#11 IPL Case Mighty Case Corporation vs.

E&J Gallo Winery

GR No. 154342
434 SCRA 473
14 July 2004
Ponente: J. Corona
Topic: Holistic and dominancy tests, similar or identical goods, trademark
infringement, unfair competition
Doctrine: The dominancy test deals with the comparison of words only
through main, essential or dominant features. On the other hand, the holistic
test deals with the entirety of marks.
Trademark infringement
1. Actually used in commerce in
Philippines and registered in
the principal register of the
Philippine Patent Office
2. Used by another person in
connection with sale, offering
for sale or advertising of any
3. Identical or similar goods
4. Can be done without consent of
trademark
registrant
or
assignee
5. Fraudulent intent unnecessary

Unfair competition
Registration not necessary

Passing off ones goods as those of

another
Unfair competition fraudulent intent
is essential

Facts:
1. Gallo Winery is a foreign corporation not doing business in the
Philippines but organized and existing under the laws of the State of
California, USA, where all its wineries are located.
2. Gallo Winery produces different kinds of wines and brandy products
and sells them in many countries under different registered
trademarks, including the Gallo and Ernest & Julio Gallo wine
trademarks.
3. Domestic corporation Andreson has been Gallo Winerys exclusive wine
importer and distributor in the Philippines since 1991.
4. Gallo Winerys Gallo wine trademark registered in IPO on 16 November
1971 renewed after 20 years.

5. Gallo Winery also applied for registration of its Ernest & Julio Gallo wine
trademark on 11 October 1990 records do not disclose if it was ever
approved by the Director of Patents.
6. Mighty Corporation and La Campania and Tobacco Industries engaged
in the cultivation, manufacture, distribution and sale of tobacco
products for which they have been using the Gallo cigarette trademark
since 1973.
7. 14 September 1973- BIR approved Tobacco Industries use of Gallo
100s cigarette mark and Gallo filter cigarette mark on 26 March 1976.
8. 1976- Tobacco Industries filed its manufacturers sworn statement as
basis for BIRs collection of specific tax on Gallos cigarettes
9. 5 February 1974- Tobacco Industries applied for, but eventually did not
pursue, the registration of the Gallo cigarette trademark in the
principal register of the then Philippine Patent Office.
10.
May 1984- Tobacco Industries assigned the Gallo cigarette
trademark to La Compania which on 16 July 1985, applied for
trademark registration in the PPO.
11.
17 July 1985- National Library issued certificate of copyright
registration for La Companias lifetime copyright claim over Gallo
cigarette labels.
12.
La Compania authorized Mighty Corporation to manufacture and
sell cigarettes bearing the Gallo trademark
13.
BIR approved Mighty Corporations use of Gallo 100s cigarette
brand, under licensing agreement with Tobacco Industries in 18 May
1988
14.
Gallo Special Menthol 100s cigarette brand on 3 April 1989.
15.
Gallo cigarettes have been sold in the Philippines since 1973
initially by Tobacco Industries, then by La Campana and finally by
Mighty Corporation.
16.
Gallo wine trademark was registered in the Philippines in 1971
17.
Respondents claim that the 1st introduced and sold the Gallo and
E&J Gallo wines in the Philippines circa 1974 w/in the then US military
facilities.
18.
1979- They had expanded their Philippine market through
authorized distributors and independent outlets
19.
Respondents claim that they 1st learned about the existence of
Gallo cigarettes in the latter part of 1992 when an Andresons
employee saw such cigarette or display with Gallo wines in a Davao
supermarket wine cellar section. Thus, this case.
Issues:

1. WON RA 8293/ IPC of the Philippines was applicable in this case?

2. WON Gallo cigarettes and wines identical and/or same channels of
trade?
3. WON Mighty Corporation liable for trademark infringement or unfair
competition?
Ruling:
1. No. Trademark and Paris Convention are the applicable laws, not the
IPC. Validity and obligation force of a law proceed from the fact that it
has first been promulgated. IPC repealed Trademark Law. IPC was
approved on 6 June 1997 and only took effect on 1 January 1998.
2. No. Wines and cigarettes are not identical, similar, competing or
related goods. For goods to be considered as such, the following must
be considered:
a. Business/location to which the goods belong
b. The class of product to which the goods belong
c. Product quality, quantity or size
d. Nature and cost of the articles
e. Descriptive properties, physical attribute
f. Purpose of goods
g. Whether article is bought for immediate consumption
h. Fields of manufacture
i. Conditions under which the article is usually purchased
j. Channels of trade through which the goods flow, distribution,
marketing, displayed and sold.
None of these were satisfied. Also, actual commercial use in the
Philippines of Gallo cigarette trademark preceded that of Gallo wine
trademark. Following universal acquiescence and comity, our municipal
law on trademarks on actual use in RP must subordinate an
international agreement as decided by a municipal tribunal. In other
words, a foreign corporation may have the capacity to sue for
infringement on account of Section 21-A of Trademark Law but whether
or not exclusive right over their symbol will depend on actual use of
trademarks as decided in line with Section 2 and 2A of the same law.
The Gallo Wine Trademark is not a well-known mark in the context of
the Paris Convention in this case since wines and cigarettes are not
identical or similar goods. Mighty failed to comply with the following
under Article 6b of Treaty of Paris:
a. Mark must be internationally known.

b. Subject of the right must be a trademark, not a patent or copyright

or anything else
c. Person claiming must be the owner of the mark.
d. No likelihood of confusion, mistake or deceit as to the identity or
source of the goods of Mighty and Gallo or business, i.e.:
1. Resemblance
2. Similarity of goods to which trademarks attached
3. Likely effect on the purchaser
4. Registrants express or implied consent and other fair and
equitable considerations.
3. No. There are 2 well known test; Dominancy and Holistic Test. Applying
these, Gallo Cigarette trademark is the devise of a large rooster facing
left, outlined in black against a gold background (either red or green
depending on filters/menthols). On the other hand, Gallo Winery
trademark is diverse. These are also with consent of the registrant and
other just and equitable considerations.
No trademark infringement since Mighty no evidence that they
employed malice, bad faith or fraud or they intend to capitalize on E&J
Wine Gallo goodwill. They are also not liable for unfair competition
since public were not likely to be deceived, as mentioned in Section 29
of the Trademark Law.
Dispositive: Wherefore, finding the petition for review meritorious, the
same is hereby granted. The questioned decision and resolution of the Court
of Appeals in CA-GR CV No. 65175 and the November 26, 1998 decision and
the 24 June 1999 order of the RTC of Makati Branch 57 in Civil Case No. 93850 are hereby reversed and set aside and the complaint against petitioners
dismissed.