and
services not less than two months in the Philippines before
the time the applications for registration are filed: And provided,
further, That the country of which the applicant for registration is
a citizen grants by law substantially similar privileges to citizens
of the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the English
language, by the government of the foreign country to the
Government of the Republic of the Philippines.
Section 2-A. Ownership of trademarks, trade names and service
marks; how acquired. - Anyone who lawfully produces or deals in
merchandise of any kind or who engages in any lawful business,
or who renders any lawful service in commerce, by actual
use thereof in manufacture or trade, in business, and in the
service rendered, may appropriate to his exclusive use a
trademark, a trade name, or a servicemark not so appropriated
by another, to distinguish his merchandise, business or service
from the merchandise, business or services of others. The
ownership or possession of a trademark, trade name, service
mark, heretofore or hereafter appropriated, as in this section
provided, shall be recognized and protected in the same manner
and to the same extent as are other property rights known to this
law.
Under Section 2, in order to register a trademark, one must be the owner
thereof and must have actually used the mark in commerce in the
Philippines for 2 months prior to the application for registration. Since
"ownership" of the trademark is required for registration, Section 2-A of

the same law sets out to define how one goes about acquiring ownership
thereof. Under Section 2-A, 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. Additionally, it is
significant to note that Section 2-A does not require that the actual use of
a trademark must be within the Philippines. Hence, under R.A. No. 166,
as amended, one may be an owner of a mark due to actual use thereof
but not yet have the right to register such ownership here due to failure
to use it within the Philippines for two months.
While the petitioners may not have qualified under Section 2 of R.A. No.
166 as a registrant, neither did respondent DGCI, since the latter also
failed to fulfill the 2-month actual use requirement. What is worse, DGCI
was not even the owner of the mark. For it to have been the owner, the
mark must not have been already appropriated (i.e., used) by someone
else. At the time of respondent DGCI's registration of the mark, the same
was already being used by the petitioners, albeit abroad, of which
DGCI's president was fully aware.
The two concepts of corporate name or business name and trademark or
service mark, are not mutually exclusive. It is common, indeed likely, that
the name of a corporation or business is also a trade name, trademark or
service mark. Section 38 of R.A. No. 166 defines the terms as follows:
Sec. 38. Words and terms defined and construed - In the
construction of this Act, unless the contrary is plainly apparent
from the context - The term "trade name" includes individual
names and surnames, firm names, trade names, devices or
words used by manufacturers, industrialists, merchants,
agriculturists, and others to identify their business, vocations or
occupations; the names or titles lawfully adopted and used
by natural or juridical persons, unions, and any
manufacturing, industrial, commercial, agricultural or other
organizations engaged in trade or commerce.
The term "trade mark" includes any word, name, symbol, emblem, sign
or device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish them from
those manufactured, sold or dealt in by others.
The term "service mark" means a mark used in the sale or advertising of
services to identify the services of one person and distinguish them
from the services of others and includes without limitation the
marks, names, symbols, titles, designations, slogans, character
names, and distinctive features of radio or other advertising.
[Emphasis supplied]

33
Clearly, from the broad definitions quoted above, the petitioners can be
considered as having used the "Shangri-La" name and "S" logo as a
tradename and service mark.
The new Intellectual Property Code (IPC), Republic Act No. 8293,
undoubtedly shows the firm resolve of the Philippines to observe and
follow the Paris Convention by incorporating the relevant portions of the
Convention such that persons who may question a mark (that is, oppose
registration, petition for the cancellation thereof, sue for unfair
competition) include persons whose internationally well-known
mark, whether or not registered, is identical with or confusingly similar to
or constitutes a translation of a mark that is sought to be registered or is
actually registered.
The Paris Convention mandates that protection should be afforded to
internationally known marks as signatory to the Paris Convention,
without regard as to whether the foreign corporation is registered,
licensed or doing business in the Philippines. It goes without saying that
the same runs afoul to Republic Act No. 166, which requires the actual
use in commerce in the Philippines of the subject mark or devise. The
apparent conflict between the two (2) was settled by the Supreme Court
in this wise "Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement inasmuch
as the apparent clash is being decided by a municipal tribuna. The fact
that international law has been made part of the law of the land does not
by any means imply the primacy of international law over national law in
the municipal sphere. Under the doctrine of incorporation as applied in
most countries, rules of international law are given a standing equal, not
superior, to national legislative enactments
Consequently, the petitioners cannot claim protection under the Paris
Convention. Nevertheless, with the double infirmity of lack of two-month
prior use, as well as bad faith in the respondent's registration of the
mark, it is evident that the petitioners cannot be guilty of infringement. It
would be a great injustice to adjudge the petitioners guilty of infringing a
mark when they are actually the originator and creator thereof.
Nor can the petitioners' separate personalities from their mother
corporation be an obstacle in the enforcement of their rights as part of
the Kuok Group of Companies and as official repository, manager and
operator of the subject mark and logo. Besides, R.A. No. 166 did not
require the party seeking relief to be the owner of the mark but "any
person who believes that he is or will be damaged by the registration of a
mark or trade name."
SEHWANI, INCORPORATED and/or BENITA'S FRITES, INC.,

vs. IN-N-OUT BURGER, INC.

Facts:
IN-N-OUT Burger, Inc. is a foreign corporation organized under US laws, and
not doing business in the Philippines. In 1997, when it applied with the IPO
for the registration of its trademark IN-N-OUT Burger & Arrow Design and
servicemark IN-N-OUT, it discovered that Sehwani Inc. had obtained a
trademark registration for the IN N OUT (with the inside of the letter O
formed like a star) in December 1993 without its authority. Respondent
demanded that Sehwani desist from claiming ownership of the mark and
voluntarily cancel its trademark registration, but Sehwani instead entered into
a licensing agreement with Benitas Fries, Inc. to use the trademark for 5
years in its restaurant in Pasig City.
In their answer with counterclaim, petitioners alleged that respondent lack the
legal capacity to sue because it was not doing business in the Philippines
and that it has no cause of action because its mark is not registered or used
in the Philippines. Petitioner Sehwani, Inc. also claimed that as the registered
owner of the "IN-N-OUT" mark, it enjoys the presumption that the same was
validly acquired and that it has the exclusive right to use the mark. Moreover,
petitioners argued that other than the bare allegation of fraud in the
registration of the mark, respondent failed to show the existence of any of the
grounds for cancellation thereof under Section 151 of Republic Act (R.A.) No.
8293.
The IPO held that respondent had the legal capacity to sue although it was
not doing business in the Philippines, and that IN-N-OUT Burger Inc was the
owner of the mark, but Sehwani was not guilty of unfair competition. (Director
General Cristobal Jr later found the petitioners guilty of unfair competition). It
cancelled the certificate of registration issued for the mark IN-N-OUT and
ordered Sehwani and Benitas Fries to stop using the mark.
Petitioners filed a motion for reconsideration and, when this was denied,
appealed the case to the office of the Director General. It was dismissed for
being filed out of time, a decision that the CA affirmed. The SC affirmed the
CA decision, but also resolved the issues, still in favor of IN-N-OUT Burger
Inc.
Issues:

34
1.Whether or not IN-N-OUT Burger has the legal capacity to sue for the
protection of its trademarks, although it is not doing business in the
Philippines.
2. Whether or not the cancellation had no basis.
3. Whether or not the registration was barred by laches.
Held:
Yes, IN-N-OUT Burger has the legal capacity to sue.
Yes, the cancellation had basis, under Sec 151 (b) of RA 8293.
NO, laches do not bar the registration of the trademark.
Ratio:
1. Sec. 160 of RA 8293 provides that a foreign national or juridical person
who does not engage in business in the Philippines, as long as it meets the
requirements of Sec. 3, may bring a civil or administrative action for
opposition, cancellation, infringement, unfair competition, or false designation
of origin and false description, whether or not it is licensed to do business in
the Philippines under existing laws.

IN-N-OUT points out that both the US and the Philippines are signatories to
the Paris Convention, Art. 6 of which protects trademarks which are wellknown in the country where protection is sought, and Art 8 of which protects
a tradename whether or not it is registered in that country.

2. Petitioners' claim that no ground exists for the cancellation of their

registration lacks merit. Under Sec. 151 (b) of RA 8293, a petition to
cancel a registered mark may be filed anytime if the registered mark is
being used, or with the permission of, the registrant so as to misrepresent
the source of the goods or services or in connection with which the mark is
used
The evidence on record shows that not only did the petitioners use the IN-NOUT Burger trademark for the name of their restaurant, but they also used
identical or confusingly similar mark for their hamburger wrappers and
french-fries receptacles, thereby effectively misrepresenting the source of the
goods and services.
3. Finally, petitioner's contention that respondent is precluded from asserting
its claim by laches, if not by prescription, lacks basis. Section 151 (b) of R.A.
No. 8293 specifically provides that a petition to cancel the registration of a
mark which is registered contrary to the provisions thereof, or which is used
to misrepresent the source of the goods or services, may be filed at any time.
Moreover, laches may not prevail against a specific provision of law, since
equity, which has been defined as 'justice outside legality' is applied in the
absence of and not against statutory law or rules of procedure. Aside from
the specific provisions of R.A. No. 8293, the Paris Convention and the WIPO
Joint Recommendation have the force and effect of law, for under Section 2,
Article II of the Constitution, the Philippines adopts the generally accepted
principles of international law as part of the law of the land. To rule otherwise
would be to defeat the equitable consideration that no one other than the
owner of the well-known mark shall reap the fruits of an honestly established
goodwill.

Also, the IPO has previously declared in an inter partes case that "IN-NOUT Burger and Arrow Design" is an internationally well known mark.
The fact that respondent's marks are neither registered nor used in the
Philippines is of no moment. The scope of protection initially afforded by
bis
Article 6 of the Paris Convention has been expanded in the 1999 Joint
Recommendation Concerning Provisions on the Protection of Well-Known
Marks, wherein the World Intellectual Property Organization (WIPO)
General Assembly and the Paris Union agreed to a nonbinding
recommendation that a well-known mark should be protected in a country
even if the mark is neither registered nor used in that country.

ETEPHA, A.G. v. DIRECTOR OF PATENTS and WESTMONT

PHARMACEUTICALS, INC. (G.R. No. L-20635 | Date: March 31, 1966 |
Sanchez, J.)
Facts:
On April 23, 1959, Westmont Pharmaceuticals, Inc. (Westmont), a New York
corporation, sought registration of trademark "Atussin" placed on its
"medicinal preparation of expectorant antihistaminic, bronchodilator sedative,

35
ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is
used exclusively in the Philippines since January 21, 1959.

Atussin (Westmont)

Pertussin (Etepha)

Label

In bold, block letters

horizontally written

Printed
diagonally
upwards and across in
semiscript style
with
flourishes and with only
the
first
letter
P
capitalized

Source of
the
medicine
shown
in
the label

Has Westmont at the

bottoms, and on the
lower left side the word
Westmont upon a white
diamond
shaped
enclosure and in red ink

Has Etepha at the

bottoms and Apothecary
E. Taeschners on top

Others

Prominently along the

left, bottom and right
edges are for bronchial
catarrh

whopping
cough coughs and
asthma

Has cough syrup

Etepha, A. G. (Etepha), a Liechtenstin corporation, objected. It claims that it

will be damaged because Atussin is so confusedly similar to its Pertussin
(Registration No. 6089, issued on September 25, 1957) used on a
preparation for the treatment of coughs, that the buying public will be misled
into believing that Westmont's product is that of petitioner's which allegedly
enjoys goodwill.
Director of Patents allowed the registration. Hence this appeal.
Issue: WON the Atussin resembles Pertussin as to be likely, when
applied to or used in connection with the goods, to cause confusion or
mistake or to deceive purchasers?
Held: No. Petition dismissed.
Ratio:
The validity of a cause for infringement is predicated upon colorable
imitation, which means a close or ingenious imitation as to be calculated to
deceive ordinary persons, or such a resemblance to the original as to
deceive an ordinary purchaser, giving such attention as a purchaser usually
gives, and to cause him to purchase the one supposing it to be the other.
That the word "tussin" came from the Latin term tussis which means cough.
It is common practice in the drug and pharmaceutical industries to 'fabricate'
marks by using syllables or words suggestive of the ailments for which they
are intended and adding thereto distinctive prefixes or suffixes. The term
tussin is merely descriptive, it is generic; it doesnt give the buyer any
indication of the origin of the goods, and it is open for appropriate by anyone.
Though it cannot be exclusively used to identify ones goods, it may properly
become the subject of a trademark by combination with another word or
phrase.
In order to see if theres an infringement, the trademark complained of should
be compared and contrasted with the purchaser's memory (not in
juxtaposition) of the trademark said to be infringed. Some such factors as
"sound; appearance; form, style, shape, size or format; color; ideas connoted
by marks; the meaning, spelling, and pronunciation, of words used; and the
setting in which the words appear" may be considered.

The two labels are entirely different in colors, contents, arrangement of words
thereon, sizes, shapes and general appearance. The contrasts in pictorial
effects and appeals to the eye is so pronounced that the label of one cannot
be mistaken for that of the other, not even by persons unfamiliar with the two
trademarks.
In Lekas & Drivas, Inc. vs. Tenth Avenue Trading Corp, the US Court of
Customs and Patent Appeals said: Only if their over-all presentations in any
of the particulars of sound, appearance, or meaning are such as would lead
the purchasing public into confusion. The test is whether the purchaser is
confused, if at all, by the marks as a whole.
The labels of the two are in different styles of writing and methods of design.
Likewise, the two words do not sound alike when pronounced. There is
not much phonetic similarity between the two. In a word combination, the part

36
that comes first is the most pronounced. Similarity in the last syllable, is not
uncommon in names given drug compounds.
Consideration should also be given to the class of persons who buy the
particular product and the circumstances ordinarily attendant to its
acquisition. The two products are to be purchased upon medical prescription.
The common trade channel is the pharmacy or the drugstore. Similarly, the
pharmacist or druggist verifies the medicine sold. The margin of error in the
acquisition of one for the other is quite remote. Even if bought without
prescription, the buyer must be one throughly familiar with what he intends to
get, else he would not have the temerity to ask for a medicine specifically
needed to cure a given ailment.
CONVERSE RUBBER CORPORATION, petitioner, vs. UNIVERSAL
RUBBER PRODUCTS, INC. and TIBURCIO S. EVALLE, DIRECTOR OF
PATENTS, respondents.
(G.R. No. L-27906 | January 8, 1987 | FERNAN, J.)
Facts:
Respondent Universal Rubber Products, Inc. filed an application with the
Philippine Patent office for registration of the trademark "UNIVERSAL
CONVERSE AND DEVICE" used on rubber shoes and rubber slippers.
Petitioner Converse Rubber Corporation filed its opposition to the application
for registration on grounds that:
a] The trademark sought to be registered is confusingly similar to the
word "CONVERSE" which is part of petitioner's corporate name
"CONVERSE RUBBER CORPORATION" as to likely deceive
purchasers of products on which it is to be used to an extent that said
products may be mistaken by the unwary public to be manufactured by
the petitioner; and,
b] The registration of respondent's trademark will cause great and
irreparable injury to the business reputation and goodwill of
petitioner in the Philippines and would cause damage to said petitioner
within the, meaning of Section 8, R.A. No. 166, as amended.
Thereafter, respondent Universal Rubber filed its answer and at the pre-trial,
the parties submitted the following partial stipulation of facts:
1] The petitioner's corporate name is "CONVERSE RUBBER
CORPORATION" and has been in existence since July 31, 1946; it is
duly organized under the laws of Massachusetts, USA and doing

business at 392 Pearl St., Malden, County of Middle sex,

Massachusetts;
2] Petitioner is not licensed to do business in the Philippines and it is
not doing business on its own in the Philippines; and,
3] Petitioner manufacturers rubber shoes and uses thereon the
trademarks "CHUCK TAYLOR "and "ALL STAR AND DEVICE".
At the trial, petitioner's lone witness, Mrs. Carmen B. Pacquing, a duly
licensed private merchant with stores at the Sta. Mesa Market and in Davao
City, testified that she had been selling CONVERSE rubber shoes in the local
market since 1956 and that sales of petitioner's rubber shoes in her stores
averaged twelve to twenty pairs a month purchased mostly by basketball
players of local private educational institutions like Ateneo, La Salle and San
Beda.
Mrs. Pacquing, further stated that she knew petitioner's rubber shoes came
from the United States "because it says there in the trademark Converse
Chuck Taylor with star red or blue and is a round figure and made in U.S.A. "
In the invoices issued by her store, the rubber shoes were described as
"Converse Chuck Taylor", "Converse All Star," "All Star Converse Chuck
Taylor," or "Converse Shoes Chuck Taylor." She also affirmed that she had
no business connection with the petitioner.
Respondent Universal Rubber, on the other hand, presented as its lone
witness the secretary of said corporation who testified that respondent has
been selling on wholesale basis "Universal Converse" sandals since 1962
and "Universal Converse" rubber shoes since 1963. Invoices were submitted
as evidence of such sales. The witness also testified that she had no Idea
why respondent chose "Universal Converse" as a trademark and that she
was unaware of the name "Converse" prior to her corporation's sale of
"Universal Converse" rubber shoes and rubber sandals.
Eventually, the Director of Patents dismissed the opposition of the petitioner
and gave due course to respondent's application: I cannot find anything that
will prevent registration of the word 'UNIVERSAL CONVERSE' in favor of the
respondent. In arriving at this conclusion, I am guided by the fact that the
opposer failed to present proof that the single word "CONVERSE' in its
corporate name has become so Identified with the corporation that whenever
used, it designates to the mind of the public that particular corporation.
Opposer's proof of its corporate personality cannot establish the use of the
word "CONVERSE" in any sense, as it is already stipulated that it is not
licensed to do business in the Philippines, and is not doing business of its
own in the Philippines. Besides, it was also stipulated that opposer

37
[petitioner], in manufacturing rubber shoes uses thereon the trademark
"CHUCK TAYLOR" and "ALL STAR and DEVICE" and none other.
Its motion for reconsideration having been denied by the respondent Director
of Patents, petitioner Converse instituted the instant petition for review.
Issue: WON the respondent Universal Rubber's partial appropriation of
petitioner Converse's corporate name is of such character that it is calculated
to deceive or confuse the public to the injury of the petitioner to which the
name belongs.
Held/Ratio: YES.
A trade name is any individual name or surname, firm name,
device or word used by manufacturers, industrialists, merchants and
others to Identify their businesses, vocations or occupations. As the
trade name refers to the business and its goodwill ... the trademark
refers to the goods." The ownership of a trademark or tradename is a
property right which the owner is entitled to protect "since there is
damage to him from confusion or reputation or goodwill in the mind of
the public as well as from confusion of goods. The modern trend is to
give emphasis to the unfairness of the acts and to classify and treat the
issue as fraud.
From a cursory appreciation of the petitioner's corporate name
"CONVERSE RUBBER CORPORATION,' it is evident that the word
"CONVERSE" is the dominant word which identifies petitioner from other
corporations engaged in similar business. Respondent, in the stipulation of
facts, admitted petitioner's existence since 1946 as a duly organized foreign
corporation engaged in the manufacture of rubber shoes. This admission
necessarily betrays its knowledge of the reputation and business of petitioner
even before it applied for registration of the trademark in question. Knowing,
therefore, that the word "CONVERSE" belongs to and is being used by
petitioner, and is in fact the dominant word in petitioner's corporate name,
respondent has no right to appropriate the same for use on its products
which are similar to those being produced by petitioner.
A corporation is entitled to the cancellation of a mark that is
confusingly similar to its corporate name." "Appropriation by another of the
dominant part of a corporate name is an infringement."
Respondent's witness had no idea why respondent chose
"UNIVERSAL CONVERSE" as trademark and the record discloses no
reasonable explanation for respondent's use of the word "CONVERSE" in its

trademark. Such unexplained use by respondent of the dominant word of

petitioner's corporate name lends itself open to the suspicion of fraudulent
motive to trade upon petitioner's reputation.
The testimony of petitioner's witness, who is a legitimate trader as
well as the invoices evidencing sales of petitioner's products in the
Philippines, give credence to petitioner Converse's claim that it has earned a
business reputation and goodwill in this country. The sales invoices
submitted by petitioner's lone witness show that it is the word "CONVERSE"
that mainly Identifies petitioner's products, i.e. "CONVERSE CHUCK
TAYLOR, "CONVERSE ALL STAR," ALL STAR CONVERSE CHUCK
TAYLOR," or "CONVERSE SHOES CHUCK and TAYLOR." Thus, contrary
to the determination of the respondent Director of Patents, the word
"CONVERSE" has grown to be Identified with petitioner's products, and in
this sense, has acquired a second meaning within the context of trademark
and tradename laws.
Furthermore, the sales invoices provide the best proof that there
were actual sales of petitioner Converse's products in the country and that
there was actual use for a protracted period of petitioner's trademark or part
thereof through these sales. The sales of 12 to 20 pairs a month of
petitioner's rubber shoes cannot be considered insignificant, considering that
they appear to be of high expensive quality, which not too many basketball
players can afford to buy. Any sale made by a legitimate trader from his store
is a commercial act establishing trademark rights since such sales are made
in due course of business to the general public, not only to limited individuals.
It is a corollary logical deduction that while Converse Rubber
Corporation is not licensed to do business in the country and is not
actually doing business here, it does not mean that its goods are not
being sold here or that it has not earned a reputation or goodwill as
regards its products.
Another factor why respondent's applications should be denied is the
confusing similarity between its trademark "UNIVERSAL CONVERSE AND
DEVICE" and petitioner's corporate name and/or its trademarks "CHUCK
TAYLOR" and "ALL STAR DEVICE" which could confuse the purchasing
public to the prejudice of petitioner.
The trademark of respondent "UNIVERSAL CONVERSE and
DEVICE" is imprinted in a circular manner on the side of its rubber shoes. In
the same manner, the trademark of petitioner which reads "CONVERSE
CHUCK TAYLOR" is imprinted on a circular base attached to the side of its
rubber shoes. The determinative factor in ascertaining whether or not marks
are confusingly similar to each other "is not whether the challenged mark

38
would actually cause confusion or deception of the purchasers but whether
the use of such mark would likely cause confusion or mistake on the part of
the buying public. It would be sufficient, for purposes of the law, that the
similarity between the two labels is such that there is a possibility or
likelihood of the purchaser of the older brand mistaking the new brand for it."
Even if not an the details just mentioned were identical, with the general
appearance alone of the two products, any ordinary, or even perhaps even
[sic] a not too perceptive and discriminating customer could be deceived ... "
By appropriating the word "CONVERSE," respondent's products are
likely to be mistaken as having been produced by petitioner. "The risk of
damage is not limited to a possible confusion of goods but also includes
confusion of reputation if the public could reasonably assume that the goods
of the parties originated from the same source.
That a foreign corporation such as petitioner has a right to maintain
an action in the forum even if it is not licensed to do business and is not
actually doing business on its own therein has been enunciated many times
by this Court. In La Chemise Lacoste, S.A. vs. Fernandez, the Court stated
that: A foreign corporation which has never done any business in the
Philippines and which is unlicensed and unregistered to do business here,
but is widely and favorably known in the Philippines through the use therein
of its products bearing its corporate and tradename, has a legal right to
maintain an action in the Philippines to restrain the residents and inhabitants
thereof from organizing a corporation therein bearing the same name as the
foreign corporation, when it appears that they have personal knowledge of
the existence of such a foreign corporation, and it is apparent that the
purpose of the proposed domestic corporation is to deal and trade in the
same goods as those of the foreign corporation.
The ruling in the aforecited case is in consonance with the
Convention of the Union of Paris for the Protection of Industrial Property to
which the Philippines became a party on September 27, 1965. Article 8
thereof provides that "a trade name [corporate name] shall be protected in all
the countries of the Union without the obligation of filing or registration,
whether or not it forms part of the trademark."
The mandate of the aforementioned Convention finds
implementation in Sec. 37 of RA No. 166 (the Trademark Law): Sec. 37.
Rights of Foreign Registrants-Persons who are nationals of, domiciled or
have a bona fide or effective business or commercial establishment in any
foreign country, which is a party to an international convention or treaty
relating to marks or tradenames on the repression of unfair competition to
which the Philippines may be a party, shall be entitled to the benefits and

subject to the provisions of this Act Tradenames of persons described in

the first paragraph of this section shall be protected without the obligation of
filing or registration whether or not they form parts of marks.
Dispositive Portion: WHEREFORE, the decision of the Director of Patents
is hereby set aside and a new one entered denying Respondent Universal
Rubber Products, Inc.'s application for registration of the trademark
"UNIVERSAL CONVERSE AND DEVICE" on its rubber shoes and slippers.
McDonalds Corp v Big Mak Burger Inc.
Facts:
McDonalds is a corporation organized under the laws of Delaware, United
States. McDonald's operates, by itself or through its franchisees, a global
chain of fast-food restaurants. McDonald'sowns a family of marks including
the "Big Mac" mark for its "double-decker hamburger sandwich."McDonald's
registered this trademark with the United States Trademark Registry on 16
October 1979. 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
Technology
("PBPTT"), now the Intellectual Property Office ("IPO"). Pending approval of
its application, McDonald's introduced its "Big Mac" hamburger sandwiches
in the Philippine market in September 1981. On 18 July 1985, the PBPTT
allowed registration of the "Big Mac" mark in the Principal Register based on
its Home Registration in the United States.
From 1982 to 1990, McDonald's spent P10.5 million in advertisement for "Big
Mac" hamburger sandwiches alone.
Petitioner McGeorge Food Industries a domestic corporation, is McDonald's
Philippine franchisee.
L.C. Big Mak Burger, Inc. ("respondent corporation") is a domestic
corporation which operates fast-food outlets and snack vans in Metro Manila
and nearby provinces.Respondent corporation's menu includes hamburger
sandwiches and other food items..

39
On 21 October 1988, LC Big Makapplied for the registration of the "Big Mak"
mark for its hamburger sandwiches. McDonald's opposed respondent
corporation's application on the ground that "Big Mak" was a colorable
imitation of its registered "Big Mac" mark for the same food products.

Having received no reply from respondent Dy, petitioners on 6 June 1990

sued LC for trademark infringement and unfair competition.

RTC issued a writ of preliminary injunction replacing the TRO.

LCs contention: McDonald's does not have an exclusive right to the "Big
Mac" mark or to any other similar mark. It pointed put thatIsaiyas Group of
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 1983, prior
to McDonald's registration on 18 July 1985. Alternatively, respondents
claimed that they are not liable for trademark infringement or for unfair
competition, as the "Big Mak" mark they sought to register does not
constitute a colorable imitation of the "Big Mac" mark. Respondents asserted
that they did not fraudulently pass off their hamburger sandwiches as those
of petitioners' Big Mac hamburgers.

On the Issue of Trademark Infringement

WON respondents allegedly used, without petitioners' consent, a colorable
imitation of the "Big Mac" mark in advertising and selling respondents'
hamburger sandwiches. (YES)

RTC: LC Big Mak liable for trademark infringement and unfair competition.

CA: Reversed. Not confusing. Company name written in wrappers.

Issue: WON LC whether is liable for trademark infringement and unfair

competition. (Yes)
Held:
On the Manner Respondents Used "Big Mak" in their Business
WON CA erred in ruling that the "L.C. Big Mak Burger, Inc." appears in the
packaging for respondents' hamburger products and not only the words "Big
Mak". (Yes)

Evidence 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 beef"
were set in smaller type, along with the locations of
branches.Respondents' cash invoices simply refer to their
hamburger sandwiches as "Big Mak."It is respondents' snack vans
that carry the words "L.C. Big Mak Burger, Inc.
It was only during the trial that respondents presented in evidence
the plastic wrappers and bags for their hamburger sandwiches where
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 factual bases for the disposition of the issues raised in this
petition.

This likely caused confusion in the mind of the purchasing public on

the source of the hamburgers or the identity of the business.
To establish trademark infringement, the following elements must be
shown: (1) the validity of plaintiff's mark; (2) the plaintiff's ownership
of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in "likelihood of confusion."Of these, it is
the element of likelihood of confusion that is the gravamen of
trademark infringement.

On the Validity of the "Big Mac" Mark and McDonald's Ownership of

such Mark
WON "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." (NO)

40

"Big Mac" mark, which should be treated in its entirety and not
dissected word for word,is neither generic nor descriptive. Generic
marks are commonly used as the name or description of
akind of goods,such as "Lite" for beer or "Chocolate Fudge" for
chocolate soda drink.
McDonald's exclusive ownership of the "Big Mac" mark is also
established. The Isaiyas Group, on the other hand, registered its
trademark only in the Supplemental Register. A mark which is not
registered in the PrincipalRegister, and thus not distinctive, has no
real protection.

On Whether Respondents' Use of the "Big Mak" Mark Results in

Likelihood of Confusion

On Types of Confusion

Section 22 covers two types of confusion arising from the use

of similar or colorable imitation marks, namely, confusion of goods
(product confusion) and confusion of business (source or origin
confusion).
Confusion of goods "in which event the ordinarily prudent
purchaser would be induced to purchase one product in the belief
that he was purchasing the other."
Confusion of business: "Here 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 into the belief that there is some
connection between the plaintiff and defendant which, in fact, does
not exist.
Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non53
competing but related enough to produce confusion of affiliation.
It is undisputed that the respondents use their "Big Mak" mark on
hamburgers, the same food product that petitioners' sell with the use
of their registered mark "Big Mac." Whether a hamburger is single,
double or triple-decker, and whether wrapped in plastic or styrofoam,
it remains the same hamburger food product. Even respondents' use
of 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.

In determining 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. In contrast, the holistic test requires the court to consider
the entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing similarity.
Clearly, respondents have adopted in "Big Mak" not only the
dominant but also almost all the features of "Big Mac."

On the Lack of Proof of Actual Confusion

While proof of actual confusion is the best evidence of infringement,

its absence is inconsequential.

On the Issue of Unfair Competition

To support their claim of unfair competition, petitioners allege that

respondents fraudulently passed off their hamburgers as "Big Mac"
hamburgers.
Passing off (or palming off) takes place where the 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.
There is actually no notice to the public that the "Big Mak"
hamburgers are products of "L.C. Big Mak Burger, Inc." and not
those of petitioners who have the exclusive right to the "Big Mac"
mark. This clearly shows respondents' intent to deceive the public.

PETITION GRANTED.
Levi Strauss Phils v Tony Lim
[GR No. 162311 | 4 December 2008 | R.T.Reyes | Certiorari R65]

41
Petitioner: Levi Strauss (Phils.), Inc. [wholly-owned subsidiary of Levi Strauss
& Co. (LS & Co.) a Delaware, USA company]
Respondent: Tony Lim
Quick Summary
Facts Levi Strauss Phils has the non-exlusive license to use LS & Cos
registered trademark and trade names for garment products. It filed a
complaint before the Inter-Agency Committee on Intellectual Property Rights
because an establishment in Manila manufactured imitations of LEVIs
garments. Surveillance, search & seizure was conduct on Tony Lims
premises. A complaint for unfair competition was filed against the latter. Levi
Strauss Phils asserts that the backpocket designs and patches of the jeans
of the parties are confusingly similar and the words LIVES ORIGINAL
JEANS and 105 are imitations of Levi Strauss Phils products. Tony Lim
argues that LIVEs is a registered trademark and that his goods werent
given the appearance likely to deceive an ordinary purchaser exercising
ordinary care. The Prosecutor dismissed the complaint. DOJ Sec Guingona
affirmed. DOJ Sec Bello granted Levi Strauss MR. Tony Lims MR was
granted. Levi Strauss filed a Rule 43 PetRev w/ the CA.
Held Unfair competition consists in employing deception or any other
means contrary to good faith by which any person shall pass off the goods
manufactured by him or in which he deals, or his business, or services for
those of the one having established goodwill, or committing any acts
calculated to produce such result. The marks registration coupled with the
stark differences between the competing marks, negate the existence of
actual intent to deceive. In Emerald v CA, since the jeans are not
inexpensive, the casual buyer is more cautious & discerning and would
prefer to mull over his purchase, making confusion & deception less likely.
The probability of deception must be tested at the point of sale since it is at
this point that the ordinary purchaser mulls upon the product and is likely to
buy the same under the belief that he is buying another.
Facts:
LS & Co. granted Levi Strauss Phils a non-exclusive license to use its
registered trademarsk & trade names for the manufacture & sale of
various garment products pants, jackets, and shirts in the Phils. It is
the only company authorized to do so for products w/ LEVIs trademarks

in the Philippines. Said trademark is registered in over 130 countries.

The trademark was first used in Phil commerce in 1946.
Levi Strauss Phils filed in 1995 a complaint before the Inter-Agency
Committee on Intellectual Property Rights because an establishment in
Manila manufactured imitations of garments with LEVIs trademarks.
Surveillance was conducted on Tony Lims business premises (Vogue
Traders Clothing Company). PNP Criminal Inves. Unit Operative served
search warrants on Tony Lims premises in Tondo Manila on 13 Dec
1995. Several items were seized. The PNP Crim Inves. Command filed a
complaint before the DOJ against Tony Lim for unfair competition under
Art 190 RPC (prior to its repeal by RA 8293 Sec 239). There was
confusing similarity between the 2 parties jeans and pants.
Tony Lims counter-affidavit reads that
o His products bear the LIVEs brand name and that these are not fake
LEVIs garments
o LIVEs is a registered trademark, the patch pocket design of LIVEs
has copyright registration
o Confusing similarity is a prejudicial question that cant be determined
w/o denial of due process, and his goods doesnt appear to likely
deceive an ordinary purchaser exercising ordinary care.
Levi Strauss Phils maintains that:
o There is likelihood of confusion because the backpocket design of
LIVEs is an imitation of Levi Strauss Phil arcuate trademark
o The mark 105 on Tony Lims product is obviously a play on Levi
Strauss Phils 501 trademark
o The phrase LIVEs and LIVEs ORIGINAL JEANS is confusingly
similar to LEVIs
o A red tab at the left seam of the right backpocket of the five-pocket
jeans also appears at the same place on LIVES jeans
o The patch used on LIVEs jeans (3 men pulling apart a pair of jeans)
thrives on Levi Strauss own patch showing 2 horses being whipped
by 2 men in an attempt to tear apart a pair of jeans
o LEVIS jeans are packaged & sold w/ carton tickets, copied by Tony
Lim in his own carton ticket bearing LIVEs 105, the horse mark, and
basic features of Levi Strauss designs
DOJ Rulings:
o The prosecution attorney recommended dismissal of the complaint
because the products of Tony Lim are not clothed w/ appearance
likely to deceive the ordinary purchaser exercising ordinary care.
This was approved by the Assistant Chief State Prosecutor.
o DOJ Secretary Guingona affirmed the prosecutors dismissal of the
complaint. The reason was that in unfair competition, a person shall,
by imitation or unfair device, induce the public to believe that his

42
goods are those of another; whereas Tony Lims products have an
entirely different spelling & meaning.
o Levi Strauss Phils MR contained that only a likelihood of confusion
is required to sustain a charge of unfair competition plus submitted
the results of a consumer survey involving a comparison of Levi
Strauss Phils & Tony Lims products.
o DOJ Secretary Bello III, successor, granted Levi Strauss Phils MR &
directed the filing of an info against Tony Lim reasoning that under
Art 189 RPC exact similarity of the competing products is not
required. Secretary Bellos factual findings revealed that Tony Lims
products were given the general appearance as that of Levi Strauss
Phils in order to deceive the buying public.
o Tony Lim filed his MR. This was granted and the charges against
him was dismissed.
The CA denied Levi Strauss Phils PetRev (Rule 43) was denied for lack
of merit because:
o To determine the likelihood of confusion, mistake or deception, all
relevant factors & circumstances (circumstances of selling, class of
purchasers, actual occurrences or absence of confusion) should be
taken into account
o The existence of some similarities bet LIVES jeans and LEVIS
garments wouldnt ipso facto equate to fraudulent intent on the part
of Tony Lim
o The spelling, pronunciation of marks, difference in back pocket
designs, dissimilarity of the carton tickets, and pricing and sale of
products.
o The probability of deception must be determined at the point of sale
and not post-sale confusion.
Issues: WON probable cause exists to charge Tony Lim with the crime of
unfair competition under Art 189 (1) RPC [No]
WON the issue of confusion should be determined only at the point of sale
[Yes]
Ratio:
Procedural
Levi Strauss Phils filed w/ the CA a PetRev under rule 43 w/c governs all
appeals from quasi-judicial bodies. DOJ is not one of the agencies
enumerated in Rule 43 1. Rule 43 PetRev to question the DOJ Secs
resolution on the determination of probable cause is an improper
remedy. In the 1993 Revised Rules on Appeals from Resolutions in
Preliminary Investigations or Reinvestigations, the resolution of the

Justice secretary affirming, modifying or reversing the resolution of the

investigating prosecutor is final.
The remedy of the aggrieved party is to file a R65 PetRev w/ the CA on
the basis of GADALEJ on the party of the DOJ Sec. The CA shouldve
dismissed the Rule 43 PetRev right away.
The decision whether or not to dismiss the criminal complaint against
Tony Lim is necessarily dependent on the sound discretion of the
investigating prosecutor and ultimately, that of the DOJ Sec. A
prosecutor is under no compulsion to file a particular crim information
where hes not convinced that he has evidence to prop up its averments,
or that the evidence at hand points to a different conclusion.
In finding that Tony Lims goods were not clothed w/ appearance that is
likely to deceive the ordinary purchaser exercising ordinary care, the
investigating prosecutor exercised discretion lodged in him by law. Thus:
o The LIVES mark is spelled & pronounced differently
o The backpocket design of Tony Lims products are different because
of the longer curved arms that stretch deep downward to a point
were the stitches form a rectangle. The arcuate design of LEVIS
jeans form a diamond instead. Even if theres a similarity in the
backpocket design, this alone doesnt establish that Tony Lims
products were intended to copy Levi Strauss Phils goods & pass
them off as the latters products. The presence of accessories
bearing Levis trademark wasnt established as there were no such
accessories seized from Tony Lim.
o The patches attached to the backpockets (3 men pulling apart a pair
of jeans versus 2 horses being whipped by 2 men in an attempt to
tear apart a pair of jeans) are different.
o The packaging and labeling of merchandise cant be appropriated
solely by Levi Strauss to the exclusion of all other manufacturers of
same class.
o There is a copyright registration issued by the Nat Library over Tony
Lims backpocket design.
No GADALEJ on the part of the DOJ was shown.
On unfair competition
Generally, unfair competition consists in employing deception or any
other means contrary to good faith by which any person shall pass off
the goods manufactured by him or in which he deals, or his business, or
services for those of the one having established goodwill, or committing
any acts calculated to produce such result.
The elements of Art 189 (1) RPC are:
(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

43
(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
Both Secretary Guingona & Justice Cuevas arrived at the conclusion that
there is insufficient evidence to prove all the elements of the crime that
would allow them to secure a conviction:
o Sec Guingona discounted the element of actual intent to deceive by
considering the difference in spelling, meaning, and phonetics of
LIVEs and LEVIs. While it is true that there may be unfair
competition even if the competing mark is registered in the
Intellectual Property Office, it is equally true that the same may show
prima facie good faith. Registration doesnt negate unfair competition
where the goods are packed or offered for sale and passed off as
those of complainant. However, the marks registration coupled with
the stark differences between the competing marks, negate the
existence of actual intent to deceive.
o Justice Cuevas failed to find the possibility of confusion & intent to
deceive the public. In Emerald v CA, since the jeans are not
inexpensive, the casual buyer is more cautious & discerning and
would prefer to mull over his purchase, making confusion &
deception less likely. Emerald Garment is instructive in explaining
the attitude of the buyer when it comes to products that are not
7
inexpensive, such as jeans. It was supported by the Del Monte v CA
case wherein the SC explained that the attitude of the purchaser is
determined by the cost of the goods. These rationale should be
applied even if only by analogy. Furthermore, these cases were
consistent w/ Asia Brewery v CA wherein the courts should consider
several factors affecting conclusions in cases of infringement &
unfair competitions age, training, educ of purchaser, nature & cost
of article, etc.
Where the similarity of the appearance of the goods as packed & offered
for sale is so striking, intent to deceive may be inferred. However, striking
similarity bet the goods of the parties herein is absent. The confusing
7
Expensive and valuable items are normally bought only after deliberate, comparative
and analytical investigation.

similarity of the goods was in issue during the prelim investigation and
since confusing similarity wasnt found, the element of fraud or deception
couldnt be inferred.
Note that Secretary Bellos opinion state that to establish probable
cause, it is enough that Tony Lim gave to his product the general
appearance of Levi Strauss product. Giving the product the general
appearance as that of anothers is just one element of unfair competition.
The consumer survey alone doesnt equate to actual confusion. The
survey conducted by Levi Strauss made interviewees view actual
samples of the products of the 2 parties approximately 5 feet away from
the interviewee. This method discounted the possibility that the ordinary
intelligent buyer would be able to closely scrutinize and even fit the
jeans. It also ignored that a consumer would consider the price of the
competing goods when choosing a brand of jeans.
Post-sale confusion shouldnt be considered in the action for unfair
competition. The test question is WON the public is likely to be deceived.
The probability of deception must be tested at the point of sale since it is
at this point that the ordinary purchaser mulls upon the product and is
likely to buy the same under the belief that he is buying another. The test
of fraudulent simulation is to be found in the likelihood of deception, or
the possibility of deception of some persons in some measure
acquainted with an established design and desirous of purchasing the
commodity with which that design has been associated.
Denied. CA decision affirmed.

Ang v. Teodoro
G.R. No. 48226, December 14, 1942
Facts: Respondent Toribio Teodoro has continuously used "Ang Tibay," both
as a trade-mark and as a trade-name, in the manufacture and sale of
slippers, shoes, and indoor baseballs since 1910. He formally registered it
as trade-mark on September 29, 1915, and as trade-name on January 3,
1933. His sales in 1937 amounted to P1,299,343.10 and in 1938,
P1,133,165.77. His expenses for advertisement from 1919 to 1938
aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for
pants and shirts on April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937. In the following year (1938) her
gross sales amounted to P422,682.09. Respondent in his brief says that
petitioner "was unable to prove that she had spent a single centavo

44
advertising "Ang Tibay" shirts and pants prior to 1938. In that year she
advertised the factory which she had just built and it was when this was
brought to the attention of the appellee that he consulted his attorneys and
eventually brought the present suit."
RTC: Absolved the defendant from the complaint, with costs against the
plaintiff, on the grounds that the two trademarks are dissimilar and are used
on different and non-competing goods; that there had been no exclusive use
of the trade-mark by the plaintiff; and that there had been no fraud in the use
of the said trade-mark by the defendant because the goods on which it is
used are essentially different from those of the plaintiff.
CA: Reversed that judgment, holding that by uninterrupted an exclusive use
since 191 in the manufacture of slippers and shoes, respondent's trade-mark
has acquired a secondary meaning; that the goods or articles on which the
two trade-marks are used are similar or belong to the same class; and that
the use by petitioner of said trade-mark constitutes a violation of sections 3
and 7 of Act No. 666.
Issue/Held: WON Ang Tibay can be appropriated as a trademark or
tradename.-YES
Ratio:
1. Ang Tibay" as employed by the respondent on the articles manufactured
by him is NOT a descriptive term.
We find it necessary to go into the etymology and meaning of the
Tagalog words "Ang Tibay" to determine whether they are a descriptive
term, i.e., whether they relate to the quality or description of the
merchandise to which respondent has applied them as a trade-mark.
The word "ang" is a definite article meaning "the" in English. It is also
used as an adverb, a contraction of the word "anong" (what or how). For
instance, instead of saying, "Anong ganda!" ("How beautiful!"), we
ordinarily say, "Ang ganda!" Tibay is a root word from which are derived
the verb magpatibay (to strenghten; the nouns pagkamatibay (strength,
durability), katibayan (proof, support, strength), katibay-tibayan (superior
strength);
and
the
adjectives
matibay
(strong,
durable,
lasting), napakatibay(very strong), kasintibay or magkasintibay (as strong
as, or of equal strength). The phrase "Ang Tibay" is an exclamation
denoting administration of strength or durability. For instance, one who

tries hard but fails to break an object exclaims, "Ang tibay!" (How
strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos
mo!" (How durable your shoes are!") The phrase "ang tibay" is never
used adjectively to define or describe an object. One does not say, "ang
tibay sapatos" or "sapatos ang tibay" is never used adjectively to define
or describe an object. One does not say, "ang tibay sapatos" or "sapatos
ang tibay" to mean "durable shoes," but "matibay na sapatos" or
"sapatos na matibay."
From all of this we deduce that "Ang Tibay" is not a descriptive term
within the meaning of the Trade-Mark Law but rather a fanciful or coined
phrase which may properly and legally be appropriated as a trade-mark
or trade-name. In this connection we do not fail to note that when the
petitioner herself took the trouble and expense of securing the
registration of these same words as a trademark of her products she or
her attorney as well as the Director of Commerce was undoubtedly
convinced that said words (Ang Tibay) were not a descriptive term and
hence could be legally used and validly registered as a trade-mark. It
seems stultifying and puerile for her now to contend otherwise,
suggestive of the story of sour grapes. Counsel for the petitioner says
that the function of a trade-mark is to point distinctively, either by its own
meaning or by association, to the origin or ownership of the wares to
which it is applied. That is correct, and we find that "Ang Tibay," as used
by the respondent to designate his wares, had exactly performed that
function for twenty-two years before the petitioner adopted it as a trademark in her own business. Ang Tibay shoes and slippers are, by
association, known throughout the Philippines as products of the Ang
Tibay factory owned and operated by the respondent Toribio Teodoro.
2. In view of the conclusion we have reached upon the first assignment of
error, it is unnecessary to apply here the doctrine of "secondary
meaning" in trade-mark parlance. This doctrine is to the effect that a
word or phrase originally incapable of exclusive appropriation with
reference to an article of the market, because geographically or
otherwise descriptive, might nevertheless have been used so long and
so exclusively by one producer with reference to his article that, in that
trade and to that branch of the purchasing public, the word or phrase has
come to mean that the article was his product. We have said that the
phrase "Ang Tibay," being neither geographic nor descriptive, was
originally capable of exclusive appropriation as a trade-mark. But were it

45
not so, the application of the doctrine of secondary meaning made by the
Court of Appeals could nevertheless be fully sustained because, in any
event, by respondent's long and exclusive use of said phrase with
reference to his products and his business, it has acquired a proprietary
connotation.
3. Petitioner contends that there can neither be infringement of trade-mark
under section 3 nor unfair competition under section 7 through her use of
the words "Ang Tibay" in connection with pants and shirts, because
those articles do not belong to the same class of merchandise as shoes
and slippers.
Section 13 provides that no alleged trade-mark or trade name shall be
registered which is identical with a registered or known trade-mark
owned by another and appropriate to the same class of merchandise, or
which to nearly resembles another person's lawful trade-mark or tradename as to be likely to cause confusion or mistake in the mind of the
public, or to deceive purchasers. And section 2 authorizes the Director of
Commerce to establish classes of merchandise for the purpose of the
registration of trade-marks and to determine the particular description of
articles included in each class; it also provides that "an application for
registration of a trade-mark shall be registered only for one class of
articles and only for the particular description of articles mentioned in
said application."
We have underlined the key words used in the statute: "goods of a
similar kin," "general class of merchandise," "same class of
merchandise," "classes of merchandise," and "class of articles," because
it is upon their implications that the result of the case hinges. These
phrases, which refer to the same thing, have the same meaning as the
phrase "merchandise of the same descriptive properties" used in the
statutes and jurisprudence of other jurisdictions.
In the present state of development of the law on Trade-Marks, Unfair
Competition, and Unfair Trading, the test employed by the courts to
determine whether noncompeting goods are or are not of the same class
is confusion as to the origin of the goods of the second user. Although
two noncompeting articles may be classified under two different classes
by the Patent Office because they are deemed not to possess the same
descriptive properties, they would, nevertheless, be held by the courts to
belong to the same class if the simultaneous use on them of identical or

closely similar trade-marks would be likely to cause confusion as to the

origin, or personal source, of the second user's goods. They would be
considered as not falling under the same class only if they are so
dissimilar or so foreign to each other as to make it unlikely that the
purchaser would think the first user made the second user's goods.
Such construction of the law is induced by cogent reasons of equity and
fair dealing. The courts have come to realize that there can be unfair
competition or unfair trading even if the goods are non-competing, and
that such unfair trading can cause injury or damage to the first user of a
given trade-mark, first, by prevention of the natural expansion of his
business and, second, by having his business reputation confused with
and put at the mercy of the second user.
Asia Brewery Inc (ABI) v. CA, San Miguel Corp (SMC)
July 5, 1993
Facts:
In Sept 1988, SMC filed a complaint against ABI for (1) trademark
infringement and (2) unfair competition on account of ABIs BEER PALE
PILSEN / BEER NA BEER which is competing with SMCs SAN MIGUEL
PALE PILSEN in the Philippine beer market.
The RTC absolved ABI. Upon appeal, the CA reversed the decision and
found ABI guilty of trademark infringement and unfair competition. The CA
ordered the latter to restrain from producing and selling the subject products
and to pay damages to SMC.
Issue:
WON ABI guilty of trademark infringement & unfair competition
Held:
Petition granted, RTC decision reinstated & affirmed
Ratio:
No trademark infringement / unfair competition
Infringement of trademark is a form of unfair competition. RA 166 (Trademark
Law), Sec 22, Trademark Law defines what constitutes infringement:

46
Sec. 22. Infringement, what constitutes. Any person who shall
use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark or
trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection
with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such
goods or services, or identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark or trade-name
and apply such reproduction, counterfeit, copy, or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such
goods, business or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided.
Infringement is determined by the "test of dominancy" rather than by
differences or variations in the details of one trademark and of another.
Similarity in size, form and color, while relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant features of
another, and confusion and deception is likely to result, infringement takes
place. Duplication or imitation is not necessary; nor it is necessary that the
infringing label should suggest an effort to imitate.
The dominant feature of SMC's trademark is the name of the product: SAN
MIGUEL PALE PILSEN. On the other hand, the dominant feature of ABI's
trademark is the name: BEER PALE PILSEN. The word "BEER" does not
appear in SMC's trademark, just as the words "SAN MIGUEL" do not appear
in ABI's trademark. Hence, there is absolutely no similarity in the dominant
features of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to
be confusingly similar to SAN MIGUEL PALE PILSEN. No one who
purchases BEER PALE PILSEN can possibly be deceived that it is SAN
MIGUEL PALE PILSEN.
Besides the dissimilarity in their names, the following other dissimilarities in
the trade dress or appearance of the competing products abound:

San Miguel Pale Pilsen

Beer Pale Pilsen

bottle has a slender tapered neck

bottle has a fat, bulging neck

words "pale pilsen" are printed in

bold and laced letters along a
diagonal band

pale pilsen" are half the size and

printed in slender block letters on a
straight horizontalband

Bottled by the San Miguel Brewery,

Philippines

Especially brewed and bottled by

Asia
Brewery
Incorporated,
Philippines

no slogan

back of bottle is printed in big, bold

letters, under a row of flower buds
and leaves, its copyrighted slogan:
"BEER NA BEER!"

back of the bottle carries the SMC

logo

no logo

bottle cap is stamped with a coat of

arms and the words "San Miguel
Brewery Philippines"

bottle cap is stamped with the name

"BEER" in the center, surrounded by
the words "Asia Brewery Incorporated
Philippines."

P7.00 / bottle

P4.25 / bottle

That the words pale pilsen are part of ABI's trademark does not constitute an
infringement for "pale pilsen" are generic words descriptive of the color
("pale"), of a type of beer ("pilsen"), which is a light bohemian beer with a
strong hops flavor that originated in the City of Pilsen in Czechoslovakia and
became famous in the Middle Ages. "Pilsen" is a "primarily geographically
descriptive word," hence, non-registerable and not appropriable by any beer
manufacturer. The Trademark Law provides:

47
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark
used to distinguish his goods, business or services from the goods,
business or services of others
(e) Consists of a mark or trade-name which, when applied to or used
in connection with the goods, business or services of the applicant is
merely descriptive or deceptively misdescriptive of them, or when
applied to or used in connection with the goods, business or services
of the applicant isprimarily geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a surname."

monopoly of the color amber for bottles, nor of white for labels, nor of the
rectangular shape which is the usual configuration of labels. Needless to say,
the shape of the bottle and of the label is unimportant. What is all important is
the name of the product written on the label of the bottle for that is how one
beer may be distinguished.

A word merely descriptive of an article of trade, or of its composition or

characteristics protected as a trademark, the right to the use of such
language being common to all. The test is not whether they are exhaustively
descriptive of the article designated, but whether in themselves, and as they
are commonly used by those 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.

That SMC's bottle is registered under R.A. No. 623 simply prohibits
manufacturers of other foodstuffs from the unauthorized use of SMC's bottles
by refilling these with their products. It was not uncommon then for products
such as patis and toyo to be sold in recycled SAN MIGUEL PALE PILSEN
bottles.

Unfair competition is the employment of deception by which a person shall

pass off his own goods as those of another who has already established
goodwill for his similar goods or any acts calculated to produce the same
result. (Sec. 29, Republic Act No. 166) The universal test question is
whether the public is likely to be deceived.
The use of ABI of the steinie bottle, similar to the SAN MIGUEL PALE
PILSEN bottle, is not unlawful. SMC merely borrowed the steinie bottle from
abroad and neither does it have patent nor trademark protection for that
bottle shape and design. 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 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 wrappers of the general form, size and character commonly
and immediately used in marketing such articles.
With regard to the white label, ABI used the color white because it presents
the strongest contrast to the amber color of the bottle. No one can have a

In order to be objectionable, fraudulent simulation must be such as appears

likely to mislead the ordinarily intelligent buyer who has a need to supply
and is familiar with the article that he seeks to purchase.

In Re Petition for Registration of Trademark "Freedom" under section 4

of Republic Act No. 166 filed in the Philippine Patent Office bearing
Serial No. 38. CO TIONG SA, applicant-petitioner, vs. DIRECTOR OF
PATENTS, respondent, SAW WOO CHIONG AND CO., oppositor.
(G.R. No. L-5378 | May 24, 1954 | Labrador, J.)
Facts:
This is an appeal filed by Co Tiong Sa, applicant for registration of
the trademark "Freedom" and its corresponding design, against a decision of
the Director of Patents sustaining the opposition thereto of Saw Woo Chiong
and Co., and denying the application.
Co Tiong Sa has used the trademark on undershirts and T-shirts
since March, 1947. The trademark sought to be registered is "Freedom". The
word "Freedom" is in hand print, with a slight to the right. In the facsimiles
attached to the original application, there are no letters, lines, or figures
around the word, but in the label, Exhibit D-1, the said word is preceded by a
triangle, with the letter "F" inside and small letters "H.L." under. A capital
letter "L" is on the lower right-hand corner; and all of these are enclosed in a
rectangle of double lines. In Exhibit D-2, the label is the same word
"Freedom" with a capital letter "M" above it, a flourish under the word
"Freedom", and the words "HIGH QUALITY" thereunder. The label used for
boxes is similar to label Exhibit D-1, except that the rectangle is in a heavy
line and is longer.

48
The label presented by Saw Woo Chiong and Co. consist of the word
"Freeman" in hand print, with a right slant, above the middle of which is a
vignette of a man wearing a to what, which vignette is preceded by the small
word "The" in print and followed by two parallel lines close to each other, and
the words "PERFECT WEAR" in smaller letters under the word "FREEMAN".
This trademark was registered in 1947 in the Bureau of Commerce and reregistered in the Patent Office on September 22, 1948. This trademark is
used not only on shirts, but also on polo shirts, undershirts, pajamas,
skippers, and T-shirts, although in the year 1947 Saw Woo Chiong and Co.
discontinued manufacturing skippers and T-shirts on the ground of scarcity of
materials. This trademark has been used since 1938, and it had been
advertised extensively in newspapers, magazines, etc.
Co Tiong Sa claims that in sustaining the objection of the oppositorrespondent, the Director of Patents erred: (1) in holding that in determining
an opposition in the registration of trademarks, attention should be centered
upon the central idea of each trademark, disregarding their differences in
details; (2) in holding that if the central idea of each trademark gives the
same general impression, the two trademarks should be adjudged as
confusingly similar; (3) in holding that the word "FREEDOM" and
"FREEMAN" convey the same general impression, hence must be adjudged
to be confusingly similar; (4) in holding that if the word "FREEDOM" is
allowed to be registered as trademark, although no confusion and deception
will actually take place, the oppositor will nevertheless be damaged; and (5)
in holding that the oppositor is not required to introduce testimony on
substantiate the claim made in its opposition.
Issue: WON the word FREEDOM and FREEMAN are confusingly similar./
WON there was infringement.
Held/Ratio: YES.
There is no question that if the details of the two trademarks are to
be considered, many differences would be noted that would enable a careful
and scrutinizing eye to distinguish one trademark from the other. But
differences of variations in the details of one trademark and of another are
not the legally accepted tests of similarity in trademarks.
It has been consistently held that the question of infringement of a
trademark is to be determined by the test of dominancy. Similarity in size,
form, and color, while relevant, is not conclusive. If the competing trademark
contains the main or essential or dominant features of another, and
confusion and deception is likely to result, infrigement takes place.

Duplication or limitation is not necessary; nor is it necessary that the

infringing label should suggest an effort to imitate. The question at issue in
cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistake in the mind of the public or to
deceive purchasers.
It must be remembered that infringement of a trademark is a form of
unfair competition (Clarke vs. Manila Candy Co., 36 Phil., 100), and unfair
competition is always a question of fact. The universal test has been said
to be whether the public is likely to be deceived.
When a person sees an object, a central or dominant idea or picture
thereof is formed in his mind. This dominant picture or idea is retained in the
mind, and the decorations or details are forgotten. When one sees the city
hall of Baguio, the dominant characteristics which are likely to be retained in
the mind are the portico in the middle of the building, the tower thereon, the
four columns supporting it, and the wings on both sides. The features that
are retained are the peculiar, dominant features. When on sees the
Legislative Building in Manila, the picture that is retained is that of a majestic
low building with concrete columns all around. In this mind-picture the slight
or minor decorations are lost sight of, and the central figure only is retained.
So is it with a customer or purchaser who sees a label. He retains in his mind
the dominant characteristics or features or central idea in the label, and does
not retain or forgets the attendant decorations, flourishes, or variations. The
ordinary customer does not scrutinize the details of the label; he forgets or
overlooks these, but retains a general impression, or a central figure, or a
dominant characteristic.
This rule has a basis in experience. The average person usually will
not, and often cannot, take in at a casual glance all, or even a large part of
the details of what he looks at. The average buyer usually seeks a sign,
some special, easily remembered earmarks of the brand he has in mind. It
may be the color, sound, design, or a peculiar shape or name. Once his eyes
see that or his ear hears it, he is satisfied. An unfair competitor need not
copy the entire mark to accomplish his fraudulent purpose. It is enough if he
takes the one feature which the average buyer is likely to remember.
The question of infringement is to be determined by the test of
dominancy. The dissimilarity in size, form and color of the label and the
place where applied are not conclusive. If the competing label contains
the trademark of another, and confusion or deception is likely to result,
infringement takes place, regardless of the fact that the accessories are
dissimilar. Duplication or exact imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort to imitate.

49
Upon examination of the trademark of the oppositor-respondent, one
will readily see that the dominant feature is the word "FREEMAN" written in a
peculiar print, slightly slanting to the right, with a peculiarly written capital
letters "FF". These dominant features or characteristics of oppositor's
trademarks are reproduced or imitated in applicant's trademark. In the first
place, the word "FREEDOM" conveys a similar idea as the word
"FREEMAN". In the second place, the style in which both capital "F" are
written are similar. The print and slant of the letters are also similar. An
ordinary purchaser or an unsuspecting customer who has seen the
oppositor's label sometime before will not recognize the difference between
that label and applicant's label. He may notice some variations, but he will
ignore these, believing that they are variations of the same trademark to
8
distinguish one kind or quality of goods from another .
After a careful study, we find that the dominant characteristic of
oppositor's trademark "FREEMAN" has been imitated in applicant's
trademark "FREEDOM," such as to confuse the public and unwary
customers and puchasers, and to deceive them into believing that the articles
bearing one label are similar or produced by the same manufacturer as those
carrying the other label. The decision of the Director of Patents sustaining the
opposition and denying the application must, therefore, be affirmed.

For purposes of illustration, the following words have been held to have the same
significance or to have the same appearance and meaning.
"CELDURA" and "CORDURA". That both marks considered as a whole are similar in
meaning and appearance can not be doubted. When spoken as written they sound very
much alike. Similarity of sound alone, under such circumstances, is sufficient to cause the
marks to be regarded as confusingly similar when applied to merchandise of the same
descriptive properties.
"SKOAL" and "SKOL", and "SKOAL" was held identical in sound and meaning to "SKOL".
(SKOL Co., Inc., vs. Olson, 151 F. 2d, 200.)
In this jurisdiction we have held that that name "Lusolin" is an infringement of the
trademark "Sapolin," as the sound of the two names is almost the same, and the labels of
containers being almost the same in respect to color, size, and other characteristics.
(Sapolin Co. vs. Balmeceda and Germann and Co., 67 Phil., 705.)
In the case of La Insular vs. Jao Oge, 47 Phil., 75, plaintiff's label represented an
European female, while defendant's was a Filipino, but both labels exhibited a matron
seated on a platform with a view of Manila Bay looking towards Mariveles at sunset. In
spite of the fact that the posture and coloring were slightly different, defendant's labels
were declared to constitute an infringement of plaintiff's labels.

Dispositive Portion:
Finding no error in the decision appealed from, the same is hereby affirmed,
with costs against the applicant-petitioner Co Tiong Sa.

Fruit of the Loom v. General Garments Corporation

Facts:
Fruit of the Loom, a corporation duly organized and existing under the
laws of the State of Rhode Island, United States of America, is the
registrant of a trademark, FRUIT OF THE LOOM, in the Philippines
Patent Office. The classes of merchandise covered are, among others,
men's, women's and children's underwear, which includes women's
panties, knitted, netted and textile fabrics.
General Garments, a domestic corporation, is the registrant of a
trademark FRUIT FOR EVE in the Philippine Patent Office covering
garments similar to petitioner's products like women's panties and
pajamas.
Fruit of the Loom filed a complaint for infringement of trademark and
unfair competition against the General Garments. Petitioner principally
alleged in the complaint the trademark FRUIT FOR EVE is confusingly
similar to its trademark FRUIT OF THE LOOM used also on women's
panties and other textile products. Furthermore, it was also alleged
therein that the color get-up and general appearance of private
respondent's hang tag consisting of a big red apple is a colorable
imitation to the hang tag of petitioner.
General Garments alleged as a defense that its registered trademark is
not confusingly similar to that of petitioner as the latter alleged. Likewise,
it stated that the trademark FRUIT FOR EVE is being used on ladies'
panties and pajamas only whereas petitioner's trademark is used even
on men's underwear and pajamas.
During pre-trial the following admissions were made:
1. That the trademark FRUIT OF THE LOOM has been registered with
the Bureau of Patents and it does not bear the notice 'Reg. Phil.
Patent Off.',
2. That the trademark FRUIT FOR EVE has been registered with the
Bureau of Patents and it bears the notice "Reg. Phil. Patent Off."
3. That at the time of its registration, plaintiff filed no opposition thereto.
TC: ordering the Bureau of Patents to cancel the registration of the
Trademark "Fruit for Eve", permanently enjoining Defendant from using
the trademark "Fruit for Eve"
CA: reversed.
Issue: whether or not private respondent's trademark FRUIT FOR EVE and
its hang tag are confusingly similar to petitioner's trademark FRUIT OF THE

50
LOOM and its hang tag so as to constitute an infringement of the latter's
trademark rights and justify the cancellation of the former.
Held: NO
there is infringement of trademark when the use of the mark involved
would be likely to cause confusion or mistake in the mind of the public or
to deceive purchasers as to the origin or source of the commodity
In cases of this nature, there can be no better evidence as to whether
there is a confusing similarity in the contesting trademarks than the
labels or hang tags themselves. A visual presentation of the labels or
hang tags is the best argument for one or the other, hence, We are
reproducing hereunder pictures of the hang tags of the products of the
parties to the case. The pictures below are part of the documentary
evidence appearing on page 124 of the original records.
Petitioner asseverates in the third and fourth assignment of errors,
which, as We have said, constitute the main argument, that the dominant
features of both trademarks is the word FRUIT. In determining whether
the trademarks are confusingly similar, a comparison of the words is not
the only determinant factor.
The trademarks in their entirety as they appear in their respective labels
or hang tags must also be considered in relation to the goods to which
they are attached. The discerning eye of the observer must focus not
only on the predominant words but also on the other features appearing
in both labels in order that he may draw his conclusion whether one is
confusingly similar to the other.
In the trademarks FRUIT OF THE LOOM and FRUIT FOR EVE, the lone
similar word is FRUIT. WE agree with the respondent court that by mere
pronouncing the two marks, it could hardly be said that it will provoke a
confusion, as to mistake one for the other. Standing by itself, FRUIT OF
THE LOOM is wholly different from FRUIT FOR EVE. WE do not agree
with petitioner that the dominant feature of both trademarks is the word
FRUIT for even in the printing of the trademark in both hang tags, the
word FRUIT is not at all made dominant over the other words.
As to the design and coloring scheme of the hang tags, while there are
similarities in the two marks like the red apple at the center of each mark,
there are also differences or dissimilarities which are glaring and striking
to the eye such as:
1. The shape of petitioner's hang tag is round with a base that
looks like a paper rolled a few inches in both ends; while that of
private respondent is plain rectangle without any base.
2. The designs differ. Petitioner's trademark is written in almost
semi-circle while that of private respondent is written in straight
line in bigger letters than petitioner's. Private respondent's tag

has only an apple in its center but that of petitioner has also
clusters of grapes that surround the apple in the center.
3. The colors of the hang tag are also very distinct from each other.
Petitioner's hang tag is fight brown while that of respondent is
pink with a white colored center piece. The apples which are the
only similarities in the hang tag are differently colored.
Petitioner's apple is colored dark red, while that of private
respondent is light red.
The similarities of the competing trademarks in this case are completely
lost in the substantial differences in the design and general appearance
of their respective hang tags. The trademarks FRUIT OF THE LOOM
and FRUIT FOR EVE do not resemble each other as to confuse or
deceive an ordinary purchaser. The ordinary purchaser must be thought
of as having, and credited with, at least a modicum of to be able to see
the obvious differences between the two trademarks in question. A
person who buys petitioner's products and starts to have a liking for it,
will not get confused and reach out for private respondent's products
when she goes to a garment store.

Del Monte Corporation and Philippine Packing Corporation v CA

Facts: Sunshine Sauce Manufacturing reused old catsup bottles made by
Del Monte, and registered by PhilPack with authority from Del Monte, for the
packaging of its own catsup, Sunshine Fruit Catsup. The bottles were bought
from the junkyard, together with various kinds of bottles, and marked with
Sunshines own logo.
Del Monte filed a complaint against Sunshine for infringement of trademark
and unfair competition, with a prayer for damages and issuance of a writ of
preliminary injunction. Sunshine said it had long ago stopped using the Del
Monte bottles, and that its own logo was substantially different from Del
Montes and would not confuse the buying public.
The RTC of Makati held that there were substantial differences between the
logos of the parties; that the defendant had ceased using the Del Monte
bottles; and that in any case Sunshine became the owner of the said bottles
upon its purchase thereof from the junk yards. Furthermore, the
complainants had failed to establish the defendants malice or bad faith,
which is an essential element of infringement of trademark or unfair
competition. The decision was affirmed in toto by the CA.

51
Issue:

dissipated as soon as the court assumes to analyze carefully the respective

features of the mark.

1. Whether to not the logos were substantially different

2. Whether or not Sunshine is guilty of infringement considering that Del
Montes bottle design was only registered in the Supplemental Register.
Held:
1. NO. Side-by-side comparison is not the final test of similarity; 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.

2. NO. Since registration was only in the Supplemental Register, this did not
vest the registrant with the exclusive right to use the label nor did it give rise
to the presumption of the validity of the registration.
Ratio:
1. Although the SC noted that there were differences between the two logos,
it 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, but the ordinary buyer does not usually make such
scrutiny nor does he usually have the time to do so. The question is not
whether the two articles are distinguishable by their label when set side by
side but whether the general confusion made by the article upon the eye of
the casual purchaser who is unsuspicious and off his guard, is such as to
likely result in his confounding it with the original. As observed in several
cases, the general impression of the ordinary purchaser, buying under the
normally prevalent conditions in trade and giving the attention such
purchasers usually give in buying that class of goods is the touchstone.
In making purchases, the consumer must depend upon his recollection of the
appearance of the product which he intends to purchase. The buyer having
in mind the mark/label of the respondent must rely upon his memory of the
petitioners mark. To determine whether a trademark has been infringed, we
must consider the mark as a whole and not as dissected. If the buyer is
deceived, it is attributable to the marks as a totality, not usually to any part of
it. The court therefore should be guided by its first impression, for a buyer
acts quickly and is governed by a casual glance, the value of which may be

It is not the function of the court in cases of infringement 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. Usually a
defendant in cases of infringement does not normally copy but makes only
colorable changes; the most successful form of copying is to employ enough
points of similarity to confuse the public with enough points of difference to
confuse the courts.
We also note that the respondent court failed to take into consideration
several factors which should have affected its conclusion, to wit: 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 under which it is usually purchased. Among these, what
essentially determines the attitude of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who
buys a box of candies will not exercise as much care as one who buys an
expensive watch. As a general rule, an ordinary buyer does not exercise as
much prudence in buying an article for which he pays a few centavos as he
does in purchasing a more valuable thing. Expensive and valuable items are
normally bought only after deliberate, comparative and analytical
investigation. But mass products, low priced articles in wide use, and matters
of everyday purchase requiring frequent replacement are bought by the
casual consumer without great care. In this latter category is catsup.

At that, even if the labels were analyzed together it is not difficult to see that
the Sunshine label is a colorable imitation of the Del Monte trademark. The
predominant colors used in the Del Monte label are green and red-orange,
the same with Sunshine. The word "catsup" in both bottles is printed in white
and the style of the print/letter is the same. Although the logo of Sunshine is
not a tomato, the figure nevertheless approximates that of a tomato.
When a manufacturer prepares to package his product, he has before him a
boundless choice of words, phrases, colors and symbols sufficient to
distinguish his product from the others. When as in this case, Sunshine

52
chose, without a reasonable explanation, to use the same colors and letters
as those used by Del Monte though the field of its selection was so broad,
the inevitable conclusion is that it was done deliberately to deceive. It has
been aptly observed that the ultimate ratio in cases of grave doubt is the rule
that as between a newcomer who by the confusion has nothing to lose and
everything to gain and one who by honest dealing has already achieved
favor with the public, any doubt should be resolved against the newcomer
inasmuch as the field from which he can select a desirable trademark to
indicate the origin of his product is obviously a large one.
2. The private respondent is not guilty of infringement for having used the Del
Monte bottle. The reason is that the configuration of the said bottle was
merely registered in the Supplemental Register.

thereof because it has not been registered in the Principal Register.

However, we find that Sunshine, despite the many choices available to it and
notwithstanding that the caution "Del Monte Corporation, Not to be Refilled"
was embossed on the bottle, still opted to use the petitioners' bottle to market
a product which Philpack also produces. This clearly shows the private
respondent's bad faith and its intention to capitalize on the latter's reputation
and goodwill and pass off its own product as that of Del Monte.
As Sunshine's label is an infringement of the Del Monte's trademark, law and
equity call for the cancellation of the private respondent's registration and
withdrawal of all its products bearing the questioned label from the market.
With regard to the use of Del Monte's bottle, the same constitutes unfair
competition; hence, the respondent should be permanently enjoined from the
use of such bottles.

In the case of Lorenzana v. Macagba, we declared that:

(1)Registration in the Principal Register gives rise to a presumption of the
validity of the registration, the registrant's ownership of the mark and his right
to the exclusive use thereof. There is no such presumption in the registration
in the Supplemental Register.
(2)Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein on the issue of ownership which may be
contested through opposition or interference proceedings or, after
registration, in a petition for cancellation.
Registration in the Principal Register is constructive notice of the registrant's
claim of ownership, while registration in the Supplemental Register is merely
proof of actual use of the trademark and notice that the registrant has used
or appropriated it. It is not subject to opposition although it may be cancelled
after the issuance. Corollarily, registration in the Principal Register is a basis
for an action for infringement while registration in the Supplemental Register
is not.
(3)In applications for registration in the Principal Register, publication of the
application is necessary. This is not so in applications for registrations in the
Supplemental Register.

The court must rule, however, that the damage prayed for cannot be granted
because the petitioner has not presented evidence to prove the amount
thereof. Fortunately for the petitioners, they may still find some small comfort
in Art. 2222 of the Civil Code, which provides for the award of nominal
damages. Accordingly, the Court can only award to the petitioners, as it
hereby does award, nominal damages in the amount of P1,000.00.

G.R. No. L-63796-97

LA CHEMISE LACOSTE, S. A. v. HON. OSCAR C. FERNANDEZ,

Presiding Judge of Branch XLIX, Regional Trial Court, National Capital
Judicial Region, Manila and GOBINDRAM HEMANDAS
G.R. No. L-65659

May 2, 1984

GOBINDRAM HEMANDAS SUJANANI, v. HON. ROBERTO V. ONGPIN, in

his capacity as Minister of Trade and Industry, and HON. CESAR SAN
DIEGO, in his capacity as Director of Patents
Ponente: Gutierrez

Facts:
It can be inferred from the foregoing that although Del Monte has actual use
of the bottle's configuration, the petitioners cannot claim exclusive use

May 2, 1984

53
Lacoste is a French corporation not doing business in the Philippines, and is
the actual owner of the trademarks "LACOSTE" "CHEMISE LACOSTE",
"CROCODILE DEVICE" and a composite mark consisting of the word
"LACOSTE" and a representation of a crocodile/alligator.
In 1975, Hemandas & Co., a duly licensed domestic firm applied for and was
issued Reg. No. SR-2225 (SR stands for Supplemental Register) for the
trademark "CHEMISE LACOSTE & CROCODILE DEVICE" by the Philippine
Patent Office for use on T-shirts, sportswear and other garment products of
the company. Two years later, it applied for the registration of the same
trademark under the Principal Register, which was granted.
Thereafter, the firm assigned to Gobindram Hemandas (Gobindram) all
rights, title, and interest in the trademark "CHEMISE LACOSTE & DEVICE".
On November 21, 1980, Lacoste filed its application for registration of the
trademark "Crocodile Device" (Application Serial No. 43242) and "Lacoste"
(Application Serial No. 43241). The former was approved for publication
while the latter was opposed by Games and Garments. On March 21, 1983,
Lacoste filed with the NBI a letter-complaint alleging acts of unfair
competition being committed by Hemandas and requesting their assistance
in his apprehension and prosecution. The NBI conducted an investigation
and subsequently filed with the RTC of Manila two applications for the
issuance of search warrants which would authorize the search of the
premises used and occupied by the Lacoste Sports Center and Games and
Garments both owned and operated by Hemandas.
The RTC issued 2 search warrants for violation of Art. 189 of the RPC. The
NBI agents executed the two search warrants and as a result of the search
found and seized various goods and articles described in the warrants.
Hemandas filed a MTQ the search warrants alleging that the trademark used
by him was different from Lacostes trademark and that pending the
resolution of IPC No. 1658 before the Patent Office, any criminal or civil
action on the same subject matter and between the same parties would be
premature. Lacoste filed its opposition. The State Prosecutor likewise
opposed stating that the goods seized were instrument of a crime and
necessary for the resolution of the case on preliminary investigation and that
the release of the said goods would be fatal to the case of the People should
prosecution follow in court.

RTC, however, recalled the search warrants and ordered NBI to return the
seized items to Hemandas.
st

1 Issue: WON Lacoste has capacity to sue in the Philippines (i.e. WON
it is doing business in the Philippines if it is, it has to allege its
capacity to sue)
Held: Yes, it has capacity to sue.
a. It is proven in evidence that it is not doing business in the
Philippines. The marketing of its products in the Philippines is done
through an exclusive distributor, Rustan Commercial Corporation,
being an independent entity which buys and then markets not only
products of the petitioner but also many other products bearing
equally well-known and established trademarks and tradenames.
b. Even if Lacoste is doing business and it has failed to allege its
capacity, it can still maintain the present suit. In Western Equipment
and Supply Co. v. Reyes, the SC ruled that a foreign corporation
which has never done any business in the Philippines and which is
unlicensed and unregistered to do business here, but is widely and
favorably known in the Philippines through the use therein of its
products bearing its corporate and tradename, has a legal right to
maintain an action in the Philippines to restrain the residents and
inhabitants thereof from organizing a corporation therein bearing the
same name as the foreign corporation, when it appears that they
have personal knowledge of the existence of such a foreign
corporation, and it is apparent that the purpose of the proposed
domestic corporation is to deal and trade in the same goods as those
of the foreign corporation.
c. Likewise, this case involves violation of Art. 189 of the RPC, the
aggrieved party being the state, though Lacostes private rights were
violated.
d. To uphold Lacostes right to sue for unfair competition or
infringement of trademarks would be to recognize our duties and the
rights of foreign states under the Paris Convention for the Protection
of Industrial Property to which the Philippines and France are parties.
In Vanity Fair Mills, Inc. v. T Eaton Co. the US Circuit Court
of Appeals said:
i. The underlying principle is that foreign nationals
should be given the same treatment in each of the
member countries as that country makes available to
its own citizens. In addition, the Convention sought
to create uniformity in certain respects by obligating

54

each member nation 'to assure to nationals of

countries of the Union an effective protection against
unfair competition.'
ii. A foreign national of a member nation using his
trademark in commerce in the US is accorded
extensive protection here against infringement and
other types of unfair competition by virtue of United
States membership in the Convention. But that
protection has its source in, and is subject to the
limitations of, American law, not the law of the
foreign national's own country.
Hence, Lacoste should be given the same protection as we
make available to our citizens. Pursuant to this, the Ministry
of Trade issued a memorandum addressed to the Director of
Patents Office to reject all pending applications for
Philippine registration of signature and other world famous
trademarks by applicants other than its original owners or
users.

nd

2 Issue: WON Hemandas is the holder of a certificate of registration of

the trademark "CHEMISE LACOSTE & CROCODILE DEVICE".

Held: No.
a. Hemandas registration is only in the Supplemental Register. A
certificate of registration in the Supplemental Register is not prima
facie evidence of the validity of registration, of the registrant's
exclusive right to use the same in connection with the goods,
business, or services specified in the certificate. Such a certificate of
registration cannot be filed, with effect, with the Bureau of Customs
in order to exclude from the Philippines, foreign goods bearing
infringement marks or trade names.
b. Agbayani, Commercial Laws: The registration of a mark upon the
supplemental register is not, as in the case of the principal register,
prima facie evidence of (1) the validity of registration; (2) registrant's
ownership of the mark; and (3) registrant's exclusive right to use the
mark. It is not subject to opposition, although it may be cancelled
after its issuance. Neither may it be the subject of interference
proceedings. Registration on the supplemental register is not
constructive notice of registrant's claim of ownership. A supplemental
register is provided for the registration of marks which are not
registrable on the principal register because of some defects

c.

(conversely, defects which make a mark unregistrable on the

principal register, yet do not bar them from the supplemental
register.)
Registration in the Supplemental Register, therefore, serves as
notice that the registrant is using or has appropriated the trademark.
By the very fact that the trademark cannot as yet be entered in the
Principal Register, all who deal with it should be on guard that there
are certain defects, some obstacles which the user must Still
overcome before he can claim legal ownership of the mark or ask the
courts to vindicate his claims of an exclusive right to the use of the
same.

GROTRIAN, HELFERICH, SHULZ, TH. STEINWEG NACHF. v. STEINWAY

& SONS (2D CIR. 1975).
Facts:
In 1835 Heinrich E. Steinweg began making pianos in Germany. He
emigrated to New York in 1850 with three sons, changed his name to
Steinway and founded appellee Steinway & Sons (hereinafter Steinway).
Heinrich's oldest son, C. F. Theodor Steinweg, remained in Germany. He
began to make pianos under his own name. Later he sold his business to his
three employees, Wilhelm Grotrian, Adolph Helfferich and H. G. W. Schulz.
Theodor then moved to New York and joined Steinway & Sons as a partner
in 1866.
The sale of the business to Messrs. Grotrian, Helfferich and Schulz
included the right to use the name "C. F. Th. Steinweg Nachf. (Successors to
C. F. Theodor Steinweg)" for ten years. The name later was changed to
"Grotrian, Helfferich, Schulz, Th. Steinweg Nachf.", the present corporate
name of appellant (hereinafter Grotrian).
Grotrian thereafter registered the trademarks "Grotrian-Steinweg"
and "Steinweg" in Germany. The latter mark was cancelled as a result of a
suit by Steinway against Grotrian. In December 1918, the Grotrian family,
owners of the firm, petitioned German officials to change its name to
"Steinweg, or at least Grotrian Steinweg". One of the principal reasons was
to aid in the export of its product. The petition was granted to the extent of
changing the name to "Grotrian-Steinweg".
Grotrian first entered the American market in 1925. From 1926
through 1928 it sold a total of 25 pianos in the United States. When Steinway
learned of this in 1928, it protested, claiming that the use of the mark
"Grotrian-Steinweg" on pianos infringed its trade names "Steinway" and

55
"Steinway & Sons". It demanded that use of the "Grotrian-Steinweg" mark be
discontinued on pianos in the United States. Undeterred, Grotrian increased
its shipments to 47 in 1929.
William Steinway, an officer of appellee, decided to confront Grotrian
face to face. In 1929, he and Grotrian reached a settlement, as evidenced by
their act of sharing a cigar (the Peace Cigar Settlement). Thereafter
Grotrian's American activities dwindled. Between 1932 and 1952 no GrotrianSteinweg pianos were exported to the United States.
However, in 1952 Grotrian reentered the American market on a mail
order basis. For the next 20 years it regularly exported a small number of
pianos (a total of 458) to the United States and distributed them through
small local dealers. Grotrian never made any pianos in the United States. It
did not employ an advertising agency or require advertising by its United
States dealers, although the latter were supplied with promotional material.
No representative of Grotrian ever came to the United States from 1929 to
1966.
In January 1967, Grotrian entered into a distributing agreement with
the Wurlitzer Company (hereinafter Wurlitzer), under which the latter agreed
to use its best efforts to sell "Grotrian- Steinweg" pianos in the United States
for five years. Wurlitzer issued a press release in July announcing that the
world famous "Grotrian-Steinweg" piano would soon be sold in Wurlitzer
stores. Steinway promptly threatened Wurlitzer with legal action to prevent
the sale in the United States of pianos with the "Grotrian-Steinweg" name.
Wurlitzer decided that it could not sell the pianos profitably without using the
Grotrian-Steinweg name. On advice of counsel, it cancelled the distribution
contract on November 21, 1967.
On July 29, 1969, Grotrian commenced the instant action against
Steinway, apparently in response to Steinway's opposition to Grotrian's
application for registration in the United States of the trademark "GrotrianSteinweg". Grotrian's complaint sought a declaratory judgment: (1) that its
trademark "Grotrian-Steinweg" and corporate name did not conflict with
appellee's trademarks "Steinway & Sons" and "Steinway"; (2) that Grotrian's
use of its trademark and corporate name in the United States did not infringe
Steinway's trademark rights and did not constitute unfair competition; (3) that
Steinway was estopped by laches from asserting any claim of conflict
between the respective marks or between the names of appellant and
appellee; and (4) that Grotrian had the right to use its trademark and
corporate name free from interference by Steinway in the United States or in
any foreign country where the activities of Grotrian or Steinway have a
substantial effect on interstate or foreign commerce.

Steinway's answer in substance denied the factual allegations of the

complaint. An injunction was sought to enjoin Grotrian: (1) from using the
word "Steinweg" alone or in conjunction with any other words or symbols; (2)
from using the name "Grotrian-Steinweg" in connection with the sale of
pianos in the United States; (3) from infringing Steinway's trademarks; (4)
from competing unfairly with Steinway; and (5) from prosecuting any
application for registration of trademarks in the United States Patent Office.
The district court concluded that "(Grotrian) is infringing (Steinway's)
trademarks Steinway and Steinway & Sons because the name GrotrianSteinweg is likely to cause confusion, mistake or deception in violation of the
Lanham Act. It ordered that Steinway recover from Grotrian damages for
infringement and unfair competition and that Steinway recover Grotrian's
profits from sales of pianos in the United States, together with the costs of
the action.
Issue:
1. Topical: WON Grotrian had infringed Steinways trademarks and
had engaged in unfair competition.
2. WON Steinway is barred by laches by virtue of the settlement
reached by Steinway and Grotrian in 1929.
Held/Ratio:
1. YES. There was deliberate intent to infringe, similarity of marks and
actual confusion.
Trademark infringement under Section 32(1) of the Lanham Act
occurs where the nonconsensual use of a colorable imitation of a valid mark
is "likely to cause confusion, or to cause mistake, or to deceive."
In considering the issue of likelihood of confusion in the instant case,
the district court weighed a number of factors, including: "the strength of the
Steinway marks; the alleged infringer's purpose in adopting its marks; the
degree of similarity between the marks; the degree of similarity between the
products; the competitive proximity of the products; actual confusion; and the
degree of care likely to be exercised by consumers."
The court considered each of these seven factors, found against
Grotrian and in favor of Steinway on each, and concluded that Grotrian
consciously and intentionally had infringed Steinway's trademarks.

56
Deliberate Intent to Infringe
Grotrian first attacks as clearly erroneous the court's finding to the
effect that Grotrian had a malicious purpose in adopting the mark "GrotrianSteinweg". The essence of that finding is that, from the time Grotrian took
over from Theodor Steinweg, both the firm and its owners have made
continuous efforts to annex the name "Steinweg" to their own business so as
to exploit its similarity to "Steinway" in the United States where Steinway has
built up a very substantial reputation through advertising and word of mouth.
The gravamen of Grotrian's contention on appeal is that the district
court rewrote the history of the firm. It seems especially piqued that the court
inferred bad faith from the family's name change. It argues that GrotrianSteinweg pianos had been sold throughout the world prior to that time and
the change was to preserve the name in the tumult following World War I.
Grotrian points to three 1926 decisions of the German Supreme Court which
it contends conclusively held: (1) that the Steinweg name was sold without
limitation to Grotrian's predecessors; and (2) that the change of the family's
name in 1919 to Grotrian-Steinweg was justified by decades of use of the
Steinweg name prior to that time. It urges that since Steinway was the
plaintiff in those cases it is collaterally estopped from relitigating the factual
issues there determined.
We believe, assuming that the German decisions were admissible
and that they contain the factual determinations claimed by Grotrian, the
district court's finding of malice is fully supported by the actions of Grotrian
since 1926.
First, there is evidence which supports a finding that Grotrian has
attempted to exploit the similarity between "Steinweg" and "Steinway" to
enhance its sales in this country. There is an obvious visual and audible
similarity between 'Steinway' and 'Steinweg', which is enhanced when the
German 'veg' is translated to the English 'way.' The probability of audible
identity of the marks is virtually assured by plaintiff's instructions to its
dealers. Such finding is squarely supported by an advertising brochure
published by Grotrian in which instructions were given to the Englishspeaking reader on how to pronounce "Grotrian-Steinweg":
Second, evidence of Grotrian's exploitation of Steinway's
trademarks is found in another advertising brochure published by Grotrian
which had been in use for four or five years at the time of trial. In that
brochure Grotrian prominently referred to the "Grotrian-Steinweg" as "The
Instrument of Immortals".This was nothing less than a blatant copying of
Steinway's registered slogan "Steinway The Instrument of the Immortals."

Indeed, Helmut Grotrian-Steinweg testified that when he prepared the

brochure he was aware of Steinway's slogan but did not realize that it was
registered in the United States. His assertion that, had he known that the
slogan was registered he would not have used it, patently was insufficient to
justify the copying. We hold that the inference of malice is clear. Grotrian,
knowing of Steinway's slogan, brazenly adopted one identical to it.
Similarity of Marks, Actual Confusion, and Degree of Care
In finding similarity of marks, the district court noted that the words
"Steinway" and "Steinweg" look and sound alike. The similarity between the
names "Grotrian-Steinweg" and "Steinway" is no less since the assumption
that "Grotrian" is the first name and "Steinweg" the last is inevitable in the
United States where hyphenated surnames are uncommon. Moreover, the
court found actual confusion on the basis of two surveys conducted by
Steinway and the representation by an American Grotrian dealer to a
Steinway dealer that the Grotrian-Steinweg was a German Steinway. Finally,
despite the high price range of both pianos ($5,000 to $13,000) and the
general sophistication of purchasers, the court found that the degree of care
exercised by buyers could not eliminate the confusion between a Steinway
and a Grotrian-Steinweg piano. We hold that the district court was not clearly
erroneous in its findings on these factors.
We agree with Grotrian that in examining the actual trademarks for
similarity of marks the district court failed to take into account the wholly
different typefaces of the two marks. The Grotrian-Steinweg mark is in Old
English type while that of Steinway is in Roman type. This difference serves
to distinguish the marks visually. The examination of the similarity of the
trademarks, however, does not end with a visual comparison of the
marks. Trademarks, like small children, are not only seen but heard.
Similarity of sound also enters into the calculation of likelihood of
confusion. The district court's finding that auditory confusion is inevitable
and thus that similarity of marks exists is not clearly erroneous.
It is undisputed that the parties are in direct competition for a rather
limited class of customer. Few people in the United States ever have heard
of a Grotrian-Steinweg. Whatever reputation Grotrian's products may enjoy
outside the United States and whatever may be the competition between the
two pianos in other countries, Steinway is the renowned name here. We think
it is inescapable that a potential American purchaser of the kind of piano
which the parties sell, upon hearing the name "Grotrian-Steinweg", would
associate Grotrian's product with Steinway.

57
The dealer confusion incident relied on by the court occurred when a
Steinway dealer was told by a Grotrian dealer that the Grotrian-Steinweg was
a German Steinway. Grotrian argues that this was not an illustration of actual
confusion. We disagree. The Steinway dealer who testified to this incident
also told of customer confusion engendered by the Grotrian dealer's
persistent reference to his piano as "the original Steinway", or the "German
Steinway", and to the word Steinway "as an Americanization of the word
'Steinweg.' The same dealer once advertised Grotrian's piano as the
"Grotrian-SteinWay". There also was evidence that other dealers invited
association between the Steinway and the Grotrian-Steinweg in their
advertisements. Even the telephone company mistakenly listed a GrotrianSteinweg dealer under the heading "Steinway Pianos" in the San Francisco
telephone directory. Finally, Helmut Grotrian-Steinweg admitted at trial that
he had been called Mr. Steinweg in conversations and had been asked
whether there was a connection between Grotrian and Steinway.
Recognizing the general difficulty of finding evidence of actual confusion, we
think such incidents highly persuasive in demonstrating the existence of
confusion.
Finally, the court found that, despite the high price of the pianos and
the sophistication of the purchasers, the likelihood of confusion resulting from
the factors discussed above could not be eliminated by the degree of care
taken in selection: Misled into an initial interest, a potential Steinway buyer
may satisfy himself that the less expensive Grotrian-Steinweg is at least as
good, if not better, than a Steinway. Deception and confusion thus work to
appropriate defendant's good will. This confusion, or mistaken beliefs as to
the companies' interrelationships, can destroy the value of the trademark
which is intended to point to only one company."
The issue here is not the possibility that a purchaser would buy a
Grotrian-Steinweg thinking it was actually a Steinway or that Grotrian had
some connection with Steinway and Sons. The harm to Steinway, rather, is
the likelihood that a consumer, hearing the "Grotrian-Steinweg" name
and thinking it had some connection with "Steinway", would consider it
on that basis. The "Grotrian-Steinweg" name therefore would attract
potential customers based on the reputation built up by Steinway in this
country for many years. The harm to Steinway in short is the likelihood that
potential piano purchasers will think that there is some connection between
the Grotrian-Steinweg and Steinway pianos.

2. NO.

The district court held that, since the peace cigar settlement included
a relinquishment by Grotrian of any claim to the United States market, there
could be no laches between 1929 and 1952 when Grotrian reentered the
United States market. It found, however, that the evidence on delay
appeared to weigh in Grotrian's favor since two letters indicated that
Steinway knew of Grotrian's reentry into the United States from at least 1957.
It nevertheless held that Grotrian's defense of laches had not been
established because no prejudice had been proven.

Mobil Oil v Pegasus

[818 F.2d 254| 4 May 1987]
Plaintiff-appellee: Mobil Oil Corporation
Defendant-appellant: Pegasus Petroleum Corporation
Facts:
Mobil engages in oil trading buys & sells crude & refined petroleum
products in bulk to insure a continuous flow of oil to its refineries, and
ultimately to its customers. Since 1931, Mobil had extensively used its
flying horse symbol representing Pegasus icow its petroleum business,
usually in red, occasionally in other colors, at all gas stations, on its
tankers, barges, vehicles, letterheads, etc. The district court explained
that rendered it a very strong mark due to use for a long period of time.
However, Mobil didnt use its flying horse symbol icow oil trading
business.
Pegasus engages only in oil trading & doesnt directly sell products to the
general public. Its founder (Gregory Callimanopulos) testified that he
selected the name "Pegasus Petroleum" because he wanted a name
with both mythical connotations and alliterative qualities. He knew of
Mobils symbol when he picked the name but claimed that he did not
know that the symbol represented Pegasus or that Mobil used the word
"Pegasus" icow its petroleum business. Pegasus president (Ben Pollner)
sent a letter to to 400-500 people in the oil trading business informing
them about Pegasus formation. An interlocking double P was used as a
letterhead. Pegasus Petroleum has never used a flying horse symbol
and sells no products with the name "Pegasus" on them.
After learning of the use of the mark Pegasus, Mobil approach
Pegasus. Attempts to reach an agreement failed. Mobil charged
Pegasus w/ trademark infringement & unfair competition; false
designation of origin; and trademark dilution. Judge MacMahon
concluded that "there is a sufficient likelihood of confusion between the
flying horse symbol and the use of the 'Pegasus' mark to grant Mobil
relief under the Lanham Act." The Judge also held for Mobil on its unfair

58
competition, false designation, and antidilution claims; and enjoined
Pegasus Petroleum's further use of the mark "Pegasus" in connection
with the oil industry. With Mobil's consent, the injunction has been
stayed, pending resolution of this appeal.
Issues: WON Pegasus infringed on Mobils registered flying horse trademark
[yes]
Ratio:
The Lanham Act prohibits the use of "any reproduction, counterfeit, copy,
or colorable imitation of a registered mark" where "such use is likely to
cause confusion, or to cause mistake, or to deceive." A plaintiff must
show a likelihood that an appreciable number of ordinarily prudent
purchasers are likely to be misled or simply confused as to the source of
the goods in question. In the Polaroid case, Judge Friendly made a nonexclusive enumeration of factors on this inquiry:
(1) the strength of the plaintiff's mark: (2) the degree of similarity between
the two marks; (3) the competitive proximity of the products or services;
(4) the existence of actual confusion; (5) the likelihood that the plaintiff
will "bridge the gap" between the two markets; (6) the defendant's good
faith in adopting its mark; (7) the quality of the defendant's product; and
(8) the sophistication of the purchasers.
Pegasus Petroleum does not dispute the district court's conclusion that
the strength of Mobil's flying horse mark is "without question, and
perhaps without equal." As an arbitrary mark--there is nothing suggestive
of the petroleum business in the flying horse symbol--Mobil's symbol
deserves "the most protection the Lanham Act can provide." Pegasus
says that the district court erred in blindly equating the word Pegasus
w/ the pictorial representation. Words & their pictorial representations are
treated the same in determining the likelihood of conculsion bet the 2
marks. There is strong probability, due to the similarity of the mark, that
the prospective purchases will equate Mobils symbol for Pegasus and
vice versa. the word "Pegasus" evokes the symbol of the flying red horse
and that the flying horse is associated in the mind with Mobil. In other
words, the symbol of the flying horse and its name "Pegasus" are
synonymous.
Direct competition bet the products is not a prerequisite to relief under
the law. Confusion, or the likelihood of confusion, not competition, is the
real test of trademark infringement. Both companies use the marks in the
petroleum industry.
The unparalleled strength of Mobil's mark demands that it be given broad
protection against infringers. Mobil's ubiquitous presence throughout the

petroleum industry further increases the likelihood that a consumer will

confuse Pegasus Petroleum with Mobil. The great similarity between the
2 marks--the district court concluded that they were "synonymous"-entitles Mobil's mark to protection over a broader range of related
products.
Likelihood of confusion exists. Intentional copying gives rise to a
presumption of a likelihood of confusion. Mr. Callimanopulos is
obviously an educated, sophisticated man who, from his prior shipping
business, was familiar with the flying horse and from his own background
and education and awareness of Greek mythology could not have
escaped the conclusion that the use of the word 'Pegasus' would infringe
the tradename and symbol of the plaintiff.
The second comer has a duty to name & dress his product as to avoid all
likelihood of customers confusion. While it isnt necessary to show actual
confusion, there can be no more be no more positive or substantial proof
of the likelihood of confusion than proof of actual confusion. The absence
of misdirected phone calls and the difference in the letter of credit
requirements are other matters.
The district court made no findings on the issue of court examination of
the quality of Pegasus products. Pegasus Petroleum argues that its
product--oil--does not differ from that sold by Mobil. However, a senior
user may sue to protect his reputation even where the infringer's goods
are of top quality.
As to sophistication of purchasers, even though defendant's business is
transacted in large quantities only with sophisticated oil traders, there is
still
and
nevertheless
a
likelihood
of
confusion
Affirmed
Coffee Partners, Inc. v. San Francisco Coffee & Roastery
G.R. 169504, MARCH 3, 2010
Facts: Petitioner Coffee Partners, Inc. is a local corporation engaged in the
business of establishing and maintaining coffee shops in the country. It has a
franchise agreement with Coffee Partners Ltd. (CPL), a business entity
organized and existing under the laws of British Virgin Islands, for a nonexclusive right to operate coffee shops in the Philippines using trademarks
designed by CPL such as "SAN FRANCISCO COFFEE."
Respondent is a local corporation engaged in the wholesale and retail sale of
coffee. It registered the business name "SAN FRANCISCO COFFEE &
ROASTERY, INC." with the Department of Trade and Industry (DTI) in June
1995. Respondent had since built a customer base that included Figaro

59
Company, Tagaytay Highlands, Fat Willys, and other coffee companies. It
later formed a joint venture company with Boyd Coffee USA under the
company name Boyd Coffee Company Philippines, Inc. (BCCPI). BCCPI
engaged in the processing, roasting, and wholesale selling of coffee.
Respondent later embarked on a project study of setting up coffee carts in
malls and other commercial establishments in Metro Manila.
In June 2001, respondent discovered that petitioner was about to open a
coffee shop under the name "SAN FRANCISCO COFFEE" in Libis, Quezon
City. According to respondent, petitioners shop caused confusion in the
minds of the public as it bore a similar name and it also engaged in the
business of selling coffee. Respondent sent a letter to petitioner demanding
that the latter stop using the name "SAN FRANCISCO COFFEE."
Respondent also filed a complaint with the Bureau of Legal AffairsIntellectual Property Office (BLA-IPO) for infringement and/or unfair
competition with claims for damages.
Petitioner denied the allegations in the complaint. Petitioner alleged it filed
with the Intellectual Property Office (IPO) applications for registration of the
mark "SAN FRANCISCO COFFEE & DEVICE" for class 42 in 1999 and for
class 35 in 2000. Petitioner maintained its mark could not be confused with
respondents trade name because of the notable distinctions in their
appearances. Petitioner argued respondent stopped operating under the
trade name "SAN FRANCISCO COFFEE" when it formed a joint venture with
Boyd Coffee USA. Petitioner contended respondent did not cite any specific
acts that would lead one to believe petitioner had, through fraudulent means,
passed off its mark as that of respondent, or that it had diverted business
away from respondent.
Issue/Held: Whether petitioners use of the trademark "SAN FRANCISCO
COFFEE" constitutes infringement of respondents trade name "SAN
FRANCISCO COFFEE & ROASTERY, INC.," even if the trade name is not
registered with the Intellectual Property Office (IPO).- YES
Ratio: In Prosource International, Inc. v. Horphag Research Management
SA, this Court laid down what constitutes infringement of an unregistered
trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property
Office; however, in infringement of trade name, the same need not be
registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or

colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale,
offering for sale, or advertising of any goods, business or services; or the
infringing mark or trade name is applied to labels, signs, prints, packages,
wrappers, receptacles, or advertisements intended to be used upon or in
connection with such goods, business, or services;
(4) The use or application of the infringing mark or trade name is likely to
cause confusion or mistake or to deceive purchasers or others as to the
goods or services themselves or as to the source or origin of such goods or
services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the
assignee thereof.
Clearly, a trade name need not be registered with the IPO before an
infringement suit may be filed by its owner against the owner of an infringing
trademark. All that is required is that the trade name is previously used in
trade or commerce in the Philippines.
RA 8293, which took effect on 1 January 1998, has dispensed with the
registration requirement. Section 165.2 of RA 8293 categorically states that
trade names shall be protected, even prior to or without registration with the
IPO, against any unlawful act including any subsequent use of the trade
name by a third party, whether as a trade name or a trademark likely to
mislead the public.Thus:
SEC. 165.2 (a) Notwithstanding any laws or regulations
providing for any obligation to register trade names,
such names shall be protected, even prior to or without
registration, against any unlawful act committed by third
parties.
(b) In particular, any subsequent use of a trade name by a
third party, whether as a trade name or a mark or collective
mark, or any such use of a similar trade name or mark, likely
to mislead the public, shall be deemed unlawful. (Emphasis
supplied)
It is the likelihood of confusion that is the gravamen of infringement. But there
is no absolute standard for likelihood of confusion. Only the particular, and

60
sometimes peculiar, circumstances of each case can determine its existence.
Thus, in infringement cases, precedents must be evaluated in the light of
each particular case.
In determining similarity and likelihood of confusion, our 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 and deception, thus constituting
infringement. If the competing trademark contains the main, essential, and
dominant features of another, and confusion or deception is likely to result,
infringement occurs. Exact duplication or imitation is not required. The
question is whether the use of the marks involved is likely to cause confusion
or mistake in the mind of the public or to deceive consumers.
In contrast, the holistic test entails a consideration of the entirety of the marks
as applied to the products, including the labels and packaging, in determining
confusing similarity. The discerning eye of the observer must focus not only
on the predominant words but also on the other features appearing on both
marks in order that the observer may draw his conclusion whether one is
confusingly similar to the other.
Applying either the dominancy test or the holistic test, petitioners "SAN
FRANCISCO COFFEE" trademark is a clear infringement of respondents
"SAN FRANCISCO COFFEE & ROASTERY, INC." trade name. The
descriptive words "SAN FRANCISCO COFFEE" are precisely the dominant
features of respondents trade name. Petitioner and respondent are engaged
in the same business of selling coffee, whether wholesale or retail. The
likelihood of confusion is higher in cases where the business of one
corporation is the same or substantially the same as that of another
corporation. In this case, the consuming public will likely be confused as to
the source of the coffee being sold at petitioners coffee shops. Petitioners
argument that "San Francisco" is just a proper name referring to the famous
city in California and that "coffee" is simply a generic term, is untenable.
Respondent has acquired an exclusive right to the use of the trade name
"SAN FRANCISCO COFFEE & ROASTERY, INC." since the registration of
the business name with the DTI in 1995. Thus, respondents use of its trade
name from then on must be free from any infringement by similarity. Of
course, this does not mean that respondent has exclusive use of the
geographic word "San Francisco" or the generic word "coffee." Geographic
or generic words are not, per se, subject to exclusive appropriation. It is only

the combination of the words "SAN FRANCISCO COFFEE," which is

respondents trade name in its coffee business, that is protected against
infringement on matters related to the coffee business to avoid confusing or
deceiving the public.
Roma Drug v. RTC of Pampanga
(G.R. No. 149907 | April 16, 2009 | TINGA, J.)
Facts:
On 14 August 2000, a team composed of the NBI operatives and
inspectors of the Bureau of Food and Drugs (BFAD) conducted a raid on
petitioner Roma Drug, a duly registered sole proprietorship of petitioner
ROMEO RODRIGUEZ operating a drug store located at San Matias,
Guagua, Pampanga.
The raid was conducted pursuant to a search warrant the RTC of
Angeles CIty. The raiding team seized several imported medicines, including
Augmentin (375mg.) tablets, Orbenin (500mg.) capsules, Amoxil (250mg.)
capsules and Ampiclox (500mg.).
It appears that Roma Drug is one of six drug stores which were
raided on or around the same time upon the request of SmithKline Beecham
Research Limited (SmithKline), a duly registered corporation which is the
local distributor of pharmaceutical products manufactured by its parent
London-based corporation. The local SmithKline has since merged with
Glaxo Wellcome Phil. Inc to form Glaxo SmithKline, private respondent in this
case. The seized medicines, which were manufactured by SmithKline, were
imported directly from abroad and not purchased through the local
SmithKline, the authorized Philippine distributor of these products.
The NBI subsequently filed a complaint against Rodriguez for violation
of Section 4 (in relation to Sections 3 and 5) of Republic Act No. 8203, also
known as the Special Law on Counterfeit Drugs (SLCD), with the Office of
the Provincial Prosecutor in San Fernando, Pampanga. The section prohibits
the sale of counterfeit drugs, which under Section 3(b)(3), includes an
unregistered imported drug product. The term unregistered signifies the
lack of registration with the Bureau of Patent, Trademark and
Technology Transfer of a trademark, tradename or other identification
mark of a drug in the name of a natural or juridical person, the process
of which is governed under Part III of the Intellectual Property Code.
In this case, there is no doubt that the subject seized drugs are
identical in content with their Philippine-registered counterparts. There is no
claim that they were adulterated in any way or mislabeled at least. Their

61
classification as counterfeit is based solely on the fact that they were
imported from abroad and not purchased from the Philippine-registered
owner of the patent or trademark of the drugs.
During preliminary investigation, Rodriguez challenged the
constitutionality of the SLCD. However, the Assistant Provincial Prosecutor
issued a Resolution recommending that Rodriguez be charged with violation
of Section 4(a) of the SLCD. The recommendation was approved by
Provincial Prosecutor Jesus Y. Manarang approved the recommendation.
Hence, the present Petition for Prohibition questing the RTC-Guagua
Pampanga and the Provincial Prosecutor to desist from further prosecuting
Rodriguez, and that Sections 3(b)(3), 4 and 5 of the SLCD be declared
unconstitutional.
Issue: WON the petitioner Roma Drug had the right to import and possess
the unregistered imported drugs.
Held/Ratio: YES.
Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual
Property Code in that the later law unequivocally grants third persons the
right to import drugs or medicines whose patent were registered in the
Philippines by the owner of the product:
Sec. 7. Section 72 of Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, is hereby amended to
read as follows:
Sec. 72. Limitations of Patent Rights. The owner of a patent
has no right to prevent third parties from performing, without his
authorization, the acts referred to in Section 71 hereof in the
following circumstances:
72.1. Using a patented product which has been put on the market in
the Philippines by the owner of the product, or with his express
consent, insofar as such use is performed after that product has
been so put on the said market: Provided, That, with regard to drugs
and medicines, the limitation on patent rights shall apply after a drug
or medicine has been introduced in the Philippines or anywhere else
in the world by the patent owner, or by any party authorized to
use the invention: Provided,further, That the right to import the
drugs and medicines contemplated in this section shall be available
to any government agency or any private third party;

72.2. Where the act is done privately and on a non-commercial

scale or for a non-commercial purpose: Provided, That it does not
significantly prejudice the economic interests of the owner of the
patent;
72.3. Where the act consists of making or using exclusively for
experimental use of the invention for scientific purposes or
educational purposes and such other activities directly related to
such scientific or educational experimental use;
72.4. In the case of drugs and medicines, where the act includes
testing, using, making or selling the invention including any data
related thereto, solely for purposes reasonably related to the
development and submission of information and issuance of
approvals by government regulatory agencies required under any
law of the Philippines or of another country that regulates the
manufacture, construction, use or sale of any product: Provided,
That, in order to protect the data submitted by the original patent
holder from unfair commercial use provided in Article 39.3 of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS Agreement), the Intellectual Property Office, in consultation
with the appropriate government agencies, shall issue the
appropriate rules and regulations necessary therein not later than
one hundred twenty (120) days after the enactment of this law;
72.5. Where the act consists of the preparation for individual
cases, in a pharmacy or by a medical professional, of a medicine in
accordance with a medical shall apply after a drug or medicine has
been introduced in the Philippines or anywhere else in the world by
the patent owner, or by any party authorized to use the invention:
Provided, further, That the right to import the drugs and medicines
contemplated in this section shall be available to any government
agency or any private third party; xxx
The unqualified right of private third parties such as petitioner Roma
Drug to import or possess unregistered imported drugs in the Philippines is
further confirmed by the Implementing Rules to Republic Act No. 9502
promulgated on 4 November 2008. The relevant provisions thereof read:
Rule 9. Limitations on Patent Rights. The owner of a patent has
no right to prevent third parties from performing, without his
authorization, the acts referred to in Section 71 of the IP Code as
enumerated hereunder:

62
(i) Introduction in the Philippines or Anywhere Else in the
World. Using a patented product which has been put on the market
in the Philippines by the owner of the product, or with his express
consent, insofar as such use is performed after that product has
been so put on the said market: Provided, That, with regard to drugs
and medicines, the limitation on patent rights shall apply after a drug
or medicine has been introduced in the Philippines or anywhere else
in the world by the patent owner, or by any party authorized to use
the invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to any
government agency or any private third party.
The drugs and medicines are deemed introduced when they have
been sold or offered for sale anywhere else in the world.
It may be that Rep. Act No. 9502 did not expressly repeal any
provision of the SLCD. However, it is clear that the SLCOs classification of
unregistered imported drugs as counterfeit drugs, and of corresponding
criminal penalties therefore are irreconcilably in the imposition conflict with
Rep. Act No. 9502 since the latter indubitably grants private third persons the
unqualified right to import or otherwise use such drugs. Where a statute of
later date, such as Rep. Act No. 9502, clearly reveals an intention on the
part of the legislature to abrogate a prior act on the subject, that
intention must be given effect.
Had the Court proceeded to directly confront the constitutionality of
the assailed provisions of the SLCD, it is apparent that it would have at least
placed in doubt the validity of the provisions. As written, the law makes a
criminal of any person who imports an unregistered drug regardless of the
purpose, even if the medicine can spell life or death for someone in the
Philippines. It does not accommodate the situation where the drug is out of
stock in the Philippines, beyond the reach of a patient who urgently depends
on it. It does not allow husbands, wives, children, siblings, parents to import
the drug in behalf of their loved ones too physically ill to travel and avail of
the meager personal use exemption allotted by the law. It discriminates, at
the expense of health, against poor Filipinos without means to travel abroad
to purchase less expensive medicines in favor of their wealthier brethren able
to do so.
Even worse is the fact that the law is not content with simply banning,
at civil costs, the importation of unregistered drugs. It equates the importers
of such drugs, many of whom motivated to do so out of altruism or basic

human love, with the malevolents who would alter or counterfeit

pharmaceutical drugs for reasons of profit at the expense of public safety.
The challenged provisions of the SLCD apparently proscribe a range
of constitutionally permissible behavior. It is laudable that with the passage of
Rep. Act No. 9502, the State has reversed course and allowed for a sensible
and compassionate approach with respect to the importation of
pharmaceutical drugs urgently necessary for the peoples constitutionallyrecognized right to health.
Dispositive Portion: WHEREFORE, the petition is GRANTED in part. A writ
of prohibition is hereby ISSUED commanding respondents from prosecuting
petitioner Romeo Rodriguez for violation of Section 4 or Rep. Act No. 8203.
The Temporary Restraining Order dated 15 October 2001 is hereby made
PERMANENT. No pronouncements as to costs.