LTDI appealed the decision to the Court of Appeals (CA-G.R. CV No. 36971).
The appellate court
[G.R. No. 120961. October 17, 1996]
DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC., petitioner, vs. THE
HONORABLE COURT OF APPEALS and LA TONDEA DISTILLERS, INC., respondents.
DECISION
VITUG, J.:
The initiatory suit was instituted on 02 November 1987 with the trial court (docketed Civil Case No. 87-
42639) for manual delivery with damages instituted by La Tondea Distillers, Inc. (LTDI), against Distilleria
Washington (Washington).LTDI, under a claim of ownership, sought to seize from Distilleria Washington 18,
157 empty 350 c.c. white flint bottles bearing the blown-in marks of La Tondea Inc. and Ginebra San
Miguel. The court, on application of LTDI, issued an order of replevin on 05 November 1987 for the seizure of
the empty gin bottles from Washington. These bottles, it was averred, were being used by Washington for its
own Gin Seven products without the consent of LTDI.
LTDI asserted that, being the owner and registrant of the bottles, it was entitled to the protection so
extended by Republic Act (R.A.) No. 623, as amended, notwithstanding its sale of the Ginebra San Miguel gin
product contained in said bottles.
Washington countered that R.A. No. 623, invoked by LTDI, should not apply to gin, an alcoholic beverage
which is unlike that of soda water, mineral or aerated water, ciders, milks, cream, or other lawful beverages
mentioned in the law, and that, in any case, ownership of the bottles should, considering the attendant facts and
circumstances, be held lawfully transferred to the buyers upon the sale of the gin and containers at a single
price.
After hearing the parties, the trial court rendered its decision, dated 03 December 1991, holding against
LTDI; viz:
WHEREFORE, premises considered, the complainant is hereby DISMISSED and plaintiff is ordered:
1. To return to defendant the 18,157 empty bottles seized by virtue of the writ for the Seizure of Personal
Property issued by this Court on November 6, 1987;
2. In the event of failure to return said empty bottles, plaintiff is ordered to indemnify defendant in the amount
of P18,157.00 representing the value of the bottles.
3. Costs against plaintiff.[1]
1
reversed the court a quo and ruled against Washington; thus:
WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. The appellant, being the owner,
is authorized to retain in its possession the 18,157 bottles registered in its name delivered to it by the sheriff
following their seizure from the appellee pursuant to the writ of replevin issued by the trial court on November
6, 1987. Costs against the appellee.[2]
Washington is now before this Court assailing the reversal of the trial courts decision. In its
petition, Washington points out that
4.00.a. Under the undisputed facts, petitioner is the lawful owner of the personal properties (18,157 empty
bottles) involved in the petition. Respondent LTDI is precluded by law from claiming the same;
4.00.b. The decision and resolution appealed from violate equity and applicable canons in the interpretation and
construction of statutes; and
4.00.c. Liquour products are not covered by Republic Act No. 623. The holding of the Court in Cagayan Valley
Enterprises, Inc. vs. Honorable Court of Appeals, 179 SCRA 218 [1989] should be reviewed and reconsidered
in light of the Constitution and House Bill No. 20585.[3]
It is a fact that R.A. No. 623 extends trademark protection in the use of containers duly registered with the
Philippine Patent Office. The pertinent provisions of R.A. 623, as amended, so reads:
SECTION 1. Persons engaged or licensed to engage in the manufacture, bottling, or selling of soda water,
mineral or aerated waters, cider, milk, cream or other lawful beverages in bottles, boxes, casks, kegs, or barrels,
and other similar containers, or in the manufacture, compressing or selling of gases such as oxygen, acetylene,
nitrogen, carbon dioxide, ammonia, hydrogen, chloride, helium, sulphur dioxide, butane, propane, freon, methyl
chloride or similar gases contained in steel cylinders, tanks, flasks, accumulators or similar containers, with
their names or the names of their principals or products, or other marks of ownership stamped or marked
thereon, may register with the Philippines Patent Office a description of the names or marks, and the purpose
for which the containers so marked are used by them, under the same conditions, rules, and regulations, made
applicable by law or regulation to the issuance of trademarks.
SEC. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or seller,
who has successfully registered the marks of ownership in accordance with the provisions of the next preceding
section, to fill such bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks, accumulators, or other similar
containers so marked or stamped, for the purpose of sale, or to sell, dispose of, buy or traffic in, or wantonly
destroy the same, whether filled or not to use the same for drinking vessels or glasses or drain pipes, foundation
pipes, for any other purpose than that registered by the manufacturer, bottler or seller. Any violation of this
section shall be punished by a fine of not more than one thousand pesos or imprisonment of not more than one
year or both.
SEC. 3. The use by any person other than the registered manufacturer, bottler or seller, without written
permission of the latter of any such bottle, cask, barrel, keg, box, steel cylinders, tanks, flasks, accumulators, or
other similar containers, or the possession thereof without written permission of the manufacturer, by any junk
dealer or dealer in casks, barrels, kegs, boxes, steel cylinders, tanks, flasks, accumulators or other similar
containers, the same being duly marked or stamped and registered as herein provided, shall give rise to a prima
facie presumption that such use or possession is unlawful.[4]
At the outset, the Court must state that it sees no cogent reason for either departing from or changing the
basic rule it laid down in Cagayan Valley Enterprises, Inc., vs. Court of Appeals.[5] The Court has there held:
The above-quoted provisions grant protection to a qualified manufacturer who successfully registered with the
Philippine Patent Office its duly stamped or marked bottles, boxes, casks and other similar containers. The mere
use of registered bottles or containers without the written consent of the manufacturer is prohibited, the only
exceptions being when they are used as containers for sisi, bagoong, patis and similar native products.
It is an admitted fact that herein petitioner Cagayan buys from junk dealers and retailers bottles which bear the
marks or names La Tondea, Inc. and Ginebra San Miguel and uses them as containers for its own liquor
products. The contention of Cagayan that the aforementioned bottles without the words property of indicated
thereon are not the registered bottles of LTI, since they do not conform with the statement or description in the
supporting affidavits attached to the original registration certificate and renewal, is untenable.
Republic Act No. 623 which governs the registration of marked bottles and containers merely requires that the
bottles, in order to be eligible for registration, must be stamped or marked with the names of the manufacturers
or the names of their principals or products, or other marks of ownership. No drawings or labels are required
but, instead, two photographs of the container, duly signed by the applicant, showing clearly and legibly the
names and other marks of ownership sought to be registered and a bottle showing the name or other mark or
ownership, irremovably stamped or marked, shall be submitted.
xxxxxxxxx
The claim of petitioner that hard liquor is not included under the term other lawful beverages as provided in
Section 1 of Republic Act No. 623, as amended by Republic Act No. 5700, is without merit. The title of the law
itself, which reads An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs,
Barrels and Other Similar Containers clearly shows the legislative intent to give protection to all marked bottles
and containers of all lawful beverages regardless of the nature of their contents. The words other lawful
beverages is used in its general sense, referring to all beverages not prohibited by law. Beverage is defined as a
liquor or liquid for drinking. Hard liquor, although regulated, is not prohibited by law, hence it is within the
purview and coverage of Republic Act No. 623, as amended. [6]
Given the nature of the action in Cagayan, as well as its factual milieu, the Court indeed hardly has had a
choice but to sustain the registrants right to the injunctive writ against the unauthorized use of its
containers. The case before us, however, goes beyond just seeking to have such use stopped but it so takes on
even the ownership issue as well. Parenthetically, petitioner is not here being charged with a violation of
Section 2 of R.A. No. 623 or of the Trademark Law. The instant suit is one for replevin (manual delivery)
2
where the claimant must be able to show convincingly that he is either the owner or clearly entitled to the
possession of the object sought to be recovered. Replevin is a possessory action the gist of which focuses on the
right of possession that, in turn, is dependent on a legal basis that, not infrequently, looks to the ownership of
the object sought to be replevied.
It is to be pointed out that a trademark refers to a word, name, symbol, emblem, sign or device or any
combination thereof adopted and used by a merchant to identify, and distinguish from others, his goods of
commerce. It is basically an intellectual creation that is susceptible to ownership [7] and, consistently therewith,
gives rise to its own elements of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along
with the applicable jus lex, comprising that ownership. The incorporeal right, however, is distinct from the
property in the material object subject to it. Ownership in one does not necessarily vest ownership in the
other. Thus, the transfer or assignment of the intellectual property will not necessarily constitute a conveyance
of the thing it covers, nor would a conveyance of the latter imply the transfer or assignment of the intellectual
right.[8]
R.A. No. 623 evidently does not disallow the sale or transfer of ownership of the marked bottles or
containers. In fact, the contrary is implicit in the law; thus
Sec. 5. No action shall be brought under this Act against any person to whom the registered manufacturer,
bottler or seller, has transferred by way of sale, any of the containers herein referred to, but the slae of the
beverage contained in the said containers shall not include the sale of the containers unless specifically so
provided.
Sec. 6. The provisions of this Act shall not be interpreted as prohibiting the use of bottles as containers for sisi,
bagoong, patis, and similar native products.
Scarcely disputed are certain and specific industry practices in the sale of gin: The manufacturer sells the
product in marked containers, through dealers, to the public in supermarkets, grocery shops, retail stores and
other sales outlets.The buyer takes the item; he is neither required to return the bottle nor required to make a
deposit to assure its return to the seller. He could return the bottle and get a refund. A number of bottles at times
find their way to commercial users. It cannot be gainsaid that ownership of the containers does pass on to the
consumer albeit subject to the statutory limitations on the use of the registered containers and to the trademark
rights of the registrant. The statement in Section 5 of R.A. 623 to the effect that the sale of beverage contained
in the said containers shall not include the sale of the containers unless specifically so provided is not a rule of
proscription. It is a rule of construction that, in keeping with the spirit and intent of the law, establishes at best a
presumption (of non-conveyance of the container) and which by no means can be taken to be either interdictive
or conclusive in character. Upon the other hand, LTDIs sales invoice, stipulating that the sale does not include
the bottles with the blow-in marks of ownership of La Tondea Distillers, cannot affect those who are not privies
thereto.
While it may be unwarranted then for LTDI to simply seize the empty containers, this Court finds it to be
legally absurd, however, to still allow petitioner to recover the possession thereof. The fact of the matter is that
R.A. 623, as amended, in affording trademark protection to the registrant, has additionally expressed a prima
facie presumption of illegal use by a possessor whenever such use or possession is without the written
permission of the registered manufacturer, a provision that is neither arbitrary nor without appropriate
rationale. Indeed, the appellate court itself has made a finding of such unauthorized use by petitioner. The Court
sees no other logical purpose for petitioners insistence to keep the bottles, except for such continued use. The
practical and feasible alternative is to merely require the payment of just compensation to petitioner for the
bottles seized from it by LTDI. Conventional wisdom, along with equity and justice to both parties, dictates it.
WHEREFORE, the decision of the appellate court is MODIFIED by ordering LTDI to pay petitioner just
compensation for the seized bottles. Instead, however, of remanding the case to the Court of Appeals to receive
evidence on, and thereafter resolve, the assessment thereof, this Court accepts and accordingly adopts the
quantification of P18,157.00 made by the trial court. No costs.
SO ORDERED.

3
G.R. No. L-48226 December 14, 1942
ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for respondent.
OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals reversing that
of the Court of First Instance of Manila and directing the Director of Commerce to cancel the registration of the
trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining the latter from using said trade-
mark on goods manufactured and sold by her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor, 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. The growth of his business is a thrilling epic of Filipino industry and
business capacity. Starting in an obscure shop in 1910 with a modest capital of P210 but with tireless industry
and unlimited perseverance, Toribio Teodoro, then an unknown young man making slippers with his own hands
but now a prominent business magnate and manufacturer with a large factory operated with modern machinery
by a great number of employees, has steadily grown with his business to which he has dedicated the best years
of his life and which he has expanded to such proportions that his gross sales from 1918 to 1938 aggregated
P8,787,025.65. 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. Neither the decision of the trial court nor that of the Court of Appeals
shows how much petitioner has spent or advertisement. But respondent in his brief says that petitioner "was
unable to prove that she had spent a single centavo 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."
The trial court (Judge Quirico Abeto) presiding 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. The second division of the Court of Appeals, composed of Justices Bengson, Padilla,
4
Lopez Vito, Tuason, and Alex Reyes, with Justice Padilla as ponente, 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. The defendant Director of Commerce did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the validity of
respondent's trade-mark "Ang Tibay." He contends that the phrase "Ang Tibay" as employed by the respondent
on the articles manufactured by him is a descriptive term because, "freely translate in English," it means
"strong, durable, lasting." He invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot be the subject of a trade-mark. He
cites among others the case of Baxter vs. Zuazua (5 Phil., 16), which involved the trade-mark "Agua de
Kananga" used on toilet water, and in which this Court held that the word "Kananga," which is the name of a
well-known Philippine tree or its flower, could not be appropriated as a trade-mark any more than could the
words "sugar," "tobacco," or "coffee." On the other hand, counsel for the respondent, in an equally well-
prepared and exhaustive brief, contend that the words "Ang Tibay" are not descriptive but merely suggestive
and may properly be regarded as fanciful or arbitrary in the legal sense. The cite several cases in which similar
words have been sustained as valid trade-marks, such as "Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and
"Fashionknit" for neckties and sweaters. 3
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 trade-mark 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.
Second. In her second assignment of error petitioner contends that the Court of Appeals erred in holding that the
words "Ang Tibay" had acquired a secondary meaning. 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. (G. & C.
Merriam Co. vs. Salfield, 198 F., 369, 373.) 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 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. (Landers, Frary, and Clark vs. Universal
Cooler Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants and shirts
are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666. She also
contends under her fourth assignment of error (which we deem convenient to pass upon together with the third)
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.
The question raised by petitioner involve the scope and application of sections 3,7, 11, 13, and 20 of the Trade-
Mark Law (Act No. 666.) Section 3 provides that "any person entitled to the exclusive use of a trade-mark to
designate the origin or ownership of goods he has made or deals in, may recover damages in a civil actions from
any person who has sold goods of a similar kind, bearing such trade-mark . . . The complaining party . . . may
have a preliminary injunction, . . . and such injunction upon final hearing, if the complainant's property in the
trade-mark and the defendant's violation thereof shall be fully established, shall be made perpetual, and this
injunction shall be part of the judgment for damages to be rendered in the same cause." Section 7 provides that
any person who, in selling his goods, shall give them the general appearance of the goods of another either in
the wrapping of the packages, or in the devices or words thereon, or in any other feature of their appearance,
which would be likely to influence purchasers to believe that the goods offered are those of the complainant,
shall be guilty of unfair competition, and shall be liable to an action for damages and to an injunction, as in the
cases of trade-mark infringement under section 3. Section 11 requires the applicant for registration of a trade-
mark to state, among others, "the general class of merchandise to which the trade-mark claimed has been
appropriated." 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 trade-name 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
5
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.
The burden of petitioner's argument is that under sections 11 and 20 the registration by respondent of the trade-
mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by petitioner for pants and
shirts because the latter do not belong to the same class of merchandise or articles as the former; that she cannot
be held guilty of infringement of trade-mark under section 3 because respondent's mark is not a valid trade-
mark, nor has it acquired a secondary meaning; that pants and shirts do not possess the same descriptive
properties as shoes and slippers; that neither can she be held guilty of unfair competition under section 7
because the use by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to mislead the general
public as to their origin or ownership; and that there is now showing that she in unfairly or fraudulently using
that mark "Ang Tibay" against the respondent. If we were interpreting the statute for the first time and in the
first decade of the twentieth century, when it was enacted, and were to construe it strictly and literally, we might
uphold petitioner's contentions. But law and jurisprudence must keep abreast with the progress of mankind, and
the courts must breathe life into the statutes if they are to serve their purpose. Our Trade-mark Law, enacted
nearly forty years ago, has grown in its implications and practical application, like a constitution, in virtue of the
life continually breathed into it. It is not of merely local application; it has its counterpart in other jurisdictions
of the civilized world from whose jurisprudence it has also received vitalizing nourishment. We have to apply
this law as it has grown and not as it was born. Its growth or development abreast with that of sister statutes and
jurisprudence in other jurisdictions is reflected in the following observation of a well-known author:
This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then, the
courts had proceeded on the theory that the same trade-mark, used on un-like goods, could not cause
confusion in trade and that, therefore, there could be no objection to the use and registration of a well-
known mark by a third party for a different class of goods. Since 1916 however, a growing sentiment
began to arise that in the selection of a famous mark by a third party, there was generally the hidden
intention to "have a free ride" on the trade-mark owner's reputation and good will. (Derenberg, Trade-
Mark Protection & Unfair Trading, 1936 edition, p. 409.)
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. Then noncompetitive products are sold under the same mark, the gradual whittling
away or dispersion of the identity and hold upon the public mind of the mark created by its first user, inevitably
results. The original owner is entitled to the preservation of the valuable link between him and the public that
has been created by his ingenuity and the merit of his wares or services. Experience has demonstrated that when
a well-known trade-mark is adopted by another even for a totally different class of goods, it is done to get the
benefit of the reputation and advertisements of the originator of said mark, to convey to the public a false
impression of some supposed connection between the manufacturer of the article sold under the original mark
and the new articles being tendered to the public under the same or similar mark. As trade has developed and
commercial changes have come about, the law of unfair competition has expanded to keep pace with the times
and the element of strict competition in itself has ceased to be the determining factor. The owner of a trade-
mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from
confusion of 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 a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid down in one form or another will
now be cited: (1) In Teodoro Kalaw Ng Khe vs. Level Brothers Company (G.R. No. 46817), decided by this
Court on April 18, 1941, the respondent company (plaintiff below) was granted injunctive relief against the use
by the petitioner of the trade-mark "Lux" and "Lifebuoy" for hair pomade, they having been originally used by
the respondent for soap; The Court held in effect that although said articles are noncompetitive, they are similar
or belong to the same class. (2) In Lincoln Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the
manufacturer of the well-known Lincoln automobile was granted injunctive relief against the use of the word
"Lincoln" by another company as part of its firm name. (3) The case of Aunt Jemima Mills Co. vs. Rigney &
Co. (247 F., 407), involved the trade-mark "Aunt Jemima," originally used on flour, which the defendant
attempted to use on syrup, and there the court held that the goods, though different, are so related as to fall
within the mischief which equity should prevent. (4) In Tiffany & Co., vs. Tiffany Productions, Inc. (264
N.Y.S., 459; 23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern, was granted injunctive relief
against the defendant, a manufacturer of motion pictures, from using the name "Tiffany." Other famous cases
cited on the margin, wherein the courts granted injunctive relief, involved the following trade-marks or trade-
names: "Kodak," for cameras and photographic supplies, against its use for bicycles. 4 "Penslar," for medicines
and toilet articles, against its use for cigars; 5 "Rolls-Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine, against its use for hats; 7 "Kotex," for sanitary napkins, against the
use of "Rotex" for vaginal syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks and
keys, against its use for electric flashlights; 10 and "Waterman," for fountain pens, against its use for razor
blades. 11lawphil.net
688), wherein the plaintiff unsuccessfully attempted to enjoin the defendant from using the word "Visualized"
in connection with history books, the court holding that said word is merely descriptive. These cases cites and
relied upon by petitioner are obviously of no decisive application to the case at bar.
We think reasonable men may not disagree that shoes and shirts are not as unrelated as fountain pens and razor
blades, for instance. The mere relation or association of the articles is not controlling. As may readily be noted
from what we have heretofore said, the proprietary connotation that a trade-mark or trade-name has acquired is
of more paramount consideration. The Court of Appeals found in this case that by uninterrupted and exclusive
use since 1910 of respondent's registered trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by
petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride on the
reputation and selling power it has acquired at the hands of the respondent. As observed in another case, 12 the
field from which a person may select a trade-mark is practically unlimited, and hence there is no excuse for
impinging upon or even closely approaching the mark of a business rival. In the unlimited field of choice, what
could have been petitioner's purpose in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain the use of the mark
"Ang Tibay." Her counsel suggests that instead of enjoining her from using it, she may be required to state in
her labels affixed to her products the inscription: "Not manufactured by Toribio Teodoro." We think such
practice would be unethical and unworthy of a reputable businessman. To the suggestion of petitioner,
respondent may say, not without justice though with a tinge of bitterness: "Why offer a perpetual apology or
explanation as to the origin of your products in order to use my trade-mark instead of creating one of your
own?" On our part may we add, without meaning to be harsh, that a self-respecting person does not remain in
the shelter of another but builds one of his own.
The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the three instances. So
ordered.
Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite on this
point only the following cases: (1) Mohawk Milk Products vs. General Distilleries Corporation (95 F. [2d],
334), wherein the court held that gin and canned milk and cream do not belong to the same class; (2) Fawcett
Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d], 194), wherein the court held that the words "Popular
Mechanics" used as the title of a magazine and duly registered as a trade-mark were not infringed by
defendant's use of the words "Modern Mechanics and Inventions" on a competitive magazine, because the word
"mechanics" is merely a descriptive name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d],
6
G.R. No. L-20635 March 31, 1966
ETEPHA, A.G., petitioner,
vs.
DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC., respondents.
McClure, Salas and Gonzalez, for petitioner.
Sycip, Salazar, Manalo, Luna and Associates, for respondent.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark,
had been previously registered in the Patent Office? — the Director of Patents answered affirmatively. Hence
this appeal.
On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of
trademark "Atussin" placed on its "medicinal preparation of expectorant antihistaminic, bronchodilator sedative,
ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is used exclusively in the Philippines
since January 21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner 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.
1. The objects of a trademark are "to point out distinctly the origin or ownership of the articles to
which it is affixed, to secure to him who has been instrumental in bringing into market a superior
article or merchandise the fruit of his industry and skill, and to prevent fraud and imposition."2 Our
over-all task then is to ascertain whether or not Atussin so resembles Pertussin "as to be likely, when
applied to or used in connection with the goods ... of the applicant, to cause confusion or mistake or to
deceive purchasers".3 And, we are to be guided by the rule that the validity of a cause for infringement
is predicated upon colorable imitation. The phrase "colorable imitation" denotes such 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." 4
2. That the word "tussin" figures as a component of both trademarks is nothing to wonder at. The
Director of Patents aptly observes that it is "the 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".5 And appropriately to be considered now
is the fact that, concededly, the "tussin" (in Pertussin and Atussin) was derived from the Latin root-
word "tussis" meaning cough.6
7
"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the
goods; it is open for appropriation by anyone. It is accordingly barred from registration as trademark.
With jurisprudence holding the line, we feel safe in making the statement that any other conclusion
would result in "appellant having practically a monopoly" 7 of the word "tussin" in a trademark.8
While "tussin" by itself cannot thus be used exclusively to identify one's goods, it may properly
become the subject of a trademark "by combination with another word or phrase".9 And this union of
words is reflected in petitioner's Pertussin and respondent's Atussin, the first with prefix "Per" and the
second with Prefix "A".1äwphï1.ñët
3. A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two
trademarks pictured in their manner of display. Inspection should be undertaken from the viewpoint of
a prospective buyer. The trademark complained of should be compared and contrasted with the
purchaser's memory (not in juxtaposition) of the trademark said to be infringed. 10 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. 11 For, indeed, trademark infringement is a form of unfair competition. 12
We take a casual look at the two labels — without spelling out the details — bearing in mind the easy-
to-remember earmarks thereof. Respondent's label underscores the trademark Atussin in bold, block
letters horizontally written. In petitioner's, on the other hand, Pertussin is printed diagonally upwards
and across in semiscript style with flourishes and with only the first letter "P" capitalized. Each label
plainly shows the source of the medicine: petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and on
top, "Apothecary E. Taeschner's"; respondent's projects "Westmont Pharmaceuticals, Inc. New York,
USA" at the bottoms, and on the lower left side the word "Westmont" upon a white diamond shaped
enclosure and in red ink — a color different from that of the words above and below it. Printed
prominently along the left, bottom and right edges of petitioner's label are indications of the use: "for
bronchial catarrh — whopping-cough — coughs and asthma". Respondent's for its part briefly
represents what its produce actually is - a "cough syrup". 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. 13
On this point the following culled from a recent decision of the United States Court of Customs and
Patent Appeals (June 15, 1956) is persuasive: 14
Confusion is likely between trademarks, however, 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 believing that the products to which the marks are applied emanated from the same
source. In testing this issue, fixed legal rules exist — if not in harmony, certainly in
abundance — but, in the final analysis, the application of these rules in any given situation
necessarily reflects a matter of individual judgment largely predicated on opinion. There is,
however, and can be no disagreement with the rule that the purchaser is confused, if at all, by
the marks as a whole.
 4. We now consider exclusively the two words — Pertussin and Atussin — as they appear on the
respective labels. As previously adverted to, these words are presented to the public in different styles
of writing and methods of design. The horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to denude
the mind of that illuminating similarity so essential for a trademark infringement case to prosper.

5. As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two
words do not sound alike — when pronounced. There is not much phonetic similarity between the two.
The Solicitor General well-observed that in Pertussin the pronunciation of the prefix "Per", whether
correct or incorrect, includes a combination of three letters P, e and r; whereas, in Atussin the whole
starts with the single letter A added to suffix "tussin". Appeals to the ear are disimilar. And this,
because in a word combination, the part that comes first is the most pronounced. An expositor of the
applicable rule here is the decision in the Syrocol-Cheracol controversy. 15 There, the ruling is that
trademark Syrocol (a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason: the two words "do not look or sound
enough alike to justify a holding of trademark infringement", and the "only similarity is in the last
syllable, and that is not uncommon in names given drug compounds".

6. In the solution of a trademark infringement problem, regard too should be given to the class of
persons who buy the particular product and the circumstances ordinarily attendant to its
acquisition. 16 The medicinal preparation clothed with the trademarks in question, are unlike articles of
everyday use such as candies, ice cream, milk, soft drinks and the like which may be freely obtained
by anyone, anytime, anywhere. Petitioner's and respondent's products are to be dispensed upon medical
prescription. The respective labels say so. An intending buyer must have to go first to a licensed doctor
of medicine; he receives instructions as to what to purchase; he reads the doctor's prescription; he
knows what he is to buy. He is not of the incautious, unwary, unobservant or unsuspecting type; he
examines the product sold to him; he checks to find out whether it conforms to the 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.

We concede the possibility that buyers might be able to obtain Pertussin or Attusin without prescription. When
this happens, then 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. In which case, the more
improbable it will be to palm off one for the other. For a person who purchases with open eyes is hardly the
man to be deceived.

For the reasons given, the appealed decision of the respondent Director of Patents — giving due course to the
application for the registration of trademark ATTUSIN is hereby affirmed. Costa against petitioner. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala, Makalintal, Bengzon, J. P., and
Zaldivar, JJ., concur.
Dizon, J., took no part.

8
[G.R. No. 114508. November 19, 1999]
PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF PATENTS and the
BARBIZON CORPORATION, respondents.
DECISION
PUNO, J.:
The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the
Philippines bound itself to honor and enforce in this country. As to whether or not the treaty affords protection
to a foreign corporation against a Philippine applicant for the registration of a similar trademark is the principal
issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed
an application with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieres
and ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the
firm name "L & BM Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of
New York, U.S.A., opposed the application. It claimed that:
"The mark BARBIZON of respondent-applicant is confusingly similar to the trademark BARBIZON which
opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON and its business reputation and
goodwill will suffer great and irreparable injury.
That the respondent-applicant's use of the said mark BARBIZON which resembles the trademark used and
owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not
abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, as amended." [1]
This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the pleadings, the parties
submitted the case for decision.
On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition and giving due
course to Escobar's application, thus:
"WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No.
19010 for the registration of the trademark BARBIZON, of respondent Lolita R. Escobar, is given due course.
IT IS SO ORDERED."[2]
9
This decision became final and on September 11, 1974, Lolita Escobar was issued a certificate of
registration for the trademark "Barbizon." The trademark was "for use in "brassieres and lady's underwear
garments like panties."[3]
Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas J. Mirpuri who,
under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's
"Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of the trademark
required under Section 12 of Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure,
the Bureau of Patents cancelled Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own
application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner
and this application was opposed by private respondent. The case was docketed as Inter Partes Case No. 2049
(IPC No. 2049).
In its opposition, private respondent alleged that:
"(a) The Opposer has adopted the trademark BARBIZON (word), sometime in June 1933 and has then used it
on various kinds of wearing apparel. On August 14, 1934, Opposer obtained from the United States Patent
Office a more recent registration of the said mark under Certificate of Registration No. 316,161. On March 1,
1949, Opposer obtained from the United States Patent Office a more recent registration for the said trademark
under Certificate of Registration No. 507,214, a copy of which is herewith attached as Annex `A.' Said
Certificate of Registration covers the following goods-- wearing apparel: robes, pajamas, lingerie, nightgowns
and slips;
(b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON and Bee design and used the
said mark in various kinds of wearing apparel. On March 15, 1977, Opposer secured from the United States
Patent Office a registration of the said mark under Certificate of Registration No. 1,061,277, a copy of which is
herein enclosed as Annex `B.' The said Certificate of Registration covers the following goods: robes, pajamas,
lingerie, nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON and a Representation of a
Woman and thereafter used the said trademark on various kinds of wearing apparel. Opposer obtained from the
United States Patent Office registration of the said mark on April 5, 1983 under Certificate of Registration No.
1,233,666 for the following goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy of the
said certificate of registration is herewith enclosed as Annex `C.'
(d) All the above registrations are subsisting and in force and Opposer has not abandoned the use of the said
trademarks. In fact, Opposer, through a wholly-owned Philippine subsidiary, the Philippine Lingerie
Corporation, has been manufacturing the goods covered by said registrations and selling them to various
countries, thereby earning valuable foreign exchange for the country. As a result of respondent-applicant's
misappropriation of Opposer's BARBIZON trademark, Philippine Lingerie Corporation is prevented from
selling its goods in the local market, to the damage and prejudice of Opposer and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been used in many countries, including the
Philippines, for at least 40 years and has enjoyed international reputation and good will for their quality. To
protect its registrations in countries where the goods covered by the registrations are being sold, Opposer has
procured the registration of the trademark BARBIZON in the following countries: Australia, Austria, Abu
Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia, Denmark, Ecuador, France, West
Germany, Greece, Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco, Panama,
New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador, South Africa, Zambia, Egypt, and Iran, among
others;
(f) To enhance its international reputation for quality goods and to further promote goodwill over its name,
marks and products, Opposer has extensively advertised its products, trademarks and name in various
publications which are circulated in the United States and many countries around the world, including the
Philippines;
(g) The trademark BARBIZON was fraudulently registered in the Philippines by one Lolita R. Escobar under
Registration No. 21920, issued on September 11, 1974, in violation of Article 189 (3) of the Revised Penal
Code and Section 4 (d) of the Trademark Law.Herein respondent applicant acquired by assignment the `rights'
to the said mark previously registered by Lolita Escobar, hence respondent-applicant's title is vitiated by the
same fraud and criminal act. Besides, Certificate of Registration No. 21920 has been cancelled for failure of
either Lolita Escobar or herein respondent-applicant, to seasonably file the statutory affidavit of use. By
applying for a re-registration of the mark BARBIZON subject of this opposition, respondent-applicant seeks to
perpetuate the fraud and criminal act committed by Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and Representation of a
Woman trademarks qualify as well-known trademarks entitled to protection under Article 6bis of the
Convention of Paris for the Protection of Industrial Property and further amplified by the Memorandum of the
Minister of Trade to the Honorable Director of Patents dated October 25, 1983 [sic],[4] Executive Order No. 913
dated October 7, 1963 and the Memorandum of the Minister of Trade and Industry to the Honorable Director of
Patents dated October 25, 1983.
(i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON trademark and
constitutes the dominant part of Opposer's two other marks namely, BARBIZON and Bee design and
BARBIZON and a Representation of a Woman. The continued use by respondent-applicant of Opposer's
trademark BARBIZON on goods belonging to Class 25 constitutes a clear case of commercial and criminal
piracy and if allowed registration will violate not only the Trademark Law but also Article 189 of the Revised
Penal Code and the commitment of the Philippines to an international treaty." [5]
Replying to private respondent's opposition, petitioner raised the defense of res judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business name "Barbizon International."
Petitioner registered the name with the Department of Trade and Industry (DTI) for which a certificate of
registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition for cancellation
of petitioner's business name.
10
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate of registration,
and declared private respondent the owner and prior user of the business name "Barbizon International." Thus:
"WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and prior user of the
business name "BARBIZON INTERNATIONAL" under Certificate of Registration No. 87-09000 dated March
10, 1987 and issued in the name of respondent, is [sic] hereby ordered revoked and cancelled. x x x."[6]
Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director of Patents. On
June 18, 1992, the Director rendered a decision declaring private respondent's opposition barred by res
judicata and giving due course to petitioner's application for registration, to wit:
"WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby DECLARED BARRED by res
judicata and is hereby DISMISSED. Accordingly, Application Serial No. 45011 for trademark BARBIZON
filed by Pribhdas J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED."[7]
Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP No. 28415. On
April 30, 1993, the Court of Appeals reversed the Director of Patents finding that IPC No. 686 was not barred
by judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further
proceedings, viz:
"WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of Patents in Inter Partes
Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded to the Bureau of Patents for further
proceedings, in accordance with this pronouncement. No costs."[8]
In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its
decision.[9] Hence, this recourse.
Before us, petitioner raises the following issues:
"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS IN INTER PARTES CASE
NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO
FAR AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY APPLIED THE PRINCIPLE OF
RES JUDICATA IN DISMISSING PRIVATE RESPONDENT BARBIZON'S OPPOSITION TO
PETITIONER'S APPLICATION FOR REGISTRATION FOR THE TRADEMARK BARBIZON, WHICH
HAS SINCE RIPENED TO CERTIFICATE OF REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE MERITS' REQUIRED A
'HEARING WHERE BOTH PARTIES ARE SUPPOSED TO ADDUCE EVIDENCE' AND WHETHER THE
JOINT SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR RESPECTIVE
PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS
WITHIN THE MEANING OF 'JUDGMENT ON THE MERITS' AS ONE OF THE REQUISITES TO
CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND INDUSTRY CANCELLING
PETITIONER'S FIRM NAME 'BARBIZON INTERNATIONAL' AND WHICH DECISION IS STILL
PENDING RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE DIRECTOR OF
PATENTS IN INTER PARTES CASE NO. 2049 HAS THE RIGHT TO DECIDE SUCH CANCELLATION
NOT ON THE BASIS OF THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION AND THE TRADEMARK
LAW (R.A. 166) WHICH IS WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE
DIRECTOR OF PATENTS."[10]
Before ruling on the issues of the case, there is need for a brief background on the function and historical
development of trademarks and 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." [11] This definition has been
simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as
"any visible sign capable of distinguishing goods."[12] In Philippine 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. [13]
Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they
indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles
come up to a certain standard of quality; and (3) they advertise the articles they symbolize.[14]
Symbols have been used to identify the ownership or origin of articles for several centuries. [15] As early as
5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe
show bison with symbols on their flanks.[16]Archaeological discoveries of ancient Greek and Roman
inscriptions on sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some features
which are thought to be marks or symbols. These marks were affixed by the creator or maker of the article, or
by public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the
settlement of accounts between an entrepreneur and his workmen. [17]
In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth
century England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on
bread, bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. [18] Every guild had its own
mark and every master belonging to it had a special mark of his own. The marks were not trademarks but police
marks compulsorily imposed by the sovereign to let the public know that the goods were not "foreign" goods
smuggled into an area where the guild had a monopoly, as well as to aid in tracing defective work or poor
craftsmanship to the artisan.[19] For a similar reason, merchants also used merchants' marks. Merchants dealt in
goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon
recovery after shipwreck or piracy.[20]
11
With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to
create or continue monopoly but to give the customer an index or guarantee of quality. [21] It was in the late 18th
century when the industrial revolution gave rise to mass production and distribution of consumer goods that the
mark became an important instrumentality of trade and commerce. [22] By this time, trademarks did not merely
identify the goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further
purchases by the consuming public.[23] Eventually, they came to symbolize the goodwill and business reputation
of the owner of the product and became a property right protected by law.[24] The common law developed the
doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from
getting another's business or injuring his reputation by unfair means, and, from defrauding the
public."[25] Subsequently, England and the United States enacted national legislation on trademarks as part of
the law regulating unfair trade.[26] It became the right of the trademark owner to exclude others from the use of
his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury. At
the same time, the trademark served as a warning against the imitation or faking of products to prevent the
imposition of fraud upon the public.[27]
Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for
the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal
guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the
goods.[28] The mark has become the "silent salesman," the conduit through which direct contact between the
trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it
has become a more convincing selling point than even the quality of the article to which it refers. [29] In the last
half century, the unparalleled growth of industry and the rapid development of communications technology
have enabled trademarks, tradenames and other distinctive signs of a product to penetrate regions where the
owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of
actual market penetration; it extends to zones where the marked article has been fixed in the public mind
through advertising.[30] Whether in the print, broadcast or electronic communications medium, particularly on
the Internet,[31] advertising has paved the way for growth and expansion of the product by creating and earning a
reputation that crosses over borders, virtually turning the whole world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this action claiming that "Barbizon"
products have been sold in the Philippines since 1970. Petitioner developed this market by working long hours
and spending considerable sums of money on advertisements and promotion of the trademark and its
products. Now, almost thirty years later, private respondent, a foreign corporation, "swaggers into the country
like a conquering hero," usurps the trademark and invades petitioner's market. [32] Justice and fairness dictate that
private respondent be prevented from appropriating what is not its own. Legally, at the same time, private
respondent is barred from questioning petitioner's ownership of the trademark because of res judicata.[33]
Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter
settled by judgment.[34] In res judicata, the judgment in the first action is considered conclusive as to every
matter offered and received therein, as to any other admissible matter which might have been offered for that
purpose, and all other matters that could have been adjudged therein.[35] Res judicata is an absolute bar to a
subsequent action for the same cause; and its requisites are: (a) the former judgment or order must be final; (b)
the judgment or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction
over the subject matter and parties; (d) there must be between the first and second actions, identity of parties, of
subject matter and of causes of action.[36]
 The Solicitor General, on behalf of respondent Director of Patents, has joined cause with petitioner. Both
claim that all the four elements of res judicata have been complied with: that the judgment in IPC No. 686 was
final and was rendered by the Director of Patents who had jurisdiction over the subject matter and parties; that
the judgment in IPC No. 686 was on the merits; and that the lack of a hearing was immaterial because
substantial issues were raised by the parties and passed upon by the Director of Patents. [37]
The decision in IPC No. 686 reads as follows:
"x x x.
Neither party took testimony nor adduced documentary evidence. They submitted the case for decision based on
the pleadings which, together with the pertinent records, have all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein opposer would probably be damaged
by the registration of the trademark BARBIZON sought by the respondent-applicant on the ground that it so
resembles the trademark BARBIZON allegedly used and owned by the former to be `likely to cause confusion,
mistake or to deceive purchasers.'
On record, there can be no doubt that respondent-applicant's sought-to-be-registered trademark BARBIZON is
similar, in fact obviously identical, to opposer's alleged trademark BARBIZON, in spelling and
pronunciation. The only appreciable but very negligible difference lies in their respective appearances or
manner of presentation. Respondent-applicant's trademark is in bold letters (set against a black background),
while that of the opposer is offered in stylish script letters.
It is opposer's assertion that its trademark BARBIZON has been used in trade or commerce in the Philippines
prior to the date of application for the registration of the identical mark BARBIZON by the respondent-
applicant. However, the allegation of facts in opposer's verified notice of opposition is devoid of such material
information. In fact, a reading of the text of said verified opposition reveals an apparent, if not deliberate,
omission of the date (or year) when opposer's alleged trademark BARBIZON was first used in trade in the
Philippines (see par. No. 1, p. 2, Verified Notice of Opposition, Rec.). Thus, it cannot here and now be
ascertained whether opposer's alleged use of the trademark BARBIZON could be prior to the use of the
identical mark by the herein respondent-applicant, since the opposer attempted neither to substantiate its claim
of use in local commerce with any proof or evidence. Instead, the opposer submitted the case for decision based
merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended application for registration that she first used
the trademark BARBIZON for brassiere (or 'brasseire') and ladies underwear garments and panties as early as
March 3, 1970. Be that as it may, there being no testimony taken as to said date of first use, respondent-
applicant will be limited to the filing date, June 15, 1970, of her application as the date of first use (Rule 173,
Rules of Practice in Trademark Cases).
From the foregoing, I conclude that the opposer has not made out a case of probable damage by the registration
of the respondent-applicant's mark BARBIZON.
12
WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No.
19010, for the registration of the trademark BARBIZON of respondent Lolita R. Escobar, is given due
course."[38]
The decision in IPC No. 686 was a judgment on the merits and it was error for the Court of Appeals to rule
that it was not. A judgment is on the merits when it determines the rights and liabilities of the parties based on
the disclosed facts, irrespective of formal, technical or dilatory objections.[39] It is not necessary that a trial
should have been conducted. If the court's judgment is general, and not based on any technical defect or
objection, and the parties had a full legal opportunity to be heard on their respective claims and contentions, it is
on the merits although there was no actual hearing or arguments on the facts of the case. [40] In the case at bar,
the Director of Patents did not dismiss private respondent's opposition on a sheer technicality. Although no
hearing was conducted, both parties filed their respective pleadings and were given opportunity to present
evidence. They, however, waived their right to do so and submitted the case for decision based on their
pleadings. The lack of evidence did not deter the Director of Patents from ruling on the case, particularly on the
issue of prior use, which goes into the very substance of the relief sought by the parties. Since private
respondent failed to prove prior use of its trademark, Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General allege that IPC No.
686 and IPC No. 2049 also comply with the fourth requisite of res judicata, i.e., they involve the same parties
and the same subject matter, and have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same subject
matter. Petitioner herein is the assignee of Escobar while private respondent is the same American corporation
in the first case. The subject matter of both cases is the trademark "Barbizon." Private respondent counter-
argues, however, that the two cases do not have identical causes of action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use and registration of the trademark in the United States and
other countries worldwide, prior use in the Philippines, and the fraudulent registration of the mark in violation
of Article 189 of the Revised Penal Code. Private respondent also cited protection of the trademark under the
Convention of Paris for the Protection of Industrial Property, specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the
Minister of Trade and Industry to the Director of Patents, as well as Executive Order (E.O.) No. 913.
The Convention of Paris for the Protection of Industrial Property, otherwise known as the 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. [41] The Convention is essentially a compact among
various countries which, as members of the Union, have pledged to accord to citizens of the other member
countries trademark and other rights comparable to those accorded their own citizens by their domestic laws for
an effective protection against unfair competition.[42] In short, foreign nationals are to be given the same
treatment in each of the member countries as that country makes available to its own citizens.[43] Nationals of
the various member nations are thus assured of a certain minimum of international protection of their industrial
property.[44]
The Convention was first signed by eleven countries in Paris on March 20, 1883. [45] It underwent several
revisions-- at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in
1958,[46] and at Stockholm in 1967. Both the Philippines and the United States of America, herein private
respondent's country, are signatories to the Convention. The United States acceded on May 30, 1887 while the
Philippines, through its Senate, concurred on May 10, 1965.[47] The Philippines' adhesion became effective on
September 27, 1965,[48] and from this date, the country obligated itself to honor and enforce the provisions of
the Convention.[49]
In the case at bar, private respondent anchors its cause of action on the first paragraph of Article 6bis of
the Paris Convention which reads as follows:
"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." [50]
This Article governs protection of well-known trademarks. Under the first paragraph, 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 mark of a person entitled to the benefits of the
Convention, and used for identical or similar goods.
Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952. [51] It is a self-
executing provision and does not require legislative enactment to give it effect in the member country. [52] It may
be applied directly by the tribunals and officials of each member country by the mere publication or
proclamation of the Convention, after its ratification according to the public law of each state and the order for
its execution.[53]
The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" in
the country where protection is sought. The power to determine whether a trademark is well-known lies in the
"competent authority of the country of registration or use." This competent authority would be either the
registering authority if it has the power to decide this, or the courts of the country in question if the issue comes
before a court.[54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the Ministry of Trade
issued a Memorandum to the Director of Patents. The Minister ordered the Director that:
13
"Pursuant to the Paris Convention for the Protection of Industrial Property to which the Philippines is a
signatory, you are hereby directed to reject all pending applications for Philippine registration of signature and
other world-famous trademarks by applicants other than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands as Lacoste, Jordache,
Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to
surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the
trademarks' foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance."[55]
Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another Memorandum to the
Director of Patents, viz:
"Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rule-making and
adjudicatory powers of the Minister of Trade and Industry and provides inter alia, that `such rule-making and
adjudicatory powers should be revitalized in order that the Minister of Trade and Industry can x x x apply more
swift and effective solutions and remedies to old and new problems x x x such as infringement of
internationally-known tradenames and trademarks x x x' and in view of the decision of the Intermediate
Appellate Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO.
13359 (17) June 1983][56] which affirms the validity of the MEMORANDUM of then Minister Luis R.
Villafuerte dated 20 November 1980 confirming our obligations under the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is a signatory, you are
hereby directed to implement measures necessary to effect compliance with our obligations under said
Convention in general, and, more specifically, to honor our commitment under Section 6bis[57] thereof, as
follows:
1. Whether the trademark under consideration is well-known in the Philippines or is a mark already belonging
to a person entitled to the benefits of the CONVENTION, this should be established, pursuant to Philippine
Patent Office procedures in inter partes and ex parte cases, according to any of the following criteria or any
combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark being considered is already well-
known in the Philippines such that permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof that goods bearing the trademark
are sold on an international scale, advertisements, the establishment of factories, sales offices, distributorships,
and the like, in different countries, including volume or other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of another country or countries,
taking into consideration the date of such registration;
(d) that the trademark has long been established and obtained goodwill and international consumer recognition
as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming ownership and has the right to registration under the
provisions of the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service marks, logos, signs,
emblems, insignia or other similar devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of, trademarks which
constitute a reproduction, translation or imitation of a trademark owned by a person, natural or corporate, who is
a citizen of a country signatory to the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL
PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in cases already or hereafter filed against
the registration of trademarks entitled to protection of Section 6 bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not entitled to such protection for final disallowance by the
Examination Division.
5. All pending applications for Philippine registration of signature and other world-famous trademarks filed by
applicants other than their original owners or users shall be rejected forthwith. Where such applicants have
already obtained registration contrary to the abovementioned PARIS CONVENTION and/or Philippine Law,
they shall be directed to surrender their Certificates of Registration to the Philippine Patent Office for
immediate cancellation proceedings.
x x x."[58]
In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all
pending applications for Philippine registration of signature and other world-famous trademarks by applicants
other than their original owners or users. The Minister enumerated several internationally-known trademarks
and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates
of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-known
trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark
is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris
Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex
parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse
applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications
for registration of world-famous trademarks by persons other than their original owners were to be rejected
forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of
14
then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade
and Industry for the effective protection of consumers and the application of swift solutions to problems in trade
and industry.[59]
Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark
case of La Chemise Lacoste, S.A. v. Fernandez.[60] This court ruled therein that under the provisions of Article
6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine
whether a trademark is well-known in this country.[61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption of the Paris
Convention in 1965. In the case at bar, the first inter partes case, IPC No. 686, was filed in 1970, before the
Villafuerte Memorandum but five (5) years afterthe effectivity of the Paris Convention. Article 6bis was
already in effect five years before the first case was instituted. Private respondent, however, did not cite the
protection of Article 6bis, neither did it mention the Paris Convention at all. It was only in 1981 when IPC No.
2049 was instituted that the Paris Convention and the Villafuerte Memorandum, and, during the pendency of the
case, the 1983 Ongpin Memorandum were invoked by private respondent.
The Solicitor General argues that the issue of whether the protection of Article 6bis of the Convention and
the two Memoranda is barred by res judicata has already been answered in Wolverine Worldwide, Inc. v. Court
of Appeals.[62] In this case, petitioner Wolverine, a foreign corporation, filed with the Philippine Patent Office a
petition for cancellation of the registration certificate of private respondent, a Filipino citizen, for the trademark
"Hush Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationally-known
trademark in the United States and other countries, and cited protection under the Paris Convention and the
Ongpin Memorandum. The petition was dismissed by the Patent Office on the ground of res judicata. It was
found that in 1973 petitioner's predecessor-in-interest filed two petitions for cancellation of the same trademark
against respondent's predecessor-in-interest. The Patent Office dismissed the petitions, ordered the cancellation
of registration of petitioner's trademark, and gave due course to respondent's application for registration. This
decision was sustained by the Court of Appeals, which decision was not elevated to us and became final and
executory.[63]
Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the Trademark Law, its
subsequent petition was based on a new cause of action, i.e., the Ongpin Memorandum and E.O. No. 913 issued
in 1983, after finality of the previous decision. We held that the said Memorandum and E.O. did not grant a new
cause of action because it did "not amend the Trademark Law," x x x "nor did it indicate a new policy with
respect to the registration in the Philippines of world-famous trademarks."[64] This conclusion was based on the
finding that Wolverine's two previous petitions and subsequent petition dealt with the same issue of ownership
of the trademark.[65] In other words, since the first and second cases involved the same issue of ownership, then
the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in IPC No.
686. Private respondent's opposition therein was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage to private respondent's business
reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a mark previously used in the
Philippines which act is penalized under Section 4 (d) of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth several issues summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its products such as robes, pajamas,
lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States Patent Office in 1934 and 1949; and
that variations of the same trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the
representation of a woman were also registered with the U.S. Patent Office in 1961 and 1976;
(c) that these marks have been in use in the Philippines and in many countries all over the world for over forty
years. "Barbizon" products have been advertised in international publications and the marks registered in 36
countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was based on fraud; and this
fraudulent registration was cancelled in 1979, stripping Escobar of whatsoever right she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-known mark under Article 6bis of the Paris
Convention, Executive Order No. 913, and the two Memoranda dated November 20, 1980 and October 25,
1983 of the Minister of Trade and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on the same class of goods as the latter's
amounts to a violation of the Trademark Law and Article 189 of the Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the trademark in
the United States and other countries, and the international recognition and reputation of the trademark
established by extensive use and advertisement of private respondent's products for over forty years here and
abroad. These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of
prior use may have been raised in IPC No. 686 but this claim was limited to prior use in the Philippines
only. Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol
"Barbizon,"[66] as the first and registered user of the mark attached to its products which have been sold and
advertised worldwide for a considerable number of years prior to petitioner's first application for registration of
her trademark in the Philippines. Indeed, these are substantial allegations that raised new issues and necessarily
gave private respondent a new cause of action. Res judicata does not apply to rights, claims or demands,
although growing out of the same subject matter, which constitute separate or distinct causes of action and were
not put in issue in the former action.[67]
Respondent corporation also introduced in the second case a fact that did not exist at the time the first case
was filed and terminated. The cancellation of petitioner's certificate of registration for failure to file the affidavit
of use arose only after IPC No. 686. It did not and could not have occurred in the first case, and this gave
respondent another cause to oppose the second application. Res judicata extends only to facts and conditions as
they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the
facts so determined.[68] When new facts or conditions intervene before the second suit, furnishing a new basis
15
for the claims and defenses of the parties, the issues are no longer the same, and the former judgment cannot be
pleaded as a bar to the subsequent action.[69]
It is also noted that the oppositions in the first and second cases are based on different laws. The
opposition in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d) [70] on
confusing similarity of trademarks and Section 8[71] on the requisite damage to file an opposition to a petition
for registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof,
E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked
Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law.[72] 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
others.[73] The mere fact that the same relief is sought in the subsequent action will not render the judgment in
the prior action operative as res judicata, such as where the two actions are based on different statutes. [74] Res
judicata therefore does not apply to the instant case and respondent Court of Appeals did not err in so ruling.
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.[75] Trademarks play a
significant role in communication, commerce and trade, and serve valuable and interrelated business functions,
both nationally and internationally. For this reason, all agreements concerning industrial property, like those on
trademarks and tradenames, are intimately connected with economic development. [76]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.[77] These advantages have been acknowledged by the Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an effective intellectual and industrial property system is vital to
the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our products."[78] The Intellectual Property Code took effect on
January 1, 1998 and by its express provision,[79] repealed the Trademark Law,[80] the Patent Law,[81] Articles 188
and 189 of the Revised Penal Code, the Decree on Intellectual Property, [82] and the Decree on Compulsory
Reprinting of Foreign Textbooks.[83] The Code was enacted to strengthen the intellectual and industrial property
system in the Philippines as mandated by the country's accession to the Agreement Establishing the World
Trade Organization (WTO).[84]
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. [85] The
WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements
and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on Trade-Related
Aspects of Intellectual Property Rights or TRIPs. [86] 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.[87] These Conventions
are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the
International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention
(1967), as revised in Stockholm on July 14, 1967.[88]
 A major proportion of international trade depends on the protection of intellectual property rights. [89] Since
the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a
considerable adverse impact on domestic and international trade revenues. [90] The TRIPs Agreement seeks to
grant adequate protection of intellectual property rights by creating a favorable economic environment to
encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about
economic, cultural and technological independence.[91] The Philippines and the United States of America have
acceded to the WTO Agreement. This Agreement has revolutionized international business and economic
relations among states, and has propelled the world towards trade liberalization and economic
globalization.[92] Protectionism and isolationism belong to the past. Trade is no longer confined to a bilateral
system. There is now "a new era of global economic cooperation, reflecting the widespread desire to operate in
a fairer and more open multilateral trading system." [93] Conformably, the State must reaffirm its commitment to
the global community and take part in evolving a new international economic order at the dawn of the new
millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

16
G.R. No. L-28554 February 28, 1983
UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner,
vs.
GENERAL MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as Director of
Patents, respondents.
Salem & Dionisio Law Office for petitioner.
Siguion Reyna, Montecillo, Bello & Ongsiako for private respondent.
TEEHANKEE, J.:
The Court affirms respondent Director of Patent's decision declaring respondent General Milling Corporation as
the prior user of the trademark "All Montana" on wheat flour in the Philippines and ordering the cancellation of
the certificate of registration for the same trademark previously issued in favor of petitioner Unno Commercial
Enterprises, Incorporated, it appearing that Unno Commercial Enterprises, Inc. merely acted as exclusive
distributor of All Montana wheat flour in the Philippines. Only the owner of a trademark, trade name or service
mark may applly for its registration and an importer, broker, indentor or distributor acquires no rights to the
trademark of the goods he is dealing with in the absence of a valid transfer or assignment of the trade mark.
On December 11, 1962, respondent General Milling Corporation filed an application for the registration of the
trademark "All Montana" to be used in the sale of wheat flour. In view of the fact that the same trademark was
previously, registered in favor of petitioner Unno Commercial Enterprises, Inc., the Chief Trademark Examiner
of the Philippines Patent Office declared an interference proceeding 1 between respondent corporation's
application (Serial No. 9732), as Junior - Party-Applicant and petitioner company's registration (Registration
No. 9589), as Senior Party-Applicant, docketed in the Philippines Patent Office as Inter Partes Case No. 313, to
determine which party has previously adopted and used the trademark "All Montana".
Respondent General Milling Corporation, in its application for registration, alleged that it started using the
trademark "All Montana" on August 31, 1955 and subsequently was licensed to use the same by Centennial
Mills, Inc. by virtue of a deed of assignment executed on September 20, 1962. On the other hand petitioner
Unno Commercial Enterprises, Inc. argued that the same trademark had been registered in its favor on March 8,
1962 asserting that it started using the trademark on June 30, 1956, as indentor or broker for S.H. Huang Bros.
& Co., a local firm.
The Director of Patents, after hearing, ruled in favor of respondent General Milling Corporation and rendered its
decision as follows:
However, there is testimony in the record (t.s.n., pp. 11-12, Jan.17,1967, testimony of Jose
Uy) to the effect that, indispensable, "ALL MONTANA" wheat flour is a premium flour
produced from premium wheat coming from the State of Montana, U.S.A. It is apparent that
17
the trademark is primarily geographically descriptive of the goods. It is therefore a matter
overlooked by the Trademark Examiner, and it is incumbent upon him to determine if the
applicant should claim and is qualified to claim distinctiveness under Section 4(f) of the
Trademark Statute. Otherwise, it is registrable on the Supplemental Register and should thus
be registered therein.
WHEREFORE, the Junior Party-Applicant is adjudged prior -user of the trademark ALL
MONTANA, but 'because it is primarily geographically descriptive, the application is herein
remanded to the Chief Trademark Examiner for proper proceeding before issuance of the
certificate of registration.
The certificate of registration issued to the Senior Party is ordered cancelled.
IT IS SO ORDERED.
After its motion for reconsideration was denied, petitioner brought the instant petition seeking the reversal of
the decision and praying that it be declared the owner and prior user of the trademark "All Montana" on wheat
flour.
Petitioner based its claim of ownership over the trademark in question by the fact that it acted as an indentor or
broker for S. H. Huang Bros. & Co., a local importer of wheat flour, offering as evidence the various shipments,
documents, invoices and other correspondence of Centennial Mills, Inc., shipping thousand of bags of wheat
flour bearing the trademark "All Montana" to the Philippines. Petitioner argued that these documents, invoices
and correspondence proved the fact that it has been using the trademark "All Montana" as early as 1955 in the
concept of an owner and maintained that anyone, whether he is only an importer, broker or indentor can
appropriate, use and own a particular mark of its own choice although he is not the manufacturer of the goods
he deals with. Relying on the provisions of Section 2-A of the Trademarks Law 2 (Republic Act 166), petitioner
insists that "the appropriation and ownership of a particular trademark is not merely confined to producers or
manufacturers but likewise to anyone who lawfully deals in merchandise who renders any lawful service in
commerce, like petitioner in the case at bar. 3
The right to register trademark is based on ownership. 4 When the applicant is not the owner of the trademark
being applied for, he has no right to apply for the registration of the same. 5 Under the Trademark Law only the
owner of the trademark, trade name or service mark used to distinguish his goods, business or service from the
goods, business or service of others is entitled to register the same. 6
The term owner does not include the importer of the goods bearing the trademark, trade name, service mark, or
other mark of ownership, unless such importer is actually the owner thereof in the country from which the
goods are imported. A local importer, however, may make application for the registration of a foreign
trademark, trade name or service mark if he is duly authorized by the actual owner of the name or other mark of
ownership. 7
Thus, this Court, has on several occasions ruled that where the applicant's alleged ownership is not shown in
any notarial document and the applicant appears to be merely an importer or distributor of the merchandise
covered by said trademark, its application cannot be granted. 8
Moreover, the provision relied upon by petitioner (Sec. 2-A, Rep. Act No. 166) allows one "who lawfully
produces or deals in merchandise ... or who engages in any lawful business or who renders any lawful service in
commerce, by actual use thereof . . . (to) appropriate to his exclusive use a trademark, or a service mark not so
appropriated by another. " In the case at bar, the evidence showed that the trademark "All Montana" was owned
and registered in the name of Centennial Mills, Inc. which later transferred it to respondent General Milling
Corporation by way of a deed of assignment. It is undisputed that way back in March, 1955, Centennial Mills,
Inc. under the tradename Wenatchee Milling Co., exported flour to the Philippines, through its distributor,
herein petitioner Unno Commercial Enterprises, Inc. which acted as indentor or broker for the firm S. H. Huang
Bros. & Co. However, because of increased taxes and subsidies, Centennial Mills discontinued shipments of
flour in the Philippines and eventually sold its brands for wheat flour, including "All Montana" brand to
respondent General Milling Corporation in consideration of 1,000 shares of stock of respondent corporation
with a par value of P100.00 per share or a total of P100,000.00. Respondent General Milling Corporation, since
the start of the operation in 1961 of its flour mills located in Lapu-lapu City, Cebu has been manufacturing and
selling "All Montana" flour in the Philippines.
As against petitioner's argument that respondent failed to establish convincingly the ownership of the trademark
"All Montana" by its assignor Centennial Mills, Inc., the Director of Patents correctly found that ample
evidence was presented that Centennial Mills, Inc. was the owner and prior user in the Philippines of the
trademark "All Montana" through a local importer and broker. The Deed of Assignment itself constitutes
sufficient proof of its ownership of the trademark "All Montana," showing that Centennial Mills was a
corporation duly organized and existing under and by virtue of the laws of the State of Oregon, U.S.A. with
principal place and business at Portland, Oregon, U.S.A. and the absolute and registered owner of several
trademarks for wheat flour, i.e. (Imperial, White Lily, Duck, General, Swan, White Horse, Vinta, El Paro,
Baker's Joy, Choice, Red Bowl All Montana and Dollar.) all of which were assigned by it to respondent General
Milling Corporation. The deed of assignment was signed by its president, Dugald MacGregor, duly
acknowledged before James Hunt, a notary public for the State of Oregon, accompanied by a certification
issued by the Secretary of State of the State of Oregon stating that the said James Hunt is a duly qualified
Notary Public with full power and authority to take acknowledgments of all oaths and that full faith and credit
should be given to his official acts as notary public.
The Director of Patents likewise correctly rejected petitioner's contention that in a 1954 conference in Manila
the ownership and use by petitioner of the brand "All Montana" was agreed upon, on the contrary finding that
"Details of that meeting were, however, explained by Mr. Dugald MacGregor, President of Centennial Mills,
Inc., as the Junior Party's rebuttal witness. Mr. MacGregor confirmed holding such conference in a restaurant in
Manila with representatives of the Senior Party, namely; Messrs. Jose Uy, Francisco Gonzales and S. H. Huang
although he could not remember the name of the restaurant. He further explained that his company owned the
trademark; that it had been using the mark in the United States; and that ownership of the mark had never been
conferred upon any other company, much less the Senior Party"; and "Inasmuch as it was not the owner of the
trademark, the Senior Party could not be regarded as having used and adopted it, and had no right to apply for
its registration. It acknowledged that it was a mere importer of flour, and a mere importer and distributor
acquires no rights in the mark used on the imported goods by the foreign exporter in the absence of an
18
assignment of any kind ... Trademarks used and adopted on goods manufactured or packed in a foreign country
in behalf of a domestic importer, broker, or indentor and distributor are presumed to be owned by the
manufacturer or packer, unless there is a written agreement clearly showing that ownership vests in the
importer, broker, indentor or distributor.
Thus, petitioner's contention that it is the owner of the mark "All Montana" because of its certificate of
registration issued by the Director of Patents, must fail, since ownership of a trademark is not acquired by the
mere fact of registration alone. 9 Registration merely creates a prima facie presumption of the validity of the
registration, of the registrant's ownership of the trademark and of the exclusive right to the use
thereof. 10 Registration does not perfect a trademark right. 11 As conceded itself by petitioner, evidence may be
presented to overcome the presumption. Prior use by one will controvert a claim of legal appropriation, by
subsequent users. In the case at bar, the Director of Patents found that "ample evidence was presented in the
record that Centennial Mills, Inc. was the owner and prior user in the Philippines of the trademark 'All Montana'
through a local importer and broker. Use of a trademark by a mere importer, indentor or exporter (the Senior
Party herein) inures to the benefit of the foreign manufacturer whose goods are Identified by the trademark. The
Junior Party has hereby established a continuous chain of title and, consequently, prior adoption and use" and
ruled that "based on the facts established, it is safe to conclude that the Junior Party has satisfactorily discharged
the burden of proving priority of adoption and use and is entitled to registration." It is well-settled that we are
precluded from making further inquiry, since the findings of fact of the Director of Patents in the absence of any
showing that there was grave abuse of discretion is binding on us 12 and the findings of facts by the Director of
Patents are deemed conclusive in the Supreme Court provided that they are supported by substantial
evidence. 13 Petitioner has failed to show that the findings of fact of the Director of Patents are not substantially
supported by evidence nor that any grave abuse of discretion was committed.
Finally, the Court finds without merit petitioner's argument that the Director of Patents could not order the
cancellation of' its certificate of registration in an interference proceeding and that the question of whether or
not a certificate of registration is to be cancelled should have been brought in cancellation proceedings. Under
Rule 178 of the Rules of the Patent Office in Trademark Cases, 14 the Director of Patents is expressly authorized
to order the cancellation of a registered mark or trade name or name or other mark of ownership in an inter
partes case, such as the interference proceeding at bar. 15
WHEREFORE, the appealed decision is hereby affirmed. No costs.
Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
G.R. No. L-75420 November 15, 1991
KABUSHI KAISHA ISETAN, also known and trading as ISETAN CO., LTD., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, THE DIRECTOR OF PATENTS, and ISETANN
DEPARTMENT STORE, INC., respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari which seeks to set aside - (1) the decision of the Court of Appeals
dated June 2, 1986 in AC-G.R. SP No. 008873 entitled "Kabushi Kaisha Isetan, also known and trading as
Isetan Company Limited v. Isetann Department Store, Inc." dismissing the petitioner's appeal from the decision
of the Director of Patents; and (2) the Resolution dated July 11, 1986 denying the petitioner's motion for
reconsideration.
As gathered from the records, the facts are as follows:
Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under the laws of Japan with
business address at 14-1 Shinjuku, 3-Chrome, Shinjuku, Tokyo, Japan. It is the owner of the trademark "Isetan"
and the "Young Leaves Design".
The petitioner alleges that it first used the trademark Isetan on November 5, 1936. It states that the trademark is
a combination of "Ise" taken from "Iseya" the first name of the rice dealer in Kondo, Tokyo in which the
establishment was first located and "Tan" which was taken from "Tanji Kosuge the First". The petitioner claims
to have expanded its line of business internationally from 1936 to 1974. The trademark "Isetan" and "Young
Leaves Design" were registered in Japan covering more than 34 classes of goods. On October 3, 1983, the
petitioner applied for the registration of "Isetan" and "Young Leaves Design" with the Philippine Patent Office
under Permanent Serial Nos. 52422 and 52423 respectively. (Rollo, p. 43)
Private respondent, Isetann Department Store, on the other hand, is a domestic corporation organized and
existing under the laws of the Philippines with business address at 423-430 Rizal Avenue, Sta. Cruz, Manila,
Philippines.
It claims that it used the word "Isetann" as part of its corporated name and on its products particularly on shirts
in Joymart Department Store sometime in January 1979. The suffix "Tann" means an altar, the place of offering
in Chinese and this was adopted to harmonize the corporate name and the corporate logo of two hands in cup
that symbolizes the act of offering to the Supreme Being for business blessing.
On May 30, 1980 and May 20, 1980, the private respondent registered "Isetann Department Store, Inc." and
Isetann and Flower Design in the Philippine Patent Office under SR. Reg. No. 4701 and 4714, respectively, as
well as with the Bureau of Domestic Trade under Certificate of Registration No. 32020. (Rollo, pp. 43-44)
19
On November 28, 1980, the petitioner filed with the Phil. Patent Office two (2) petitions for the cancellation of
Certificates of Supplemental Registration Nos. SR-4714 and SR-4701 stating among others that:
. . . except for the additional letter "N" in the word "Isetan", the mark registered by the registrant is
exactly the same as the trademark ISETAN owned by the petitioner and that the young leaves
registered by the registrant is exactly the same as the young leaves design owned by the petitioner.
The petitioner further alleged that private respondent's act of registering a trademark which is exactly the same
as its trademark and adopting a corporate name similar to that of the petitioner were with the illegal and
immoral intention of cashing in on the long established goodwill and popularity of the petitioner's reputation,
thereby causing great and irreparable injury and damage to it (Rollo, p. 521). It argued that both the petitioner's
and respondent's goods move in the same channels of trade, and ordinary people will be misled to believe that
the products of the private respondent originated or emanated from, are associated with, or are manufactured or
sold, or sponsored by the petitioner by reason of the use of the challenged trademark.
The petitioner also invoked the Convention of Paris of March 20, 1883 for the Protection of Industrial Property
of which the Philippines and Japan are both members. The petitioner stressed that the Philippines' adherence to
the Paris Convention committed to the government to the protection of trademarks belonging not only to
Filipino citizens but also to those belonging to nationals of other member countries who may seek protection in
the Philippines. (Rollo, p. 522)
The petition was docketed as Inter Partes Cases Nos. 1460 and 1461 (Rollo, p. 514)
Meanwhile, the petitioner also filed with the Securities and Exchange Commission (SEC) a petition to cancel
the mark "ISETAN" as part of the registered corporate name of Isetann Department Store, Inc. which petition
was docketed as SEC Case No. 2051 (Rollo, p. 524) On May 17, 1985, this petition was denied in a decision
rendered by SEC's Hearing Officer, Atty. Joaquin C. Garaygay.
On appeal, the Commission reversed the decision of the Hearing Officer on February 25, 1986. It directed the
private respondent to amend its Articles of Incorporation within 30 days from finality of the decision.
On April 15, 1986, however, respondent Isetann Department Store filed a motion for reconsideration. (Rollo,
pp. 325-353). And on September 10, 1987, the Commission reversed its earlier decision dated February 25,
1986 thereby affirming the decision rendered by the Hearing Officer on May 17, 1985. The Commission stated
that since the petitioner's trademark and tradename have never been used in commerce on the petitioner's
products marketed in the Philippines, the trademark or tradename have not acquired a reputation and goodwill
deserving of protection from usurpation by local competitors. (Rollo, p. 392).
This SEC decision which denied and dismissed the petition to cancel was submitted to the Director of Patents as
part of the evidence for the private respondent.
On January 24, 1986, the Director of Patents after notice and hearing rendered a joint decision in Inter Partes
Cases Nos. 1460 and 1461, the dispositive portion of which reads:
 WHEREFORE, all the foregoing considered, this Office is constrained to hold that the herein
Petitioner has not successfully made out a case of cancellation. Accordingly, Inter Partes Cases Nos.
1460 and 1461 are, as they are hereby, DISMISSED. Hence, Respondent's Certificate of Supplemental
Registration No. 4714 issued on May 20, 1980 covering the tradename "ISETANN DEPT. STORE,
INC. & FLOWER DESIGN" are, as they are hereby, ordered to remain in full force and effect for the
duration of their term unless sooner or later terminated by law.
The corresponding application for registration in the Principal Register of the Trademark and of the
tradename aforesaid are hereby given due course.
Let the records of these cases be transmitted to the Trademark Examining Division for appropriate
action in accordance with this Decision.
On February 21, 1986, Isetan Company Limited moved for the reconsideration of said decision but the motion
was denied on April 2, 1986 (Rollo, pp. 355-359).
From this adverse decision of the Director of Patents, the petitioner appealed to the Intermediate Appellate
Court (now Court of Appeals).
On June 2, 1986, the IAC dismissed the appeal on the ground that it was filed out of time.
The petitioner's motion for reconsideration was likewise denied in a resolution dated July 11, 1986.
Hence, this petition.
Initially, the Court dismissed the petition in a resolution dated July 8, 1987, on the ground that it was filed
fourteen (14) days late. However, on motion for reconsideration, whereby the petitioner appealed to this Court
on equitable grounds stating that it has a strong and meritorious case, the petition was given due course in a
resolution dated May 19, 1988 to enable us to examine more fully any possible denial of substantive justice.
The parties were then required to submit their memoranda. (Rollo, pp. 2-28; Resolution, pp. 271; 453)
After carefully considering the records of this case, we reiterate our July 8, 1987 resolution dismissing the
petition. There are no compelling equitable considerations which call for the application of the rule enunciated
in Serrano v. Court of Appeals (139 SCRA 179 [1985]) and Orata v. Intermediate Appellate Court, et al. (185
SCRA 148 [1990]) that considerations of substantial justice manifest in the petition may relax the stringent
application of technical rules so as not to defeat an exceptionally meritorious petition.
There is no dispute and the petitioner does not question the fact that the appeal was filed out of time.
Not only was the appeal filed late in the Court of Appeals, the petition for review was also filed late with us. In
common parlance, the petitioner's case is "twice dead" and may no longer be reviewed.
The Court of Appeals correctly rejected the appeal on the sole ground of late filing when it ruled:
20
Perfection of an appeal within the time provided by law is jurisdictional, and failure to observe the
period is fatal.
The decision sought to be appealed is one rendered by the Philippine Patent Office, a quasi-
judicial body. Consequently, under Section 23(c) of the Interim Rules of Court, the appeal shall be
governed by the provisions of Republic Act No. 5434, which provides in its Section 2;
Sec. 2. Appeals to Court of Appeals. - Appeals to the Court of Appeals shall be filed within fifteen (15)
days from notice of the ruling, award, order, decision or judgment or from the date of its last
publication, if publication is required by law for its effectivity; or in case a motion for reconsideration
is filed within that period of fifteen (15) days, then within ten (10) days from notice or publication,
when required by law, of the resolution denying the motion for reconsideration. No more than one
motion for reconsideration shall be allowed any party. If no appeal is filed within the periods here
fixed, the ruling, award, order, decision or judgment shall become final and may be executed as
provided by existing law.
Attention is invited to that portion of Section 2 which states that in case a motion for reconsideration is
filed, an appeal should be filed within ten (10) days from notice of the resolution denying the motion
for reconsideration.
The petitioner received a copy of the Court of Appeals' resolution denying and received by us on August 8,
1986, its motion for reconsideration on July 17, 1986. It had only up to August 1, 1986 to file a petition for
review with us. The present petition was posted on August 2, 1986. There is no question that it was, again, filed
late because the petitioner filed an ex-parte motion for admission explaining the delay.
The decision of the Patent Office has long become final and executory. So has the Court of Appeal decision.
Regarding the petitioner's claims of substantial justice which led us to give due course, we decline to disturb the
rulings of the Patent Office and the Court of Appeals.
A fundamental principle of Philippine Trademark Law is that actual use in commerce in the Philippines is a pre-
requisite to the acquisition of ownership over a trademark or a tradename.
The trademark Law, Republic Act No. 166, as amended, under which this case heard and decided provides:
SEC. 2. What are registrable.- Trademark, tradenames and service marks owned by persons,
corporation, partnerships or associations domiciled in the Philippines and by persons, corporations,
partnerships or associations domicided in any foreign country may be registered in accordance with the
provisions of this Act: Provided, That said trademarks, tradenames, 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 by R.A. No. 865).
SEC. 2-A. Ownership of trademarks, tradenames 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 tradename, or a service
mark not so appropriated by another, to distinguish his merchandise, business or service from the
merchandise, business or service of others. The ownership or possession of a trademark, tradename,
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 the law. (As
amended by R.A. No. 638)"
These provisions have been interpreted in Sterling Products International, Inc. v. Farbenfabriken Bayer
Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
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 over a
trademark.
xxx xxx xxx
... Adoption alone of a trademark would not give exclusive right thereto. Such right grows out of their
actual use. Adoption is not use. One way make advertisements, issue circulars, give out price lists on
certain goods; but these alone would not give exclusive right of use.For trademark is a creation of use.
The underlying reason for all these is that purchasers have come to understand the mark as indicating
the origin of the wares. Flowing from this is the trader's right to protection in the trade he has built up
and the goodwill he has accumulated from use of the trademark. ...
In fact, a prior registrant cannot claim exclusive use of the trademark unless it uses it in commerce.
We ruled in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526 [1982]):
3. The Trademark Law is very clear. It requires actual commercial use of the mark prior to its
registration. - There is no dispute that respondent corporation was the first registrant, yet it failed to
fully substantiate its claim that it used in trade or business in the Philippines the subject mark; it did
not present proof to invest it with exclusive, continuous adoption of the trademark which should
consist among others, of considerable sales since its first use. The invoices (Exhibits 7, 7-a, and 8-b)
submitted by respondent which were dated way back in 1957 show that the zippers sent to the
Philippines were to be used as "samples" and "of no commercial value". The evidence for respondent
must be clear, definite and free from incosistencies. (Sy Ching v. Gaw Lui. 44 SCRA 148-149)
"Samples" are not for sale and therefore, the fact of exporting them to the Philippines cannot be
considered to be equivalent to the "use" contemplated by the law. Respondent did not expect income
from such "samples". "There were no receipts to establish sale, and no proof were presented to show
21
that they were subsequently sold in the Philippines." (Pagasa Industrial Corp. v. Court of Appeals, 118
SCRA 526 [1982]; Emphasis Supplied)
The records show that the petitioner has never conducted any business in the Philippines. It has never promoted
its tradename or trademark in the Philippines. It has absolutely no business goodwill in the Philippines. It is
unknown to Filipinos except the very few who may have noticed it while travelling abroad. It has never paid a
single centavo of tax to the Philippine government. Under the law, it has no right to the remedy it seeks.
There can be no question from the records that the petitioner has never used its tradename or trademark in the
Philippines.
The petitioner's witnesses, Mr. Mayumi Takayama and Mr. Hieoya Murakami, admitted that:
1) The petitioner's company is not licensed to do business in the Philippines;
2) The petitioner's trademark is not registered under Philippine law; and
3) The petitioner's trademark is not being used on products in trade, manufacture, or business in the Philippines.
It was also established from the testimony of Atty. Villasanta, petitioner's witness, that the petitioner has never
engaged in promotional activities in the Philippines to popularize its trademark because not being engaged in
business in the Philippines, there is no need for advertising. The claim of the petitioner that millions of dollars
have been spent in advertising the petitioner's products, refers to advertising in Japan or other foreign places.
No promotional activities have been undertaken in the Philippines, by the petitioner's own admission.
Any goodwill, reputation, or knowledge regarding the name Isetann is purely the work of the private
respondent. Evidence was introduced on the extensive promotional activities of the private respondent.
It might be pertinent at this point to stress that what is involved in this case is not so much a trademark as a
tradename. Isetann Department Store, Inc. is the name of a store and not of product sold in various parts of the
country. This case must be differentiated from cases involving products bearing such familiar names as
"colgate", "Singer". "Toyota", or "Sony" where the products are marketed widely in the Philippines. There is
not product with the name "Isetann" popularized with that brand name in the Philippines. Unless one goes to the
store called Isetann in Manila, he would never know what the name means. Similarly, until a Filipino buyer
steps inside a store called "Isetan" in Tokyo or Hongkong, that name would be completely alien to him. The
records show that among Filipinos, the name cannot claim to be internationally well-known.
The rule is that the findings of facts of the Director of Patents are conclusive on the Supreme Court, provided
they are supported by substantial evidence. (Chua Che v. Phil. Patent Office, 13 SCRA 67 [1965]; Chung Te v.
Ng Kian Giab, 18 SCRA 747 [1966]; Marvex Commercial Co., Inc. v. Petra Hawpia & Co., 18 SCRA 1178
[1966]; Lim Kiah v. Kaynee, Co. 25 SCRA 485 [1968]; Kee Boc v. Dir. of Patents, 34 SCRA 570 [1970]).
The conclusions of the Director of Patents are likewise based on applicable law and jurisprudence:
 What is to be secured from unfair competition in a given territory is the trade which one has in that WHEREFORE, premises considered, the petition is hereby DISMISSED.
particular territory. There is where his business is carried on where the goodwill symbolized by the
trademark has immediate value; where the infringer may profit by infringement. SO ORDERED.

There is nothing new in what we now say. Plaintiff itself concedes (Brief for Plaintiff-Appellant, p. 88) Fernan, C.J., Paras and Bidin, JJ., concur.
that the principle of territoriality of the Trademark Law has been recognized in the Philippines, citing
Ingenohl v. Walter E. Olsen, 71 L. ed. 762. As Callmann puts it, the law of trademarks "rests upon the
doctrine of nationality or territoriality." (2 Callmann, Unfair Competition and Trademarks, 1945 ed., p.
1006) (Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellachaft, 27 SCRA
1214 [1969]; Emphasis supplied)

The mere origination or adoption of a particular tradename without actual use thereof in the market is
insufficient to give any exclusive right to its use (Johnson Mfg. Co. v. Leader Filling Stations Corp. 196 N.E.
852, 291 Mass. 394), even though such adoption is publicly declared, such as by use of the name in
advertisements, circulars, price lists, and on signs and stationery. (Consumers Petrolum Co. v. Consumers Co.
of ILL. 169 F 2d 153)

The Paris Convention for the Protection of Industrial Property does not automatically exclude all countries of
the world which have signed it from using a tradename which happens to be used in one country. To illustrate -
If a taxicab or bus company in a town in the United Kingdom or India happens to use the tradename "Rapid
Transportation", it does not necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji, or the
Philippines.

As stated by the Director of Patents -

Indeed, the Philippines is a signatory to this Treaty and, hence, we must honor our obligation
thereunder on matters concerning internationally known or well known marks. However, this Treaty
provision clearly indicated the conditions which must exist before any trademark owner can claim and
be afforded rights such as the Petitioner herein seeks and those conditions are that:

a) the mark must be internationally known or well known;

b) the subject of the right must be a trademark, not a patent or copyright or anything else;

c) the mark must be for use in the same or similar kinds of goods; and

d) the person claiming must be the owner of the mark (The Parties Convention Commentary on the
Paris Convention. Article by Dr. Bogach, Director General of the World Intellectual Property
Organization, Geneva, Switzerland, 1985)

The respondent registered its trademark in 1979. It has continuously used that name in commerce. It has
established a goodwill through extensive advertising. The people who buy at Isetann Store do so because of
Isetann's efforts. There is no showing that the Japanese firm's registration in Japan or Hongkong has any
influence whatsoever on the Filipino buying public.
22
G.R. No. 91332 July 16, 1993
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND FABRIQUES OF TABAC
REUNIES, S.A., petitioners
vs.
THE COURT OF APPEALS AND FORTUNE TOBACCO CORPORATION, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco Law Office for petitioners.
Teresita Gandionco-Oledan for private respondent.
MELO, J.:
In the petition before us, petitioners Philip Morris, Inc., Benson and Hedges (Canada), Inc., and Fabriques of
Tabac Reunies, S.A., are ascribing whimsical exercise of the faculty conferred upon magistrates by Section 6,
Rule 58 of the Revised Rules of Court when respondent Court of Appeals lifted the writ of preliminary
injunction it earlier had issued against Fortune Tobacco Corporation, herein private respondent, from
manufacturing and selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective symbols "MARK VII", "MARK TEN", and "LARK", also for
cigarettes, must be protected against unauthorized appropriation, petitioners twice solicited the ancillary writ in
the course the main suit for infringement but the court of origin was unpersuaded.
Before we proceed to the generative facts of the case at bar, it must be emphasized that resolution of the issue
on the propriety of lifting the writ of preliminary injunction should not be construed as a prejudgment of the suit
below. Aware of the fact that the discussion we are about to enter into involves a mere interlocutory order, a
discourse on the aspect infringement must thus be avoided. With these caveat, we shall now shift our attention
to the events which spawned the controversy.
As averred in the initial pleading, Philip Morris, Incorporated is a corporation organized under the laws of the
State of Virginia, United States of America, and does business at 100 Park Avenue, New York, New York,
United States of America. The two other plaintiff foreign corporations, which are wholly-owned subsidiaries of
Philip Morris, Inc., are similarly not doing business in the Philippines but are suing on an isolated transaction.
As registered owners "MARK VII", "MARK TEN", and "LARK" per certificates of registration issued by the
Philippine Patent Office on April 26, 1973, May 28, 1964, and March 25, 1964, plaintiffs-petitioners asserted
that defendant Fortune Tobacco Corporation has no right to manufacture and sell cigarettes bearing the
allegedly identical or confusingly similar trademark "MARK" in contravention of Section 22 of the Trademark
Law, and should, therefore, be precluded during the pendency of the case from performing the acts complained
of via a preliminary injunction (p. 75, Court of Appeals Rollo in AC-G.R. SP No. 13132).
For its part, Fortune Tobacco Corporation admitted petitioners' certificates of registration with the Philippine
Patent Office subject to the affirmative and special defense on misjoinder of party plaintiffs. Private respondent
23
alleged further that it has been authorized by the Bureau of Internal Revenue to manufacture and sell cigarettes
bearing the trademark "MARK", and that "MARK" is a common word which cannot be exclusively
appropriated (p.158, Court of Appeals Rollo in A.C.-G.R. SP No. 13132). On March 28, 1983, petitioners'
prayer for preliminary injunction was denied by the Presiding Judge of Branch 166 of the Regional Trial Court
of the National Capital Judicial Region stationed at Pasig, premised upon the following propositions:
Plaintiffs admit in paragraph 2 of the complaint that ". . . they are
not doing business in the Philippines and are suing on an isolated transaction . . .". This
simply means that they are not engaged in the sale, manufacture, importation, expor[t]ation
and advertisement of their cigarette products in the Philippines. With this admission,
defendant asks: ". . . how could defendant's "MARK" cigarettes cause the former "irreparable
damage" within the territorial limits of the Philippines?" Plaintiffs maintain that since their
trademarks are entitled to protection by treaty obligation under Article 2 of the Paris
Convention of which the Philippines is a member and ratified by Resolution No. 69 of the
Senate of the Philippines and as such, have the force and effect of law under Section 12,
Article XVII of our Constitution and since this is an action for a violation or infringement of a
trademark or trade name by defendant, such mere allegation is sufficient even in the absence
of proof to support it. To the mind of the Court, precisely, this is the issue in the main case to
determine whether or not there has been an invasion of plaintiffs' right of property to such
trademark or trade name. This claim of plaintiffs is disputed by defendant in paragraphs 6 and
7 of the Answer; hence, this cannot be made a basis for the issuance of a writ of preliminary
injunction.
There is no dispute that the First Plaintiff is the registered owner of trademar[k] "MARK VII"
with Certificate of Registration No. 18723, dated April 26,1973 while the Second Plaintiff is
likewise the registered owner of trademark "MARK TEN" under Certificate of Registration
No. 11147, dated May 28, 1963 and the Third Plaintiff is a registrant of trademark "LARK" as
shown by Certificate of Registration No. 10953 dated March 23, 1964, in addition to a
pending application for registration of trademark "MARK VII" filed on November 21, 1980
under Application Serial No. 43243, all in the Philippine Patent Office. In same the manner,
defendant has a pending application for registration of the trademark "LARK" cigarettes with
the Philippine Patent Office under Application Serial No. 44008. Defendant contends that
since plaintiffs are "not doing business in the Philippines" coupled the fact that the Director of
Patents has not denied their pending application for registration of its trademark "MARK", the
grant of a writ of preliminary injunction is premature. Plaintiffs contend that this act(s) of
defendant is but a subterfuge to give semblance of good faith intended to deceive the public
and patronizers into buying the products and create the impression that defendant's goods are
identical with or come from the same source as plaintiffs' products or that the defendant is a
licensee of plaintiffs when in truth and in fact the former is not. But the fact remains that with
its pending application, defendant has embarked in the manufacturing, selling, distributing
and advertising of "MARK" cigarettes. The question of good faith or bad faith on the part of
defendant are matters which are evidentiary in character which have to be proven during the
hearing on the merits; hence, until and unless the Director of Patents has denied defendant's
application, the Court is of the opinion and so holds that issuance a writ of preliminary
injunction would not lie.
There is no question that defendant has been authorized by the Bureau of Internal Revenue to
manufacture cigarettes bearing the trademark "MARK" (Letter of Ruben B. Ancheta, Acting
Commissioner addressed to Fortune Tobacco Corporation dated April 3, 1981, marked as
Annex "A", defendant's "OPPOSITION, etc." dated September 24, 1982). However, this
authority is qualified . . . that the said brands have been accepted and registered by the Patent
Office not later than six (6) months after you have been manufacturing the cigarettes and
placed the same in the market." However, this grant ". . . does not give you protection against
any person or entity whose rights may be prejudiced by infringement or unfair competition in
relation to your indicated trademarks/brands". As aforestated, the registration of defendant's
application is still pending in the Philippine Patent Office.
It has been repeatedly held in this jurisdiction as well as in the United States that the right or
title of the applicant for injunction remedy must be clear and free from doubt. Because of the
disastrous and painful effects of an injunction, Courts should be extremely careful, cautious
and conscionable in the exercise of its discretion consistent with justice, equity and fair play.
There is no power the exercise of which is more delicate which requires
greater caution, deliberation, and sound discretion, or (which is) more
dangerous in a doubtful case than the issuing of an injunction; it is the
strong arm of equity that never ought to be extended unless to cases of great
injury, where courts of law cannot afford an adequate or commensurate
remedy in damages. The right must be clear, the injury impending or
threatened, so as to be averted only by the protecting preventive process of
injunction. (Bonaparte v. Camden, etc. N. Co., 3 F. Cas. No. 1, 617, Baldw.
205, 217.)
Courts of equity constantly decline to lay down any rule which injunction
shall be granted or withheld. There is wisdom in this course, for it is
impossible to foresee all exigencies of society which may require their aid
to protect rights and restrain wrongs. (Merced M. Go v. Freemont, 7 Gal.
317, 321; 68 Am. Dec. 262.)
It is the strong arm of the court; and to render its operation begin and useful,
it must be exercised with great discretion, and when necessary requires it.
(Attorney-General v. Utica Inc. Co., P. John Ch. (N.Y.) 371.)
Having taken a panoramic view of the position[s] of both parties as viewed from their
pleadings, the picture reduced to its minimum size would be this: At the crossroads are the
two (2) contending parties, plaintiffs vigorously asserting the rights granted by law, treaty and
jurisprudence to restrain defendant in its activities of manufacturing, selling, distributing and
advertising its "MARK" cigarettes and now comes defendant who countered and refused to be
restrained claiming that it has been authorized temporarily by the Bureau of Internal Revenue
under certain conditions to do so as aforestated coupled by its pending application for
registration of trademark "MARK" in the Philippine Patent Office. This circumstance in itself
24
has created a dispute between the parties which to the mind of the Court does not warrant the
issuance of a writ of preliminary injunction.
It is well-settled principle that courts of equity will refuse an application for
the injunctive remedy where the principle of law on which the right to
preliminary injunction rests is disputed and will admit of doubt, without a
decision of the court of law establishing such principle although satisfied as
to what is a correct conclusion of law upon the facts. The fact, however, that
there is no such dispute or conflict does not in itself constitute a justifiable
ground for the court to refuse an application for the injunctive relief.
(Hackensack Impr. Commn. v. New Jersey Midland P. Co., 22 N.J. Eg. 94.)
Hence, the status quo existing between the parties prior to the filing of this case should be
maintained. For after all, an injunction, without reference to the parties, should be violent,
vicious nor even vindictive. (pp. 338-341, Rollo in G.R. No. 91332.)
In the process of denying petitioners' subsequent motion for reconsideration of the order denying issuance of the
requested writ, the court of origin took cognizance of the certification executed on January 30, 1984 by the
Philippine Patent Office attesting to the fact that private respondent's application for registration is still pending
appropriate action. Apart from this communication, what prompted the trial court judge to entertain the idea of
prematurity and untimeliness of petitioners' application for a writ of preliminary injunction was the letter from
the Bureau of Internal Revenue date February 2, 1984 which reads:
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:
In connection with your letter dated January 25, 1984, reiterating your query as to whether
your label approval automatically expires or becomes null and void after six (6) months if the
brand is not accepted and by the patent office, please be informed that no provision in the Tax
Code or revenue regulation that requires an applicant to comply with the aforementioned
condition order that his label approved will remain valid and existing.
Based on the document you presented, it shows that registration of this particular label still
pending resolution by the Patent Office. These being so , you may therefore continue with the
production said brand of cigarette until this Office is officially notified that the question of
ownership of "MARK" brand is finally resolved.
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique Madarang, Chief of the Trademark Division of the then
Philippine Patent Office that Fortune's application for its trademark is still pending before said office (p.
311, Rollo).
Petitioners thereafter cited supervening events which supposedly transpired since March 28, 1983, when the
trial court first declined issuing a writ of preliminary injunction, that could alter the results of the case in that
Fortune's application had been rejected, nay, barred by the Philippine Patent Office, and that the application had
been forfeited by abandonment, but the trial court nonetheless denied the second motion for issuance of the
injunctive writ on April 22, 1987, thus:
For all the prolixity of their pleadings and testimonial evidence, the plaintiffs-movants have
fallen far short of the legal requisites that would justify the grant of the writ of preliminary
injunction prayed for. For one, they did not even bother to establish by competent evidence
that the products supposedly affected adversely by defendant's trademark now subject of an
application for registration with the Philippine Patents Office, are in actual use in the
Philippines. For another, they concentrated their fire on the alleged abandonment and
forfeiture by defendant of said application for registration.
The Court cannot help but take note of the fact that in their complaint plaintiffs included a
prayer for issuance preliminary injunction. The petition was duly heard, and thereafter matter
was assiduously discussed lengthily and resolved against plaintiffs in a 15-page Order issued
by the undersigned's predecessor on March 28, 1983. Plaintiffs' motion for reconsideration
was denied in another well-argued 8 page Order issued on April 5, 1984,, and the matter was
made to rest.
However, on the strength of supposed changes in the material facts of this case, plaintiffs
came up with the present motion citing therein the said changes which are: that defendant's
application had been rejected and barred by the Philippine Patents Office, and that said
application has been deemed abandoned and forfeited. But defendant has refiled the same.
Plaintiffs' arguments in support of the present motion appear to be a mere rehash of their stand
in the first above-mentioned petition which has already been ruled upon adversely against
them. Granting that the alleged changes in the material facts are sufficient grounds for a
motion seeking a favorable grant of what has already been denied, this motion just the same
cannot prosper.
In the first place there is no proof whatsoever that any of plaintiffs' products which they seek
to protect from any adverse effect of the trademark applied for by defendant, is in actual use
and available for commercial purposes anywhere in the Philippines. Secondly as shown by
plaintiffs' own evidence furnished by no less than the chief of Trademarks Division of the
Philippine Patent Office, Atty. Enrique Madarang, the abandonment of an application is of no
moment, for the same can always be refiled. He said there is no specific provision in the rules
prohibiting such refiling (TSN, November 21, 1986, pp. 60 & 64, Raviera). In fact, according
to Madarang, the refiled application of defendant is now pending before the Patents Office.
25
Hence, it appears that the motion has no leg to stand on. (pp. 350-351, Rolloin G. R. No.
91332.)
Confronted with this rebuff, petitioners filed a previous petition for certiorari before the Court, docketed as
G.R. No. 78141, but the petition was referred to the Court of Appeals.
The Court of Appeals initially issued a resolution which set aside the court of origin's order dated April 22,
1987, and granted the issuance of a writ of preliminary injunction enjoining Fortune, its agents, employees, and
representatives, from manufacturing, selling, and advertising "MARK" cigarettes. The late Justice Cacdac,
speaking for the First Division of the Court of Appeals in CA-G.R. SP No. 13132, remarked:
There is no dispute that petitioners are the registered owners of the trademarks for cigarettes
"MARK VII", "MARK TEN", and "LARK".(Annexes B, C and D, petition). As found and
reiterated by the Philippine Patent Office in two (2) official communications dated April 6,
1983 and January 24, 1984, the trademark "MARK" is "confusingly similar" to the
trademarks of petitioners, hence registration was barred under Sec. 4 (d) of Rep. Act. No. 166,
as amended (pp. 106, 139, SCA rollo). In a third official communication dated April 8, 1986,
the trademark application of private respondent for the "MARK" under Serial No. 44008 filed
on February 13, 1981 which was declared abandoned as of February 16, 1986, is now deemed
forfeited, there being no revival made pursuant to Rule 98 of the Revised Rules of
Practitioners in Trademark Cases." (p. 107, CA rollo). The foregoing documents or
communications mentioned by petitioners as "the changes in material facts which occurred
after March 28, 1983", are not also questioned by respondents.
Pitted against the petitioners' documentary evidence, respondents pointed to (1) the letter
dated January 30, 1979 (p. 137, CA rollo) of Conrado P. Diaz, then Acting Commissioner of
Internal Revenue, temporarily granting the request of private respondent for a permit to
manufacture two (2) new brands of cigarettes one of which is brand "MARK" filter-type
blend, and (2) the certification dated September 26, 1986 of Cesar G. Sandico, Director of
Patents (p. 138, CA rollo) issued upon the written request of private respondents' counsel
dated September 17, 1986 attesting that the records of his office would show that the
"trademark MARK" for cigarettes is now the subject of a pending application under Serial
No. 59872 filed on September 16, 1986.
Private respondent's documentary evidence provides the reasons neutralizing or weakening
their probative values. The penultimate paragraph of Commissioner Diaz' letter of authority
reads:
Please be informed further that the authority herein granted does not give
you protection against any person or entity whose rights may be prejudiced
by infringement or unfair competition in relation to your above-named
brands/trademark.
while Director Sandico's certification contained similar conditions as follows:
 This Certification, however, does not give protection as against any person
or entity whose right may be prejudiced by infringement or unfair
competition in relation to the aforesaid trademark nor the right to register if
contrary to the provisions of the Trademark Law, Rep. Act No. 166 as
amended and the Revised Rules of Practice in Trademark Cases.
The temporary permit to manufacture under the trademark "MARK" for cigarettes and the
acceptance of the second application filed by private respondent in the height of their dispute
in the main case were evidently made subject to the outcome of the said main case or Civil
Case No. 47374 of the respondent Court. Thus, the Court has not missed to note the absence
of a mention in the Sandico letter of September 26, 1986 of any reference to the pendency of
the instant action filed on August 18, 1982. We believe and hold that petitioners have shown
a prima facie case for the issuance of the writ of prohibitory injunction for the purposes stated
in their complaint and subsequent motions for the issuance of the prohibitory writ. (Buayan
Cattle Co. vs. Quintillan, 125 SCRA 276)
The requisites for the granting of preliminary injunction are the existence of the right
protected and the facts against which the injunction is to be directed as violative of said right.
(Buayan Cattle Co. vs. Quintillan, supra; Ortigas & Co. vs. Ruiz, 148 SCRA 326). It is a writ
framed according to the circumstances of the case commanding an act which the Court
regards as essential to justice and restraining an act it deems contrary to equity and good
conscience (Rosauro vs. Cuneta, 151 SCRA 570). If it is not issued, the defendant may,
before final judgment, do or continue the doing of the act which the plaintiff asks the court to
restrain, and thus make ineffectual the final judgment rendered afterwards granting the relief
sought by the plaintiff (Calo vs. Roldan, 76 Phil. 445). Generally, its grant or denial rests
upon the sound discretion of the Court except on a clear case of abuse (Belish Investment &
Finance Co. vs. State House, 151 SCRA 636). Petitioners' right of exclusivity to their
registered trademarks being clear and beyond question, the respondent court's denial of the
prohibitive writ constituted excess of jurisdiction and grave abuse discretion. If the lower
court does not grant preliminary injunction, the appellate court may grant the same. (Service
Specialists, Inc. vs. Sheriff of Manila, 145 SCRA 139). (pp. 165-167, Rollo in G.R. No.
91332.)
After private respondent Fortune's motion for reconsideration was rejected, a motion to dissolve the disputed
writ of preliminary injunction with offer to post a counterbond was submitted which was favorably acted upon
by the Court of Appeals, premised on the filing of a sufficient counterbond to answer for
whatever perjuicio petitioners may suffer as a result thereof, to wit:
The private respondent seeks to dissolve the preliminary injunction previously granted by this
Court with an offer to file a counterbond. It was pointed out in its supplemental motion that
lots of workers employed will be laid off as a consequence of the injunction and that the
government will stand to lose the amount of specific taxes being paid by the
private respondent. The specific taxes being paid is the sum total of P120,120, 295.98 from
January to July 1989.
26
The petitioners argued in their comment that the damages caused by the infringement of their
trademark as well as the goodwill it generates are incapable of pecuniary estimation and
monetary evaluation and not even the counterbond could adequately compensate for the
damages it will incur as a result of the dissolution of the bond. In addition, the petitioner
further argued that doing business in the Philippines is not relevant as the injunction pertains
to an infringement of a trademark right.
After a thorough re-examination of the issues involved and the arguments advanced by both
parties in the offer to file a counterbond and the opposition thereto, WE believe that there are
sound and cogent reasons for US to grant the dissolution of the writ of preliminary injunction
by the offer of the private respondent to put up a counterbond to answer for whatever
damages the petitioner may suffer as a consequence of the dissolution of the preliminary
injunction.
The petitioner will not be prejudiced nor stand to suffer irreparably as a consequence of the
lifting of the preliminary injunction considering that they are not actually engaged in the
manufacture of the cigarettes with the trademark in question and the filing of the counterbond
will amply answer for such damages.
While the rule is that an offer of a counterbond does not operate to dissolve an injunction
previously granted, nevertheless, it is equally true that an injunction could be dissolved only
upon good and valid grounds subject to the sound discretion of the court. As WE have
maintained the view that there are sound and good reasons to lift the preliminary injunction,
the motion to file a counterbond is granted. (pp. 53-54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-examination geared towards reimposition of the writ of
preliminary injunction but to no avail (p. 55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three aspersions that respondent court gravely abused its discretion
tantamount to excess of jurisdiction when:
I. . . . it required, contrary to law and jurisprudence, that in order that petitioners may suffer
irreparable injury due to the lifting of the injunction, petitioners should be using actually their
registered trademarks in commerce in the Philippines;
II. . . . it lifted the injunction in violation of section 6 of Rule 58 of the Rules of Court; and
III. . . . after having found that the trial court had committed grave abuse of discretion and
exceeded its jurisdiction for having refused to issue the writ of injunction to restrain private
respondent's acts that are contrary to equity and good conscience, it made a complete about
face for legally insufficient grounds and authorized the private respondent to continue
performing the very same acts that it had considered contrary to equity and good conscience,
thereby ignoring not only the mandates of the Trademark Law, the international commitments
of the Philippines, the judicial admission of private respondent that it will have no more right
 to use the trademark "MARK" after the Director of Patents shall have rejected the application
to register it, and the admonitions of the Supreme Court. (pp. 24-25, Petition; pp. 25-
26, Rollo.)
To sustain a successful prosecution of their suit for infringement, petitioners, as foreign corporations not
engaged in local commerce, rely on section 21-A of the Trademark Law reading as follows:
Sec. 21-A. Any foreign corporation or juristic person to which a mark or trade-name has been
registered or assigned under this act may bring an action hereunder for infringement, for
unfair competition, or false designation of origin and false description, whether or not it has
been licensed to do business in the Philippines under Act Numbered Fourteen hundred and
fifty-nine, as amended, otherwise known as the Corporation Law, at the time it brings
complaint: Provided, That the country of which the said foreign corporation or juristic person
is a citizen or in which it is domiciled, by treaty, convention or law, grants a similar privilege
to corporate or juristic persons of the Philippines. (As inserted by Sec. 7 of Republic Act No.
638.)
to drive home the point that they are not precluded from initiating a cause of action in the
Philippines on account of the principal perception that another entity is pirating their symbol
without any lawful authority to do so. Judging from a perusal of the aforequoted Section 21-
A, the conclusion reached by petitioners is certainly correct for the proposition in support
thereof is embedded in the Philippine legal jurisprudence.
Indeed, it was stressed in General Garments Corporation vs. Director of Patents (41 SCRA 50 [1971]) by then
Justice (later Chief Justice) Makalintal that:
Parenthetically, it may be stated that the ruling in the Mentholatum case was subsequently
derogated when Congress, purposely to "counteract the effects" of said case, enacted Republic
Act No. 638, inserting Section 21-A in the Trademark Law, which allows a foreign
corporation or juristic person to bring an action in Philippine courts for infringement of a
mark or tradename, for unfair competition, or false designation of origin and false description,
"whether or not it has been licensed to do business in the Philippines under Act Numbered
Fourteen hundred and fifty-nine, as amended, otherwise known as the Corporation Law, at the
time it brings complaint."
Petitioner argues that Section 21-A militates against respondent's capacity to maintain a suit
for cancellation, since it requires, before a foreign corporation may bring an action, that its
trademark or tradename has been registered under the Trademark Law. The argument misses
the essential point in the said provision, which is that the foreign corporation is allowed
thereunder to sue "whether or not it has been licensed to do business in the Philippines"
pursuant to the Corporation Law (precisely to counteract the effects of the decision in the
Mentholatum case). (at p. 57.)
27
However, on May, 21, 1984, Section 21-A, the provision under consideration, was qualified by this Court in La
Chemise Lacoste S.A. vs. Fernandez (129 SCRA 373 [1984]), to the effect that a foreign corporation not doing
business in the Philippines may have the right to sue before Philippine Courts, but existing adjective axioms
require that qualifying circumstances necessary for the assertion of such right should first be affirmatively
pleaded (2 Agbayani Commercial Laws of the Philippines, 1991 Ed., p. 598; 4 Martin, Philippine Commercial
Laws, Rev. Ed., 1986, p. 381). Indeed, it is not sufficient for a foreign corporation suing under Section 21-A to
simply allege its alien origin. Rather, it must additionally allege its personality to sue. Relative to this condition
precedent, it may be observed that petitioners were not remiss in averring their personality to lodge a complaint
for infringement (p. 75, Rollo in AC-G.R. SP No. 13132) especially so when they asserted that the main action
for infringement is anchored on an isolated transaction (p. 75, Rollo in AC-G.R. SP No. 13132; Atlantic Mutual
Ins. Co. vs. Cebu Stevedoring Co., Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial Law Compendium, Fifth
Rev. Ed., 1988, p. 103).
Another point which petitioners considered to be of significant interest, and which they desire to impress upon
us is the protection they enjoy under the Paris Convention of 1965 to which the Philippines is a signatory. Yet,
insofar as this discourse is concerned, there is no necessity to treat the matter with an extensive response
because adherence of the Philippines to the 1965 international covenant due to pact sunt servanda had been
acknowledged in La Chemise (supra at page 390).
Given these confluence of existing laws amidst the cases involving trademarks, there can be no disagreement to
the guiding principle in commercial law that foreign corporations not engaged in business in the Philippines
may maintain a cause of action for infringement primarily because of Section 21-A of the Trademark Law when
the legal standing to sue is alleged, which petitioners have done in the case at hand.
In assailing the justification arrived at by respondent court when it recalled the writ of preliminary injunction,
petitioners are of the impression that actual use of their trademarks in Philippine commercial dealings is not an
indispensable element under Article 2 of the Paris Convention in that:
(2) . . . . no condition as to the possession of a domicile or establishment in the country where
protection is claimed may be required of persons entitled to the benefits of the Union for the
enjoyment of any industrial property of any industrial property rights. (p. 28, Petition; p.
29, Rollo in G.R. No. 91332.)
Yet petitioners' perception along this line is nonetheless resolved by Sections 2 and 2-A of the Trademark Law
which speak loudly, about necessity of actual commercial use of the trademark in the local forum:
Sec. 2. What are registrable. — Trademarks, tradenames 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,
tradenames, 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 by R.A. No. 865).
Sec. 2-A. Ownership of trademarks, tradenames 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 tradename, or a service mark not so appropriated by another, to
distinguish his merchandise, business or service from the merchandise, business or service of
others. The ownership or possession of a trademark, tradename, 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 the law. (As
amended by R.A. No. 638). (Kabushi Kaisha Isetan vs. Intermediate Appellate Court, 203
SCRA 583 [1991], at pp. 589-590; emphasis supplied.)
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 tribunal (Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland,
1906, 8 Sessions 93; Paras, International Law and World Organization, 1971 Ed., p. 20). Withal, 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 (Salonga and Yap, Public International Law, Fourth ed., 1974, p. 16).
The aforequoted basic provisions of our Trademark Law, according to Justice Gutierrez, Jr., in Kabushi Kaisha
Isetan vs. Intermediate Appellate Court (203 SCRA 583 [1991]), have been construed in this manner:
A fundamental principle of Philippine Trademark Law is that actual use in commerce in the
Philippines is a pre-requisite to the acquisition of ownership over a trademark or a tradename.
xxx xxx xxx
These provisions have been interpreted in Sterling Products International, Inc. v.
Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
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 over a trademark.
xxx xxx xxx
. . . Adoption alone of a trademark would not give exclusive right thereto.
Such right grows out of their actual use. Adoption is not use. One may
make advertisements, issue circulars, give out price lists on certain goods;
28
but these alone would not give exclusive right of use. For trademark is a
creation of use. The underlying reason for all these is that purchasers have
come to understand the mark as indicating the origin of the wares. Flowing
from this is the trader's right to protection in the trade he has built up and
the goodwill he has accumulated from use of the trademark. . . .
In fact, a prior registrant cannot claim exclusive use of the trademark unless it uses it in
commerce.
We rule[d] in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526 [1982]):
3. The Trademark law is very clear. It requires actual commercial use of the mark prior to its
registration. There is no dispute that respondent corporation was the first registrant, yet it
failed to fully substantiate its claim that it used in trade or business in the Philippines the
subject mark; it did not present proof to invest it with exclusive, continuous adoption of the
trademark which should consist among others, of considerable sales since its first use. The
invoices (Exhibits 7, 7-a, and 8-b) submitted by respondent which were dated way back in
1957 show that the zippers sent to the Philippines were to be used as "samples" and "of no
commercial value". The evidence for respondent must be clear, definite and free from
inconsistencies. (Sy Ching v. Gaw Lui, 44 SCRA 148-149) "Samples" are not for sale and
therefore, the fact of exporting them to the Philippines cannot be considered to be equivalent
to the "use" contemplated by the law. Respondent did not expect income from such
"samples". There were no receipts to establish sale, and no proof were presented to show that
they were subsequently sold in the Philippines. (Pagasa Industrial Corp. v. Court of Appeals,
118 SCRA 526 [1982]; Emphasis Supplied)
The records show that the petitioner has never conducted any business in the Philippines. It
has never promoted its tradename or trademark in the Philippines. It is unknown to Filipino
except the very few who may have noticed it while travelling abroad. It has never paid a
single centavo of tax to the Philippine government. Under the law, it has no right to the
remedy it seeks. (at pp. 589-591.)
In other words, petitioners 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 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 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.
Going back to the first assigned error, we can not help but notice the manner the ascription was framed which
carries with it the implied but unwarranted assumption of the existence of petitioners' right to relief. It must be
emphasized that this aspect of exclusive dominion to the trademarks, together with the corollary allegation of
irreparable injury, has yet to be established by petitioners by the requisite quantum of evidence in civil cases. It
cannot be denied that our reluctance to issue a writ of preliminary injunction is due to judicial deference to the
lower courts, involved as there is mere interlocutory order (Villarosa vs. Teodoro, Sr., 100 Phil. 25 [1956]). In
point of adjective law, the petition has its roots on a remedial measure which is but ancillary to the main action
for infringement still pending factual determination before the court of origin. It is virtually needless to stress
the obvious reality that critical facts in an infringement case are not before us more so when even Justice
Feliciano's opinion observes that "the evidence is scanty" and that petitioners "have yet to submit copies or
photographs of their registered marks as used in cigarettes" while private respondent has not, for its part,
"submitted the actual labels or packaging materials used in selling its "Mark" cigarettes." Petitioners therefore,
may not be permitted to presume a given state of facts on their so called right to the trademarks which could be
subjected to irreparable injury and in the process, suggest the fact of infringement. Such a ploy would
practically place the cart ahead of the horse. To our mind, what appears to be the insurmountable barrier to
petitioners' portrayal of whimsical exercise of discretion by the Court of Appeals is the well-taken remark of
said court that:
The petitioner[s] will not be prejudiced nor stand to suffer irreparably as a consequence of the
lifting of the preliminary injunction considering that they are not actually engaged in the
manufacture of the cigarettes with the trademark in question and the filing of the counterbond
will amply answer for such damages. (p. 54. Rollo in G.R. No. 91332.)
More telling are the allegations of petitioners in their complaint (p. 319, Rollo G.R. No. 91332) as well as in the
very petition filed with this Court (p. 2, Rollo in G.R. No. 91332) indicating that they are not doing business in
the Philippines, for these frank representations are inconsistent and incongruent with any pretense of a right
which can breached (Article 1431, New Civil Code; Section 4, Rule 129; Section 3, Rule 58, Revised Rules of
Court). Indeed, to be entitled to an injunctive writ, petitioner must show that there exists a right to be protected
and that the facts against which injunction is directed are violative of said right (Searth Commodities
Corporation vs. Court of Appeals, 207 SCRA 622 [1992]). It may be added in this connection that albeit
petitioners are holders of certificate of registration in the Philippines of their symbols as admitted by private
respondent, the fact of exclusive ownership cannot be made to rest solely on these documents since dominion
over trademarks is not acquired by the mere fact of registration alone and does not perfect a trademark right
(Unno Commercial Enterprises, Inc. vs. General Milling Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of petitioners anent the absence of business activity here and rely on
the remaining statements of the complaint below, still, when these averments are juxtaposed with the denials
and propositions of the answer submitted by private respondent, the supposed right of petitioners to the symbol
have thereby been controverted. This is not to say, however, that the manner the complaint was traversed by the
answer is sufficient to tilt the scales of justice in favor of private respondent. Far from it. What we are simply
conveying is another basic tenet in remedial law that before injunctive relief may properly issue, complainant's
right or title must be undisputed and demonstrated on the strength of one's own title to such a degree as to
unquestionably exclude dark clouds of doubt, rather than on the weakness of the adversary's evidence, inasmuch
as the possibility of irreparable damage, without prior proof of transgression of an actual existing right, is no
ground for injunction being mere damnum absque injuria (Talisay-Silay Milling Co., Inc. vs. CFI of Negros
Occidental, 42 SCRA 577 [1971]; Francisco, Rules of Court, Second ed., 1985, p. 225; 3 Martin, Rules of
Court, 1986 ed., p. 82).
29
On the economic repercussion of this case, we are extremely bothered by the thought of having to participate in
throwing into the streets Filipino workers engaged in the manufacture and sale of private respondent's "MARK"
cigarettes who might be retrenched and forced to join the ranks of the many unemployed and unproductive as a
result of the issuance of a simple writ of preliminary injunction and this, during the pendency of the case before
the trial court, not to mention the diminution of tax revenues represented to be close to a quarter million pesos
annually. On the other hand, if the status quo is maintained, there will be no damage that would be suffered by
petitioners inasmuch as they are not doing business in the Philippines.
With reference to the second and third issues raised by petitioners on the lifting of the writ of preliminary
injunction, it cannot be gainsaid that respondent court acted well within its prerogatives under Section 6, Rule
58 of the Revised Rules of Court:
Sec. 6. Grounds for objection to, or for motion of dissolution of injunction. — The injunction
may be refused or, if granted ex parte, may be dissolved, upon the insufficiency of the
complaint as shown by the complaint itself, with or without notice to the adverse party. It may
also be refused or dissolved on other grounds upon affidavits on the part of the defendants
which may be opposed by the plaintiff also by affidavits. It may further be refused or, if
granted, may be dissolved, if it appears after hearing that although the plaintiff is entitled to
the injunction, the issuance or continuance thereof, as the case may be, would cause great
damage to the defendant while the plaintiff can be fully compensated for such damages as he
may suffer, and the defendant files a bond in an amount fixed by the judge conditioned that he
will pay all damages which the plaintiff may suffer by the refusal or the dissolution of the
injunction. If it appears that the extent of the preliminary injunction granted is too great, it
must be modified.
Under the foregoing rule, injunction may be refused, or, if granted, may be dissolved, on the following
instances:
(1) If there is insufficiency of the complaint as shown by the allegations therein. Refusal or
dissolution may be granted in this case with or without notice to the adverse party.
(2) If it appears after hearing that although the plaintiff is entitled to the injunction, the
issuance or continuance thereof would cause great damage to the defendant, while the
plaintiff can be fully compensated for such damages as he may suffer. The defendant, in this
case, must file a bond in an amount fixed by the judge conditioned that he will pay all
damages which plaintiff may suffer by the refusal or the dissolution of the injunction.
(3) On the other grounds upon affidavits on the part of the defendant which may be opposed
by the plaintiff also affidavits.
Modification of the injunction may also be ordered by the court if it appears that the extent of
the preliminary injunction granted is too great. (3 Martin, Rules of Court, 1986 ed., p. 99;
Francisco, supra, at p. 268.)
In view of the explicit representation of petitioners in the complaint that they are not engaged in business in the
Philippines, it inevitably follows that no conceivable damage can be suffered by them not to mention the
foremost consideration heretofore discussed on the absence of their "right" to be protected. At any rate, and
assuming in gratia argumenti that respondent court erroneously lifted the writ it previously issued, the same
may be cured by appeal and not in the form of a petition for certiorari (Clark vs. Philippine Ready Mix
Concrete Co., 88 Phil. 460 [1951]). Verily, and mindful of the rule that a writ of preliminary injunction is an
interlocutory order which is always under the control of the court before final judgment, petitioners' criticism
must fall flat on the ground, so to speak, more so when extinction of the previously issued writ can even be
made without previous notice to the adverse party and without a hearing (Caluya vs. Ramos, 79 Phil. 640
[1974]; 3 Moran, Rules of Court, 1970 ed., p. 81).

WHEREFORE, the petition is hereby DISMISSED and the Resolutions of the Court of Appeals dated
September 14, 1989 and November 29, 1989 are hereby AFFIRMED.

SO ORDERED.

Bidin, J., concurs.

Davide, Jr., concurs in the result.

Romero, J. took no part.

30
PHILIP MORRIS, INC., BENSON & HEDGES G.R. No. 158589
Certificate of Registration No. 19053, another subsidiary of Philip Morris, Inc., the Swiss company Fabriques
(CANADA), INC., and FABRIQUES DE TABAC
REUNIES, S.A., (now known as PHILIP Present: de Tabac Reunies, S.A., is the assignee of the trademark LARK, which was originally registered in 1964 by
MORRIS PRODUCTS S.A.),
Petitioners, PUNO, J., Chairperson, Ligget and Myers Tobacco Company. On the other hand, respondent Fortune Tobacco Corporation, a company
SANDOVAL-GUTIERREZ, organized in the Philippines, manufactures and sells cigarettes using the trademark MARK.
CORONA,
- versus - AZCUNA, and
GARCIA, JJ. The legal dispute between the parties started when the herein petitioners, on the claim that an infringement of
FORTUNE TOBACCO CORPORATION, their respective trademarks had been committed, filed, on August 18, 1982, a Complaint for Infringement of
Respondent. Promulgated:
Trademark and Damages against respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374
June 27, 2006 of the Regional Trial Court of Pasig, Branch 166.
x------------------------------------------------------------------------------------x
The decision under review summarized what happened next, as follows:

DECISION
GARCIA, J.:
Via this petition for review under Rule 45 of the Rules of Court, herein petitioners Philip Morris, Inc., Benson
& Hedges (Canada) Inc., and Fabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek the
reversal and setting aside of the following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 66619, to
wit:
1. Decision dated January 21, 2003[1] affirming an earlier decision of the Regional Trial
Court of Pasig City, Branch 166, in its Civil Case No. 47374, which dismissed the
complaint for trademark infringement and damages thereat commenced by the
petitioners against respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 2003[2] denying petitioners motion for reconsideration.
Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of Virginia, United States of
America, is, per Certificate of Registration No. 18723 issued on April 26, 1973 by the Philippine Patents Office
(PPO), the registered owner of the trademark MARK VII for cigarettes. Similarly, petitioner Benson & Hedges
(Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark MARK TEN for
cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be seen in Trademark
31
In the Complaint xxx with prayer for the issuance of a preliminary injunction, [petitioners]
alleged that they are foreign corporations not doing business in the Philippines and are suing
on an isolated transaction. xxx they averred that the countries in which they are domiciled
grant xxx to corporate or juristic persons of the Philippines the privilege to bring action for
infringement, xxx without need of a license to do business in those countries. [Petitioners]
likewise manifested [being registered owners of the trademark MARK VII and MARK
TEN for cigarettes as evidenced by the corresponding certificates of registration and an
applicant for the registration of the trademark LARK MILDS]. xxx. [Petitioners] claimed that
they have registered the aforementioned trademarks in their respective countries of origin and
that, by virtue of the long and extensive usage of the same, these trademarks have already
gained international fame and acceptance. Imputing bad faith on the part of the
[respondent], petitioners claimed that the [respondent], without any previous consent from
any of the [petitioners], manufactured and sold cigarettes bearing the identical and/or
confusingly similar trademark MARK xxx Accordingly, they argued that [respondents] use of
the trademark MARK in its cigarette products have caused and is likely to cause confusion or
mistake, or would deceive purchasers and the public in general into buying these products
under the impression and mistaken belief that they are buying [petitioners] products.
Invoking the provisions of the Paris Convention for the Protection of Industrial and
Intellectual Property (Paris Convention, for brevity), to which the Philippines is a signatory
xxx, [petitioners] pointed out that upon the request of an interested party, a country of the
Union may prohibit the use of a trademark which constitutes a reproduction, imitation, or
translation of a mark already belonging to a person entitled to the benefits of the said
Convention. They likewise argued that, in accordance with Section 21-A in relation to Section
23 of Republic Act 166, as amended, they are entitled to relief in the form of damages xxx
[and] the issuance of a writ of preliminary injunction which should be made permanent to
enjoin perpetually the [respondent] from violating [petitioners] right to the exclusive use of
their aforementioned trademarks.
[Respondent] filed its Answer xxx denying [petitioners] material allegations and xxx averred
[among other things] xxx that MARK is a common word, which cannot particularly identify a
product to be the product of the [petitioners] xxx
xxx xxx xxx.
Meanwhile, after the [respondent] filed its Opposition (Records, Vo. I, p. 26), the matter of
the [petitioners] prayer for the issuance of a writ of preliminary injunction was negatively
resolved by the court in an Order xxx dated March 28, 1973. [The incidental issue of the
propriety of an injunction would eventually be elevated to the CA and would finally be
resolved by the Supreme Court in its Decision dated July 16, 1993 in G.R. No. 91332]. xxx.
xxx xxx xxx
After the termination of the trial on the merits xxx trial court rendered
its Decision xxx dated November 3, 1999 dismissing the complaint and counterclaim after
making a finding that the [respondent] did not commit trademark infringement against the
[petitioners]. Resolving first the issue of whether or not [petitioners] have capacity to institute
the instant action, the trial court opined that [petitioners] failure to present evidence to support
their allegation that their respective countries indeed grant Philippine corporations reciprocal
or similar privileges by law xxx justifies the dismissal of the complaint xxx. It added that the
testimonies of [petitioners] witnesses xxx essentially declared that [petitioners] are in fact
doing business in the Philippines, but [petitioners] failed to establish that they are doing so in
accordance with the legal requirement of first securing a license. Hence, the court declared
that [petitioners] are barred from maintaining any action in Philippine courts pursuant to
Section 133 of the Corporation Code.
The issue of whether or not there was infringement of the [petitioners] trademarks by the
[respondent] was likewise answered xxx in the negative. It expounded that in order for a
name, symbol or device to constitute a trademark, it must, either by itself or by association,
point distinctly to the origin or ownership of the article to which it is applied and be of such
nature as to permit an exclusive appropriation by one person. Applying such principle to the
instant case, the trial court was of the opinion that the words MARK, TEN, LARK and the
Roman Numerals VII, either alone or in combination of each other do not by themselves or by
association point distinctly to the origin or ownership of the cigarettes to which they refer,
such that the buying public could not be deceived into believing that [respondents] MARK
cigarettes originated either from the USA, Canada, or Switzerland.
Emphasizing that the test in an infringement case is the likelihood of confusion or deception,
the trial court stated that the general rule is that an infringement exists if the resemblance is so
close that it deceives or is likely to deceive a customer exercising ordinary caution in his
dealings and induces him to purchase the goods of one manufacturer in the belief that they are
those of another. xxx. The trial court ruled that the [petitioners] failed to pass these tests as it
neither presented witnesses or purchasers attesting that they have bought [respondents]
product believing that they bought [petitioners] MARK VII, MARK TEN or LARK, and have
also failed to introduce in evidence a specific magazine or periodical circulated locally, which
32
promotes and popularizes their products in the Philippines. It, moreover, elucidated that the
words consisting of the trademarks allegedly infringed by [respondent] failed to show that
they have acquired a secondary meaning as to identify them as [petitioners] products. Hence,
the court ruled that the [petitioners] cannot avail themselves of the doctrine of secondary
meaning.
As to the issue of damages, the trial court deemed it just not to award any to either party
stating that, since the [petitioners] filed the action in the belief that they were aggrieved by
what they perceived to be an infringement of their trademark, no wrongful act or omission can
be attributed to them. xxx.[3] (Words in brackets supplied)
Maintaining to have the standing to sue in the local forum and that respondent has committed trademark
infringement, petitioners went on appeal to the CA whereat their appellate recourse was docketed as CA-G.R.
CV No. 66619.
Eventually, the CA, in its Decision dated January 21, 2003, while ruling for petitioners on the matter
of their legal capacity to sue in this country for trademark infringement, nevertheless affirmed the trial courts
decision on the underlying issue of respondents liability for infringement as it found that:
xxx the appellants [petitioners] trademarks, i.e., MARK VII, MARK TEN and
LARK, do not qualify as well-known marks entitled to protection even without the benefit of
actual use in the local market and that the similarities in the trademarks in question are
insufficient as to cause deception or confusion tantamount to infringement. Consequently, as
regards the third issue, there is likewise no basis for the award of damages prayed for by the
appellants herein.[4] (Word in bracket supplied)
With their motion for reconsideration having been denied by the CA in its equally
challenged Resolution of May 30, 2003, petitioners are now with this Court via this petition for review
essentially raising the following issues: (1) whether or not petitioners, as Philippine registrants of trademarks,
are entitled to enforce trademark rights in this country; and (2) whether or not respondent has committed
trademark infringement against petitioners by its use of the mark MARK for its cigarettes, hence liable for
damages.
In its Comment,[5] respondent, aside from asserting the correctness of the CAs finding on its liability
for trademark infringement and damages, also puts in issue the propriety of the petition as it allegedly raises
questions of fact.
The petition is bereft of merit.

Dealing first with the procedural matter interposed by respondent, we find that the petition raises both
questions of fact and law contrary to the prescription against raising factual questions in a petition for review on
certiorari filed before the Court. A question of law exists when the doubt or difference arises as to what the law
is on a certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or
falsity of alleged facts.[6]
Indeed, the Court is not the proper venue to consider factual issues as it is not a trier of facts. [7] Unless
the factual findings of the appellate court are mistaken, absurd, speculative, conflicting, tainted with grave
abuse of discretion, or contrary to the findings culled by the court of origin, [8] we will not disturb them.
It is petitioners posture, however, that their contentions should
be treated as purely legal since they are assailing erroneous conclusions deduced from a set of undisputed facts.
Concededly, when the facts are undisputed, the question of whether or not the conclusion drawn
therefrom by the CA is correct is one of law.[9] But, even if we consider and accept as pure questions of law the
issues raised in this petition, still, the Court is not inclined to disturb the conclusions reached by the appellate
court, the established rule being that all doubts shall be resolved in favor of the correctness of such
[10]
conclusions.
Be that as it may, we shall deal with the issues tendered and determine whether the CA ruled in accordance with
law and established jurisprudence in arriving at its assailed decision.
A trademark is 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 in by others.[11] Inarguably, a trademark deserves protection. For, as Mr.
Justice Frankfurter observed in Mishawaka Mfg. Co. v. Kresge Co.:[12]
The protection of trademarks is the laws recognition of the psychological function of
symbols. If it is true that we live by symbols, it is no less true that we purchase goods by
them. A trade-mark is a merchandising short-cut which induces a purchaser to select what he
wants, or what he has been led to believe what he wants. The owner of a mark exploits this
human propensity by making every effort to impregnate the atmosphere of the market with
the drawing power of a congenial symbol. Whatever the means employed, the aim is the same
- to convey through the mark, in the minds of potential customers, the desirability of the
33
commodity upon which it appears. Once this is attained, the trade-mark owner has something
of value.If another poaches upon the commercial magnetism of the symbol he has created, the
owner can obtain legal redress.
It is thus understandable for petitioners to invoke in this recourse their entitlement to enforce
trademark rights in this country, specifically, the right to sue for trademark infringement in Philippine courts
and be accorded protection against unauthorized use of their Philippine-registered trademarks.
In support of their contention respecting their right of action, petitioners assert that, as corporate
nationals of member-countries of the Paris Union, they can sue before Philippine courts for infringement of
trademarks, or for unfair competition, without need of obtaining registration or a license to do business in
the Philippines, and without necessity of actually doing business in the Philippines. To petitioners, these
grievance right and mechanism are accorded not only by Section 21-A of Republic Act (R.A.) No. 166, as
amended, or the Trademark Law, but also by Article 2 of the Paris Convention for the Protection of Industrial
Property, otherwise known as the Paris Convention.
In any event, petitioners point out that there is actual use of their trademarks in the Philippines as
evidenced by the certificates of registration of their trademarks. The marks MARK TEN and LARK were
registered on the basis of actual use in accordance with Sections 2-A[13] and 5(a)[14] of R.A. No. 166, as
amended, providing for a 2-month pre-registration use in local commerce and trade while the registration of
MARK VII was on the basis of registration in the foreign country of origin pursuant to Section 37 of the same
law wherein it is explicitly provided that prior use in commerce need not be alleged.[15]
Besides, petitioners argue that their not doing business in the Philippines, if that be the case, does not
mean that cigarettes bearing their trademarks are not available and sold locally. Citing Converse Rubber
Corporation v. Universal Rubber Products, Inc.,[16] petitioners state that such availability and sale may be
effected through the acts of importers and distributors.
Finally, petitioners would press on their entitlement to protection even in the absence of actual use of
trademarks in the country in view of the Philippines adherence to the Trade Related Aspects of Intellectual
Property Rights or the TRIPS Agreement and the enactment of R.A. No. 8293, or the Intellectual Property Code
(hereinafter the IP Code), both of which provide that the fame of a trademark may be acquired through
promotion or advertising with no explicit requirement of actual use in local trade or commerce.
Before discussing petitioners claimed entitlement to enforce trademark rights in the Philippines, it must
be emphasized that their standing to sue in Philippine courts had been recognized, and rightly so, by the CA. It
ought to be pointed out, however, that the appellate court qualified its holding with a statement, following G.R.
No. 91332, entitled Philip Morris, Inc., et al. v. The Court of Appeals and Fortune Tobacco
Corporation,[17] that such right to sue does not necessarily mean protection of their registered marks in the
absence of actual use in the Philippines.
Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of
registration of their trademarks in the Philippines.
As we ruled in G.R. No. 91332,[18] supra, so it must be here.
Admittedly, the registration of a trademark gives the registrant,
such as petitioners, advantages denied non-registrants or ordinary users, like respondent. But while petitioners
enjoy the statutory presumptions arising from such registration, [19] i.e., as to the validity of the registration,
ownership and the exclusive right to use the registered marks, they may not successfully sue on the basis alone
of their respective certificates of registration of trademarks. For, petitioners are still foreign corporations. As
such, they ought, as a condition to availment of the rights and privileges vis--vis their trademarks in this
country, to show proof that, on top of Philippine registration, their country grants substantially similar
rights and privileges to Filipino citizens pursuant to Section 21-A[20] of R.A. No. 166.
In Leviton Industries v. Salvador,[21] the Court further held that the aforementioned reciprocity
requirement is a condition sine qua non to filing a suit by a foreign corporation which, unless alleged in the
complaint, would justify dismissal thereof, a mere allegation that the suit is being pursued under Section 21-A
of R.A. No. 166 not being sufficient. In a subsequent case, [22] however, the Court held that where the
complainant is a national of a Paris Convention- adhering country, its allegation that it is suing under said
Section 21-A would suffice, because the reciprocal agreement between the two countries is embodied and
supplied by the Paris Convention which, being considered part of Philippine municipal laws, can be taken
judicial notice of in infringement suits.[23]
34
As well, the fact that their respective home countries, namely, the United States, Switzerland and
Canada, are, together with the Philippines, members of the Paris Union does not automatically entitle petitioners
to the protection of their trademarks in this country absent actual use of the marks in local commerce and
trade.
True, the Philippines adherence to the Paris Convention[24] effectively obligates the country to honor and
enforce its provisions[25] as regards the protection of industrial property of foreign nationals in this
country. However, any protection accorded has to be made subject to the limitations of Philippine
laws.[26] Hence, despite Article 2 of the Paris Convention which substantially provides that (1) nationals of
member-countries shall have in this country rights specially provided by the Convention as are consistent with
Philippine laws, and enjoy the privileges that Philippine laws now grant or may hereafter grant to its nationals,
and (2) while no domicile requirement in the country where protection is claimed shall be required of persons
entitled to the benefits of the Union for the enjoyment of any industrial property rights,[27] foreign nationals
must still observe and comply with the conditions imposed by Philippine law on its nationals.
Considering that R.A. No. 166, as amended, specifically Sections 2 [28] and 2-A[29] thereof, mandates actual
use of the marks and/or emblems in local commerce and trade before they may be registered and ownership
thereof acquired, the petitioners cannot, therefore, dispense with the element of actual use. Their being nationals
of member-countries of the Paris Union does not alter the legal situation.
In Emerald Garment Mfg. Corporation v. Court of Appeals,[30] the Court reiterated its rulings
in Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, [31] Kabushi Kaisha Isetan v.
Intermediate Appellate Court,[32] and Philip Morris v. Court of Appeals and Fortune Tobacco
Corporation[33] on the importance of actual commercial use of a trademark in the Philippinesnotwithstanding
the Paris Convention:
The provisions of the 1965 Paris Convention relied upon by private respondent and
Sec. 21-A of the Trademark Law were sufficiently expounded upon and qualified in the recent
case of Philip Morris, Inc., et. al. vs. Court of Appeals:
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on trademarks
regarding the requirements of actual use in the Philippines must subordinate an international
agreement inasmuch as the apparent clash is being decided by a municipal tribunal.
 Xxx. Withal, 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.
xxx xxx xxx
In other words, (a foreign corporation) may have the capacity to sue for infringement 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.
Contrary to what petitioners suggest, the registration of trademark cannot be deemed conclusive as to
the actual use of such trademark in local commerce. As it were, registration does not confer upon the registrant
an absolute right to the registered mark. The certificate of registration merely constitutes prima facie evidence
that the registrant is the owner of the registered mark. Evidence of non-usage of the mark rebuts the
presumption of trademark ownership,[34] as what happened here when petitioners no less admitted not doing
business in this country.[35]
Most importantly, we stress that registration in the Philippines of trademarks does not ipso
facto convey an absolute right or exclusive ownership thereof. To borrow from Shangri-La International Hotel
Management, Ltd. v. Development Group of Companies, Inc. [36] trademark is a creation of use and, therefore,
actual use is a pre-requisite to exclusive ownership; registration is only an administrative confirmation of the
existence of the right of ownership of the mark, but does not perfect such right; actual use thereof is the
[37]
perfecting ingredient.
Petitioners reliance on Converse Rubber Corporation[38] is quite misplaced, that case being cast in a
different factual milieu. There, we ruled that a foreign owner of a Philippine trademark, albeit not licensed to
do, and not so engaged in, business in the Philippines, may actually earn reputation or goodwill for its goods in
the country. But unlike in the instant case, evidence of actual sales of Converse rubber shoes, such as sales
invoices, receipts and the testimony of a legitimate trader, was presented in Converse.
This Court also finds the IP Code and the TRIPS Agreement to be inapplicable, the infringement complaint
herein having been filed in August 1982 and tried under the aegis of R.A. No. 166, as amended. The IP Code,
35
however, took effect only on January 1, 1998 without a provision as to its retroactivity.[39] In the same vein, the
TRIPS Agreement was inexistent when the suit for infringement was filed, the Philippines having adhered
thereto only on December 16, 1994.
With the foregoing perspective, it may be stated right off that the registration of a trademark unaccompanied by
actual use thereof in the country accords the registrant only the standing to sue for infringement in Philippine
courts. Entitlement to protection of such trademark in the country is entirely a different matter.
This brings us to the principal issue of infringement.
Section 22 of R.A. No. 166, as amended, defines what constitutes trademark infringement, as follows:
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
tradename 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 of color ably imitate any such mark or
tradename 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.
Petitioners would insist on their thesis of infringement since respondents mark MARK for cigarettes is
confusingly or deceptively similar with their duly registered MARK VII, MARK TEN and LARK marks
likewise for cigarettes. To them, the word MARK would likely cause confusion in the trade, or deceive
purchasers, particularly as to the source or origin of respondents cigarettes.
The likelihood of confusion is the gravamen of trademark infringement. [40] But likelihood of confusion
is a relative concept, the particular, and sometimes peculiar, circumstances of each case being determinative of
its existence. Thus, in trademark infringement cases, more than in other kinds of litigation, precedents must be
evaluated in the light of each particular case.[41]
 In determining similarity and likelihood of confusion,
jurisprudence has developed two tests: the dominancy test and the holistic test.[42] The dominancy test[43] sets
sight on the similarity of the prevalent features of the competing trademarks that might cause confusion and
deception, thus constitutes infringement. Under this norm, the question at issue turns on whether the use of the
marks involved would be likely to cause confusion or mistake in the mind of the public or deceive
purchasers.[44]
In contrast, the holistic test[45] entails a consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity.
Upon consideration of the foregoing in the light of the peculiarity of this case, we rule against the
likelihood of confusion resulting in infringement arising from the respondents use of the trademark MARK for
its particular cigarette product.
For one, as rightly concluded by the CA after comparing the trademarks involved in their entirety as
they appear on the products,[46] the striking dissimilarities are significant enough to warn any purchaser that one
is different from the other. Indeed, although the perceived offending word MARK is itself prominent in
petitioners trademarks MARK VII and MARK TEN, the entire marking system should be considered as a whole
and not dissected, because a discerning eye would focus not only on the predominant word but also on the other
features appearing in the labels. Only then would such discerning observer draw his conclusion whether one
mark would be confusingly similar to the other and whether or not sufficient differences existed between the
marks.[47]
This said, the CA then, in finding that respondents goods cannot be mistaken as any of the three
cigarette brands of the petitioners, correctly relied on the holistic test.
But, even if the dominancy test were to be used, as urged by the petitioners, but bearing in mind that a
trademark serves as a tool to point out distinctly the origin or ownership of the goods to which it is
[48]
affixed, the likelihood of confusion tantamount to infringement appears to be farfetched. The reason for the
origin and/or ownership angle is that unless the words or devices do so point out the origin or ownership, the
person who first adopted them cannot be injured by any appropriation or imitation of them by others, nor can
[49]
the public be deceived.
36
Since the word MARK, be it alone or in combination with the word TEN and the Roman numeral VII,
does not point to the origin or ownership of the cigarettes to which they apply, the local buying public could not
possibly be confused or deceived that respondents MARK is the product of petitioners and/or originated from
the U.S.A., Canada or Switzerland. And lest it be overlooked, no actual commercial use of petitioners marks in
local commerce was proven. There can thus be no occasion for the public in this country, unfamiliar in the first
place with petitioners marks, to be confused.
For another, a comparison of the trademarks as they appear on the goods is just one of the appreciable
circumstances in determining likelihood of confusion. Del Monte Corp. v. CA[50] dealt with another, where we
instructed to give due regard to the ordinary purchaser, thus:
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.
When we spoke of an ordinary purchaser, the reference was not to the completely unwary customer but
to the ordinarily intelligent buyer considering the type of product involved. [51]
It cannot be over-emphasized that the products involved are addicting cigarettes purchased mainly by
those who are already predisposed to a certain brand. Accordingly, the ordinary buyer thereof would be all too
familiar with his brand and discriminating as well. We, thus, concur with the CA when it held, citing a
definition found in Dy Buncio v. Tan Tiao Bok,[52] that the ordinary purchaser in this case means one
accustomed to buy, and therefore to some extent familiar with, the goods in question.
Pressing on with their contention respecting the commission of trademark infringement, petitioners finally point
to Section 22 of R.A. No. 166, as amended. As argued, actual use of trademarks in local commerce is, under
said section, not a requisite before an aggrieved trademark owner can restrain the use of his trademark upon
goods manufactured or dealt in by another, it being sufficient that he had registered the trademark or trade-name
with the IP Office. In fine, petitioners submit that respondent is liable for infringement,

having manufactured and sold cigarettes with the trademark MARK which, as it were, are identical and/or
confusingly similar with their duly registered trademarks MARK VII, MARK TEN and LARK.
This Court is not persuaded.
In Mighty Corporation v. E & J Gallo Winery,[53] the Court held that the following constitute the
elements of trademark infringement in accordance not only with Section 22 of R.A. No. 166, as amended, but
[54]
also Sections 2, 2-A, 9-A and 20 thereof:
(a) a trademark actually used in commerce in the Philippines and registered in the principal
register of the Philippine Patent Office,
(b) is used by another person in connection with the sale, offering for sale, or advertising of
any goods, business or services 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 such trademark is reproduced,
counterfeited, copied or colorably imitated by another person and such reproduction,
counterfeit, copy or colorable imitation 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 as to likely cause confusion or mistake or to deceive purchasers,
(c) the trademark is used for identical or similar goods, and
admit in their Complaint that they are not doing business in the Philippines, hence, admitting
that their products are not being sold in the local market. We likewise see no cogent reason to
disturb the trial courts finding that the appellants failed to establish that their products are
widely known by local purchasers as (n)o specific magazine or periodical published in the
Philippines, or in other countries but circulated locally have been presented by the appellants
during trial. The appellants also were not able to show the length of time or the extent of the
promotion or advertisement made to popularize their products in the Philippines.[56]
Last, but not least, we must reiterate that the issue of trademark infringement is factual,
with both the trial and appellate courts having peremptorily found allegations of infringement on the part of
respondent to be without basis. As we said time and time again, factual determinations of the trial court,
concurred in by the CA, are final and binding on this Court. [57]
For lack of convincing proof on the part of the petitioners of actual use of their registered trademarks
prior to respondents use of its mark and for petitioners failure to demonstrate confusing similarity between said
trademarks, the dismissal of their basic complaint for infringement and the concomitant plea for damages must
be affirmed. The law, the surrounding circumstances and the equities of the situation call for this disposition.
WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed decision and resolution of
the Court of Appeals are AFFIRMED.

(d) such act is done without the consent of the trademark registrant or assignee. Costs against the petitioners.
As already found herein, while petitioners have registered the trademarks MARK VII, MARK TEN
and LARK for cigarettes in the Philippines, prior actual commercial use thereof had not been proven. In fact, SO ORDERED
petitioners judicial admission of not doing business in this country effectively belies any pretension to the
contrary.

Likewise, we note that petitioners even failed to support their claim that their respective marks are
well-known and/or have acquired goodwill in the Philippines so as to be entitled to protection even without
actual use in this country in accordance with Article 6bis[55] of the Paris Convention. As correctly found by the
CA, affirming that of the trial court:

xxx the records are bereft of evidence to establish that the appellants [petitioners]
products are indeed well-known in the Philippines, either through actual sale of the product or
through different forms of advertising. This finding is supported by the fact that appellants
37
SHANGRI-LA INTERNATIONAL HOTEL G.R. No. 159938
every turn, it filed on October 18, 1982 with the Bureau of Patents, Trademarks and Technology Transfer
MANAGEMENT, LTD., SHANGRI-LA
PROPERTIES, INC., MAKATI SHANGRI-LA Present: (BPTTT) pursuant to Sections 2 and 4 of Republic Act (RA) No. 166, [3] as amended, an application for
HOTEL & RESORT, INC., AND KUOK
PHILIPPINES PROPERTIES, INC., PUNO, J., Chairperson, registration covering the subject mark and logo. On May 31, 1983, the BPTTT issued in favor of DGCI the
Petitioners, SANDOVAL-GUTIERREZ, corresponding certificate of registration therefor, i.e., Registration No. 31904. Since then, DGCI started
CORONA,
AZCUNA, and using the Shangri-La mark and S logo in its restaurant business.
GARCIA, JJ.
- versus - On the other hand, the 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
DEVELOPERS GROUP OF COMPANIES, INC., Promulgated:
Respondent. has used the name Shangri-La in all Shangri-La hotels and hotel-related establishments around the world which

March 31, 2006 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
x-----------------------------------------------------------------------------------x
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.
DECISION

GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioners Shangri-La International Hotel
Management, Ltd. (SLIHM), et al. assail and seek to set aside the Decision dated May 15, 2003 [1] of the Court
of Appeals (CA) in CA-G.R. CV No. 53351 and its Resolution[2] of September 15, 2003 which effectively
affirmed with modification an earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case
No. Q-91-8476, an action for infringement and damages, thereat commenced by respondent Developers Group
of Companies, Inc. (DGCI) against the herein petitioners.
The facts:
At the core of the controversy are the Shangri-La mark and S logo. Respondent DGCI claims ownership of said
mark and logo in the Philippines on the strength of its prior use thereof within the country. As DGCI stresses at
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.
From the records, it appears that 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 gave the following explanation for the
logo, to wit:
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.

38
 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.
On June 21, 1988, the petitioners filed with the BPTTT a petition, docketed as Inter Partes Case No. 3145,
praying for the cancellation of the registration of the Shangri-La mark and S logo issued torespondent 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 No. 3529,praying for the registration of the same
mark and logo in their own names.
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.
It is principally upon the foregoing factual backdrop that respondent DGCI filed a complaint for Infringement
and Damages with the RTC of Quezon City against the herein petitioners SLIHM, Shangri-La Properties, Inc.,
Makati Shangri-La Hotel & Resort, Inc., and Kuok Philippine Properties, Inc., docketed as Civil Case No. Q-
91-8476 and eventually raffled to Branch 99 of said court. 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. As 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.
In their Answer with Counterclaim, the petitioners accused DGCI of appropriating and illegally using
the Shangri-La mark and S logo, adding that the legal and beneficial ownership thereof pertained to
39
SLIHMand 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 SLIHMs exclusive right to said mark and logo. They
further claimed having used, since late 1975, the internationally-known and specially-designed Shangri-
La mark and S logo for all the hotels in their hotel chain.
Pending trial on the merits of Civil Case No. Q-91-8476, the trial court issued a Writ of Preliminary Injunction
enjoining the petitioners from using the subject mark and logo. The preliminary injunction issue ultimately
reached the Court in G.R. No. 104583 entitled Developers Group of Companies, Inc. vs. Court of Appeals, et
al. In a decision[4] dated March 8, 1993, the Court nullified the writ of preliminary injunction issued by the trial
court and directed it to proceed with the main case and decide it with deliberate dispatch.
While trial was in progress, the petitioners filed with the court a motion to suspend proceedings on account of
the pendency before the BPTTT of Inter Partes Case No. 3145 for the cancellation of DGCIs certificate of
registration. For its part, respondent DGCI filed a similar motion in that case, invoking in this respect the
pendency of its infringement case before the trial court. The parties respective motions to suspend proceedings
also reached the Court via their respective petitions in G.R. No. 114802, entitled Developers Group of
Companies, Inc. vs. Court of Appeals, et al. and G.R. No. 111580, entitled Shangri-La International Hotel
Management LTD., et al. vs. Court of Appeals, et al., which were accordingly consolidated.
In a consolidated decision[5] dated June 21, 2001, the Court, limiting itself to the core issue of whether, despite
the petitioners institution of Inter Partes Case No. 3145 before the BPTTT, herein respondent DGCI can file a
subsequent action for infringement with the regular courts of justice in connection with the same registered
mark, ruled in the affirmative, but nonetheless ordered the BPTTT to suspend further proceedings in said inter
partes case and to await the final outcome of the main case.
Meanwhile, trial on the merits of the infringement case proceeded. Presented as DGCIs lone witness was
Ramon Syhunliong, President and Chairman of DGCIs Board of Directors. Among other things, this witness
testified that:

1. He is a businessman, with interest in lumber, hotel, hospital, trading and restaurant
businesses but only the restaurant business bears the name Shangri-La and uses the
same and the S-logo as service marks. The restaurant now known as Shangri-La
Finest Chinese Cuisine was formerly known as the Carvajal Restaurant until
December 1982, when respondent took over said restaurant business.
2. He had traveled widely around Asia prior to 1982, and admitted knowing the Shangri-La
Hotel in Hong Kong as early as August 1982.
3. The S-logo was one of two (2) designs given to him in December 1982, scribbled on a
piece of paper by a jeepney signboard artist with an office somewhere in
Balintawak. The unnamed artist supposedly produced the two designs after about
two or three days from the time he (Syhunliong) gave the idea of the design he had in
mind.
4. On October 15, 1982, or before the unknown signboard artist supposedly created the
Shangri-La and S designs, DGCI was incorporated with the primary purpose of
owning or operating, or both, of hotels and restaurants.
5. On October 18, 1982, again prior to the alleged creation date of the mark and logo, DGCI
filed an application for trademark registration of the mark SHANGRI-LA FINEST
CHINESE CUISINE & S. Logo with the BPTTT. On said date, respondent DGCI
amended its Articles of Incorporation to reflect the name of its restaurant, known and
operating under the style and name of SHANGRI-LA FINEST CHINESE CUISINE.
Respondent DGCI obtained Certificate of Registration No. 31904 for the Shangri-La
mark and S logo.
Eventually, the trial court, on the postulate that petitioners, more particularly petitioner SLIHMs, use of the
mark and logo in dispute constitutes an infringement of DGCIs right thereto, came out with its decision [6] on
March 8, 1996 rendering judgment for DGCI, as follows:
WHEREFORE, judgment is hereby rendered in favor of [respondent DGCI] and against
[SLIHM, et al.]
a) Upholding the validity of the registration of the service mark Shangri-la and S-Logo in the name of
[respondent];
b) Declaring [petitioners] use of said mark and logo as infringement of [respondents] right thereto;
c) Ordering [petitioners], their representatives, agents, licensees, assignees and other persons
acting under their authority and with their permission, to permanently cease and desist from
using and/or continuing to use said mark and logo, or any copy, reproduction or colorable
imitation
40
thereof, in the promotion, advertisement, rendition of their hotel and allied projects and
services or in any other manner whatsoever;
d) Ordering [petitioners] to remove said mark and logo from any premises, objects, materials
and paraphernalia used by them and/or destroy any and all prints, signs, advertisements or
other materials bearing said mark and logo in their possession and/or under their control; and
e) Ordering [petitioners], jointly and severally, to indemnify [respondent] in the amounts of
P2,000,000.00 as actual and compensatory damages, P500,000.00 as attorneys fee and
expenses of litigation.
Let a copy of this Decision be certified to the Director, Bureau of Patents, Trademarks and
Technology Transfer for his information and appropriate action in accordance with the
provisions of Section 25, Republic Act No. 166
Costs against [petitioners].
SO ORDERED. [Words in brackets added.]
Therefrom, the petitioners went on appeal to the CA whereat their recourse was docketed as CA G.R. SP No.
53351.
As stated at the threshold hereof, the CA, in its assailed Decision of May 15, 2003,[7] affirmed that of the lower
court with the modification of deleting the award of attorneys fees. The appellate court predicated its
affirmatory action on the strength or interplay of the following premises:
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[8], as reiterated in Philip Morris, Inc. v. Court of Appeals.[9]
2. On the other hand, respondent 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
 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.
Petitioners then moved for a reconsideration, which motion was denied by the CA in its equally
assailed Resolution of September 15, 2003.[10]
As formulated by the petitioners, the issues upon which this case hinges are:
1. Whether the CA erred in finding that respondent had the right to file an
application for registration of the Shangri-La mark and S logo although
respondent never had any prior actual commercial use thereof;
2. Whether the CA erred in finding that respondent's supposed use of the identical
Shangri-La mark and S logo of the petitioners was not evident bad faith and can
actually ripen into ownership, much less registration;
3. Whether the CA erred in overlooking petitioners' widespread prior use of the
Shangri-La mark and S logo in their operations;
4. Whether the CA erred in refusing to consider that petitioners are entitled to
protection under both R.A. No. 166, the old trademark law, and the Paris
Convention for the Protection of Industrial Property;
5. Whether the CA erred in holding that SLIHM did not have the right to legally
own the Shangri-La mark and S logo by virtue of and despite their ownership by
the Kuok Group;
6. Whether the CA erred in ruling that petitioners' use of the mark and logo
constitutes actionable infringement;
7. Whether the CA erred in awarding damages in favor of respondent despite the
absence of any evidence to support the same, and in failing to award relief in
favor of the petitioners; and
8. Whether petitioners should be prohibited from continuing their use of the mark
and logo in question.
There are two preliminary issues, however, that respondent DGCI calls our attention to, namely:
1. Whether the certification against forum-shopping submitted on behalf of the petitioners
is sufficient;
41
2. Whether the issues posed by petitioners are purely factual in nature hence improper for
resolution in the instant petition for review on certiorari.
DGCI claims that the present petition for review should be dismissed outright for certain procedural defects, to
wit: an insufficient certification against forum shopping and raising pure questions of fact. On both counts, we
find the instant petition formally and substantially sound.
In its Comment, respondent alleged that the certification against forum shopping signed by Atty. Lee Benjamin
Z. Lerma on behalf and as counsel of the petitioners was insufficient, and that he was not duly authorized to
execute such document. Respondent further alleged that since petitioner SLIHM is a foreign entity based
in Hong Kong, the Director's Certificate executed by Mr. Madhu Rama Chandra Rao, embodying the board
resolution which authorizes Atty. Lerma to act for SLIHM and execute the certification against forum shopping,
should contain the authentication by a consular officer of the Philippinesin Hong Kong.
In National Steel Corporation v. CA,[11] the Court has ruled that the certification on non-forum shopping may be
signed, for and in behalf of a corporation, by a specifically authorized lawyer who has personal knowledge of
the facts required to be disclosed in such document. The reason for this is that a corporation can only exercise
its powers through its board of directors and/or its duly authorized officers and agents. Physical acts, like the
signing of documents, can be performed only by natural persons duly authorized for the purpose.[12]
Moreover, Rule 7, Section 5 of the Rules of Court concerning the certification against forum shopping does not
require any consular certification if the petitioner is a foreign entity. Nonetheless, to banish any lingering doubt,
petitioner SLIHM furnished this Court with a consular certification dated October 29, 2003 authenticating the
Director's Certificate authorizing Atty. Lerma to execute the certification against forum shopping, together with
petitioners manifestation of February 9, 2004.
Respondent also attacks the present petition as one that raises pure questions of fact. It points out that in a
petition for review under Rule 45 of the Rules of Court, the questions that may properly be inquired into are
strictly circumscribed by the express limitation that the petition shall raise only questions of law which must be
distinctly set forth.[13] We do not, however, find that the issues involved in this petition consist purely of
questions of fact. These issues will be dealt with as we go through the questions raised by the petitioners one by
one.
 2. Registration in the Principal Register is limited to the actual owner of
Petitioners' first argument is that the respondent had no right to file an application for registration of the trademark and proceedings therein pass on the issue of ownership,
the Shangri-La mark and S logo because it did not have prior actual commercial use thereof. To respondent, which may be contested through opposition or interference
proceedings, or, after registration, in a petition for cancellation. xxx
such an argument raises a question of fact that was already resolved by the RTC and concurred in by the CA. [Emphasis supplied]

First off, all that the RTC found was that respondent was the prior user and registrant of the subject mark and
logo in the Philippines. Taken in proper context, the trial courts finding on prior use can only be interpreted to
Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and use in
mean that respondent used the subject mark and logo in the country before the petitioners did. It cannot be
trade or commerce. As between actual use of a mark without registration, and registration of the mark without
construed as being a factual finding that there was prior use of the mark and logo before registration.
actual use thereof, the former prevails over the latter. For a rule widely accepted and firmly entrenched, because
Secondly, the question raised is not purely factual in nature. In the context of this case, it involves resolving it has come down through the years, is that actual use in commerce or business is a pre-requisite to the
whether a certificate of registration of a mark, and the presumption of regularity in the performance of official acquisition of the right of ownership.[16]
functions in the issuance thereof, are sufficient to establish prior actual use by the registrant. It further entails While the present law on trademarks[17] has dispensed with the requirement of prior actual use at the time of
answering the question of whether prior actual use is required before there may be a valid registration of a mark. 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
Under the provisions of the former trademark law, R.A. No. 166, as amended, which was in effect up
use in the Philippines before the filing of the application for registration. [18]Trademark is a creation of use and
to December 31, 1997, hence, the law in force at the time of respondent's application for registration of
therefore actual use is a pre-requisite to exclusive ownership and its registration with the Philippine Patent
trademark, the root of ownership of a trademark is actual use in commerce. Section 2 of said law requires that
Office is a mere administrative confirmation of the existence of such right. [19]
before a trademark can be registered, it must have been actually used in commerce and service for not less than
By itself, registration is not a mode of acquiring ownership. When the applicant is not the owner of the
two months in the Philippines prior to the filing of an application for its registration.
trademark being applied for, he has no right to apply for registration of the same. Registration merely creates
Registration, without more, does not confer upon the registrant an absolute right to the registered mark. The
a prima facie presumption of the validity of the registration, of the registrant's ownership of the trademark and
certificate of registration is merely a prima facie proof that the registrant is the owner of the registered mark or
of the exclusive right to the use thereof.[20] Such presumption, just like the presumptive regularity in the
trade name. Evidence of prior and continuous use of the mark or trade name by another can overcome the
performance of official functions, is rebuttable and must give way to evidence to the contrary.
presumptive ownership of the registrant and may very well entitle the former to be declared owner in an
appropriate case.[14]
Here, respondent's own witness, Ramon Syhunliong, testified that a jeepney signboard artist allegedly
commissioned to create the mark and logo submitted his designs only in December 1982. [21] This was two-and-
[15]
Among the effects of registration of a mark, as catalogued by the Court in Lorenzana v. Macagba, are:
a-half months after the filing of the respondents trademark application on October 18, 1982 with the BPTTT. It
was also only in December 1982 when the respondent's restaurant was opened for business. [22] Respondent
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 cannot now claim before the Court that the certificate of registration itself is proof that the two-month prior use
right to the exclusive use thereof. x x x
requirement was complied with, what with the fact that its very own witness testified otherwise in the trial
court. And because at the time (October 18, 1982) the respondent filed its application for trademark registration

42
of the Shangri-La mark and S logo, respondent was not using these in the Philippines commercially, the The S-logo is, likewise, not unusual. The devise looks like a modified Old English print. [30]
registration is void.

To jump from a recognition of the fact that the mark and logo must have been copied to a rationalization for the
Petitioners also argue that the respondent's use of the Shangri-La mark and S logo was in evident bad faith and
possibility that both the petitioners and the respondent coincidentally chose the same name and logo is not only
cannot therefore ripen into ownership, much less registration. While the respondent is correct in saying that a
contradictory, but also manifestly mistaken or absurd. Furthermore, the S logo appears nothing like the Old
finding of bad faith is factual, not legal,[23] hence beyond the scope of a petition for review, there are, however,
English print that the CA makes it out to be, but is obviously a symbol with oriental or Asian overtones. At any
noted exceptions thereto. Among these exceptions are:
rate, it is ludicrous to believe that the parties would come up with the exact same lettering for the word Shangri-
1. When the inference made is manifestly mistaken, absurd or impossible;[24]
La and the exact same logo to boot. As correctly observed by the petitioners, to which we are in full accord:
2. When there is grave abuse of discretion;[25]
3. When the judgment is based on a misapprehension of facts;[26]
x x x When a trademark copycat adopts the word portion of another's trademark as
4. When the findings of fact are conflicting;[27] and
his own, there may still be some doubt that the adoption is intentional. But if he
5. When the facts set forth in the petition as well as in the petitioner's main and reply briefs
copies not only the word but also the word's exact font and lettering style and in
are not disputed by the respondent.[28]
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.[31]

And these are naming but a few of the recognized exceptions to the rule.
The CA itself, in its Decision of May 15, 2003, found that the respondents president and chairman of the board, It is truly difficult to understand why, of the millions of terms and combination of letters and designs available,
Ramon Syhunliong, had been a guest at the petitioners' hotel before he caused the registration of the mark and the respondent had to choose exactly the same mark and logo as that of the petitioners, if there was no intent to
logo, and surmised that he must have copied the idea there: take advantage of the goodwill of petitioners' mark and logo.[32]

Did Mr. Ramon Syhunliong, [respondent's] President copy the mark and devise from one of
[petitioners] hotel (Kowloon Shangri-la) abroad? The mere fact that he was a visitor of
[petitioners] hotel abroad at one time (September 27, 1982) establishes [petitioners] allegation
that he got the idea there.[29]
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. [33] 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.

Yet, in the very next paragraph, despite the preceding admission that the mark and logo must have been copied,
This point is further bolstered by the fact that under either Section 17 of R.A. No. 166, or Section 151 of
the CA tries to make it appear that the adoption of the same mark and logo could have been coincidental:
R.A. No. 8293, or Article 6bis(3) of the Paris Convention, no time limit is fixed for the cancellation of marks

The word or name Shangri-la and the S-logo, are not uncommon. The word Shangri- registered or used in bad faith.[34] This is precisely why petitioners had filed an inter partes case before the
la refers to a (a) remote beautiful imaginary place where life approaches perfection or (b) BPTTT for the cancellation of respondent's registration, the proceedings on which were suspended pending
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 resolution of the instant case.
parties, inspired by the novel, both adopted the mark for their business to conjure [a] place of
beauty and pleasure.

43

Respondent DGCI also rebukes the next issue raised by the petitioners as being purely factual in nature, namely,
whether the CA erred in overlooking petitioners' widespread prior use of the Shangri-La mark and S logo in
their operations. The question, however, is not whether there had been widespread prior use, which would have
been factual, but whether that prior use entitles the petitioners to use the mark and logo in the Philippines. This
is clearly a question which is legal in nature.
It has already been established in the two courts below, and admitted by the respondents president himself, that
petitioners had prior widespread use of the mark and logo abroad:
There is, to be sure, an impressive mass of proof that petitioner SLIHM and its related
companies abroad used the name and logo for one purpose or another x x x. [35] [Emphasis
supplied]
In respondent's own words, [T]he Court of Appeals 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.[36]To petitioners' mind, it was error for the CA to rule that their worldwide use of the mark and logo
in dispute could not have conferred upon them any right thereto. Again, this is a legal question which is well
worth delving into.
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, byactual use thereof in
manufacture or trade, in business, and in the service rendered, may appropriate to his
44
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. [Emphasis supplied]
Admittedly, the CA was not amiss in saying that the law requires the actual use in commerce of the said trade
name and S logo in the Philippines. Hence, consistent with its finding that the bulk of the petitioners' evidence
shows that the alleged use of the Shangri-La trade name was done abroad and not in the Philippines, it
is understandable for that court to rule in respondents favor. Unfortunately, however, what the CA failed to
perceive is that there is a crucial difference between the aforequoted Section 2 and Section 2-A of R.A. No.
166. For, while Section 2 provides for what is registrable, Section 2-A, on the other hand, sets out
how ownership is acquired. These are two distinct concepts.
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 DGCIs president was fully aware.
It is respondent's contention that since the petitioners adopted the Shangri-La mark and S logo as a mere
corporate name or as the name of their hotels, instead of using them as a trademark or service mark, then such
name and logo are not trademarks. 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]
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-
knownmark, 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.[37]
45
However, while the Philippines was already a signatory to the Paris Convention, the IPC only took effect on
January 1, 1988, and in the absence of a retroactivity clause, R.A. No. 166 still applies.[38] Under the prevailing
law and jurisprudence at the time, the CA had not erred in ruling that:
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 tribunal (Mortensen vs. Peters, Great Britain, High Court of
Judiciary of Scotland, 1906, 8 Sessions 93; Paras, International Law and
World Organization, 1971 Ed., p. 20). Withal, 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 (Salonga and Yap, Public International Law,
Fourth ed., 1974, p. 16).[39] [Emphasis supplied]
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.[40]
WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of the Court of
Appeals dated May 15, 2003 and September 15, 2003, respectively, and the Decision of the Regional Trial
Court of Quezon City dated March 8, 1996 are hereby SET ASIDE. Accordingly, the complaint for
infringement in Civil Case No. Q-91-8476 is ordered DISMISSED.

SO ORDERED.

46
BERRIS AGRICULTURAL G.R. No. 183404
On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with business address in Barangay Masiit,
CO., INC.,
Petitioner, Present: Calauan, Laguna, filed with the IPO Bureau of Legal Affairs (IPO-BLA) a Verified Notice of

VELASCO, JR., J.,* Opposition[4] against the mark under application allegedly because NS D-10 PLUS is similar and/or confusingly
NACHURA,** similar to its registered trademark D-10 80 WP, also used for Fungicide (Class 5) with active ingredient 80%
- versus - Acting Chairperson,
LEONARDO-DE CASTRO,*** Mancozeb. The opposition was docketed as IPC No. 14-2005-00099.
BRION,**** and
MENDOZA, JJ.
After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-Abelardo (Director Abelardo) of
NORVY ABYADANG, Promulgated:
the IPO-BLA issued Decision No. 2006-24[5] (BLA decision), the dispositive portion of which reads
Respondent.
October 13, 2010
WHEREFORE, viewed in the light of all the foregoing, this Bureau finds and so
x------------------------------------------------------------------------------------x holds that Respondent-Applicants mark NS D-10 PLUS is confusingly similar to the
Opposers mark and as such, the opposition is hereby SUSTAINED.Consequently, trademark
application bearing Serial No. 4-2004-00450 for the mark NS D-10 PLUS filed on January
16, 2004 by Norvy A. Ab[yada]ng covering the goods fungicide under Class 5 of the
DECISION International Classification of goods is, as it is hereby, REJECTED.

Let the filewrapper of the trademark NS D-10 PLUS subject matter under
NACHURA, J.: consideration be forwarded to the Administrative, Financial and Human Resources
Development Services Bureau (AFHRDSB) for appropriate action in accordance with this
Order with a copy to be furnished the Bureau of Trademark (BOT) for information and to
update its records.

SO ORDERED.[6]
[1]
This petition for review on certiorari under Rule 45 of the Rules of Court seeks the reversal of the Decision
dated April 14, 2008[2] and the Resolution dated June 18, 2008[3] of the Court of Appeals (CA) in CA-G.R. SP
No. 99928. Abyadang filed a motion for reconsideration, and Berris, in turn, filed its opposition to the motion.

The antecedents On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D)[7] (BLA resolution), denying the
motion for reconsideration and disposing as follows

On January 16, 2004, respondent Norvy A. Abyadang (Abyadang), proprietor of NS Northern Organic
IN VIEW OF THE FOREGOING, the Motion for Reconsideration filed by the
Fertilizer, with address at No. 43 Lower QM, Baguio City, filed with the Intellectual Property Office (IPO) a Respondent-Applicant is hereby DENIED FOR LACK OF MERIT. Consequently,
trademark application for the mark NS D-10 PLUS for use in connection with Fungicide (Class 5) with active Decision No. 2006-24 dated April 28, 2006 STANDS.

ingredient 80% Mancozeb. The application, under Application Serial No. 4-2004-00450, was given due course Let the filewrapper of the trademark NS D-10 PLUS subject matter under
consideration be forwarded to the Bureau of Trademarks for appropriate action in accordance
and was published in the IPO e-Gazette for opposition on July 28, 2005.
with this Resolution.

47
 SO ORDERED.[8]
Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of the Director General, Intellectual
Property Philippines (IPPDG), docketed as Appeal No. 14-06-13.
With the filing of the parties respective memoranda, Director General Adrian S. Cristobal, Jr. of the IPPDG
rendered a decision dated July 20, 2007,[9] ruling as follows
Wherefore, premises considered[,] the appeal is hereby DENIED. Accordingly, the
appealed Decision of the Director is hereby AFFIRMED.
Let a copy of this Decision as well as the trademark application and records be
furnished and returned to the Director of Bureau of Legal Affairs for appropriate
action. Further, let also the Directors of the Bureau of Trademarks, the Administrative,
Financial and Human Resources Development Services Bureau, and the library of the
Documentation, Information and Technology Transfer Bureau be furnished a copy of this
Decision for information, guidance, and records purposes.
SO ORDERED.[10]
Undeterred, Abyadang filed a petition for review[11] before the CA.
In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It held
In sum, the petition should be granted due to the following reasons: 1) petitioners
mark NS D-10 PLUS is not confusingly similar with respondents trademark D-10 80 WP; 2)
respondent failed to establish its ownership of the mark D-10 80 WP and 3) respondents
trademark registration for D-10 80 WP may be cancelled in the present case to avoid
multiplicity of suits.
WHEREFORE, the petition is GRANTED. The decision dated July 20, 2007 of the
IPO Director General in Appeal No. 14-06-13 (IPC No. 14-2005-00099)
is REVERSED and SET ASIDE, and a new one is entered giving due course to petitioners
application for registration of the mark NS D-10 PLUS, and canceling respondents trademark
registration for D-10 80 WP.
SO ORDERED.[12]
48
Berris filed a Motion for Reconsideration, but in its June 18, 2008 Resolution, the CA denied the motion for
lack of merit. Hence, this petition anchored on the following arguments
I. The Honorable Court of Appeals finding that there exists no confusing similarity
between Petitioners and respondents marks is based on misapprehension of facts,
surmise and conjecture and not in accord with the Intellectual Property Code and
applicable Decisions of this Honorable Court [Supreme Court].
II. The Honorable Court of Appeals Decision reversing and setting aside the
technical findings of the Intellectual Property Office even without a finding or, at the
very least, an allegation of grave abuse of discretion on the part of said agency is not
in accord with law and earlier pronouncements of this Honorable Court [Supreme
Court].
III. The Honorable Court of Appeals Decision ordering the cancellation of herein
Petitioners duly registered and validly existing trademark in the absence of a
properly filed Petition for Cancellation before the Intellectual Property Office is not
in accord with the Intellectual Property Code and applicable Decisions of this
Honorable Court [Supreme Court].[13]
The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No.
8293[14] (Intellectual Property Code of the Philippines), specifically Sections 121 to 170 thereof. It took effect
on January 1, 1998. Prior to its effectivity, the applicable law was R.A. No. 166, [15] as amended.
Interestingly, R.A. No. 8293 did not expressly repeal in its entirety R.A. No. 166, but merely provided
in Section 239.1[16] that Acts and parts of Acts inconsistent with it were repealed. In other words, only in the
instances where a substantial and irreconcilable conflict is found between the provisions of R.A. No. 8293 and
of R.A. No. 166 would the provisions of the latter be deemed repealed.
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. [17] It also
defines a collective mark as any visible sign designated as such in the application for registration and capable of
distinguishing the origin or any other common characteristic, including the quality of goods or services of
different enterprises which use the sign under the control of the registered owner of the collective mark.[18]
 On the other hand, 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. [19] 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[20] 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 registrants
ownership of the mark, and of the registrants exclusive right to use the same in connection with the goods or
services and those that are related thereto specified in the certificate. [21] 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. [22] 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.[23] 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. [24]
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. [25]
In the instant case, both parties have submitted proof to support their claim of ownership of their
respective trademarks.
49
Culled from the records, Berris, as oppositor to Abyadangs application for registration of his
trademark, presented the following evidence: (1) its trademark application dated November 29, 2002 [26] with
Application No. 4-2002-0010272; (2) its IPO certificate of registration dated October 25, 2004, [27] with
Registration No. 4-2002-010272 and July 8, 2004 as the date of registration; (3) a photocopy of its
packaging[28] bearing the mark D-10 80 WP; (4) photocopies of its sales invoices and official receipts;[29] and
(5) its notarized DAU dated April 23, 2003,[30] stating that the mark was first used on June 20, 2002, and
indicating that, as proof of actual use, copies of official receipts or sales invoices of goods using the mark were
attached as Annex B.
On the other hand, Abyadangs proofs consisted of the following: (1) a photocopy of the
packaging[31] for his marketed fungicide bearing mark NS D-10 PLUS; (2) Abyadangs Affidavit dated February
14, 2006,[32] stating among others that the mark NS D-10 PLUS was his own creation derived from: N for
Norvy, his name; S for Soledad, his wifes name; D the first letter for December, his birth month; 10 for
October, the 10th month of the year, the month of his business name registration; and PLUS to connote superior
quality; that when he applied for registration, there was nobody applying for a mark similar to NS D-10 PLUS;
that he did not know of the existence of Berris or any of its products; that D-10 could not have been associated
with Berris because the latter never engaged in any commercial activity to sell D-10 80 WP fungicide in the
local market; and that he could not have copied Berris mark because he registered his packaging with the
Fertilizer and Pesticide Authority (FPA) ahead of Berris; (3) Certification dated December 19, 2005 [33] issued
by the FPA, stating that NS D-10 PLUS is owned and distributed by NS Northern Organic Fertilizer, registered
with the FPA since May 26, 2003, and had been in the market since July 30, 2003; (4) Certification dated
October 11, 2005[34] issued by the FPA, stating that, per monitoring among dealers in Region I and in the
Cordillera Administrative Region registered with its office, the Regional Officer neither encountered the
fungicide with mark D-10 80 WP nor did the FPA provincial officers from the same area receive any report as
to the presence or sale of Berris product; (5) Certification dated March 14, 2006 [35] issued by the FPA,
certifying that all pesticides must be registered with the said office pursuant to Section 9 [36] of Presidential
Decree (P.D.) No. 1144[37] and Section 1, Article II of FPA Rules and Regulations No. 1, Series of 1977; (6)
Certification dated March 16, 2006[38] issued by the FPA, certifying that the pesticide D-10 80 WP was
registered by Berris on November 12, 2004; and (7) receipts from Sunrise Farm Supply [39] in La Trinidad,
Benguet of the sale of Abyadangs goods referred to as D-10 and D-10+.
Based on their proffered pieces of evidence, both Berris and Abyadang claim to be the prior user of
their respective marks.
We rule in favor of Berris.
Berris was able to establish that it was using its mark D-10 80 WP since June 20, 2002, even before it
filed for its registration with the IPO on November 29, 2002, as shown by its DAU which was under oath and
notarized, bearing the stamp of the Bureau of Trademarks of the IPO on April 25, 2003, [40] and which stated that
it had an attachment as Annex B sales invoices and official receipts of goods bearing the mark. Indeed, the
DAU, being a notarized document, especially when received in due course by the IPO, is evidence of the facts it
stated and has the presumption of regularity, entitled to full faith and credit upon its face. Thus, the burden of
proof to overcome the presumption of authenticity and due execution lies on the party contesting it, and the
rebutting evidence should be clear, strong, and convincing as to preclude all controversy as to the falsity of the
certificate.[41] What is more, the DAU is buttressed by the Certification dated April 21, 2006 [42] issued by the
Bureau of Trademarks that Berris mark is still valid and existing.
Hence, we cannot subscribe to the contention of Abyadang that Berris DAU is fraudulent based only
on his assumption that Berris could not have legally used the mark in the sale of its goods way back in June
2002 because it registered the product with the FPA only on November 12, 2004. As correctly held by the
IPPDG in its decision on Abyadangs appeal, the question of whether or not Berris violated P.D. No. 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. Thus, even a determination of violation by Berris of P.D. No. 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.
50
Furthermore, even the FPA Certification dated October 11, 2005, stating that the office had neither
encountered nor received reports about the sale of the fungicide D-10 80 WP within Region I and the Cordillera
Administrative Region, could not negate the fact that Berris was selling its product using that mark in 2002,
especially considering that it first traded its goods in Calauan, Laguna, where its business office is located, as
stated in the DAU.
Therefore, Berris, as prior user and prior registrant, is the owner of the mark D-10 80 WP. As such,
Berris has in its favor the rights conferred by Section 147 of R.A. No. 8293, which provides
Sec. 147. Rights Conferred.
147.1. The owner of a registered mark shall have the exclusive right to prevent all
third parties not having the owners consent from using in the course of trade identical or
similar signs or containers for goods or services which are identical or similar to those in
respect of which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a likelihood
of confusion shall be presumed.
147.2. The exclusive right of the owner of a well-known mark defined in Subsection
123.1(e) which is registered in the Philippines, shall extend to goods and services which are
not similar to those in respect of which the mark is registered: Provided, That use of that mark
in relation to those goods or services would indicate a connection between those goods or
services and the owner of the registered mark: Provided, further, That the interests of the
owner of the registered mark are likely to be damaged by such use.
Now, we confront the question, Is Abyadangs mark NS D-10 PLUS confusingly similar to that of
Berris D-10 80 WP such that the latter can rightfully prevent the IPO registration of the former?
We answer in the affirmative.
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 teststhe 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.[43]
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. [44]
Comparing Berris mark D-10 80 WP with Abyadangs mark NS D-10 PLUS, as appearing on their
respective packages, one cannot but notice that both have a common component which is D-10. On Berris
package, the D-10 is written with a bigger font than the 80 WP. Admittedly, the D-10 is the dominant feature of
the mark. The D-10, being at the beginning of the mark, is what is most remembered of it. Although, it appears
in Berris certificate of registration in the same font size as the 80 WP, its dominancy in the D-10 80 WP mark
stands since the difference in the form does not alter its distinctive character.[45]
Applying the Dominancy Test, it cannot be gainsaid that Abyadangs NS D-10 PLUS is similar to
Berris D-10 80 WP, that confusion or mistake is more likely to occur. Undeniably, both marks pertain to the
same type of goods fungicide with 80% Mancozeb as an active ingredient and used for the same group of fruits,
crops, vegetables, and ornamental plants, using the same dosage and manner of application. They also 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. Undeniably, the likelihood of
confusion is present.
51
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,[46] 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 Abyadangs application for registration
of the mark NS D-10 PLUS.
Verily, the protection of trademarks as intellectual property is intended not only to preserve the
goodwill and reputation of the business established on the goods bearing the mark through actual use over a
period of time, but also to safeguard the public as consumers against confusion on these goods.[47] On this
matter of particular concern, administrative agencies, such as the IPO, by reason of their special knowledge and
expertise over matters falling under their jurisdiction, are in a better position to pass judgment thereon. Thus,
their findings of fact in that regard are generally accorded great respect, if not finality by the courts, as long as
they are supported by substantial evidence, even if such evidence might not be overwhelming or even
preponderant. It is not the task of the appellate court to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the administrative agency in respect to
sufficiency of evidence.[48]
 Inasmuch as the ownership of the mark D-10 80 WP fittingly belongs to Berris, and because the same
should not have been cancelled by the CA, we consider it proper not to belabor anymore the issue of whether
cancellation of a registered mark may be done absent a petition for cancellation.

WHEREFORE, the petition is GRANTED. The assailed Decision dated April 14, 2008 and
Resolution dated June 18, 2008 of the Court of Appeals in CA-G.R. SP No. 99928 are REVERSED and SET
ASIDE.Accordingly, the Decision No. 2006-24 dated April 28, 2006 and the Resolution No. 2006-09(D) dated
August 2, 2006 in IPC No. 14-2005-00099, and the Decision dated July 20, 2007 in Appeal No. 14-06-13
are REINSTATED. Costs against respondent.

SO ORDERED.

52
G.R. No. 184850 October 20, 2010 On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-005393, also for the mark "VESPA,"
for use on air compressors.11 On January 18, 2004, the IPO issued COR No. 4-1999-005393 in favor of
E.Y. INDUSTRIAL SALES, INC. and ENGRACIO YAP, Petitioners, EYIS.12 Thereafter, on February 8, 2007, Shen Dar was also issued COR No. 4-1997-121492.13
vs.
SHEN DAR ELECTRICITY AND MACHINERY CO., LTD., Respondent. In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS’ COR with the BLA. 14 In
the Petition, Shen Dar primarily argued that the issuance of the COR in favor of EYIS violated Section 123.1
DECISION paragraphs (d), (e) and (f) of Republic Act No. (RA) 8293, otherwise known as the Intellectual Property Code
(IP Code), having first filed an application for the mark. Shen Dar further alleged that EYIS was a mere
distributor of air compressors bearing the mark "VESPA" which it imported from Shen Dar. Shen Dar also
VELASCO, JR., J.:
argued that it had prior and exclusive right to the use and registration of the mark "VESPA" in the Philippines
under the provisions of the Paris Convention.15
The Case
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners of the mark "VESPA" being
This Petition for Review on Certiorari under Rule 45 seeks to nullify and reverse the February 21, 2008 the sole assembler and fabricator of air compressors since the early 1990s. They further alleged that the air
Decision1and the October 6, 2008 Resolution2 rendered by the Court of Appeals (CA) in CA-G.R. SP No. compressors that Shen Dar allegedly supplied them bore the mark "SD" for Shen Dar and not "VESPA."
99356 entitled Shen Dar Electricity and Machinery Co., Ltd. v. E.Y. Industrial Sales, Inc. and Engracio Yap. Moreover, EYIS argued that Shen Dar, not being the owner of the mark, could not seek protection from the
provisions of the Paris Convention or the IP Code. 16
The assailed decision reversed the Decision dated May 25, 2007 3 issued by the Director General of the
Intellectual Property Office (IPO) in Inter Partes Case No. 14-2004-00084. The IPO Director General upheld Thereafter, the Director of the BLA issued its Decision dated May 29, 2006 in favor of EYIS and against Shen
Certificate of Registration (COR) No. 4-1999-005393 issued by the IPO for the trademark "VESPA" in favor of Dar, the dispositive portion of which reads:
petitioner E.Y. Industrial Sales, Inc. (EYIS), but ordered the cancellation of COR No. 4-1997-121492, also for
the trademark "VESPA," issued in favor of respondent Shen Dar Electricity and Machinery Co., Ltd. (Shen
Dar). The Decision of the IPO Director General, in effect, affirmed the Decision dated May 29, 20064 issued by WHEREFORE, premises considered, the Petition for Cancellation is, as it is hereby, DENIED. Consequently,
the Director of the Bureau of Legal Affairs (BLA) of the IPO. Certificate of Registration No. 4-1999-[005393] for the mark "VESPA" granted in the name of E.Y. Industrial
Sales, Inc. on 9 January 2007 is hereby upheld.
The Facts
Let the filewrapper of VESPA subject matter of this case be forwarded to the Administrative, Financial and
Human Resource Development Services Bureau for issuance and appropriate action in accordance with this
EYIS is a domestic corporation engaged in the production, distribution and sale of air compressors and other DECISION and a copy thereof furnished to the Bureau of Trademarks for information and update of its records.
industrial tools and equipment.5 Petitioner Engracio Yap is the Chairman of the Board of Directors of EYIS.6
SO ORDERED.17
Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of air compressors. 7
Shen Dar appealed the decision of the BLA Director to the Director General of the IPO. In the appeal, Shen Dar
Both companies claimed to have the right to register the trademark "VESPA" for air compressors. raised the following issues:

From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales contracts. In the Sales 1. Whether the BLA Director erred in ruling that Shen Dar failed to present evidence;
Contract dated April 20, 2002,8 for example, Shen Dar would supply EYIS in one (1) year with 24 to 30 units of
40-ft. containers worth of air compressors identified in the Packing/Weight Lists simply as SD-23, SD-29, SD-
2. Whether the registration of EYIS’ application was proper considering that Shen Dar was the first to
31, SD-32, SD-39, SD-67 and SD-68. In the corresponding Bill of Ladings, the items were described merely as
file an application for the mark; and
air compressors.9 There is no documentary evidence to show that such air compressors were marked "VESPA."

On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-121492 with the IPO for the mark 3. Whether the BLA Director correctly ruled that EYIS is the true owner of the mark. 18
"VESPA, Chinese Characters and Device" for use on air compressors and welding machines.10
Later, the IPO Director General issued a Decision dated May 25, 2007 upholding the COR issued in favor of
EYIS while cancelling the COR of Shen Dar, the dispositive portion of which reads:

53
WHEREFORE, premises considered, the appeal is DENIED. Certificate of Registration No. 4-1999-005393 for
the mark VESPA for air compressor issued in favor of Appellee is hereby upheld. Consequently, Certificate of
Registration No. 4-1997-121492 for the mark VESPA, Chinese Characters & Device for goods air compressor
and spot welding machine issued in favor of Appellant is hereby ordered cancelled.
Let a copy of this Decision as well as the records of this case be furnished and returned to the Director of
Bureau of Legal Affairs for appropriate action. Further, let also the Directors of the Bureau of Trademarks, the
Administrative, Financial and Human Resources Development Services Bureau, and the Documentation,
Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance,
and records purposes.19
Shen Dar appealed the above decision of the IPO Director General to the CA where Shen Dar raised the
following issues:
1. Whether Shen Dar is guilty of forum shopping;
2. Whether the first-to-file rule applies to the instant case;
3. Whether Shen Dar presented evidence of actual use;
4. Whether EYIS is the true owner of the mark "VESPA";
5. Whether the IPO Director General erred in cancelling Shen Dar’s COR No. 4-1997-121492 without
a petition for cancellation; and
6. Whether Shen Dar sustained damages.20
In the assailed decision, the CA reversed the IPO Director General and ruled in favor of Shen Dar. The
dispositive portion states:
WHEREFORE, premises considered, the petition is GRANTED. Consequently, the assailed decision of the
Director General of the Intellectual Property Office dated May 25, 2007 is hereby REVERSED and SET
ASIDE. In lieu thereof, a new one is entered: a) ordering the cancellation of Certificate of Registration No. 4-
1999-005393 issued on January 19, 2004 for the trademark VESPA in favor of E.Y. Industrial Sales, Inc.; b)
ordering the restoration of the validity of Certificate of Registration No. 4-1997-121492 for the trademark
VESPA in favor of Shen Dar Electricity and Machinery Co., Ltd. No pronouncement as to costs.
SO ORDERED.21
In ruling for Shen Dar, the CA ruled that, despite the fact that Shen Dar did not formally offer its evidence
before the BLA, such evidence was properly attached to the Petition for Cancellation. As such, Shen Dar’s
evidence may be properly considered. The CA also enunciated that the IPO failed to properly apply the
provisions of Sec. 123.1(d) of RA 8293, which prohibits the registration of a trademark in favor of a party when
54
there is an earlier filed application for the same mark. The CA further ruled that Shen Dar should be considered
to have prior use of the mark based on the statements made by the parties in their respective Declarations of
Actual Use. The CA added that EYIS is a mere importer of the air compressors with the mark "VESPA" as may
be gleaned from its receipts which indicated that EYIS is an importer, wholesaler and retailer, and therefore,
cannot be considered an owner of the mark.22
EYIS filed a motion for reconsideration of the assailed decision which the CA denied in the assailed resolution.
Hence, the instant appeal.
Issues
EYIS and Yap raise the following issues in their petition:
A. Whether the Director General of the IPO correctly upheld the rights of Petitioners over the
trademark VESPA.
B. Whether the Director General of the IPO can, under the circumstances, order the cancellation of
Respondent’s certificate of registration for VESPA, which has been fraudulently obtained and
erroneously issued.
C. Whether the Honorable Court of Appeals was justified in reversing the findings of fact of the IPO,
which affirm the rights of Petitioner EYIS over the trademark VESPA and when such findings are
supported by the evidence on record.
D. Whether this Honorable Court may review questions of fact considering that the findings of the
Court of Appeals and the IPO are in conflict and the conclusions of the appellee court are contradicted
by the evidence on record.23
The Ruling of the Court
The appeal is meritorious.
First Issue:
Whether this Court may review the questions of fact presented
Petitioners raise the factual issue of who the true owner of the mark is. As a general rule, this Court is not a trier
of facts. However, such rule is subject to exceptions.
In New City Builders, Inc. v. National Labor Relations Commission, 24 the Court ruled that:
We are very much aware that the rule to the effect that this Court is not a trier of facts admits of exceptions. As
we have stated in Insular Life Assurance Company, Ltd. vs. CA:
[i]t is a settled rule that in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts
and does not normally undertake the re-examination of the evidence presented by the contending parties during
the trial of the case considering that the findings of facts of the CA are conclusive and binding on the Court.
However, the Court had recognized several exceptions to this rule, to wit: (1) when the findings are grounded
entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the
Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion. (Emphasis supplied.)
In the instant case, the records will show that the IPO and the CA made differing conclusions on the issue of
ownership based on the evidence presented by the parties. Hence, this issue may be the subject of this Court’s
review.
Second Issue:
Whether evidence presented before the BLA must be formally offered
Preliminarily, it must be noted that the BLA ruled that Shen Dar failed to adduce evidence in support of its
allegations as required under Office Order No. 79, Series of 2005, Amendments to the Regulations on Inter
Partes Proceedings, having failed to formally offer its evidence during the proceedings before it. The BLA
ruled:
At the outset, we note petitioner’s failure to adduce any evidence in support of its allegations in the Petition for
Cancellation. Petitioner did not file nor submit its marked evidence as required in this Bureau’s Order No.
2006-157 dated 25 January 2006 in compliance with Office Order No. 79, Series of 2005, Amendments to the
Regulations on Inter Partes Proceedings.25 x x x
In reversing such finding, the CA cited Sec. 2.4 of BLA Memorandum Circular No. 03, Series of 2005, which
states:
Section 2.4. In all cases, failure to file the documentary evidences in accordance with Sections 7 and 8 of the
rules on summary proceedings shall be construed as a waiver on the part of the parties. In such a case, the
original petition, opposition, answer and the supporting documents therein shall constitute the entire evidence
for the parties subject to applicable rules.
55
The CA concluded that Shen Dar needed not formally offer its evidence but merely needed to attach its
evidence to its position paper with the proper markings, 26 which it did in this case.
The IP Code provides under its Sec. 10.3 that the Director General of the IPO shall establish the procedure for
the application for the registration of a trademark, as well as the opposition to it:
Section 10. The Bureau of Legal Affairs.¾The Bureau of Legal Affairs shall have the following functions:
xxxx
10.3. The Director General may by Regulations establish the procedure to govern the implementation of this
Section.
Thus, the Director General issued Office Order No. 79, Series of 2005 amending the regulations on Inter Partes
Proceedings, Sec. 12.1 of which provides:
Section 12. Evidence for the Parties¾
12.1. The verified petition or opposition, reply if any, duly marked affidavits of the witnesses, and the
documents submitted, shall constitute the entire evidence for the petitioner or opposer. The verified answer,
rejoinder if any, and the duly marked affidavits and documents submitted shall constitute the evidence for the
respondent. Affidavits, documents and other evidence not submitted and duly marked in accordance with the
preceding sections shall not be admitted as evidence.
The preceding sections referred to in the above provision refer to Secs. 7.1, 8.1 and 9 which, in turn, provide:
Section 7. Filing of Petition or Opposition¾
7.1. The petition or opposition, together with the affidavits of witnesses and originals of the documents and
other requirements, shall be filed with the Bureau, provided, that in case of public documents, certified copies
shall be allowed in lieu of the originals. The Bureau shall check if the petition or opposition is in due form as
provided in the Regulations particularly Rule 3, Section 3; Rule 4, Section 2; Rule 5, Section 3; Rule 6, Section
9; Rule 7, Sections 3 and 5; Rule 8, Sections 3 and 4. For petition for cancellation of layout design (topography)
of integrated circuits, Rule 3, Section 3 applies as to the form and requirements. The affidavits, documents and
other evidence shall be marked consecutively as "Exhibits" beginning with the letter "A".
Section 8. Answer¾
8.1. Within three (3) working days from receipt of the petition or opposition, the Bureau shall issue an order for
the respondent to file an answer together with the affidavits of witnesses and originals of documents, and at the
same time shall notify all parties required to be notified in the IP Code and these Regulations, provided, that in
case of public documents, certified true copies may be submitted in lieu of the originals. The affidavits and
documents shall be marked consecutively as "Exhibits" beginning with the number "1".
Section 9. Petition or Opposition and Answer must be verified¾ Subject to Rules 7 and 8 of these regulations,
the petition or opposition and the answer must be verified. Otherwise, the same shall not be considered as
having been filed.
In other words, as long as the petition is verified and the pieces of evidence consisting of the affidavits of the
witnesses and the original of other documentary evidence are attached to the petition and properly marked in
accordance with Secs. 7.1 and 8.1 abovementioned, these shall be considered as the evidence of the petitioner.
There is no requirement under the abovementioned rules that the evidence of the parties must be formally
offered to the BLA.
In any case, as a quasi-judicial agency and as stated in Rule 2, Sec. 5 of the Regulations on Inter Partes
Proceedings, the BLA is not bound by technical rules of procedure. The evidence attached to the petition may,
therefore, be properly considered in the resolution of the case.
Third Issue:
Whether the IPO Director General can
validly cancel Shen Dar’s Certificate of Registration
In his Decision, the IPO Director General stated that, despite the fact that the instant case was for the
cancellation of the COR issued in favor of EYIS, the interests of justice dictate, and in view of its findings, that
the COR of Shen Dar must be cancelled. The Director General explained:
Accordingly, while the instant case involves a petition to cancel the registration of the Appellee’s trademark
VESPA, the interest of justice requires that Certificate of Registration No. 4-1997-121492 be cancelled. While
the normal course of proceedings should have been the filing of a petition for cancellation of Certificate of
Registration No. 4-1997-121492, that would involve critical facts and issues that have already been resolved in
this case. To allow the Applicant to still maintain in the Trademark Registry Certificate of Registration No. 4-
1997-121492 would nullify the exclusive rights of Appellee as the true and registered owner of the mark
VESPA and defeat the purpose of the trademark registration system. 27
Shen Dar challenges the propriety of such cancellation on the ground that there was no petition for cancellation
as required under Sec. 151 of RA 8293.
Office Order No. 79, Series of 2005, provides under its Sec. 5 that:
Section 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases.¾The rules of
procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases. The Rules of Court
may be applied suppletorily. The Bureau shall not be bound by strict technical rules of procedure and evidence
but may adopt, in the absence of any applicable rule herein, such mode of proceedings which is consistent with
the requirements of fair play and conducive to the just, speedy and inexpensive disposition of cases, and which
will give the Bureau the greatest possibility to focus on the contentious issues before it. (Emphasis supplied.)
56
The above rule reflects the oft-repeated legal principle that quasi-judicial and administrative bodies are not
bound by technical rules of procedure. Such principle, however, is tempered by fundamental evidentiary rules,
including due process. Thus, we ruled in Aya-ay, Sr. v. Arpaphil Shipping Corp.:28
That administrative quasi-judicial bodies like the NLRC are not bound by technical rules of procedure in the
adjudication of cases does not mean that the basic rules on proving allegations should be entirely dispensed
with. A party alleging a critical fact must still support his allegation with substantial evidence. Any decision
based on unsubstantiated allegation cannot stand as it will offend due process.
x x x The liberality of procedure in administrative actions is subject to limitations imposed by basic
requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in
administrative procedure "does not go so far as to justify orders without a basis in evidence having rational
probative value." More specifically, as held in Uichico v. NLRC:
It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of
procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to
disregard certain fundamental evidentiary rules.
This was later reiterated in Lepanto Consolidated Mining Company v. Dumapis: 29
While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by the technical rules
of procedure in the adjudication of cases, this procedural rule should not be construed as a license to disregard
certain fundamental evidentiary rules. The evidence presented must at least have a modicum of admissibility for
it to have probative value. Not only must there be some evidence to support a finding or conclusion, but the
evidence must be substantial. Substantial evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion. Thus, even though technical
rules of evidence are not strictly complied with before the LA and the NLRC, their decision must be based on
evidence that must, at the very least, be substantial.
The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not preclude the
cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing for the cancellation of EYIS’
COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true owner of the mark "VESPA"
and, thus, entitled to have it registered. Shen Dar had more than sufficient opportunity to present its evidence
and argue its case, and it did. It was given its day in court and its right to due process was respected. The IPO
Director General’s disregard of the procedure for the cancellation of a registered mark was a valid exercise of
his discretion.
Fourth Issue:
Whether the factual findings of the IPO are binding on the CA
Next, petitioners challenge the CA’s reversal of the factual findings of the BLA that Shen Dar and not EYIS is
the prior user and, therefore, true owner of the mark. In arguing its position, petitioners cite numerous rulings of
this Court where it was enunciated that the factual findings of administrative bodies are given great weight if
not conclusive upon the courts when supported by substantial evidence.
We agree with petitioners that the general rule in this jurisdiction is that the factual findings of administrative
bodies deserve utmost respect when supported by evidence. However, such general rule is subject to exceptions.
In Fuentes v. Court of Appeals,30 the Court established the rule of conclusiveness of factual findings of the CA
as follows:
Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court in cases brought to it from the Court of
Appeals x x x is limited to the review and revision of errors of law allegedly committed by the appellate court,
as its findings of fact are deemed conclusive. As such this Court is not duty-bound to analyze and weigh all over
again the evidence already considered in the proceedings below. This rule, however, is not without exceptions."
The findings of fact of the Court of Appeals, which are as a general rule deemed conclusive, may admit of
review by this Court:
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
(2) when the findings are grounded entirely on speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken,
absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such
findings are contrary to the admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will
justify a different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the specific evidence on which they
are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but
such findings are contradicted by the evidence on record. (Emphasis supplied.)
Thereafter, in Villaflor v. Court of Appeals,31 this Court applied the above principle to factual findings of quasi-
judicial bodies, to wit:
57
Proceeding by analogy, the exceptions to the rule on conclusiveness of factual findings of the Court of Appeals,
enumerated in Fuentes vs. Court of Appeals, can also be applied to those of quasi-judicial bodies x x x.
(Emphasis supplied.)
Here, the CA identified certain material facts that were allegedly overlooked by the BLA and the IPO Director
General which it opined, when correctly appreciated, would alter the result of the case. An examination of the
IPO Decisions, however, would show that no such evidence was overlooked.
First, as to the date of first use of the mark by the parties, the CA stated:
To begin with, when respondents-appellees filed its application for registration of the VESPA trademark on July
28, 1999, they stated under oath, as found in their DECLARATION OF ACTUAL USE, that their first use of
the mark was on December 22, 1998. On the other hand, [Shen Dar] in its application dated June 09, 1997
stated, likewise under oath in their DECLARATION OF ACTUAL USE, that its first use of the mark was in
June 1996. This cannot be made any clearer. [Shen Dar] was not only the first to file an application for
registration but likewise first to use said registrable mark.32
Evidently, the CA anchors its finding that Shen Dar was the first to use the mark on the statements of the parties
in their respective Declarations of Act ual Use. Such conclusion is premature at best. While a Declaration
of Actual Use is a notarized document, hence, a public document, it is not conclusive as to the fact of first use
of a mark. The declaration must be accompanied by proof of actual use as of the date claimed. In a declaration
of actual use, the applicant must, therefore, present evidence of such actual use.
The BLA ruled on the same issue, as follows:
More importantly, the private respondent’s prior adoption and continuous use of the mark ‘VESPA’ on air
compressors is bolstered by numerous documentary evidence consisting of sales invoices issued in the name of
E.Y. Industrial and Bill of Lading (Exhibits ‘4’ to ‘375’). Sales Invoice No. 12075 dated March 27, 1995
antedates petitioner’s date of first use on January 1, 1997 indicated in its trademark application filed on June 9,
1997 as well as the date of first use in June of 1996 as indicated in the Declaration of Actual Use submitted on
December 3, 2001 (Exhibit ‘385’). The use by respondent registrant in the concept of owner is shown by
commercial documents, sales invoices unambiguously describing the goods as "VESPA" air compressors.
Private respondents have sold the air compressors bearing the "VESPA" to various locations in the Philippines,
as far as Mindanao and the Visayas since the early 1990’s. We carefully inspected the evidence consisting of
three hundred seventy-one (371) invoices and shipment documents which show that VESPA air compressors
were sold not only in Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City, Zamboanga City,
Cagayan de Oro City, Davao City, to name a few. There is no doubt that it is through private respondents’
efforts that the mark "VESPA" used on air compressors has gained business goodwill and reputation in the
Philippines for which it has validly acquired trademark rights. Respondent E.Y. Industrial’s right has been
preserved until the passage of RA 8293 which entitles it to register the same. 33
Comparatively, the BLA’s findings were founded upon the evidence presented by the parties. An example of
such evidence is Invoice No. 12075 dated March 29, 1995 34 where EYIS sold four units of VESPA air
compressors to Veteran Paint Trade Center. Shen Dar failed to rebut such evidence. The truth, as supported by
the evidence on record, is that EYIS was first to use the mark.
Moreover, the discrepancy in the date provided in the Declaration of Actual Use filed by EYIS and the proof
submitted was appropriately considered by the BLA, ruling as follows:
On the contrary, respondent EY Industrial was able to prove the use of the mark "VESPA" on the concept of an
owner as early as 1991. Although Respondent E.Y. indicated in its trademark application that its first use was in
December 22, 1998, it was able to prove by clear and positive evidence of use prior to such date.
In Chuang Te v. Ng Kian-Guiab and Director of Patents, L-23791, 23 November 1966, the High Court clarified:
Where an applicant for registration of a trademark states under oath the date of his earliest use, and later on he
wishes to carry back his first date of use to an earlier date, he then takes on the greater burden of presenting
"clear and convincing evidence" of adoption and use as of that earlier date. (B.R. Baker Co. vs. Lebrow Bros.,
150 F. 2d 580.)35
The CA further found that EYIS is not a manufacturer of air compressors but merely imports and sells them as a
wholesaler and retailer. The CA reasoned:
Conversely, a careful perusal of appellees’ own submitted receipts shows that it is not manufacturer but an
importer, wholesaler and retailer. This fact is corroborated by the testimony of a former employee of appellees.
Admittedly too, appellees are importing air compressors from [Shen Dar] from 1997 to 2004. These matters,
lend credence to [Shen Dar’s] claim that the letters SD followed by a number inscribed in the air compressor is
only to describe its type, manufacturer business name and capacity. The VESPA mark is in the sticker which is
attached to the air compressors. The ruling of the Supreme Court, in the case of UNNO Commercial
Enterprises, Inc. vs. General Milling Corporation et al., is quite enlightening, thus We quote:
"The term owner does not include the importer of the goods bearing the trademark, trade name, service mark, or
other mark of ownership, unless such importer is actually the owner thereof in the country from which the
goods are imported. Thus, this Court, has on several occasions ruled that where the applicant’s alleged
ownership is not shown in any notarial document and the applicant appears to be merely an importer or
distributor of the merchandise covered by said trademark, its application cannot be granted." 36
This is a non sequitur. It does not follow. The fact that EYIS described itself in its sales invoice as an importer,
wholesaler and retailer does not preclude its being a manufacturer. Sec. 237 of the National Internal Revenue
Code states:
Section 237. Issuance of Receipts or Sales or Commercial Invoices.¾All persons subject to an internal revenue
tax shall, for each sale and transfer of merchandise or for services rendered valued at Twenty-five pesos
(P25.00) or more, issue duly registered receipts or sale or commercial invoices, prepared at least in duplicate,
showing the date of transaction, quantity, unit cost and description of merchandise or nature of service:
Provided, however, That where the receipt is issued to cover payment made as rentals, commissions,
compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and
address of the purchaser, customer or client.
58
The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the
transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the
same in his place of business for a period of three (3) years from the close of the taxable year in which such
invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of
business, for a like period.
The Commissioner may, in meritorious cases, exempt any person subject to an internal revenue tax from
compliance with the provisions of this Section. (Emphasis supplied.)
Correlatively, in Revenue Memorandum No. 16-2003 dated May 20, 2003, the Bureau of Internal Revenue
defined a Sales Invoice and identified its required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) – is written account of goods sold or services rendered and the prices
charged therefor used in the ordinary course of business evidencing sale and transfer or agreement to sell or
transfer of goods and services. It contains the same information found in the Official Receipt.
Official Receipt (OR) – is a receipt issued for the payment of services rendered or goods sold. It contains the
following information:
a. Business name and address;
b. Taxpayer Identification Number;
c. Name of printer (BIR Permit No.) with inclusive serial number of booklets and date of issuance of
receipts.
There is no requirement that a sales invoice should accurately state the nature of all the businesses of the seller.
There is no legal ground to state that EYIS’ "declaration" in its sales invoices that it is an importer, wholesaler
and retailer is restrictive and would preclude its being a manufacturer.
From the above findings, there was no justifiable reason for the CA to disregard the factual findings of the IPO.
The rulings of the IPO Director General and the BLA Director were supported by clear and convincing
evidence. The facts cited by the CA and Shen Dar do not justify a different conclusion from that of the IPO.
Hence, the findings of the BLA Director and the IPO Director General must be deemed as conclusive on the
CA.
Fifth Issue:
Whether EYIS is the true owner of the mark "VESPA"
In any event, given the length of time already invested by the parties in the instant case, this Court must write
finis to the instant controversy by determining, once and for all, the true owner of the mark "VESPA" based on
the evidence presented.
RA 8293 espouses the "first-to-file" rule as stated under Sec. 123.1(d) which states:
Section 123. Registrability. - 123.1. A mark cannot be registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or
priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion. (Emphasis
supplied.)
Under this provision, the registration of a mark is prevented with the filing of an earlier application for
registration. This must not, however, be interpreted to mean that ownership should be based upon an earlier
filing date. While RA 8293 removed the previous requirement of proof of actual use prior to the filing of an
application for registration of a mark, proof of prior and continuous use is necessary to establish ownership of a
mark. Such ownership constitutes sufficient evidence to oppose the registration of a mark.
Sec. 134 of the IP Code provides that "any person who believes that he would be damaged by the registration of
a mark x x x" may file an opposition to the application. The term "any person" encompasses the true owner of
the mark¾the prior and continuous user.
Notably, the Court has ruled that the prior and continuous use of a mark may even overcome the presumptive
ownership of the registrant and be held as the owner of the mark. As aptly stated by the Court in Shangri-la
International Hotel Management, Ltd. v. Developers Group of Companies, Inc.: 37
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.
xxxx
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 pre-requisite to the
acquisition of the right of ownership.
59
xxxx
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 facie presumption 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.
Here, the incontrovertible truth, as established by the evidence submitted by the parties, is that EYIS is the prior
user of the mark. The exhaustive discussion on the matter made by the BLA sufficiently addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a legitimate corporation engaged in buying, importing,
selling, industrial machineries and tools, manufacturing, among others since its incorporation in 1988. (Exhibit
"1"). Indeed private respondents have submitted photographs (Exhibit "376", "377", "378", "379") showing an
assembly line of its manufacturing or assembly process.1avvphi1
More importantly, the private respondent’s prior adoption and continuous use of the mark "VESPA" on air
compressors is bolstered by numerous documentary evidence consisting of sales invoices issued in the name of
respondent EY Industrial and Bills of Lading. (Exhibits "4" to "375"). Sales Invoice No. 12075 dated March 27,
1995 antedates petitioner’s date of first use in January 1, 1997 indicated in its trademark application filed in
June 9, 1997 as well as the date of first use in June of 1996 as indicated in the Declaration of Actual Use
submitted on December 3, 2001 (Exhibit "385"). The use by respondent-registrant in the concept of owner is
shown by commercial documents, sales invoices unambiguously describing the goods as "VESPA" air
compressors. Private respondents have sold the air compressors bearing the "VESPA" to various locations in the
Philippines, as far as Mindanao and the Visayas since the early 1990’s. We carefully inspected the evidence
consisting of three hundred seventy one (371) invoices and shipment documents which show that "VESPA" air
compressors were sold not only in Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City,
Zamboanga City, Cagayan de Oro City, Davao City to name a few. There is no doubt that it is through private
respondents’ efforts that the mark "VESPA" used on air compressors has gained business goodwill and
reputation in the Philippines for which it has validly acquired trademark rights. Respondent EY Industrial’s
right has been preserved until the passage of RA 8293 which entitles it to register the same. x x x 38
On the other hand, Shen Dar failed to refute the evidence cited by the BLA in its decision. More importantly,
Shen Dar failed to present sufficient evidence to prove its own prior use of the mark "VESPA." We cite with
approval the ruling of the BLA:
[Shen Dar] avers that it is the true and rightful owner of the trademark "VESPA" used on air compressors. The
thrust of [Shen Dar’s] argument is that respondent E.Y. Industrial Sales, Inc. is a mere distributor of the
"VESPA" air compressors. We disagree.
This conclusion is belied by the evidence. We have gone over each and every document attached as Annexes
"A", "A" 1-48 which consist of Bill of Lading and Packing Weight List. Not one of these documents referred to
a "VESPA" air compressor. Instead, it simply describes the goods plainly as air compressors which is type "SD"
and not "VESPA". More importantly, the earliest date reflected on the Bill of Lading was on May 5, 1997.
(Annex – "A"-1). [Shen Dar] also attached as Annex "B" a purported Sales Contract with respondent EY
Industrial Sales dated April 20, 2002. Surprisingly, nowhere in the document does it state that respondent EY
Industrial agreed to sell "VESPA" air compressors. The document only mentions air compressors which if
genuine merely bolsters respondent Engracio Yap’s contention that [Shen Dar] approached them if it could sell
the "Shen Dar" or "SD" air compressor. (Exhibit "386") In its position paper, [Shen Dar] merely mentions of
Bill of Lading constituting respondent as consignee in 1993 but never submitted the same for consideration of
this Bureau. The document is also not signed by [Shen Dar]. The agreement was not even drafted in the
letterhead of either [Shen Dar] nor [sic] respondent – registrant. Our only conclusion is that [Shen Dar] was not
able to prove to be the owner of the VESPA mark by appropriation. Neither was it able to prove actual
commercial use in the Philippines of the mark VESPA prior to its filing of a trademark application in 9 June
1997.39

As such, EYIS must be considered as the prior and continuous user of the mark "VESPA" and its true owner.
Hence, EYIS is entitled to the registration of the mark in its name.

WHEREFORE, the petition is hereby GRANTED. The CA’s February 21, 2008 Decision and October 6, 2008
Resolution in CA-G.R. SP No. 99356 are hereby REVERSED and SET ASIDE. The Decision dated May 25,
2007 issued by the IPO Director General in Inter Partes Case No. 14-2004-00084 and the Decision dated May
29, 2006 of the BLA Director of the IPO are hereby REINSTATED.

No costs. SO ORDERED.

60
G.R. No. 185830 June 5, 2013
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES), INC., Petitioner,
vs.
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L., B.V., Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the December 23, 2008 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 104672 which affirmed in toto the Intellectual Property Office (IPO) Director
General’s April 21, 2008 Decision3 that declared respondent Renaud Cointreau & Cie (Cointreau) as the true
and lawful owner of the mark "LE CORDON BLEU & DEVICE" and thus, is entitled to register the same
under its name.
The Facts
On June 21, 1990, Cointreau, a partnership registered under the laws of France, filed before the (now defunct)
Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) of the Department of Trade and Industry a
trademark application for the mark "LE CORDON BLEU & DEVICE" for goods falling under classes 8, 9, 16,
21, 24, 25, 29, and 30 of the International Classification of Goods and Services for the Purposes of Registrations
of Marks ("Nice Classification") (subject mark). The application was filed pursuant to Section 37 of Republic
Act No. 166, as amended (R.A. No. 166), on the basis of Home Registration No. 1,390,912, issued on
November 25, 1986 in France. Bearing Serial No. 72264, such application was published for opposition in the
March-April 1993 issue of the BPTTT Gazette and released for circulation on May 31, 1993. 4
On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject
application, averring that: (a) it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE
MANILLE," which it has been using since 1948 in cooking and other culinary activities, including in its
restaurant business; and (b) it has earned immense and invaluable goodwill such that Cointreau’s use of the
subject mark will actually create confusion, mistake, and deception to the buying public as to the origin and
sponsorship of the goods, and cause great and irreparable injury and damage to Ecole’s business reputation and
goodwill as a senior user of the same.5
On October 7, 1993, Cointreau filed its answer claiming to be the true and lawful owner of the subject mark. It
averred that: (a) it has filed applications for the subject mark’s registration in various jurisdictions, including the
Philippines; (b) Le Cordon Bleu is a culinary school of worldwide acclaim which was established in Paris,
France in 1895; (c) Le Cordon Bleu was the first cooking school to have set the standard for the teaching of
classical French cuisine and pastry making; and (d) it has trained students from more than eighty (80)
nationalities, including Ecole’s directress, Ms. Lourdes L. Dayrit. Thus, Cointreau concluded that Ecole’s claim
of being the exclusive owner of the subject mark is a fraudulent misrepresentation. 6
61
During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos. 60631 and
54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU PARIS 1895 & DEVICE" for
goods and services under classes 21 and 41 of the Nice Classification, respectively.7
The Ruling of the Bureau of Legal Affairs
In its Decision8 dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the IPO sustained Ecole’s opposition
to the subject mark, necessarily resulting in the rejection of Cointreau’s application. 9 While noting the
certificates of registration obtained from other countries and other pertinent materials showing the use of the
subject mark outside the Philippines, the BLA did not find such evidence sufficient to establishCointreau’s
claim of prior use of the same in the Philippines. It emphasized that the adoption and use of trademark must be
in commerce in the Philippines and not abroad. It then concluded that Cointreau has not established any
proprietary right entitled to protection in the Philippine jurisdiction because the law on trademarks rests upon
the doctrine of nationality or territoriality.10
On the other hand, the BLA found that the subject mark, which was the predecessor of the mark "LE CORDON
BLEU MANILLE" has been known and used in the Philippines since 1948 and registered under the name
"ECOLE DE CUISINE MANILLE (THE CORDON BLEU OF THE PHILIPPINES), INC." on May 9, 1980.11
Aggrieved, Cointreau filed an appeal with the IPO Director General.
The Ruling of the IPO Director General
In his Decision dated April 21, 2008, the IPO Director General reversed and set aside the BLA’s decision, thus,
granting Cointreau’s appeal and allowing the registration of the subject mark. 12 He held that while Section 2 of
R.A. No. 166 requires actual use of the subject mark in commerce in the Philippines for at least two (2) months
before the filing date of the application, only the owner thereof has the right to register the same, explaining that
the user of a mark in the Philippines is not ipso facto its owner. Moreover, Section 2-A of the same law does not
require actual use in the Philippines to be able to acquire ownership of a mark. 13
In resolving the issue of ownership and right to register the subject mark in favor of Cointreau, he considered
Cointreau’s undisputed use of such mark since 1895 for its culinary school in Paris, France (in which
petitioner’s own directress, Ms. Lourdes L. Dayrit, had trained in 1977). Contrarily, he found that while Ecole
may have prior use of the subject mark in the Philippines since 1948, it failed to explain how it came up with
such name and mark. The IPO Director General therefore concluded that Ecole has unjustly appropriated the
subject mark, rendering it beyond the mantle of protection of Section 4(d) 14 of R.A. No. 166.15
Finding the IPO Director General’s reversal of the BLA’s Decision unacceptable, Ecole filed a Petition for
Review16dated June 7, 2008 with the CA.
Ruling of the CA
In its Decision dated December 23, 2008, the CA affirmed the IPO Director General’s Decision in toto. 17 It
declared Cointreau as the true and actual owner of the subject mark with a right to register the same in the
Philippines under Section 37 of R.A. No. 166, having registered such mark in its country of origin on November
25, 1986.18
The CA likewise held that Cointreau’s right to register the subject mark cannot be barred by Ecole’s prior use
thereof as early as 1948 for its culinary school "LE CORDON BLEU MANILLE" in the Philippines because its
appropriation of the mark was done in bad faith. Further, Ecole had no certificate of registration that would put
Cointreau on notice that the former had appropriated or has been using the subject mark. In fact, its application
for trademark registration for the same which was just filed on February 24, 1992 is still pending with the
IPO.19
Hence, this petition.
Issues Before the Court
The sole issue raised for the Court’s resolution is whether the CA was correct in upholding the IPO Director
General’s ruling that Cointreau is the true and lawful owner of the subject mark and thus, entitled to have the
same registered under its name.
At this point, it should be noted that the instant case shall be resolved under the provisions of the old Trademark
Law, R.A. No. 166, which was the law in force at the time of Cointreau’s application for registration of the
subject mark.
The Court’s Ruling
The petition is without merit.
In the petition, Ecole argues that it is the rightful owner of the subject mark, considering that it was the first
entity that used the same in the Philippines. Hence, it is the one entitled to its registration and not Cointreau.
Petitioner’s argument is untenable.
Under Section 220 of R.A. No. 166, 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 two (2) months prior to the application for
registration. Section 2-A21 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. Thus, as
correctly mentioned by the CA, under R.A. No. 166, one may be an owner of a mark due to its actual use but
may not yet have the right to register such ownership here due to the owner’s failure to use the same in the
Philippines for two (2) months prior to registration.22
Nevertheless, foreign marks which are not registered are still accorded protection against infringement and/or
unfair competition. At this point, it is worthy to emphasize that the Philippines and France, Cointreau’s country
62
of origin, are both signatories to the Paris Convention for the Protection of Industrial Property (Paris
Convention).23 Articles 6bis and 8 of the Paris Convention state:
ARTICLE 6bis
(1) The countries of the Union undertake, ex officio 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.1âwphi1 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.
ARTICLE 8
A trade name shall be protected in all the countries of the Union without the obligation of filing or registration,
whether or not it forms part of a trademark. (Emphasis and underscoring supplied)
In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris Convention, to wit:
Section 37. Rights of foreign registrants. - Persons who are nationals of, domiciled in, or have a bona fide or
effective business or commercial establishment in any foreign country, which is a party to any international
convention or treaty relating to marks or trade-names, or the repression of unfair competition to which the
Philippines may be a party, shall be entitled to the benefits and subject to the provisions of this Act to the extent
and under the conditions essential to give effect to any such convention and treaties so long as the Philippines
shall continue to be a party thereto, except as provided in the following paragraphs of this section.
xxxx
Trade-names of persons described in the first paragraph of this section shall be protected without the obligation
of filing or registration whether or not they form parts of marks.
xxxx
In view of the foregoing obligations under the Paris Convention, the Philippines is obligated to assure nationals
of the signatory-countries that they are afforded an effective protection against violation of their intellectual
property rights in the Philippines in the same way that their own countries are obligated to accord similar
protection to Philippine nationals.24 "Thus, under Philippine law, a trade name of a national of a State that is a
party to the Paris Convention, whether or not the trade name forms part of a trademark, is protected "without the
obligation of filing or registration.’" 25
In the instant case, it is undisputed that Cointreau has been using the subject mark in France since 1895, prior to
Ecole’s averred first use of the same in the Philippines in 1948, of which the latter was fully aware thereof. In
fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its foundress, Pat Limjuco Dayrit), had trained
in Cointreau’s Le Cordon Bleu culinary school in Paris, France. Cointreau was likewise the first registrant of
the said mark under various classes, both abroad and in the Philippines, having secured Home Registration No.
1,390,912 dated November 25, 1986 from its country of origin, as well as several trademark registrations in the
Philippines.26

On the other hand, Ecole has no certificate of registration over the subject mark but only a pending application
covering services limited to Class 41 of the Nice Classification, referring to the operation of a culinary school.
Its application was filed only on February 24, 1992, or after Cointreau filed its trademark application for goods
and services falling under different classes in 1990. Under the foregoing circumstances, even if Ecole was the
first to use the mark in the Philippines, it cannot be said to have validly appropriated the same.

It is thus clear that at the time Ecole started using the subject mark, the same was already being used by
Cointreau, albeit abroad, of which Ecole’s directress was fully aware, being an alumna of the latter’s culinary
school in Paris, France. Hence, Ecole cannot claim any tinge of ownership whatsoever over the subject mark as
Cointreau is the true and lawful owner thereof. As such, the IPO Director General and the CA were correct in
declaring Cointreau as the true and lawful owner of the subject mark and as such, is entitled to have the same
registered under its name.

In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, as amended, has already dispensed with the requirement of prior actual use at
the time of registration.27 Thus, there is more reason to allow the registration of the subject mark under the name
of Cointreau as its true and lawful owner.

As a final note, "the function of a trademark is to point out distinctly the origin or ownership of the goods (or
services) to which it is affixed; to secure to him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the
genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of
an inferior and different article as his product." 28 As such, courts will protect trade names or marks, although
not registered or properly selected as trademarks, on the broad ground of enforcing justice and protecting one in
the fruits of his toil.29

WHEREFORE, the petition is DENIED. Accordingly, the December 23, 2008 Decision of the Court of Appeals
in CA-G.R. SP No. 104672 is hereby AFFIRMED in toto.

SO ORDERED.

63
G.R. No. L-20635 March 31, 1966
ETEPHA, A.G., petitioner,
vs.
DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC., respondents.
McClure, Salas and Gonzalez, for petitioner.
Sycip, Salazar, Manalo, Luna and Associates, for respondent.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark,
had been previously registered in the Patent Office? — the Director of Patents answered affirmatively. Hence
this appeal.
On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of
trademark "Atussin" placed on its "medicinal preparation of expectorant antihistaminic, bronchodilator sedative,
ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is used exclusively in the Philippines
since January 21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner 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.
1. The objects of a trademark are "to point out distinctly the origin or ownership of the articles to
which it is affixed, to secure to him who has been instrumental in bringing into market a superior
article or merchandise the fruit of his industry and skill, and to prevent fraud and imposition." 2 Our
over-all task then is to ascertain whether or not Atussin so resembles Pertussin "as to be likely, when
applied to or used in connection with the goods ... of the applicant, to cause confusion or mistake or to
deceive purchasers".3 And, we are to be guided by the rule that the validity of a cause for infringement
is predicated upon colorable imitation. The phrase "colorable imitation" denotes such 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." 4
2. That the word "tussin" figures as a component of both trademarks is nothing to wonder at. The
Director of Patents aptly observes that it is "the 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". 5 And appropriately to be considered now
is the fact that, concededly, the "tussin" (in Pertussin and Atussin) was derived from the Latin root-
word "tussis" meaning cough.6
64
"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the
goods; it is open for appropriation by anyone. It is accordingly barred from registration as trademark.
With jurisprudence holding the line, we feel safe in making the statement that any other conclusion
would result in "appellant having practically a monopoly" 7 of the word "tussin" in a trademark.8
While "tussin" by itself cannot thus be used exclusively to identify one's goods, it may properly
become the subject of a trademark "by combination with another word or phrase". 9 And this union of
words is reflected in petitioner's Pertussin and respondent's Atussin, the first with prefix "Per" and the
second with Prefix "A".1äwphï1.ñët
3. A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two
trademarks pictured in their manner of display. Inspection should be undertaken from the viewpoint of
a prospective buyer. The trademark complained of should be compared and contrasted with the
purchaser's memory (not in juxtaposition) of the trademark said to be infringed. 10 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. 11 For, indeed, trademark infringement is a form of unfair competition. 12
We take a casual look at the two labels — without spelling out the details — bearing in mind the easy-
to-remember earmarks thereof. Respondent's label underscores the trademark Atussin in bold, block
letters horizontally written. In petitioner's, on the other hand, Pertussin is printed diagonally upwards
and across in semiscript style with flourishes and with only the first letter "P" capitalized. Each label
plainly shows the source of the medicine: petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and on
top, "Apothecary E. Taeschner's"; respondent's projects "Westmont Pharmaceuticals, Inc. New York,
USA" at the bottoms, and on the lower left side the word "Westmont" upon a white diamond shaped
enclosure and in red ink — a color different from that of the words above and below it. Printed
prominently along the left, bottom and right edges of petitioner's label are indications of the use: "for
bronchial catarrh — whopping-cough — coughs and asthma". Respondent's for its part briefly
represents what its produce actually is - a "cough syrup". 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. 13
On this point the following culled from a recent decision of the United States Court of Customs and
Patent Appeals (June 15, 1956) is persuasive: 14
Confusion is likely between trademarks, however, 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 believing that the products to which the marks are applied emanated from the same
source. In testing this issue, fixed legal rules exist — if not in harmony, certainly in
abundance — but, in the final analysis, the application of these rules in any given situation
necessarily reflects a matter of individual judgment largely predicated on opinion. There is,
however, and can be no disagreement with the rule that the purchaser is confused, if at all, by
the marks as a whole.
 4. We now consider exclusively the two words — Pertussin and Atussin — as they appear on the
respective labels. As previously adverted to, these words are presented to the public in different styles
of writing and methods of design. The horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to denude
the mind of that illuminating similarity so essential for a trademark infringement case to prosper.

5. As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two
words do not sound alike — when pronounced. There is not much phonetic similarity between the two.
The Solicitor General well-observed that in Pertussin the pronunciation of the prefix "Per", whether
correct or incorrect, includes a combination of three letters P, e and r; whereas, in Atussin the whole
starts with the single letter A added to suffix "tussin". Appeals to the ear are disimilar. And this,
because in a word combination, the part that comes first is the most pronounced. An expositor of the
applicable rule here is the decision in the Syrocol-Cheracol controversy. 15 There, the ruling is that
trademark Syrocol (a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason: the two words "do not look or sound
enough alike to justify a holding of trademark infringement", and the "only similarity is in the last
syllable, and that is not uncommon in names given drug compounds".

6. In the solution of a trademark infringement problem, regard too should be given to the class of
persons who buy the particular product and the circumstances ordinarily attendant to its
acquisition. 16 The medicinal preparation clothed with the trademarks in question, are unlike articles of
everyday use such as candies, ice cream, milk, soft drinks and the like which may be freely obtained
by anyone, anytime, anywhere. Petitioner's and respondent's products are to be dispensed upon medical
prescription. The respective labels say so. An intending buyer must have to go first to a licensed doctor
of medicine; he receives instructions as to what to purchase; he reads the doctor's prescription; he
knows what he is to buy. He is not of the incautious, unwary, unobservant or unsuspecting type; he
examines the product sold to him; he checks to find out whether it conforms to the 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.

We concede the possibility that buyers might be able to obtain Pertussin or Attusin without prescription. When
this happens, then 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. In which case, the more
improbable it will be to palm off one for the other. For a person who purchases with open eyes is hardly the
man to be deceived.

For the reasons given, the appealed decision of the respondent Director of Patents — giving due course to the
application for the registration of trademark ATTUSIN is hereby affirmed. Costa against petitioner. So ordered.

65
G.R. No. L-48226 December 14, 1942
ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for respondent.
OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals reversing that
of the Court of First Instance of Manila and directing the Director of Commerce to cancel the registration of the
trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining the latter from using said trade-
mark on goods manufactured and sold by her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor, 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. The growth of his business is a thrilling epic of Filipino industry and
business capacity. Starting in an obscure shop in 1910 with a modest capital of P210 but with tireless industry
and unlimited perseverance, Toribio Teodoro, then an unknown young man making slippers with his own hands
but now a prominent business magnate and manufacturer with a large factory operated with modern machinery
by a great number of employees, has steadily grown with his business to which he has dedicated the best years
of his life and which he has expanded to such proportions that his gross sales from 1918 to 1938 aggregated
P8,787,025.65. 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. Neither the decision of the trial court nor that of the Court of Appeals
shows how much petitioner has spent or advertisement. But respondent in his brief says that petitioner "was
unable to prove that she had spent a single centavo 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."
The trial court (Judge Quirico Abeto) presiding 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. The second division of the Court of Appeals, composed of Justices Bengson, Padilla,
66
Lopez Vito, Tuason, and Alex Reyes, with Justice Padilla as ponente, 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. The defendant Director of Commerce did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the validity of
respondent's trade-mark "Ang Tibay." He contends that the phrase "Ang Tibay" as employed by the respondent
on the articles manufactured by him is a descriptive term because, "freely translate in English," it means
"strong, durable, lasting." He invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot be the subject of a trade-mark. He
cites among others the case of Baxter vs. Zuazua (5 Phil., 16), which involved the trade-mark "Agua de
Kananga" used on toilet water, and in which this Court held that the word "Kananga," which is the name of a
well-known Philippine tree or its flower, could not be appropriated as a trade-mark any more than could the
words "sugar," "tobacco," or "coffee." On the other hand, counsel for the respondent, in an equally well-
prepared and exhaustive brief, contend that the words "Ang Tibay" are not descriptive but merely suggestive
and may properly be regarded as fanciful or arbitrary in the legal sense. The cite several cases in which similar
words have been sustained as valid trade-marks, such as "Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and
"Fashionknit" for neckties and sweaters. 3
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 trade-mark 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.
Second. In her second assignment of error petitioner contends that the Court of Appeals erred in holding that the
words "Ang Tibay" had acquired a secondary meaning. 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. (G. & C.
Merriam Co. vs. Salfield, 198 F., 369, 373.) 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 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. (Landers, Frary, and Clark vs. Universal
Cooler Corporation, 85 F. [2d], 46.)
Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants and shirts
are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666. She also
contends under her fourth assignment of error (which we deem convenient to pass upon together with the third)
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.
The question raised by petitioner involve the scope and application of sections 3,7, 11, 13, and 20 of the Trade-
Mark Law (Act No. 666.) Section 3 provides that "any person entitled to the exclusive use of a trade-mark to
designate the origin or ownership of goods he has made or deals in, may recover damages in a civil actions from
any person who has sold goods of a similar kind, bearing such trade-mark . . . The complaining party . . . may
have a preliminary injunction, . . . and such injunction upon final hearing, if the complainant's property in the
trade-mark and the defendant's violation thereof shall be fully established, shall be made perpetual, and this
injunction shall be part of the judgment for damages to be rendered in the same cause." Section 7 provides that
any person who, in selling his goods, shall give them the general appearance of the goods of another either in
the wrapping of the packages, or in the devices or words thereon, or in any other feature of their appearance,
which would be likely to influence purchasers to believe that the goods offered are those of the complainant,
shall be guilty of unfair competition, and shall be liable to an action for damages and to an injunction, as in the
cases of trade-mark infringement under section 3. Section 11 requires the applicant for registration of a trade-
mark to state, among others, "the general class of merchandise to which the trade-mark claimed has been
appropriated." 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 trade-name 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
67
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.
The burden of petitioner's argument is that under sections 11 and 20 the registration by respondent of the trade-
mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by petitioner for pants and
shirts because the latter do not belong to the same class of merchandise or articles as the former; that she cannot
be held guilty of infringement of trade-mark under section 3 because respondent's mark is not a valid trade-
mark, nor has it acquired a secondary meaning; that pants and shirts do not possess the same descriptive
properties as shoes and slippers; that neither can she be held guilty of unfair competition under section 7
because the use by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to mislead the general
public as to their origin or ownership; and that there is now showing that she in unfairly or fraudulently using
that mark "Ang Tibay" against the respondent. If we were interpreting the statute for the first time and in the
first decade of the twentieth century, when it was enacted, and were to construe it strictly and literally, we might
uphold petitioner's contentions. But law and jurisprudence must keep abreast with the progress of mankind, and
the courts must breathe life into the statutes if they are to serve their purpose. Our Trade-mark Law, enacted
nearly forty years ago, has grown in its implications and practical application, like a constitution, in virtue of the
life continually breathed into it. It is not of merely local application; it has its counterpart in other jurisdictions
of the civilized world from whose jurisprudence it has also received vitalizing nourishment. We have to apply
this law as it has grown and not as it was born. Its growth or development abreast with that of sister statutes and
jurisprudence in other jurisdictions is reflected in the following observation of a well-known author:
This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then, the
courts had proceeded on the theory that the same trade-mark, used on un-like goods, could not cause
confusion in trade and that, therefore, there could be no objection to the use and registration of a well-
known mark by a third party for a different class of goods. Since 1916 however, a growing sentiment
began to arise that in the selection of a famous mark by a third party, there was generally the hidden
intention to "have a free ride" on the trade-mark owner's reputation and good will. (Derenberg, Trade-
Mark Protection & Unfair Trading, 1936 edition, p. 409.)
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. Then noncompetitive products are sold under the same mark, the gradual whittling
away or dispersion of the identity and hold upon the public mind of the mark created by its first user, inevitably
results. The original owner is entitled to the preservation of the valuable link between him and the public that
has been created by his ingenuity and the merit of his wares or services. Experience has demonstrated that when
a well-known trade-mark is adopted by another even for a totally different class of goods, it is done to get the
benefit of the reputation and advertisements of the originator of said mark, to convey to the public a false
impression of some supposed connection between the manufacturer of the article sold under the original mark
and the new articles being tendered to the public under the same or similar mark. As trade has developed and
commercial changes have come about, the law of unfair competition has expanded to keep pace with the times
and the element of strict competition in itself has ceased to be the determining factor. The owner of a trade-
mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from
confusion of 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 a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid down in one form or another will
now be cited: (1) In Teodoro Kalaw Ng Khe vs. Level Brothers Company (G.R. No. 46817), decided by this
Court on April 18, 1941, the respondent company (plaintiff below) was granted injunctive relief against the use
by the petitioner of the trade-mark "Lux" and "Lifebuoy" for hair pomade, they having been originally used by
the respondent for soap; The Court held in effect that although said articles are noncompetitive, they are similar
or belong to the same class. (2) In Lincoln Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the
manufacturer of the well-known Lincoln automobile was granted injunctive relief against the use of the word
"Lincoln" by another company as part of its firm name. (3) The case of Aunt Jemima Mills Co. vs. Rigney &
Co. (247 F., 407), involved the trade-mark "Aunt Jemima," originally used on flour, which the defendant
attempted to use on syrup, and there the court held that the goods, though different, are so related as to fall
within the mischief which equity should prevent. (4) In Tiffany & Co., vs. Tiffany Productions, Inc. (264
N.Y.S., 459; 23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern, was granted injunctive relief
against the defendant, a manufacturer of motion pictures, from using the name "Tiffany." Other famous cases
cited on the margin, wherein the courts granted injunctive relief, involved the following trade-marks or trade-
names: "Kodak," for cameras and photographic supplies, against its use for bicycles. 4 "Penslar," for medicines
and toilet articles, against its use for cigars; 5 "Rolls-Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine, against its use for hats; 7 "Kotex," for sanitary napkins, against the
use of "Rotex" for vaginal syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks and
keys, against its use for electric flashlights; 10 and "Waterman," for fountain pens, against its use for razor
blades. 11lawphil.net
688), wherein the plaintiff unsuccessfully attempted to enjoin the defendant from using the word "Visualized"
in connection with history books, the court holding that said word is merely descriptive. These cases cites and
relied upon by petitioner are obviously of no decisive application to the case at bar.
We think reasonable men may not disagree that shoes and shirts are not as unrelated as fountain pens and razor
blades, for instance. The mere relation or association of the articles is not controlling. As may readily be noted
from what we have heretofore said, the proprietary connotation that a trade-mark or trade-name has acquired is
of more paramount consideration. The Court of Appeals found in this case that by uninterrupted and exclusive
use since 1910 of respondent's registered trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by
petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride on the
reputation and selling power it has acquired at the hands of the respondent. As observed in another case, 12 the
field from which a person may select a trade-mark is practically unlimited, and hence there is no excuse for
impinging upon or even closely approaching the mark of a business rival. In the unlimited field of choice, what
could have been petitioner's purpose in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain the use of the mark
"Ang Tibay." Her counsel suggests that instead of enjoining her from using it, she may be required to state in
her labels affixed to her products the inscription: "Not manufactured by Toribio Teodoro." We think such
practice would be unethical and unworthy of a reputable businessman. To the suggestion of petitioner,
respondent may say, not without justice though with a tinge of bitterness: "Why offer a perpetual apology or
explanation as to the origin of your products in order to use my trade-mark instead of creating one of your
own?" On our part may we add, without meaning to be harsh, that a self-respecting person does not remain in
the shelter of another but builds one of his own.
The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the three instances. So
ordered.
Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite on this
point only the following cases: (1) Mohawk Milk Products vs. General Distilleries Corporation (95 F. [2d],
334), wherein the court held that gin and canned milk and cream do not belong to the same class; (2) Fawcett
Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d], 194), wherein the court held that the words "Popular
Mechanics" used as the title of a magazine and duly registered as a trade-mark were not infringed by
defendant's use of the words "Modern Mechanics and Inventions" on a competitive magazine, because the word
"mechanics" is merely a descriptive name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d],
68
  G.R. No. L-14761 January 28, 1961 On September 28, 1958, the Court of First Instance of Manila rendered decision in the unfair competition case
perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods manufactured
ARCE SONS AND COMPANY, petitioner, and/or sold by it and ordering it to pay petitioner by way of damages all the profits it may have realized by the
vs. use of said name, plus the sum of P5,000.00 as attorney's fee and costs of suit. From this decision, respondent
SELECTA BISCUIT COMPANY, INC., ET AL., respondents. brought the matter on appeal to the Court of Appeals wherein the case was docketed as CA-G.R. No. 24017-R.

x---------------------------------------------------------x
G.R. No. L-17981 January 28, 1961
ARCE SONS AND COMPANY, plaintiff-appellee,
vs.
SELECTA BISCUIT COMPANY, INC., defendant-appellant.
Manuel O. Chan and Ramon S. Ereñeta for plaintiff-appellee.
E. Voltaire Garcia for defendant-appellant.
BAUTISTA ANGELO, J.:
On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the
Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be use in its
bakery products alleging that it is in actual use thereof for not less than two months before said date and that "no
other persons, partnership, corporation or association ... has the right to use said trade-mark in the Philippines,
either in the identical form or in any such near resemblance thereto, as might be calculated to deceive." Its
petition was referred to an examiner for study who found that the trade-mark sought to be registered resembles
the word "SELECTA" used by the Acre and Sons and Company, hereinafter referred to as petitioner, in its milk
and ice cream products so that its use by respondent will cause confusion as to the origin of their respective
goods. Consequently, he recommended that the application be refused. However, upon reconsideration, the
Patent Office ordered the publication of the application for purposes of opposition.
In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the mark
"SELECTA" had been continuously used by petitioner in the manufacture and sale of its products, including
cakes, bakery products, milk and ice cream from the time of its organization and even prior thereto by its
predecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become identified with name
of the petitioner and its business; (3) that petitioner had warned respondent not to use said mark because it was
already being used by the former, but that the latter ignored said warning; (4) that respondent is using the word
"SELECTA" as a trade-mark as bakery products in unfair competition with the products of petitioner thus
resulting in confusion in trade; (5) that the mark to which the application of respondent refers has striking
resemblance, both in appearance and meaning, to petitioner's mark as to be mistaken therefor by the public and
cause respondent's goods to be sold as petitioner's; and (6) that actually a complaint has been filed by the
petitioner against respondent for unfair competition in the Court of First Instance of Manila asking for damages
and for the issuance of a writ of injunction against respondent enjoining the latter for continuing with the use of
said mark.
69
Inasmuch as the issues of the facts in the case of unfair competition are substantially identical with those raised
before the Patent Office, the parties at the hearing thereof, agreed to submit the evidence they introduced before
the Court of First Instance of Manila to said office, and on the strength thereof, the Director of Patents, on
December 7, 1958, rendered decision dismissing petitioner's opposition and stating that the registration of the
trade-mark "SELECTA" in favor of applicant Selecta Biscuits Company, Inc. will not cause confusion or
mistake nor will deceive the purchasers as to the cause damage to petitioner. Hence, petitioner interposed the
present petition for review.
On September 7, 1960, this Court issued a resolution of the following tenor:
In G.R. No. L-14761 (Arce Sons and Company vs. Selecta Biscuits Company, Inc., et al.), considering
that the issue raised and evidence presented in this appeal are the same as those involved and presented
in Civil Case No. 32907, entitled Arce Sons and Company vs. Selecta Biscuit Company, Inc. of the
Court of First Instance of Manila, presently pending appeal in the Court of Appeals, docketed as CA-
G.R. No. 24017-R, the Court resolved to require the parties, or their counsel, to inform this Court why
the appeal pending before the Court of Appeals should not be forwarded to this Court in order that the
two cases may be consolidated and jointly decided, to avoid any conflicting decision, pursuant to the
provisions of section 17, paragraph 5, of the Judiciary Act of 1948 (Republic Act No. 296).
And having both petitioner and respondent manifested in writing that they do not register any objection that the
case they submitted on appeal to the Court of Appeals be certified to this Court so that it may be consolidated
with the present case, the two cases are now before us for consolidated decision.
The case for petitioner is narrated in the decision of the court a quo as follows: .
"In 1933, Ramon Arce, predecessor in interest of the plaintiff, started a milk business in Novaliches,
Rizal, using the name 'SELECTA' as a trade-name as well as a trade-mark. He begun selling and
distributing his products to different residences, restaurants and offices, in bottles on the caps of which
were inscribed the words 'SELECTA FRESH MILK.' As his business prospered, he thought of
expanding and, in facts, he expanded his business by establishing a store at Nos. 711-713 Lepanto
Street. While there, he began to cater, in addition to milk, ice cream, sandwiches and other food
products. As his catering and ice cream business prospered in a big way, he placed a sign signboard in
his establishment with the name 'SELECTA' inscribed thereon. This signboard was place right in front
of the said store. For the sake of efficiency, the Novaliches place was made the pasteurizing plant and
its products were distributed through the Lepanto store. Special containers made of tin cans with the
words 'SELECTA' written on their covers and 'embossed or blown' on the bottles themselves were
used. Similarly, exclusive bottles for milk products were ordered from Getz Brothers with the word
'SELECTA 'blown on them. The sandwiches which were sold and distributed were wrapped in carton
boxes with covers bearing the name 'SELECTA.' To the ordinary cars being used for the delivery of
his products to serve outside orders were added to a fleet of five (5) delivery trucks with the word
'SELECTA ' prominently painted on them. Sales were made directly at the Lepanto store or by means
of deliveries to specified addresses, restaurants and offices inside Manila and its suburbs and
sometimes to customers in the provinces. As time passed, new products were produced for sale, which
as cheese (cottage cheese) with special containers especially ordered from the Philippine Education
Company with the 'SELECTA ' written on their covers.
The war that broke out on December 8, 1941, did not stop Ramon Arce from continuing with his
business. After a brief interruption of about a mouth, that is, during the end of January, 1942, and early
February, 1942, he resumed his business using the same trade-name and trade-mark, but this time, on a
large scale. He entered the restaurant business. Dairy products ice cream, milk, sandwiches continued
to be sold and distributed by him. However, Ramon Arce was again forced to discontinue the business
on October, 1944, because time was beginning to be precarious. American planes started to bomb
Manila and one of his sons, Eulalio Arce, who was managing the business, was seized by the Japanese.
Liberation came and immediately thereafter. Ramon Arce once more resumed his business, even more
actively, by adding another store located at the corner of Lepanto and Azcarraga Streets. Continuing to
use the name 'Selecta,' he added bakery products to his line of business. With a firewood type of oven,
about one-half the size of the courtroom, he made his own bread, cookies, pastries and assorted bakery
products. Incidentally, Arce's bakery was transferred to Balintawak, Quezon City — another expansion
of his business — where the bakery products are now being baked thru the use of firewood, electric
and gas oven. These bakery products, like his other products, are being sold the store itself and /or
delivered to people ordering them in Manila and even Baguio. Like the other products, special carton
boxes in different sizes, according to the bakery products, with the name 'Selecta' on top of the covers
are provided for these bakery products. For the cakes, special boxes and labels reading 'Selecta Cakes
for all occasions' are made. For the milk products, special bottle caps and bottles with the colored
words 'Quality Always Selecta Fresh Milk, One Pint' inscribed and blown on the sides of the bottles -
an innovation from the old bottles and caps used formerly. Similar, special boxes with the name
'Selecta 'are provided for fried chicken sold to customers.
Business being already well established, Ramon Arce decided to retire, so that his children can go on
with the business. For this purpose, he transferred and leased to them all his rights, interest and
participations in the business, including the use of the name of 'Selecta,' sometime in the year 1950, at
a monthly rental of P10,000.00, later reduced to P6,500.00. He further wrote the Bureau of Commerce
letter dated February 10, 1950, requesting cancellation of the business name 'Selecta Restaurant' to
give way to the registration of the same 'Selecta' and asked that the same be registered in the name of
Arce Sons & Company, a co-partnership entered into by and among his children on February 10, 1950.
Said co-partnership was organized, so its articles of co-partnership state, 'conduct a first class
restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy
and bakery products; and to carry on such other legitimate business as may produce profit'; Arce Sons
& Company has thus continued the lucrative business of their predecessor in interest. It is now, and has
always been, engaged in the restaurant business, the sale of milk, and the production and sale of cakes,
dairy products and bakery products. Arce Sons & Company are now making bakery products like
bread rolls, pan de navaro, pan de sal, and other types, of cookies and biscuit of the round, hard and
other types, providing thereof special boxes with the same "Selecta'.
70
Pursuing the policy of expansion adopted by their predecessor, Arce Sons & Company established
another store the now famous 'Selecta Dewey Boulevard', with seven (7) delivery trucks with the
'Selecta ' conspicuously painted on them, to serve, deliver, and cater to customers in and outside of
Manila." .
The case for respondent on the other hand, is expressed as follows:
Defendant was organized and registered as a corporation under the name and style of Selecta Biscuit
Company, Inc. on March 2, 1955 (Exhibit 2-A; p. 3, April 17, 1958) but started operation as a biscuit
factory on June 20 1955 (t.s.n. p.3, id). The name 'Selecta' was chosen by the organizers of defendant
who are Chinese citizens as a translation of the Chinese word 'Ching Suan' which means 'mapili' in
Tagalog, and Selected' in English (t.s.n. p, id.). Thereupon, the Articles of Incorporation of Selecta
Biscuit Company, Inc. were registered with the Securities and Exchange Commission (t.s.n. P.5. id.),
and at the same time registered as a business name with the Bureau of Commerce which issued
certificate of registration No. 55594 (Exhibit 3; Exhibit 3-A). The same name Selecta Biscuit
Company, Inc. was also subsequently registered with the Bureau of Internal Revenue which issued
Registration Certificate No. 35764 (Exhibit 4, t.s.n., p. id.). Inquiries were also made with the Patent
Office of 'Selecta'; after an official of the Patent referred to index cards information was furnished to
the effect that defendant could register the name 'Selecta' with the Bureau of Patents (t.s.n. ,p.7, id).
Accordingly, the corresponding petition for registration of trade-mark was filed (Exhs. 5,5-A, Exhibit
5-B). Defendant actually operated its business factory on June 20, 1955, while the petition for
registration of trade-mark 'Selecta' was filed with the Philippine Patent Office only on September 1,
1955, for the Philippine Patent Office informed the defendant that the name should first be used before
registration (t.s.n. p.8 ,id.). The factory of defendant is located at Tuazon Avenue, Northern Hills,
Malabon, Rizal, showing plainly on its wall facing the streets the name 'SELECTA BISCUIT
COMPANY, INC.' (Exhs. 6, 6-a 6-B, t.s.n., p. 9, id.). It is significant to note that Eulalio Arce,
Managing Partner of the plaintiff resided and resides near the defendant's factory, only around 150
meters away ; in fact, Arce use to pass in front of the factory of defendant while still under
construction and up to the present time (t.s.n., pp. 9, 10, id.). Neither Eulalio Arce nor any other person
in representation of the plaintiff complained to the defendant about the use of the name 'Selecta
Biscuit' until of the present complaint.
There are other factories using 'Selecta as trade-mark for biscuit (t.s.n., p. 12; Exhs. 7, 7-A,7-B; Exhibit
8, 8-A, 8-B; Exhibits Exhibit 9, 9-A, 9-B); defendant in fact uses different kinds of trade-mark (Exhibit
10, 10-A, to 10-W, t.s.n., p. 17).
The biscuits, cookies, and crackers manufactured and sold by defendant are wrapped in cellophane
pouches and place inside tin can (Exh. 11; t.s.n. p. 19); the products of defendant are sold through the
length and breadth of the Philippines through agents with more than one hundred 600 stores as
customers buying on credit (t.s.n.) pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958). Defendant employs
more than one hundred (100) laborers and employees presently although it started with around seventy
(70) employees and laborers (t.s.n. p. 24); its present capitalization fully paid is Two Hundred Thirty
Four Thousand Pesos (P234,000.00.)additional capitalization's were duly authorized by the Securities
and Exchange Commission (Exhs. 13, 13-A) there was no complaint whatsoever from plaintiff saw
 defendant's business growing bigger and bigger and flourishing (t.s.n., p. 21); when plaintiff filed its
complaint.
Defendant advertises its products through radio broadcast and spot announcement (Exhs. 14, 14-A to
14-L; inclusive Exhs. 15, 15-A, 15-B, 15-C; Exh. 16, 16-A, 16-B to 16-E, inclusive; Exhs. 17, 17-B to
17-L, inclusive); the broadcasts scripts announced therein through the radio clearly show, among
others, that Selecta Biscuit are manufactured by Selecta Company, Inc. at Tuazon Avenue, Northern
Hills, Malabon, Rizal, with Telephone ]No. 2-13-27 (Exhs. 23-A 23-B, 23-D, 23-E, 23-F).
Besides the signboard, 'Selecta Biscuit Company, Inc.' on the building itself, defendant has installed
signboard along the highways to indicate the location of the factory of defendant (Exhs. 18, 18-A);
delivery trucks defendant are plainly carrying signboards Selecta Biscuit Company, Inc., Tuazon
Avenue, Northern Hills Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19, 19-A, 19-B, 19-C 19-D,19-
E,19-F). Defendant is using modern machineries in its biscuit factory (Exhs. 20, 20-A, 20-B, 19-C, 20-
D, 20-E). The defendant sells its products thoughout 20-C, 20-D,20-E). The defendant sells its product
throughout the Philippines, including Luzon , Visayas, Mindanao; its customers count, among others,
600 stores buying on credit; its stores buying on cash number around 50 (t.s.n.), p. 10). Sales in Manila
and suburbs are minimal, (Exh. 12). Defendant is a wholesaler and not a retailer of biscuits, cookies
and crackers. This is the nature of the operation of the business of the defendant."
At the outset one cannot but note that in the two cases appealed before us which involve the same parties and
the same issues of fact and law, the Court a quo and the Director of Patents have rendered contradictory
decisions. While the former is of the opinion that the word 'SELECTA' has been used by the petitioner, or its
predecessor-in-interest, as a trade-mark in the sale and distribution of its dairy and bakery products as early as
1933 to the extent that it has acquired a proprietary connotation so that to allow respondent to use it now as a
trade-mark in its business would be an usurpation of petitioner's goodwill and an infringement of its property
right, the Director of Patents entertained a contrary opinion. He believes that the word as used by the petitioner
functions only to point to the place of business or location of its restaurant while the same word as used by
respondent points to the origin of the products its manufactures and sells and he predicates this distinction upon
the fact that while the goods of petitioner are only served within its restaurant or sold only on special orders in
the City of Manila, respondent's goods are ready-made and are for sale throughout the length and breadth of the
country. He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade
contrary to the finding of the court a quo. Which of this opinions is correct is the issue now for determination.
It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as 1933. He
sold his milk products in bottles covered with caps on which the words 'SELECTA FRESH MILK' were
inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila, where he sold, in
addition to his products, ice cream, sandwiches and other food products, placing right in front of his
establishment a signboard with the name 'SELECTA' inscribed thereon. Special containers made of tin cans
with the word 'SELECTA' written on their covers were used for his products. Bottle with the same word
embossed on their sides were used for his milk products. The sandwiches he sold and distributed were wrapped
in carton boxes with covers bearing the same name. He used several cars and trucks for delivery purposes on the
sides of which were written the same word. As new products were produced for sale, the same were placed in
containers with the same name written on their covers. After the war, he added to his business such items as
cakes, bread, cookies, pastries, and assorted bakery products. Then his business was acquired by petitioner, a
71
co-partnership organized by his sons, the purposes of which are "to conduct a first class restaurant business; to
engage in the manufacture and sale of ice cream, milk, cakes and other products; and to carry on such other
legitimate business as may produce profit."
The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of the word
"SELECTA" not only as a trade-name indicative of the location of the restaurant where it manufactures and
sells its products, but as trade-mark is used. This is not only in accordance with its general acceptation but with
our law on the matter. "
Trade-mark' or trade-name', distinction being highly technical, is sign, device, or mark by which
articles produced are dealt in by particular person or organization are distinguished or distinguishable
from those produced or dealt in by other." (Church of God v. Tomlinson Church of God, 247 SW 2d,
63,64)"
A 'trade-mark' is a distinctive mark of authenticity through which the merchandise of a particular
producer or manufacturer may be distinguished from that of others, and its sole function is to designate
distinctively the origin of the products to which it is attached." (Reynolds & Reynolds Co. v. Nordic,
et. al., 114F 2d, 278) "
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." (Section 38, Republic Act No. 166).
Verily, the word 'SELECTA' has been chosen by petitioner and has been inscribed on all its products to serve
not only as a sign or symbol that may indicate that they are manufactured and sold by it but as a mark of
authenticity that may distinguish them from the products manufactured and sold by other merchants or
businessmen. The Director of Patents, therefore, erred in holding that petitioner made use of that word merely
as a trade-name and not as a trade-mark within the meaning of the law.1
The word 'SELECTA', it is true, may be an ordinary or common word in the sense that may be used or
employed by any one in promoting his business or enterprise, but once adopted or coined in connection with
one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may
acquire a secondary meaning as to be exclusively associated with its products and business. 2 In this sense, its
used by another may lead to confusion in trade and cause damage to its business. And this is the situation of
petitioner when it used the word 'SELECTA' as a trade-mark. In this sense, the law gives its protection and
guarantees its used to the exclusion of all others a (G. & C. Merriam Co. v. Saalfield, 198 F. 369, 373). And it is
also in the sense that the law postulates that "The ownership or possession of a trade-mark, . . . shall be
recognized and protected in the same manner and to the same extent, as are other property rights known to the
law," thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages
in a civil action from any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-
A and 23, Republic Act No. 166, as amended).
The term 'SELECTA' may be placed at par with the words "Ang Tibay" which this Court has considered not
merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a
trade-mark. In that case, this Court found that respondent has constantly used the term "Ang Tibay" , both as a
trade-mark and a trade-name, in the manufacture and sale of slippers, shoes and indoor baseballs for twenty-two
years before petitioner registered it as a trade-name for pants and shirts so that it has performed during that
period the function of a trade-mark to point distinctively, or by its own meaning or by association, to the origin
or ownership of the wares to which it applies. And holding that respondent was entitled to protection in the use
of that trade-mark, this Court made the following comment:
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. '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 trade-mark 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. Even if 'AngTibay', therefore, were not capable of exclusive appropriation as a trade-mark,
the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in
any event, by respondent's long and exclusive appropriation with reference to an article on the market,
because geographically or otherwise descriptive, might nevertheless have been used so long and
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 article was his product." (Ang v.
Teodoro, supra.).
The rationale in the Ang Tibay case applies on all fours to the case of petitioner.
But respondent claims that it adopted the trade-mark 'SELECTA' in good faith and not precisely to engage in
unfair competition with petitioner. It tried to establish that respondent was organized as a corporation under the
name of Selecta Biscuit Company, Inc. on March 2, 1955 and started operations as a biscuit factory on June 20,
1955; that the name 'SELECTA' was chosen by the organizers of respondent who are Chinese citizens as a
translation of the Chinese word "Ching Suan" which means "mapili" in Tagalog, and "Selected" in English;
that , thereupon, it registered its articles of incorporation with the Securities and Exchange Commission and the
name 'SELECTA' as a business name with the Bureau of Commerce which issued to it Certificate of
Registration No. 55594; and that it also registered the same trade-name with the Bureau of Internal Revenue and
took steps to obtain a patent from the Patent Office by filing with it as application for the registration of said
trade-name.
The suggestion that the name 'SELECTA' was chosen by the organizers of respondent merely as a translation
from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of its
selection, for if the only purpose is to make an English translation of that word and not to compete with the
business of petitioner, why chose the word 'SELECTA', a Spanish word, and not "Selected", the English
equivalent thereof, as was done by other well-known enterprises? In the words of petitioner's counsel, "Why
with all the words in the English dictionary and all the words in the Spanish dictionary and all the phrases that
could be coined, should defendant-appellant (respondent) choose 'SELECTA' if its purpose was not and is not to
fool the people and to damage plaintiff-appellee?" In this respect, we find appropriate the following comment of
the trial court:
Eventually, like the plaintiff, one is tempted to ask as to why with the richness in words of the English
language and with the affluence of the Spanish vocabulary or, for that matter, of our own dialects,
72
should the defendant choose the controverted word "Selecta", which has already acquired a secondary
meaning by virtue of plaintiff's prior and continued use of the same as a trade-mark or trade-name of
its products? The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was
chosen for its bakery products by the organizers of said company from the Chinese word 'Ching Suan'
meaning 'mapili', which in English translation , is to say the least, very weak and untenable. Sy Hap
himself admitted that he had known Eulalio Arce, the person managing plaintiff's business, since 1954;
that since he began to reside at 10th Avenue, Grace Park, he had known the Selecta Restaurant on
Azcarraga Street and Dewey Blvd. and that he even had occasion to eat in one of the restaurants of the
plaintiff. All of these circumstances tend to conspire in inducing one to doubt defendant's motive for
using the same word "Selecta" for its bakery products. To allow the defendant here to use the word
"Selecta" in spite of the fact that this word has already been adopted and exploited by Ramon Arce and
by his family thru the organization of Arce Sons and Company, for the maintenance of its goodwill, for
which said plaintiff and its predecessor have spent time, effort and fortune, is to permit business pirates
and buccaneers to appropriate for themselves and to their profit and advantage the trade names and
trade marks of well established merchants with all their attendant good will and commercial benefit.
Certainly, this cannot be allowed, and it becomes the duty of the court to protect the legitimate owners
of said trade-names and trade-marks, for under the law, the same constitute one kind of property right
entitled to the necessary legal protection.
Other points raised by respondent to show that the trial court erred in holding that the adoption by it of the word
'SELECTA' is tantamount to unfair competition are: (1) that its products are biscuits, crackers, and cookies,
wrapped in cellophane packages, place in tin containers, and that its products may last a year with out spoilage,
while the ice cream, milk, cakes and other bakery products which petitioner manufactures last only for two or
three days; (2) that the sale and distribution of petitioner's products are on retail basis, limited to the City of
Manila and suburbs, and its place of business is localized at Azcarraga, corner of Lepanto Street and at Dewey
Blvd., Manila, while that of respondent is on a wholesale basis, extending throughout the length and breadth of
the Philippines; (3) that petitioner's signboard on its place of business reads 'SELECTA' and on its delivery
trucks "Selecta, Quality Always, Restaurant and Caterer, Azcarraga, Dewey Blvd., Balintawak and Telephone
number," in contrast with respondent's signboard on its factory which reads "Selecta Biscuit Company, Inc.,"
and on its delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-
13-27; (4) that the business name of petitioner is different from the business name of respondent; (5) that
petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in the
amount of P234,000.00 out of the P500,000.00 authorized capital, (6) that the use of the name 'SELECTA' by
respondent cannot lead to confusion in the business operation of the parties.
We have read carefully the reasons advanced in support of the points raised by counsel in an effort to make
inroads into the findings of the court a quo on unfair competition, but we believe them to be substantial and
untenable. They appear to be well answered and refuted by counsel for petitioner in his brief, which refutation
we do not need to repeat here. Suffice it to state that we agree with the authorities and reasons advanced therein
which incidentally constitute the best support of the decision of the court a quo.
With regard to the claim that petitioner failed to present sufficient evidence on the contract of lease of the
business from its predecessor-in-interest, we find that under the circumstances secondary evidence is
admissible.
In view of the foregoing, we hold that the Director of Patents committed an error in dismissing the opposition of
petitioner and in holding that the registration of the trade-mark 'SELECTA' in favor of respondent will not cause
damage to petitioner, and consequently, we hereby reverse his decision.

Consistently with this finding, we hereby affirm the decision of the court a quo rendered in G.R. No. L-17981.
No costs.

Paras, C.J., Bengzon, Labrador, Reyes, J.B.L. Barrera, Gutierrez David, Paredes and Dizon., JJ., concur.
Padilla, and Concepcion, JJ., took no part.

73
G.R. No. 103543 July 5, 1993
ASIA BREWERY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.
Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for petitioner.
Roco, Bunag, Kapunan Law Office for private respondent.
DECISION
GRIÑO-AQUINO, J.:
On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for
infringement of trademark and unfair competition on account of the latter’s BEER PALE PILSEN or BEER NA
BEER product which has been competing with SMC’s SAN MIGUEL PALE PILSEN for a share of the local
beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig,
Metro Manila.)
On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O. Bersamira,
dismissing SMC’s complaint because ABI “has not committed trademark infringement or unfair competition
against” SMC (p. 189, Rollo).
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the Court of
Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and ponente, and Justices Venancio
D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court. The dispositive part of the
decision reads as follows:
In the light of the foregoing analysis and under the plain language of the applicable rule and principle on the
matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new judgment entered in favor of the
plaintiff and against the defendant as follows:
(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are hereby permanently
enjoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or
supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in bottles and under labels
substantially identical with or like the said bottles and labels of plaintiff San Miguel Corporation employed for
that purpose, or substantially identical with or like the bottles and labels now employed by the defendant for
that purpose, or in bottles or under labels which are calculated to deceive purchasers and consumers into the
belief that the beer is the product of the plaintiff or which will enable others to substitute, sell or palm off the
said beer of the defendant as and for the beer of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and pay the San Miguel
Corporation double any and all the payments derived by defendant from operations of its business and the sale
of goods bearing the mark “Beer Pale Pilsen” estimated at approximately Five Million Pesos (P5,000,000.00);
to recall all its products bearing the mark “Beer Pale Pilsen” from its retailers and deliver these as well as all
labels, signs, prints, packages, wrappers, receptacles and advertisements bearing the infringing mark and all
74
plates, molds, materials and other means of making the same to the Court authorized to execute this judgment
for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral
damages and Half a Million Pesos (P5,000,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney’s fees in the amount of P250,000.00 plus costs
to this suit. (p. 90, Rollo.)
Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was modified by the
separate opinions of the Special Sixth Division 1 so that it should read thus:
In the light of the foregoing analysis and under the plain language of the applicable rule and principle on the
matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new judgment entered in favor of the
plaintiff and against the defendant as follows:
(1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are hereby permanently
enjoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or
supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in bottles and under labels
substantially identical with or like the said bottles and labels of plaintiff San Miguel Corporation employed for
that purpose, or substantially identical with or like the bottles and labels now employed by the defendant for
that purpose, or in bottles or under labels which are calculated to deceive purchasers and consumers into the
belief that the beer if the product of the plaintiff or which will enable others to substitute, sell or palm off the
said beer of the defendant as and for the beer of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products bearing the mark Beer Pale
Pilsen from its retailers and deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and
advertisements bearing the infringing mark and all plates, molds, materials and other means of making the same
to the Court authorized to execute this judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral
damages and Half a Million Pesos (P500,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney’s fees in the amount of P250,000.00 plus costs
of this suit.
In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of Court. The
lone issue in this appeal is whether ABI infringes SMC’s trademark: San Miguel Pale Pilsen with Rectangular
Hops and Malt Design, and thereby commits unfair competition against the latter. It is a factual issue (Phil. Nut
Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the findings of the Court of Appeals
upon factual questions are conclusive and ought not to be disturbed by us. However, there are exceptions to this
general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and conjectures;
(2) When the inference of the Court of Appeals from its findings of fact is manifestly mistaken, absurd and
impossible;
(3) Where there is grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the appellate court, in making its findings, went beyond the issues of the case, and the same are
contrary to the admissions of both the appellant and the appellee;
(6) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they are based;
(8) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by
the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the absence of evidence and are
contradicted on record. (Reynolds Philippine Corporation vs. Court of Appeals, 169 SCRA 220, 223
citing, Mendoza vs. Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay
vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs. Court of Appeals, 198
SCRA 333, 336; also Apex Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs. De
Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA,
102 SCRA 817; and Moran, Jr. vs. CA, 133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct findings
based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of
the Court of Appeals and trial court are contrary to each other, the Supreme Court may scrutinize the evidence
on record. (Cruz vs. CA, 129 SCRA 222, 227.)
The present case is one of the exceptions because there is no concurrence between the trial court and the Court
of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER PALE PILSEN in
amber colored steinie bottles of 320 ml. capacity with a white painted rectangular label has committed
trademark infringement and unfair competition against SMC.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100, 106).
Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes
infringement:
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. (Emphasis supplied.)
This definition implies that only registered trade marks, trade names and service marks are protected against
infringement or unauthorized use by another or others. The use of someone else’s registered trademark, trade
name or service mark is unauthorized, hence, actionable, if it is done “without the consent of the registrant.”
(Ibid.)
The registered trademark of SMC for its pale pilsen beer is:
San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau of Patents, Trademarks
and Technology Transfer Trademark Certificate of Registration No. 36103, dated 23 Oct. 1986, (p. 174, Rollo.)
75
As described by the trial court in its decision (Page 177, Rollo):
. . . . a rectangular design [is] bordered by what appears to be minute grains arranged in rows of three in which
there appear in each corner hop designs. At the top is a phrase written in small print “Reg. Phil. Pat. Off.” and
at the bottom “Net Contents: 320 Ml.” The dominant feature is the phrase “San Miguel” written horizontally at
the upper portion. Below are the words “Pale Pilsen” written diagonally across the middle of the rectangular
design. In between is a coat of arms and the phrase “Expertly Brewed.” The “S” in “San” and the “M” of
“Miguel,” “P” of “Pale” and “Pilsen” are written in Gothic letters with fine strokes of serifs, the kind that first
appeared in the 1780s in England and used for printing German as distinguished from Roman and Italic. Below
“Pale Pilsen” is the statement “And Bottled by” (first line, “San Miguel Brewery” (second line), and
“Philippines” (third line). (p. 177,Rollo; Emphasis supplied.)
On the other hand, ABI’s trademark, as described by the trial court, consists of:
. . . a rectangular design bordered by what appear to be buds of flowers with leaves. The dominant feature is
“Beer” written across the upper portion of the rectangular design. The phrase “Pale Pilsen” appears immediately
below in smaller block letters. To the left is a hop design and to the right, written in small prints, is the phrase
“Net Contents 320 ml.” Immediately below “Pale Pilsen” is the statement written in three lines “Especially
brewed and bottled by” (first line), “Asia Brewery Incorporated” (second line), and “Philippines” (third line),
(p. 177, Rollo; Emphasis supplied.)
Does ABI’s BEER PALE PILSEN label or “design” infringe upon SMC’s SAN MIGUEL PALE PILSEN
WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is “No.”
Infringement is determined by the “test of dominancy” rather than by differences or variations in the details of
one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4
(1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus:
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,
infringement takes place. Duplication or imitation is not necessary; nor it is necessary that the infringing label
should suggest an effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495,
citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of
trademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in the mind
of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .)
(Emphasis supplied.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or “resemblance
between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the other. . . .
[But] this is not such similitude as amounts to identity.”
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test is
“similarity in the dominant features of the trademarks.”
What are the dominant features of the competing trademarks before us?
There is hardly any dispute that the dominant feature of SMC’s trademark is the name of the product: SAN
MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the
letters “S” and “M” on an amber background across the upper portion of the rectangular design.
On the other hand, the dominant feature of ABI’s trademark is the name: BEER PALE PILSEN, with the word
“Beer” written in large amber letters, larger than any of the letters found in the SMC label.
The trial court perceptively observed that 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. No evidence whatsoever was presented by SMC proving otherwise.
Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or appearance of
the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words “pale pilsen” on SMC’s label are printed in bold and laced letters along a diagonal band, whereas
the words “pale pilsen” on ABI’s bottle are half the size and printed in slender block letters on a
straight horizontal band. (See Exhibit “8-a”.).
(3) The names of the manufacturers are prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is “Bottled by the San Miguel Brewery, Philippines,” whereas BEER PALE
PILSEN is “Especially brewed and bottled by Asia Brewery Incorporated, Philippines.”
(4) On the back of ABI’s bottle is printed in big, bold letters, under a row of flower buds and leaves, its
copyrighted slogan:
“BEER NA BEER!”
Whereas SMC’s bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER PALE
PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words “San Miguel
Brewery Philippines” encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name “BEER” in the center, surrounded by the words
“Asia Brewery Incorporated Philippines.”
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25 per bottle)
and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only P4.25 for a bottle of beer
cannot expect to receive San Miguel Pale Pilsen from the storekeeper or bartender.
The fact that the words pale pilsen are part of ABI’s trademark does not constitute an infringement of SMC’s
trademark: SAN MIGUEL PALE PILSEN, 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. (Webster’s Third New International
Dictionary of the English Language, Unabridged. Edited by Philip Babcock Gove. Springfield, Mass.: G & C
Merriam Co., [c] 1976, page 1716.) “Pilsen” is a “primarily geographically descriptive word,” (Sec. 4, subpar.
76
[e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not appropriable
by any beer manufacturer. The Trademark Law provides:
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 shall have the right to register the same [on the principal
register], unless it:
xxx xxx 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.” (Emphasis supplied.)
The words “pale pilsen” may not be appropriated by SMC for its exclusive use even if they are part of its
registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as “evaporated
milk,” “tomato ketchup,” “cheddar cheese,” “corn flakes” and “cooking oil” may be appropriated by any single
manufacturer of these food products, for no other reason than that he was the first to use them in his registered
trademark. In Masso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a dealer
in shoes cannot register “Leather Shoes” as his trademark because that would be merely descriptive and it
would be unjust to deprive other dealers in leather shoes of the right to use the same words with reference to
their merchandise. No one may appropriate generic or descriptive words. They belong to the public domain
(Ong Ai Gui vs. Director of Patents, 96 Phil. 673, 676 [1955]):
A word or a combination of words which is merely descriptive of an article of trade, or of its composition,
characteristics, or qualities, cannot be appropriated and protected as a trademark to the exclusion of its use by
others. . . . inasmuch as all persons have an equal right to produce and vend similar articles, they also have the
right to describe them properly and to use any appropriate language or words for that purpose, and no person
can appropriate to himself exclusively any word or expression, properly descriptive of the article, its qualities,
ingredients or characteristics, and thus limit other persons in the use of language appropriate to the description
of their manufactures, the right to the use of such language being common to all. This rule excluding descriptive
terms has also been held to apply to trade-names. As to whether words employed fall within this prohibition, it
is said that the true 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. (52 Am. Jur. 542-543.)
. . . . Others may use the same or similar descriptive word in connection with their own wares, provided they
take proper steps to prevent the public being deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16
E. [2d] 598.)
. . . . A descriptive word may be admittedly distinctive, especially if the user is the first creator of the article. It
will, however, be denied protection, not because it lacks distinctiveness, but rather because others are equally
entitled to its use. (2 Callman, Unfair Competition and Trademarks, pp. 869-870.)” (Emphasis supplied.)
The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has printed its
name all over the bottle of its beer product: on the label, on the back of the bottle, as well as on the bottle cap,
disproves SMC’s charge that ABI dishonestly and fraudulently intends to palm off its BEER PALE PILSEN as
SMC’s product. In view of the visible differences between the two products, the Court believes it is quite
unlikely that a customer of average intelligence would mistake a bottle of BEER PALE PILSEN for SAN
MIGUEL PALE PILSEN.
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-colored steinie
bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media, does not necessarily
constitute unfair competition.
Unfair competition is the employment of deception or any other means contrary to good faith by which a person
shall pass off the goods manufactured by him or in which he deals, or his business, or services, for those of
another who has already established goodwill for his similar goods, business or services, or any acts calculated
to produce the same result. (Sec. 29, Republic Act No. 166, as amended.) The law further enumerates the more
common ways of committing unfair competition, thus:
Sec. 29. . . .
In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed
guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to
influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose.
(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false
belief that such person is offering the services of another who has identified such services in the mind of the
public; or
(c) Any person who shall make any false statement in the course of trade or who shall commit any other act
contrary to good faith of a nature calculated to discredit the goods, business or services of another.
In this case, the question to be determined is whether ABI is using a name or mark for its beer that has
previously come to designate SMC’s beer, or whether ABI is passing off its BEER PALE PILSEN as SMC’s
SAN MIGUEL PALE PILSEN.
. . ..The universal test question is whether the public is likely to be deceived. Nothing less than conduct tending
to pass off one man’s goods or business as that of another will constitute unfair competition. Actual or probable
deception and confusion on the part of the customers by reason of defendant’s practices must always appear.
(Shell Co., of the Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle, is not
unlawful. As pointed out by ABI’s counsel, SMC did not invent but merely borrowed the steinie bottle from
abroad and it claims neither patent nor trademark protection for that bottle shape and design. (See rollo, page
55.) The Cerveza Especial and the Efes Pale Pilsen use the “steinie” bottle. (See Exhibits 57-D, 57-E.) The trial
court found no infringement of SMC’s bottle —
The court agrees with defendant that there is no infringement of plaintiff’s bottle, firstly, because according to
plaintiff’s witness Deogracias Villadolid, it is a standard type of bottle called steinie, and to witness Jose
Antonio Garcia, it is not a San Miguel Corporation design but a design originally developed in the United States
77
by the Glass Container Manufacturer’s Institute and therefore lacks exclusivity. Secondly, the shape was never
registered as a trademark. Exhibit “C” is not a registration of a beer bottle design required under Rep. Act 165
but the registration of the name and other marks of ownership stamped on containers as required by Rep. Act
623. Thirdly, the neck of defendant’s bottle is much larger and has a distinct bulge in its uppermost part. (p.
186, Rollo.)
The petitioner’s contention that bottle size, shape and color may not be the exclusive property of any one beer
manufacturer is well taken. SMC’s being the first to use the steinie bottle does not give SMC a vested right to
use it to the exclusion of everyone else. Being of functional or common use, and not the 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 (Dy Buncio vs. Tan Tiao Bok, 42 Phil.
190, 194-195.)
. . . protection against imitation should be properly confined to nonfunctional features. Even if purely functional
elements are slavishly copied, the resemblance will not support an action for unfair competition, and the first
user cannot claim secondary meaning protection. Nor can the first user predicate his claim to protection on the
argument that his business was established in reliance on any such unpatented nonfunctional feature, even “at
large expenditure of money.” (Callman Unfair Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].)
(Petition for Review, p. 28.)
ABI does not use SMC’s steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which has a
fat bulging neck to differentiate it from SMC’s bottle. The amber color is a functional feature of the beer bottle.
As pointed out by ABI, all bottled beer produced in the Philippines is contained and sold in amber-colored
bottles because amber is the most effective color in preventing transmission of light and provides the maximum
protection to beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38 F2d
885, a merchant cannot be enjoined from using a type or color of bottle where the same has the useful purpose
of protecting the contents from the deleterious effects of light rays. Moreover, no one may have a monopoly of
any color. Not only beer, but most medicines, whether in liquid or tablet form, are sold in amber-colored
bottles.
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC’s bottle because that bottle
capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December 1979, of the
Department of Trade, Metric System Board.
With regard to the white label of both beer bottles, ABI explained that it used the color white for its label
because white presents the strongest contrast to the amber color of ABI’s bottle; it is also the most economical
to use on labels, and the easiest to “bake” in the furnace (p. 16, TSN of September 20, 1988). No one can have a
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 from the others.
In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both labeled as
Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of conventional color, both with
labels containing designs drawn in green ink and Chinese characters written in red ink, one label showing a
double-decked jar in the center, the other, a flower pot, this court found that the resemblances between the
designs were not sufficient to mislead the ordinary intelligent buyer, hence, there was no unfair competition.
The Court held:
. . . . In order that there may be deception of the buying public in the sense necessary to constitute unfair
competition, it is necessary to suppose a public 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
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 possibility of the deception, of
the person who knows nothing about the design which has been counterfeited, and who must be indifferent as
between that and the other. The simulation, in order to be objectionable, must be such as appears likely to
mislead the ordinarily intelligent buyer who has a need to supply and is familiar with the article that he seeks to
purchase.
The main thrust of SMC’s complaint if not infringement of its trademark, but unfair competition arising from
the allegedly “confusing similarity” in the general appearance or trade dress of ABI’s BEER PALE PILSEN
beside SMC’s SAN MIGUEL PALE PILSEN (p. 209, Rollo)
SMC claims that the “trade dress” of BEER PALE PILSEN is “confusingly similar” to its SAN MIGUEL
PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles with white rectangular
labels.
However, when as in this case, the names of the competing products are clearly different and their respective
sources are prominently printed on the label and on other parts of the bottle, mere similarity in the shape and
size of the container and label, does not constitute unfair competition. The steinie bottle is a standard bottle for
beer and is universally used. SMC did not invent it nor patent it. The fact that SMC’s bottle is registered under
R.A. No. 623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped or Marked Bottles,
Boxes, Casks, Kegs, Barrels and Other Similar Containers) 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 (fish sauce) and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN
bottles. Registration of SMC’s beer bottles did not give SMC a patent on the steinie or on bottles of similar size,
shape or color.
Most containers are standardized because they are usually made by the same manufacturer. Milk, whether in
powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard ketchup or vinegar
bottle with its familiar elongated neck. Many other grocery items such as coffee, mayonnaise, pickles and
peanut butter are sold in standard glass jars. The manufacturers of these foodstuffs have equal right to use these
standards tins, bottles and jars for their products. Only their respective labels distinguish them from each other.
Just as no milk producer may sue the others for unfair competition because they sell their milk in the same size
and shape of milk can which he uses, neither may SMC claim unfair competition arising from the fact that
ABI’s BEER PALE PILSEN is sold, like SMC’s SAN MIGUEL PALE PILSEN in amber steinie bottles.
The record does not bear out SMC’s apprehension that BEER PALE PILSEN is being passed off as SAN
MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally order their beer
by brand. As pointed out by ABI’s counsel, in supermarkets and tiendas, beer is ordered by brand, and the
customer surrenders his empty replacement bottles or pays a deposit to guarantee the return of the empties. If
his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement. In
sari-sari stores, beer is also ordered from the tindera by brand. The same is true in restaurants, pubs and beer
gardens — beer is ordered from the waiters by brand. (Op. cit. page 50.)
Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer market for
the past hundred years, those who have been drinking no other beer but SAN MIGUEL PALE PILSEN these
many years certainly know their beer too well to be deceived by a newcomer in the market. If they gravitate to
78
ABI’s cheaper beer, it will not be because they are confused or deceived, but because they find the competing
product to their taste.
Our decision in this case will not diminish our ruling in “Del Monte Corporation vs. Court of Appeals and
Sunshine Sauce Manufacturing Industries,” 181 SCRA 410, 419,3 that:
. . . 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.
That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases of
infringement and unfair competition, the courts should “take into consideration several factors which would
affect its conclusion, to wit: the age, training and education of the usual purchaser, the nature and cost of the
article, whether the article is bought for immediate consumption and also the conditions under which it is
usually purchased” (181 SCRA 410, 418-419).
The Del Monte case involved catsup, a common household item which is bought off the store shelves by
housewives and house help who, if they are illiterate and cannot identify the product by name or brand, would
very likely identify it by mere recollection of its appearance. Since the competitor, Sunshine Sauce Mfg.
Industries, not only used recycled Del Monte bottles for its catsup (despite the warning embossed on the bottles:
“Del Monte Corporation. Not to be refilled.”) but also used labels which were “a colorable imitation” of Del
Monte’s label, we held that there was infringement of Del Monte’s trademark and unfair competition by
Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf but ordered by
brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.
Moreover, SMC’s brand or trademark: “SAN MIGUEL PALE PILSEN” is not infringed by ABI’s mark:
“BEER NA BEER” or “BEER PALE PILSEN.” ABI makes its own bottle with a bulging neck to differentiate it
from SMC’s bottle, and prints ABI’s name in three (3) places on said bottle (front, back and bottle cap) to prove
that it has no intention to pass of its “BEER” as “SAN MIGUEL.”
There is no confusing similarity between the competing beers for the name of one is “SAN MIGUEL” while the
competitor is plain “BEER” and the points of dissimilarity between the two outnumber their points of similarity.
Petitioner ABI has neither infringed SMC’s trademark nor committed unfair competition with the latter’s SAN
MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes with the latter in the
open market, that competition is neither unfair nor fraudulent. Hence, we must deny SMC’s prayer to suppress
it.
WHEREFORE, finding the petition for review meritorious, the same is hereby GRANTED. The decision and
resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby SET ASIDE and that of the trial court
is REINSTATED and AFFIRMED. Costs against the private respondent.
SO ORDERED.
G.R. No. 100098 December 29, 1995
EMERALD GARMENT MANUFACTURING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY
TRANSFER and H.D. LEE COMPANY, INC., respondents.
KAPUNAN, J.:
In this petition for review on certiorari under Rule 45 of the Revised Rules of Court, Emerald Garment
Manufacturing Corporation seeks to annul the decision of the Court of Appeals dated 29 November 1990 in
CA-G.R. SP No. 15266 declaring petitioner's trademark to be confusingly similar to that of private respondent
and the resolution dated 17 May 1991 denying petitioner's motion for reconsideration.
The record reveals the following antecedent facts:
On 18 September 1981, 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 on 27 October 1980 in the name of petitioner Emerald Garment Manufacturing Corporation, a
domestic corporation organized and existing under Philippine laws. The petition was docketed as Inter Partes
Case No. 1558.1
Private respondent, 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, and not abandoned, 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." 2
In its answer dated 23 March 1982, petitioner 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. 3
On 20 February 1984, petitioner caused the publication of its application for registration of the trademark
"STYLISTIC MR. LEE" in the Principal Register." 4
On 27 July 1984, 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. 5 The case was docketed
as Inter Partes Case No. 1860.
79
On 21 June 1985, the Director of Patents, on motion filed by private respondent dated 15 May 1985, issued an
order consolidating Inter Partes Cases Nos. 1558 and 1860 on grounds that a common question of law was
involved.6
On 19 July 1988, the Director of Patents rendered a decision granting private respondent's petition for
cancellation and opposition to registration.
The Director of Patents found 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.7
Moreover, the Director of Patents, 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."8
On 3 August 1988, petitioner appealed to the Court of Appeals and on 8 August 1988, it filed with the BPTTT a
Motion to Stay Execution of the 19 July 1988 decision of the Director of Patents on grounds that the same
would cause it great and irreparable damage and injury. Private respondent submitted its opposition on 22
August 1988.9
On 23 September 1988, the BPTTT issued Resolution No. 88-33 granting petitioner's motion to stay execution
subject to the following terms and conditions:
1. That under this resolution, Respondent-Registrant is authorized only to dispose of its
current stock using the mark "STYLISTIC MR. LEE";
2. That Respondent-Registrant is strictly prohibited from further production, regardless of
mode and source, of the mark in question (STYLISTIC MR. LEE) in addition to its current
stock;
3. That this relief Order shall automatically cease upon resolution of the Appeal by the Court
of Appeals and, if the Respondent's appeal loses, all goods bearing the mark "STYLISTIC
MR. LEE" shall be removed from the market, otherwise such goods shall be seized in
accordance with the law.
SO ORDERED.10
On 29 November 1990, the Court of Appeals promulgated its decision affirming the decision of the Director of
Patents dated 19 July 1988 in all respects.11
In said decision the Court of Appeals expounded, thus:
xxx xxx xxx
Whether or not a trademark causes confusion and is likely to deceive the public is a question
of fact which is to be resolved by applying the "test of dominancy", meaning, if the competing
trademark contains the main or essential or dominant features of another by reason of which
confusion and deception are likely to result, then infringement takes place; that duplication or
imitation is not necessary, a similarity in the dominant features of the trademark would be
sufficient.
The word "LEE" is the most prominent and distinctive feature of the appellant's trademark
and all of the appellee's "LEE" trademarks. It is the mark which draws the attention of the
buyer and leads him to conclude that the goods originated from the same manufacturer. While
it is true that there are other words such as "STYLISTIC", printed in the appellant's label,
such word is printed in such small letters over the word "LEE" that it is not conspicuous
enough to draw the attention of ordinary buyers whereas the word "LEE" is printed across the
label in big, bold letters and of the same color, style, type and size of lettering as that of the
trademark of the appellee. The alleged difference is too insubstantial to be noticeable. Even
granting arguendo that the word "STYLISTIC" is conspicuous enough to draw attention, the
goods may easily be mistaken for just another variation or line of garments under the ap
appelle's "LEE" trademarks in view of the fact that the appellee has registered trademarks
which use other words in addition to the principal mark "LEE" such as "LEE RIDERS",
"LEESURES" and "LEE LEENS". The likelihood of confusion is further made more probable
by the fact that both parties are engaged in the same line of business. It is well to reiterate that
the determinative factor in ascertaining whether or not the marks are confusingly similar to
each other is not whether the challenged mark 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.
xxx xxx xxx
The appellee has sufficiently established its right to prior use and registration of the trademark
"LEE" in the Philippines and is thus entitled to protection from any infringement upon the
same. It is thus axiomatic that one who has identified a peculiar symbol or mark with his
goods thereby acquires a property right in such symbol or mark, and if another infringes the
trademark, he thereby invokes this property right.
The merchandise or goods being sold by the parties are not that expensive as alleged to be by
the appellant and are quite ordinary commodities purchased by the average person and at
times, by the ignorant and the unlettered. Ordinary purchasers will not as a rule examine the
small letterings printed on the label but will simply be guided by the presence of the striking
mark "LEE". Whatever difference there may be will pale in insignificance in the face of an
evident similarity in the dominant features and overall appearance of the labels of the
parties.12
xxx xxx xxx
80
On 19 December 1990, petitioner filed a motion for reconsideration of the above-mentioned decision of the
Court of Appeals.
Private respondent opposed said motion on 8 January 1991 on grounds that it involved an impermissible change
of theory on appeal. Petitioner allegedly raised entirely new and unrelated arguments and defenses not
previously raised in the proceedings below such as laches and a claim that private respondent appropriated the
style and appearance of petitioner's trademark when it registered its "LEE" mark under Registration No.
44220.13
On 17 May 1991, the Court of Appeals issued a resolution rejecting petitioner's motion for reconsideration and
ruled thus:
xxx xxx xxx
A defense not raised in the trial court cannot be raised on appeal for the first time. An issue
raised for the first time on appeal and not raised timely in the proceedings in the lower court is
barred by estoppel.
The object of requiring the parties to present all questions and issues to the lower court before
they can be presented to this Court is to have the lower court rule upon them, so that this
Court on appeal may determine whether or not such ruling was erroneous. The purpose is also
in furtherance of justice to require the party to first present the question he contends for in the
lower court so that the other party may not be taken by surprise and may present evidence to
properly meet the issues raised.
Moreover, for a question to be raised on appeal, the same must also be within the issues raised
by the parties in their pleadings. Consequently, when a party deliberately adopts a certain
theory, and the case is tried and decided based upon such theory presented in the court below,
he will not be permitted to change his theory on appeal. To permit him to do so would be
unfair to the adverse party. A question raised for the first time on appeal, there having
opportunity to raise them in the court of origin constitutes a change of theory which is not
permissible on appeal.
In the instant case, appellant's main defense pleaded in its answer dated March 23, 1982 was
that there was "no confusing similarity between the competing trademark involved. On
appeal, the appellant raised a single issue, to wit:
The only issue involved in this case is whether or not respondent-registrant's
trademark "STYLISTIC MR. LEE" is confusingly similar with the
petitioner's trademarks "LEE or LEERIDERS, LEE-LEENS and LEE-
SURES."
Appellant's main argument in this motion for reconsideration on the other hand is that the
appellee is estopped by laches from asserting its right to its trademark. Appellant claims
 although belatedly that appellee went to court with "unclean hands" by changing the
appearance of its trademark to make it identical to the appellant's trademark.
Neither defenses were raised by the appellant in the proceedings before the Bureau of Patents.
Appellant cannot raise them now for the first time on appeal, let alone on a mere motion for
reconsideration of the decision of this Court dismissing the appellant's appeal.
While there may be instances and situations justifying relaxation of this rule, the circumstance
of the instant case, equity would be better served by applying the settled rule it appearing that
appellant has not given any reason at all as to why the defenses raised in its motion for
reconsideration was not invoked earlier.14
xxx xxx xxx
Twice rebuffed, petitioner presents its case before this Court on the following assignment of errors:
I. THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE
RESPONDENT CAUSED THE ISSUANCE OF A FOURTH "LEE" TRADEMARK
IMITATING THAT OF THE PETITIONER'S ON MAY 5, 1989 OR MORE THAN EIGHT
MONTHS AFTER THE BUREAU OF PATENT'S DECISION DATED JULY 19, 1988.
II. THE COURT OF APPEALS ERRED IN RULING THAT THE DEFENSE OF
ESTOPPEL BY LACHES MUST BE RAISED IN THE PROCEEDINGS BEFORE THE
BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER.
III. THE COURT OF APPEALS ERRED WHEN IT CONSIDERED PRIVATE
RESPONDENT'S PRIOR REGISTRATION OF ITS TRADEMARK AND DISREGARDED
THE FACT THAT PRIVATE RESPONDENT HAD FAILED TO PROVE COMMERCIAL
USE THEREOF BEFORE FILING OF APPLICATION FOR REGISTRATION. 15
In addition, petitioner reiterates the issues it raised in the Court of Appeals:
I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER OR NOT PETITIONER'S
TRADEMARK SYTLISTIC MR. LEE, IS CONFUSINGLY SIMILAR WITH THE
PRIVATE RESPONDENT'S TRADEMARK LEE OR LEE-RIDER, LEE-LEENS AND
LEE-SURES.
II. PETITIONER'S EVIDENCES ARE CLEAR AND SUFFICIENT TO SHOW THAT IT IS
THE PRIOR USER AND ITS TRADEMARK IS DIFFERENT FROM THAT OF THE
PRIVATE RESPONDENT.
III. PETITIONER'S TRADEMARK IS ENTIRELY DIFFERENT FROM THE PRIVATE
RESPONDENT'S AND THE REGISTRATION OF ITS TRADEMARK IS PRIMA
FACIE EVIDENCE OF GOOD FAITH.
81
IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK CANNOT BE CONFUSED
WITH PRIVATE RESPONDENT'S LEE TRADEMARK.16
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.
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. 17
Private respondent counters by maintaining that petitioner was barred from raising new issues on appeal, the
only contention in the proceedings below being the presence or absence of confusing similarity between the two
trademarks in question.18
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." 19 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, 20 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 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. 21 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.
Corollarily, private respondent could hardly be accused of inexcusable delay in filing its notice of opposition to
petitioner's application for registration in the principal register since said application was published only on 20
February 1984.22 From the time of publication to the time of filing the opposition on 27 July 1984 barely five
(5) months had elapsed. To be barred from bringing suit on grounds of estoppel and laches, the delay must be
lengthy.23
More crucial is the issue of confusing similarity between the two trademarks. Petitioner vehemently contends
that its trademark "STYLISTIC MR. LEE" is entirely different from and not confusingly similar to private
respondent's "LEE" trademark.
Private respondent maintains otherwise. It asserts that petitioner's trademark tends to mislead and confuse the
public and thus constitutes an infringement of its own mark, since the dominant feature therein is the word
"LEE."
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.
Practical application, however, of the aforesaid provision is easier said than done. In the history of trademark
cases in the Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is a
colorable imitation of another, no set rules can be deduced. Each case must be decided on its own merits.
In Esso Standard Eastern, Inc. v. Court of Appeals,24 we held:
. . . But likelihood of confusion is a relative concept; to be determined only according to the
particular, and sometimes peculiar, circumstances of each case. It is unquestionably true that,
as stated in Coburn vs. Puritan Mills, Inc.: "In trademark cases, even more than in other
litigation, precedent must be studied in the light of the facts of the particular case."
xxx xxx xxx
Likewise, it has been observed that:
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, such as the class of product or business to
which the article belongs; the product's quality, quantity, or size, including its wrapper or
container; the dominant color, style, size, form, meaning of letters, words, designs and
emblems used; the nature of the package, wrapper or container; the character of the product's
purchasers; location of the business; the likelihood of deception or the mark or name's
tendency to confuse;
etc.25
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
82
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." 26
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.27
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 28 and other cases 29 and the Holistic Test
developed in Del Monte Corporation v. Court of Appeals 30 and its proponent cases.31
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.
xxx xxx xxx
. . . 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. [C. Neilman Brewing Co. v. Independent Brewing Co., 191 F., 489,
495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in
cases of infringement of trademarks is whether the use of the marks involved would be likely
to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . .) 32
xxx xxx xxx
On the other side of the spectrum, the holistic test mandates that the entirety of the marks in question must be
considered in determining confusing similarity.
xxx xxx xxx
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. 33
xxx xxx xxx
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 cautious and discriminating in and would
prefer to mull over his purchase. Confusion and deception, then, is less likely. In Del Monte Corporation
v. Court of Appeals, 34 we noted that:
. . . Among these, what essentially determines the attitudes 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. . . .
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, in line with the foregoing discussions, 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.
The definition laid down in Dy Buncio v. Tan Tiao Bok 35 is better suited to the present case. There, 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."
83
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". 36 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.
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.
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. 4 of R.A. No. 166, particularly paragraph 4 (e):
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 xxx 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; (Emphasis ours.)
xxx xxx xxx
"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.37
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 pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166) which explicitly
provides that:
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 trade-
marks, 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.)
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.) (Emphasis ours.)
The provisions of the 1965 Paris Convention for the Protection of Industrial Property 38 relied upon by private
respondent and Sec. 21-A of the Trademark Law (R.A. No. 166)39 were sufficiently expounded upon and
qualified in the recent case of Philip Morris, Inc. v. Court of Appeals:40
xxx xxx xxx
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 tribunal (Mortisen vs. Peters,
Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions, 93; Paras, International
Law and World Organization, 1971 Ed., p. 20). Withal, the fact that international law has
been made part of the law of the land does not by any means imply the primacy of
84
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.
xxx xxx xxx
In other words, (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.
xxx xxx xxx
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 1973.41 However, registration alone will not suffice. In Sterling Products
International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft,42 we declared:
xxx xxx xxx
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.
xxx xxx xxx
It would seem quite clear that adoption alone of a trademark would not give exclusive right
thereto. Such right "grows out of their actual use." Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but these alone would not
give exclusive right of use. For trademark is a creation of use. The underlying reason for all
these is that purchasers have come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader's right to protection in the trade he has built up and the
goodwill he has accumulated from use of the trademark. Registration of a trademark, of
course, has value: it is an administrative act declaratory of a pre-existing right. Registration
does not, however, perfect a trademark right. (Emphasis ours.)
xxx xxx xxx
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, is qualified. A registration certificate serves merely as prima facie evidence. It is
not conclusive but can and may be rebutted by controverting evidence.
Moreover, the aforequoted provision applies only to registrations in the principal register. 43 Registrations in the
supplemental register do not enjoy a similar privilege. A supplemental register was created precisely for the
registration of marks which are not registrable on the principal register due to some defects. 44
The determination as to who is the prior user of the trademark is a question of fact and it is this Court's working
principle not to disturb the findings of the Director of Patents on this issue in the absence of any showing of
grave abuse of discretion. The findings of facts of the Director of Patents are conclusive upon the Supreme
Court provided they are supported by substantial evidence.45
In the case at bench, however, we reverse the findings of the Director of Patents and the Court of Appeals. After
a meticulous study of the records, we observe that the Director of Patents and the Court of Appeals relied
mainly on the registration certificates as proof of use by private respondent of the trademark "LEE" which, as
we have previously discussed are not sufficient. We cannot give credence to private respondent's claim that its
"LEE" mark first reached the Philippines in the 1960's through local sales by the Post Exchanges of the U.S.
Military Bases in the Philippines46 based as it was solely on the self-serving statements of Mr. Edward Poste,
General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein
private respondent. 47Similarly, we give little weight to the numerous
vouchers representing various advertising expenses in the Philippines for "LEE" products. 48 It is well to note
that these expenses were incurred only in 1981 and 1982 by LEE (Phils.), Inc. after it entered into a licensing
agreement with private respondent on 11 May 1981. 49
On the other hand, petitioner has sufficiently shown that it has been in the business of selling jeans and other
garments adopting its "STYLISTIC MR. LEE" trademark since 1975 as evidenced by appropriate sales invoices
to various stores and retailers.50
Our rulings in Pagasa Industrial Corp. v. Court of Appeals 51 and Converse Rubber Corp. v. Universal Rubber
Products, Inc.,52 respectively, are instructive:
The Trademark Law is very clear. It requires actual commercial use of the mark prior to its
registration. There is no dispute that respondent corporation was the first registrant, yet it
failed to fully substantiate its claim that it used in trade or business in the Philippines the
85
subject mark; it did not present proof to invest it with exclusive, continuous adoption of the
trademark which should consist among others, of considerable sales since its first use. The
invoices submitted by respondent which were dated way back in 1957 show that the zippers
sent to the Philippines were to be used as "samples" and "of no commercial value." The
evidence for respondent must be clear, definite and free from inconsistencies. "Samples" are
not for sale and therefore, the fact of exporting them to the Philippines cannot be considered
to be equivalent to the "use" contemplated by law. Respondent did not expect income from
such "samples." There were no receipts to establish sale, and no proof were presented to show
that they were subsequently sold in the Philippines.
xxx xxx xxx
The sales invoices provide the best proof that there were actual sales of petitioner's product in
the country and that there was actual use for a protracted period of petitioner's trademark or
part thereof through these sales.
For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioner's use of its own
mark and for failure to establish confusing similarity between said trademarks, private respondent's action for
infringement must necessarily fail.
WHEREFORE, premises considered, the questioned decision and resolution are hereby REVERSED and SET
ASIDE.
SO ORDERED.
Bellosillo and Hermosisima, Jr., JJ., concur.
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, LEE-
LEENS and LEE-SURES" such that the trademark "STYLISTIC MR. LEE" is an infringement of the earlier
registered trademarks.
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, LEE-
LEENS and LEE-SURES" such that the trademark "STYLISTIC MR. LEE" is an infringement of the earlier
registered trademarks.

86
FREDCO MANUFACTURING G.R. No. 185917

CORPORATION,
Before the Court is a petition for review1 assailing the 24 October 2008 Decision2 and 8 January 2009
Petitioner, Present:
Resolution3 of the Court of Appeals in CA-G.R. SP No. 103394.
CARPIO, J.,
Chairperson,
NACHURA,

- versus - PERALTA,
ABAD, and
MENDOZA, JJ. The Antecedent Facts

PRESIDENT AND FELLOWS

On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation organized and
OF HARVARD COLLEGE Promulgated: existing under the laws of the Philippines, filed a Petition for Cancellation of Registration No. 56561 before the

(HARVARD UNIVERSITY), Bureau of Legal Affairs of the Intellectual Property Office (IPO) against respondents President and Fellows of
Harvard College (Harvard University), a corporation organized and existing under the laws of Massachusetts,
Respondents. June 1, 2011
United States of America. The case was docketed as Inter Partes Case No. 14-2005-00094.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Fredco alleged that Registration No. 56561 was issued to Harvard University on 25 November 1993 for the
mark Harvard Veritas Shield Symbol for decals, tote bags, serving trays, sweatshirts, t-shirts, hats and flying
discs under Classes 16, 18, 21, 25 and 28 of the Nice International Classification of Goods and Services. Fredco
DECISION
alleged that the mark Harvard for t-shirts, polo shirts, sandos, briefs, jackets and slacks was first used in the
Philippines on 2 January 1982 by New York Garments Manufacturing & Export Co., Inc. (New York
Garments), a domestic corporation and Fredcos predecessor-in-interest. On 24 January 1985, New York
CARPIO, J.:
Garments filed for trademark registration of the mark Harvard for goods under Class 25. The application
matured into a registration and a Certificate of Registration was issued on 12 December 1988, with a 20-year
term subject to renewal at the end of the term. The registration was later assigned to Romeo Chuateco, a

The Case member of the family that owned New York Garments.

87
 15. France 40. Spain
16. Great Britain 41. Sweden
17. Germany 42. Taiwan
Fredco alleged that it was formed and registered with the Securities and Exchange Commission on 9 November
18. Greece 43. Thailand
1995 and had since then handled the manufacture, promotion and marketing of Harvard clothing articles.
19. Hong Kong 44. Turkey
Fredco alleged that at the time of issuance of Registration No. 56561 to Harvard University, New York
20. India 45. United Arab Emirates
Garments had already registered the mark Harvard for goods under Class 25. Fredco alleged that the registration
21. Indonesia 46. Uruguay
was cancelled on 30 July 1998 when New York Garments inadvertently failed to file an affidavit of use/non-use 22. Ireland 47. United States of America
on the fifth anniversary of the registration but the right to the mark Harvard remained with its predecessor New 23. Israel 48. Venezuela
York Garments and now with Fredco. 24. Italy 49. Zimbabwe
25. Japan 50. European Community5

Harvard University, on the other hand, alleged that it is the lawful owner of the name and mark Harvard in
numerous countries worldwide, including the Philippines. Among the countries where Harvard University has The name and mark Harvard was adopted in 1639 as the name of Harvard College 6 of Cambridge,
registered its name and mark Harvard are: Massachusetts, U.S.A. The name and mark Harvard was allegedly used in commerce as early as 1872. Harvard
University is over 350 years old and is a highly regarded institution of higher learning in the United States and
throughout the world. Harvard University promotes, uses, and advertises its name Harvard through various
1. Argentina 26. South Korea
publications, services, and products in foreign countries, including the Philippines. Harvard University further
2. Benelux4 27. Malaysia
alleged that the name and the mark have been rated as one of the most famous brands in the world, valued
3. Brazil 28. Mexico
between US $750,000,000 and US $1,000,000,000.
4. Canada 29. New Zealand
5. Chile 30. Norway
6. China P.R. 31. Peru
7. Colombia 32. Philippines
Harvard University alleged that in March 2002, it discovered, through its international trademark watch
8. Costa Rica 33. Poland
program, Fredcos website www.harvard-usa.com. The website advertises and promotes the brand name Harvard
9. Cyprus 34. Portugal
Jeans USA without Harvard Universitys consent. The websites main page shows an oblong logo bearing the
10. Czech Republic 35. Russia
mark Harvard Jeans USA, Established 1936, and Cambridge, Massachusetts. On 20 April 2004, Harvard
11. Denmark 36. South Africa
12. Ecuador 37. Switzerland University filed an administrative complaint against Fredco before the IPO for trademark infringement and/or

13. Egypt 38. Singapore unfair competition with damages.

14. Finland 39. Slovak Republic

88
 with the Petitioners goods, the Respondent-Registrant has acquired vested right over the same
Harvard University alleged that its valid and existing certificates of trademark registration in the Philippines
and therefore, should not be cancelled.
are:

Let the filewrapper of the Trademark Registration No. 56561 issued on November 25, 1993
for the trademark HARVARD VE RI TAS SHIELD SYMBOL, subject matter of this case
1. Trademark Registration No. 56561 issued on 25 November 1993 for Harvard Veritas Shield Design together with a copy of this Decision be forwarded to the Bureau of Trademarks (BOT) for
for goods and services in Classes 16, 18, 21, 25 and 28 (decals, tote bags, serving trays, sweatshirts, t- appropriate action.

shirts, hats and flying discs) of the Nice International Classification of Goods and Services;
SO ORDERED.8
2. Trademark Registration No. 57526 issued on 24 March 1994 for Harvard Veritas Shield Symbol for
services in Class 41; Trademark Registration No. 56539 issued on 25 November 1998 for Harvard for
services in Class 41; and
Harvard University filed an appeal before the Office of the Director General of the IPO. In a Decision 9 dated 21
3. Trademark Registration No. 66677 issued on 8 December 1998 for Harvard Graphics for goods in
April 2008, the Office of the Director General, IPO reversed the decision of the Bureau of Legal Affairs, IPO.
Class 9. Harvard University further alleged that it filed the requisite affidavits of use for the mark
Harvard Veritas Shield Symbol with the IPO.

Further, on 7 May 2003 Harvard University filed Trademark Application No. 4-2003-04090 for Harvard
Medical International & Shield Design for services in Classes 41 and 44. In 1989, Harvard University
established the Harvard Trademark Licensing Program, operated by the Office for Technology and Trademark
Licensing, to oversee and manage the worldwide licensing of the Harvard name and trademarks for various
goods and services. Harvard University stated that it never authorized or licensed any person to use its name
and mark Harvard in connection with any goods or services in the Philippines.
In a Decision7 dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau of Legal Affairs,
IPO cancelled Harvard Universitys registration of the mark Harvard under Class 25, as follows:
The Director General ruled that more than the use of the trademark in the Philippines, the applicant must be the
owner of the mark sought to be registered. The Director General ruled that the right to register a trademark is
based on ownership and when the applicant is not the owner, he has no right to register the mark. The Director
General noted that the mark covered by Harvard Universitys Registration No. 56561 is not only the word
Harvard but also the logo, emblem or symbol of Harvard University. The Director General ruled that Fredco
failed to explain how its predecessor New York Garments came up with the mark Harvard. In addition, there
was no evidence that Fredco or New York Garments was licensed or authorized by Harvard University to use its
name in commerce or for any other use.

WHEREFORE, premises considered, the Petition for Cancellation is hereby GRANTED.

The dispositive portion of the decision of the Office of the Director General, IPO reads:
Consequently, Trademark Registration Number 56561 for the trademark HARVARD VE RI
TAS SHIELD SYMBOL issued on November 25, 1993 to PRESIDENT AND FELLOWS OF
HARVARD COLLEGE (HARVARD UNIVERSITY) should be CANCELLED only with
respect to goods falling under Class 25. On the other hand, considering that the goods of
Respondent-Registrant falling under Classes 16, 18, 21 and 28 are not confusingly similar
89
 WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed decision
is hereby REVERSED and SET ASIDE. Let a copy of this Decision as well as the trademark
application and records be furnished and returned to the Director of Bureau of Legal Affairs
for appropriate action. Further, let also the Directors of the Bureau of Trademarks and the
Administrative, Financial and Human Resources Development Services Bureau, and the
library of the Documentation, Information and Technology Transfer Bureau be furnished a
copy of this Decision for information, guidance, and records purposes.
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.12
The dispositive portion of the decision of the Court of Appeals reads:

SO ORDERED.10
WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
April 21, 2008 of the Director General of the IPO in Appeal No. 14-07-09 Inter Partes Case
No. 14-2005-00094 is hereby AFFIRMED.

Fredco filed a petition for review before the Court of Appeals assailing the decision of the Director General. SO ORDERED.13

Fredco filed a motion for reconsideration.

The Decision of the Court of Appeals

In its Resolution promulgated on 8 January 2009, the Court of Appeals denied the motion for lack of merit.
In its assailed decision, the Court of Appeals affirmed the decision of the Office of the Director General of the
IPO.

Hence, this petition before the Court.

The Court of Appeals adopted the findings of the Office of the Director General and ruled that the latter
correctly set aside the cancellation by the Director of the Bureau of Legal Affairs of Harvard Universitys
trademark registration under Class 25. The Court of Appeals ruled that Harvard University was able to
substantiate that it appropriated and used the marks Harvard and Harvard Veritas Shield Symbol in Class 25 The Issue

way ahead of Fredco and its predecessor New York Garments. The Court of Appeals also ruled that the records
failed to disclose any explanation for Fredcos use of the name and mark Harvard and the words USA,
The issue in this case is whether the Court of Appeals committed a reversible error in affirming the decision of
Established 1936, and Cambridge, Massachusetts within an oblong device, US Legend and Europes No. 1
the Office of the Director General of the IPO.
Brand. Citing Shangri-La International Hotel Management, Ltd. v. Developers Group of Companies, Inc.,11 the
Court of Appeals ruled:

The Ruling of this Court

90
 the commerce in the Philippines for the said period is not necessary. An applicant for
registration based on home certificate of registration need not even have used the mark or
trade name in this country.16
The petition has no merit.

Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco alleged that Harvard Universitys
There is no dispute that the mark Harvard used by Fredco is the same as the mark Harvard in the Harvard
registration is based on home registration for the mark Harvard Veritas Shield for Class 25.17
Veritas Shield Symbol of Harvard University. It is also not disputed that Harvard University was named
Harvard College in 1639 and that then, as now, Harvard University is located in Cambridge, Massachusetts,
U.S.A. It is also unrefuted that Harvard University has been using the mark Harvard in commerce since 1872. It In any event, under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293), 18 [m]arks registered under
is also established that Harvard University has been using the marks Harvard and Harvard Veritas Shield Republic Act No. 166 shall remain in force but shall be deemed to have been granted under this Act x x x,
Symbol for Class 25 goods in the United States since 1953. Further, there is no dispute that Harvard University which does not require actual prior use of the mark in the Philippines. Since the mark Harvard Veritas Shield
has registered the name and mark Harvard in at least 50 countries. Symbol is now deemed granted under R.A. No. 8293, any alleged defect arising from the absence of actual
prior use in the Philippines has been cured by Section 239.2.19 In addition, Fredcos registration was already
cancelled on 30 July 1998 when it failed to file the required affidavit of use/non-use for the fifth anniversary of
On the other hand, Fredcos predecessor-in-interest, New York Garments, started using the mark Harvard in the
the marks registration. Hence, at the time of Fredcos filing of the Petition for Cancellation before the Bureau of
Philippines only in 1982. New York Garments filed an application with the Philippine Patent Office in 1985 to
Legal Affairs of the IPO, Fredco was no longer the registrant or presumptive owner of the mark Harvard.
register the mark Harvard, which application was approved in 1988. Fredco insists that the date of actual use in
the Philippines should prevail on the issue of who has the better right to register the marks.

There are two compelling reasons why Fredcos petition must fail.

Under Section 2 of Republic Act No. 166,14 as amended (R.A. No. 166), before a trademark can be registered, it
must have been actually used in commerce for not less than two months in the Philippines prior to the filing of First, Fredcos registration of the mark Harvard and its identification of origin as Cambridge, Massachusetts
an application for its registration. While Harvard University had actual prior use of its marks abroad for a long falsely suggest that Fredco or its goods are connected with Harvard University, which uses the same mark
time, it did not have actual prior use in the Philippines of the mark Harvard Veritas Shield Symbol before its Harvard and is also located in Cambridge, Massachusetts. This can easily be gleaned from the following oblong
application for registration of the mark Harvard with the then Philippine Patents Office. However, Harvard logo of Fredco that it attaches to its clothing line:
Universitys registration of the name Harvard is based on home registration which is allowed under Section 37
of R.A. No. 166.15 As pointed out by Harvard University in its Comment:

Although Section 2 of the Trademark law (R.A. 166) requires for the registration of trademark
that the applicant thereof must prove that the same has been actually in use in commerce or
services for not less than two (2) months in the Philippines before the application for Fredcos registration of the mark Harvard should not have been allowed because Section 4(a) of R.A. No. 166
registration is filed, where the trademark sought to be registered has already been registered in prohibits the registration of a mark which may disparage or falsely suggest a connection with persons, living
a foreign country that is a member of the Paris Convention, the requirement of proof of use in or dead, institutions, beliefs x x x. Section 4(a) of R.A. No. 166 provides:
91

Section 4. Registration of trade-marks, trade-names and service- marks on the principal
register. ‒ There is hereby established a register of trade-mark, trade-names and service-
marks which shall be known as the principal register. The owner of a trade-mark, a 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:
(a) Consists of or comprises immoral, deceptive or scandalous manner, or matter which may
disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs,
or national symbols, or bring them into contempt or disrepute;
(b) x x x (emphasis supplied)
Fredcos use of the mark Harvard, coupled with its claimed origin in Cambridge, Massachusetts, obviously
suggests a false connection with Harvard University. On this ground alone, Fredcos registration of the mark
Harvard should have been disallowed.
Indisputably, Fredco does not have any affiliation or connection with Harvard University, or even with
Cambridge, Massachusetts. Fredco or its predecessor New York Garments was not established in 1936, or in
the U.S.A. as indicated by Fredco in its oblong logo. Fredco offered no explanation to the Court of Appeals or
to the IPO why it used the mark Harvard on its oblong logo with the words Cambridge, Massachusetts,
Established in 1936, and USA. Fredco now claims before this Court that it used these words to evoke a lifestyle
or suggest a desirable aura of petitioners clothing lines. Fredcos belated justification merely confirms that it
sought to connect or associate its products with Harvard University, riding on the prestige and popularity of
Harvard University, and thus appropriating part of Harvard Universitys goodwill without the latters consent.
Section 4(a) of R.A. No. 166 is identical to Section 2(a) of the Lanham Act, 20 the trademark law of the United
States. These provisions are intended to protect the right of publicity of famous individuals and institutions from
commercial exploitation of their goodwill by others.21 What Fredco has done in using the mark Harvard and the
words Cambridge, Massachusetts, USA to evoke a desirable aura to its products is precisely to exploit
commercially the goodwill of Harvard University without the latters consent. This is a clear violation of Section
4(a) of R.A. No. 166. Under Section 17(c) 22 of R.A. No. 166, such violation is a ground for cancellation of
92
Fredcos registration of the mark Harvard because the registration was obtained in violation of Section 4 of R.A.
No. 166.
Second, the Philippines and the United States of America are both signatories to the Paris Convention for the
Protection of Industrial Property (Paris Convention). The Philippines became a signatory to the Paris
Convention on 27 September 1965. Articles 6bis and 8 of the Paris Convention state:
ARTICLE 6bis
(i) 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, imitation or translation, liable to
create confusion or a mark considered by the competent authority of the country as
being already the mark of a person entitled to the benefits of the present 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.
ARTICLE 8
A trade name shall be protected in all the countries of the Union without the obligation of
filing or registration, whether or not it forms part of a trademark. (Emphasis supplied)
Thus, this Court has ruled that the Philippines is obligated to assure nationals of countries of the Paris
Convention that they are afforded an effective protection against violation of their intellectual property rights in
the Philippines in the same way that their own countries are obligated to accord similar protection to Philippine
nationals.23
Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166, as follows:
 Section 37. Rights of foreign registrants. Persons who are nationals of, domiciled in, or have a
bona fide or effective business or commercial establishment in any foreign country, which is a
party to any international convention or treaty relating to marks or trade-names, or the
repression of unfair competition to which the Philippines may be a party, shall be entitled to
the benefits and subject to the provisions of this Act to the extent and under the conditions
essential to give effect to any such convention and treaties so long as the Philippines shall
continue to be a party thereto, except as provided in the following paragraphs of this section.
xxxx
Trade-names of persons described in the first paragraph of this section shall be
protected without the obligation of filing or registration whether or not they form parts
of marks.24
x x x x (Emphasis supplied)
Thus, under Philippine law, a trade name of a national of a State that is a party to the Paris Convention, whether
or not the trade name forms part of a trademark, is protected without the obligation of filing or registration.
Harvard is the trade name of the world famous Harvard University, and it is also a trademark of Harvard
University. Under Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166, Harvard University
is entitled to protection in the Philippines of its trade name Harvard even without registration of such trade
name in the Philippines. This means that no educational entity in the Philippines can use the trade name
Harvard without the consent of Harvard University. Likewise, no entity in the Philippines can claim, expressly
or impliedly through the use of the name and mark Harvard, that its products or services are authorized,
approved, or licensed by, or sourced from, Harvard University without the latters consent.
Article 6bis of the Paris Convention has been administratively implemented in the Philippines through two
directives of the then Ministry (now Department) of Trade, which directives were upheld by this Court in
25
several cases. On 20 November 1980, then Minister of Trade Secretary Luis Villafuerte issued a
Memorandum directing the Director of Patents to reject, pursuant to the Paris Convention, all pending
applications for Philippine registration of signature and other world-famous trademarks by applicants other than
their original owners.26The Memorandum states:
93
Pursuant to the Paris Convention for the Protection of Industrial Property to which the
Philippines is a signatory, you are hereby directed to reject all pending applications for
Philippine registration of signature and other world-famous trademarks by applicants other
than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands as
Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la
Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks
should be asked to surrender their certificates of registration, if any, to avoid suits for
damages and other legal action by the trademarks foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance.27
In a Memorandum dated 25 October 1983, then Minister of Trade and Industry Roberto Ongpin affirmed the
earlier Memorandum of Minister Villafuerte. Minister Ongpin directed the Director of Patents to implement
measures necessary to comply with the Philippines obligations under the Paris Convention, thus:
1. Whether the trademark under consideration is well-known in the
Philippines or is a mark already belonging to a person entitled to the
benefits of the CONVENTION, this should be established, pursuant to
Philippine Patent Office procedures in inter partes and ex parte cases,
according to any of the following criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark being considered is
already well-known in the Philippines such that permission for its use by other than its
original owner will constitute a reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof that goods
bearing the trademark are sold on an international scale, advertisements, the establishment of
 factories, sales offices, distributorships, and the like, in different countries, including volume
or other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of another
country or countries, taking into consideration the dates of such registration;
(d) that the trademark has been long established and obtained goodwill and general
international consumer recognition as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming ownership and has the right to
registration under the provisions of the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include tradenames,
service marks, logos, signs, emblems, insignia or other similar devices used for
identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of,
trademarks which constitute a reproduction, translation or imitation of a trademark owned by
a person, natural or corporate, who is a citizen of a country signatory to the PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY.
x x x x28 (Emphasis supplied)
In Mirpuri, the Court ruled that the essential requirement under Article 6bis of the Paris Convention is that the
trademark to be protected must be well-known in the country where protection is sought. 29 The Court declared
that the power to determine whether a trademark is well-known lies in the competent authority of the country of
registration or use.30 The Court then stated that the competent authority would either be the registering authority
if it has the power to decide this, or the courts of the country in question if the issue comes before the courts. 31
To be protected under the two directives of the Ministry of Trade, an internationally well-known mark need not
be registered or used in the Philippines.32 All that is required is that the mark is well-known internationally and
in the Philippines for identical or similar goods, whether or not the mark is registered or used in the Philippines.
The Court ruled in Sehwani, Incorporated v. In-N-Out Burger, Inc.:33
94
The fact that respondents marks are neither registered nor used in the Philippines is of
no moment. The scope of protection initially afforded by Article 6bis 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. Part I, Article 2(3) thereof provides:
(3) [Factors Which Shall Not Be Required] (a) A Member State shall not require, as a
condition for determining whether a mark is a well-known mark:
(i) that the mark has been used in, or that the mark has been registered or that an application
for registration of the mark has been filed in or in respect of, the Member State:
(ii) that the mark is well known in, or that the mark has been registered or that an application
for registration of the mark has been filed in or in respect of, any jurisdiction other than the
Member State; or
(iii) that the mark is well known by the public at large in the Member State. 34 (Italics in the
original decision; boldface supplied)
Indeed, Section 123.1(e) of R.A. No. 8293 now categorically states that a mark which is considered by the
competent authority of the Philippines to be well-known internationally and in the Philippines, whether or
not it is registered here, cannot be registered by another in the Philippines. Section 123.1(e) does not require
that the well-known mark be used in commerce in the Philippines but only that it be well-known in the
Philippines. Moreover, Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names
and Marked or Stamped Containers, which implement R.A. No. 8293, provides:
Rule 102. Criteria for determining whether a mark is well-known. In determining whether a
mark is well-known, the following criteria or any combination thereof may be taken into
account:
(a) the duration, extent and geographical area of any use of the mark, in particular, the
duration, extent and geographical area of any promotion of the mark, including advertising or
publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the
mark applies;
(b) the market share, in the Philippines and in other countries, of the goods and/or services to
which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of registration attained by the mark in the world;
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is a well-known
mark; and
(l) the presence or absence of identical or similar marks validly registered for or used on
identical or similar goods or services and owned by persons other than the person claiming
that his mark is a well-known mark. (Emphasis supplied)
95
Since any combination of the foregoing criteria is sufficient to determine that a mark is well-known, it is
clearly not necessary that the mark be used in commerce in the Philippines. Thus, while under the territoriality
principle a mark must be used in commerce in the Philippines to be entitled to protection, internationally well-
known marks are the exceptions to this rule.
In the assailed Decision of the Office of the Director General dated 21 April 2008, the Director General found
that:
Traced to its roots or origin, HARVARD is not an ordinary word. It refers to no other than
Harvard University, a recognized and respected institution of higher learning located in
Cambridge, Massachusetts, U.S.A. Initially referred to simply as the new college, the
institution was named Harvard College on 13 March 1639, after its first principal donor, a
young clergyman named John Harvard. A graduate of Emmanuel College, Cambridge in
England, John Harvard bequeathed about four hundred books in his will to form the basis of
the college library collection, along with half his personal wealth worth several hundred
pounds. The earliest known official reference to Harvard as a university rather than college
occurred in the new Massachusetts Constitution of 1780.
Records also show that the first use of the name HARVARD was in 1638 for educational
services, policy courses of instructions and training at the university level. It has a Charter. Its
first commercial use of the name or mark HARVARD for Class 25 was on 31 December
1953 covered by UPTON Reg. No. 2,119,339 and 2,101,295. Assuming in arguendo, that the
Appellate may have used the mark HARVARD in the Philippines ahead of the Appellant, it
still cannot be denied that the Appellants use thereof was decades, even centuries, ahead of
the Appellees. More importantly, the name HARVARD was the name of a person whose
deeds were considered to be a cornerstone of the university. The Appellants logos, emblems
or symbols are owned by Harvard University. The name HARVARD and the logos, emblems
or symbols are endemic and cannot be separated from the institution. 35
Finally, in its assailed Decision, the Court of Appeals ruled:
Records show that Harvard University is the oldest and one of the foremost educational
institutions in the United States, it being established in 1636. It is located primarily in
Cambridge, Massachusetts and was named after John Harvard, a puritan minister who left to
the college his books and half of his estate.
 WHEREFORE, we DENY the petition. We AFFIRM the 24 October 2008 Decision and 8 January 2009
The mark Harvard College was first used in commerce in the United States in 1638 for
educational services, specifically, providing courses of instruction and training at the Resolution of the Court of Appeals in CA-G.R. SP No. 103394.
university level (Class 41). Its application for registration with the United States Patent and
Trademark Office was filed on September 20, 2000 and it was registered on October 16,
SO ORDERED.
2001. The marks Harvard and Harvard Ve ri tas Shield Symbol were first used in commerce
in the the United States on December 31, 1953 for athletic uniforms, boxer shorts, briefs,
caps, coats, leather coats, sports coats, gym shorts, infant jackets, leather jackets, night shirts,
shirts, socks, sweat pants, sweatshirts, sweaters and underwear (Class 25). The applications
for registration with the USPTO were filed on September 9, 1996, the mark Harvard was
registered on December 9, 1997 and the mark Harvard Ve ri tas Shield Symbol was registered
on September 30, 1997.36

We also note that in a Decision37 dated 18 December 2008 involving a separate case between Harvard
University and Streetward International, Inc.,38 the Bureau of Legal Affairs of the IPO ruled that the mark
Harvard is a well-known mark. This Decision, which cites among others the numerous trademark registrations
of Harvard University in various countries, has become final and executory.

There is no question then, and this Court so declares, that Harvard is a well-known name and mark not only in
the United States but also internationally, including the Philippines. The mark Harvard is rated as one of the
most famous marks in the world. It has been registered in at least 50 countries. It has been used and promoted
extensively in numerous publications worldwide. It has established a considerable goodwill worldwide since
the founding of Harvard University more than 350 years ago. It is easily recognizable as the trade name and
mark of Harvard University of Cambridge, Massachusetts, U.S.A., internationally known as one of the leading
educational institutions in the world. As such, even before Harvard University applied for registration of the
mark Harvard in the Philippines, the mark was already protected under Article 6bis and Article 8 of the Paris
Convention. Again, even without applying the Paris Convention, Harvard University can invoke Section 4(a) of
R.A. No. 166 which prohibits the registration of a mark which may disparage or falsely suggest a connection
withpersons, living or dead, institutions, beliefs x x x.

96
G.R. No. 186088 (g) [Petitioner's] registration and use of the applied for mark in connection with goods under Class 11 will
weaken the unique and distinctive significance of mark PHILIPS and will tarnish, degrade or dilute the
WILTON DY and/or PHILITES ELECTRONIC & LIGHTING PRODUCTS, Petitioner distinctive quality of Opposer's trademark and will result in the gradual attenuation or whittling away of the
vs value of Opposer's trademark, in violation of Opposer's proprietary rights. 6
KONINKLIJKE PHILIPS ELECTRONICS, N.V., Respondent

DECISION

SERENO, CJ.:

This Petition for Review on Certiorari1 filed by petitioner Wilton Dy and/or Philites Electronic & Lighting
Products ("PHILITES") assails the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No.
103350. The appellate court reversed and set aside the Decision4 of the IPP Office of the Director General (IPP-
DG), which affirmed the Decision5 of the Intellectual Property Philippines Bureau of Legal Affairs (IPP-BLA)
On 8 August 2006, petitioner filed a Verified Answer, stating that its PHILITES & LETTER P DEVICE
upholding petitioner's trademark application.
trademark and respondent's PHILIPS have vast dissimilarities in terms of spelling, sound and meaning.7
THE ANTECEDENT FACTS
At the conclusion of the hearing, on 9 November 2006, IPP-BLA Director Estrellita Beltran-Abelardo rendered
a Decision8 denying the Opposition filed by respondent PHILIPS. The dispositive portion of the Decision reads:
On 12 April 2000, petitioner PHILITES filed a trademark application (Application Serial Number 4-2000-
002937) covering its fluorescent bulb, incandescent light, starter and ballast. After publication, respondent
WHEREFORE, premises considered the OPPOSITION filed by Koninklijke Philips Electronics, N.V. is
Koninklijke Philips Electronics, N .V. ("PHILIPS") filed a Verified Notice of Opposition on 17 March 2006,
hereby DENIED. Accordingly, Application Serial no. 4-2000-002937 filed by Respondent-Applicant, Wilton
alleging the following:
Dy and/or Philites Electronic & Lighting Products on 12 April 2000 for the mark "PHILITES & LETTER P
DEVICE" used on fluorescent bulb, incandescent light starter, ballast under class 11, is as it is,
(a) The approval of Application Serial No. 4-2000-002937 is contrary to the following provisions of Republic hereby GRANTED.
Act No. [RAJ 8293 or the Intellectual Property Code of the Philippines (IP Code): Sections 123.l(d), (i) and
(iii), 123.l(e), 147, and 168.
Let the filewrapper of "PHILITES & LETTER P DEVICE," subject matter of this case together with this
Decision be forwarded to the Bureau of Trademarks (BOT) for appropriate action.
(b) The approval of Application Serial No. 4-2000-002937 will cause grave and irreparable damage and injury
to oppose.
SO ORDERED.
(c) The use and registration of the applied for mark by [petitioner] will mislead the public as to the origin,
In upholding petitioner's trademark application, the IPP-BLA stated that assuming respondent's mark was well-
nature, quality, and characteristic of the goods on which it is affixed;
known in the Philippines, there should have been prior determination of whether or not the mark under
application for registration was "identical with, or confusingly similar to, or constitutes a translation of such
(d) [Petitioner's] application for registration is tantamount to fraud as it seeks to register and obtain legal well-known mark in order that the owner of the well-known mark can prevent its registration." 9 From the
protection for an identical or confusingly similar mark that clearly infringes upon the established rights of the evidence presented, the IPP-BLA concluded that the PHILIPS and PHILITES marks were so unlike, both
[respondent] over its registered and internationally well-known mark. visually and aurally. It held that no confusion was likely to occur, despite their contemporaneous use, based on
the following observations:
(e) The registration of the trademark PHILITES & LETTER P DEVICE in the name of the [petitioner] will
violate the proprietary rights and interests, business reputation and goodwill of the [respondent] over its The Philips shield mark has four stars in different sizes located at the north east and south west portions inside a
trademark, considering that the distinctiveness of the trademark PHILIPS will be diluted. circle within the shield. There are three wavy lines dissecting the middle of the circle. None of these appear in
the respondent's mark.
(t) The registration of the applied for mark will not only prejudice the Opposer, but will also cause [petitioner]
to unfairly profit commercially from the goodwill, fame and notoriety of Opposer's trademark and reputation.

97
[Respondent] declares that the word Philips is the surname of the brothers who founded the Philips company
engaged in manufacturing and selling lighting products. [Petitioner] on the other hand has testified that the word
Philites is coined from the word 'Philippines' and 'lights,' hence 'Philites.' This Bureau finds that there is no
dictionary meaning to the [petitioner's] mark. It is a coined and arbitrary word capable of appropriation as a
trademark. x x x
Moreover, by mere pronouncing the two marks, the phonetic sounds produced when each mark is uttered are
not the same. The last syllable of respondent's mark is uttered in a long vowel sound, while the last vowel of the
opposer's mark is not.
x x x. This Bureau believes that opposer has no monopoly over the color or diameter or shape of a light bulb or
packaging shape unless registrations were secured to protect the same. The images of the packages are
reproduced below for reference.
x x x. For one, respondent adopts a yellow to light yellow dominant color while the oppose uses an orange
yellow hue. The mark "Philites" is printed in yellow with light blue background as compared to the "Philips"
mark typed in white against a black background.
It is fundamental in trademark jurisprudence that color alone, unless displayed in an arbitrary design docs not
function as a trademark.
Secondly, there appears to be other advertising slogans that appear in respondent's package such as the words,
"new", "prolong lite life", "E-coat finished" and "with additional 35% more than ordinary". These phrases are
absent in opposer's package. These phrases can be considered in the nature of descriptive terms that can be
appropriated by anyone.10
98
Upon appeal, the IPP-DG rendered a Decision11 on 16 April 2008, affirming the ruling of the IPP-BLA as
follows:
WHEREFORE, premises considered, that instant appeal is hereby DISMISSED for lack of merit. Accordingly,
Decision No. 2006-125 of the Director of the Bureau of Legal Affairs dated 09 November 2006, is hereby
AFFIRMED.
Let a copy of this Decision as well as the trademark application and records be furnished and returned to the
Director of Bureau of Legal Affairs for appropriate action. Further, let also the Directors of the Bureau of
Trademarks, the Administrative, Pinancial and Human Resources Development Services Bureau, and the library
of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for
information, guidance and records purposes.
SO ORDERED.
In so ruling, the IPP-DG noted that "[t]he dominant feature of the [respondent's] trademark is 'PHILIPS' while
that of the [petitioner's] trademark is 'PHILITES.' While the first syllables of the marks are identical - 'PHI' - the
second syllables are not. The differences in the last syllable accounted for the variance of the trademarks
visually and aurally."12 Moreover, there were "glaring differences and dissimilarities in the design and general
appearance of the Philips shield emblem mark and the letter 'P' of Philites mark." 13 Thus, "even if the
[petitioner's] products bearing the trademark PHILIPS are placed side by side with other brands, the purchaser
would not be confused to pick up the [petitioner's] product if this is his choice or preference, unless the
resemblance in the appearance of the trademarks is so glaring which [it] is not in this case." 14
As regards the issue of petitioner submitting a trademark drawing different from that used in the packaging, the
IPP-DG noted that this case involved an opposition to the registration of a mark, while labels and packaging
were technically not a part thereof.15 At best, respondent supposedly had the remedy of filing a case for
trademark infringement and/or unfair competition.16
Upon intermediate appellate review, the CA rendered a Decision 17 on 7 October 2008. The dispositive portion
herein reads:
WHEREFORE, premises considered, the Petition for Review is GRANTED. The Decision dated 16 April 2008
of the Director General of the Intellectual Property Office in Appeal No. 14-06-28; IPC No. 14-2006- 00034 is
REVERSED and SET ASIDE. The application for trademark registration (Application Serial Number 4-2000-
002937) of respondent Wilton Dy and/or Philites Electronic & Lighting Products is DISMISSED. Costs against
respondent.
SO ORDERED.
In so ruling, the CA reasoned that the "drawing of the trademark submitted by [petitioner] has a different
appearance from that of [petitioner's] actual wrapper or packaging that contain the light bulbs, which We find
confusingly similar with that of [respondent's] registered trademark and packaging." 18 Moreover, it found to be
"self-serving [petitioner's] asseveration that the mark 'PHILITES' is a coined or arbitrary mark from the words
'Philippines' and 'lights.' Of all the marks that [petitioner] could possibly think of for his light bulbs, it is odd (d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or
that [petitioner] chose a mark with the letters 'PHILI,' which are the same prevalent or dominant five letters priority date, in respect of:
found in [respondent's] trademark 'PHILIPS' for the same products, light bulbs." 19 Hence, the appellate court
concluded that petitioner had intended to ride on the long-established reputation and goodwill of respondent's (i) The same goods or services, or
trademark.20
(ii) Closely related goods or services, or
On 25 October 2008, petitioner filed a Motion for Reconsideration, which was denied in a Resolution21 issued
by the CA on 18 December 2008. (iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

Hence, this petition.

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark whid1 is considered by the
competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it
Respondent filed its Comment22 on 23 June 2009, and petitioner filed its Reply23 on 10 November 2009. is registered here, as being already the mark of a person other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in determining whether a mark is well-known, account
THE ISSUES shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philipines which has been obtained as a result of the promotion of the mark.28
From the foregoing, we reduce the issues to the following:
Respondent's mark is a registered and well-known mark in the
1. Whether or not respondent's mark is a registered and well-known mark in the Philippines; and Philippines

2. Whether or not the mark applied for by petitioner is identical or confusingly similar with that of respondent. There is no question that respondent's mark PHILIPS is already a registered and well-known mark in the
Philippines.
OUR RULING
As we have said in Fredco Manufacturing Corporation v. Harvard University,29 "[i]ndeed, Section 123.l(e) of
R.A. No. 8293 now categorically states that 'a mark which is considered by the competent authority of the
The Petition is bereft of merit.
Philippines to be well-known internationally and in the Philippines, whether or not it is registered here,' cannot
be registered by another in the Ph iii ppines. "30
A trademark is "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
Rule l00(a) of the Rules and Regulations on Trademarks, Service Marks, Tradenames and Marked or Stamped
manufactured, sold, or dealt by othcrs." 24 It is "intellectual property deserving protection by law," 25 and
Containers defines "competent authority" in the following manner:
"susceptible to registration if it is crafted fancifully or arbitrarily and is capable of identifying and
distinguishing the goods of one manufacturer or seller from those of another." 26
(c) "Competent authority" for purposes of determining whether a mark is well-known, means the Court, the
Director General, the Director of the Bureau of Legal Affairs, or any administrative agency or office vested
Section 122 of the Intellectual Property Code of the Philippines (IPC) provides that rights to a mark shall be
with quasi-judicial or judicial jurisdiction to hear and adjudicate any action to enforce the rights to a mark.
acquired through registration validly done in accordance with the provisions of this law.27 Corollary to that rule,
Section 123 provides which marks cannot be registered.
We thus affirm the following findings of the CA, inasmuch as the trademark of PHILIPS is a registered and
well-known mark, as held in the Supreme Court Decision in Philips Export B. V, v. CA:31
Respondent opposes petitioner's application on the ground that PHILITES' registration will mislead the public
over an identical or confusingly similar mark of PHILIPS, which is registered and internationally well-known
mark. Specifically, respondent invokes the following provisions of Section 123: Petitioner (PHILIPS) is the registered owner in the Philippines of the "PHILIPS" and "PHILIPS SHIELD
EMBLEM" trademarks, as shown by Certificates of Registration Nos. 42271 and 42270. The Philippine
trademark registrations of petitioner's "PHILIPS" and "PHILIPS SHIELD EMBLEM" are also evidenced by
Section 123. Registrability. - 123 .1. A mark cannot be registered if it:
Certificates of Registration Nos. R- 1651, R-29134, R-1674, and R-28981. The said registered trademarks
"PHILIPS" and "PHILIPS SHIELD EMBLEM" cover classes 7, 8, 9, 10, 11, 14, and 16. The assailed Decision
xxx itself states that "(T)he Appellant's trademark is already registered and in use in the Philippines". It also appears
that worldwide, petitioner has thousands of trademark registrations x x x in various countries. As found by the
99
High Court in Philips Export B.V. vs Court of Appeals, PHILIPS is a trademark or trade name which was The confusing similarity becomes even more prominent when we examine the entirety of the marks used by
registered as far back as 1922, and has acquired the status of a well-known mark in the Philippines and petitioner and respondent, including the way the products are packaged. In using the holistic test, we find that
internationally as well.32 there is a confusing similarity between the registered marks PHILIPS and PHILITES, and note that the mark
petitioner seeks to register is vastly different from that which it actually uses in the packaging of its products.
Petitioner seeks to register a mark We quote with approval the findings of the CA as follows:
nearly resembling that of respondent,
which may likely to deceive or cause Applying the holistic test, entails a consideration of the entirety of the marks as applied to the products,
confusion among consumers. including the labels and packaging, in determining confusing similarity. A comparison between petitioner's
registered trademark "PHILIPS'' as used in the wrapper or packaging of its light bulbs and that of respondent's
Despite respondent's diversification to numerous and varied industries, 33 the records show that both parties are applied for trademark "PHILITES" as depicted in the container or actual wrapper/packaging of the latter's light
engaged in the same line of business: selling identical or similar goods such as fluorescent bulbs, incandescent bulbs will readily show that there is a strong similitude and likeness between the two trademarks that will likely
lights, starters and ballasts. cause deception or confusion to the purchasing public. The fact that the parties' wrapper or packaging reflects
negligible differences considering the use of a slightly different font and hue of the yellow is of no moment
In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the dominancy because taken in their entirety, respondent's trademark "PHILITES" will likely cause confusion or deception to
the ordinary purchaser with a modicum of intelligence. 38
test, and the holistic or totality test.34

WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari is hereby DENIED. The 7
On one hand, 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. October 2008 Decision and 18 December 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 103350
Duplication or imitation is not necessary; neither is it required that the mark sought to be registered suggests an are hereby AFFIRMED.
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. " 35 SO ORDERED.

On the other hand, 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."361âwphi1

Applying the dominancy test to this case requires us to look only at the mark submitted by petitioner in its
application, while we give importance to the aural and visual impressions the mark is likely to create in the
minds of the buyers. We agree with the findings of the CA that the mark "PHILITES" bears an uncanny
resemblance or confusing similarity with respondent's mark "PHILIPS," to wit:

Applying the dominancy test in the instant case, it shows the uncanny resemblance or confusing similarity
between the trademark applied for by respondent with that of petitioner's registered trademark. An examination
of the trademarks shows that their dominant or prevalent feature is the five-letter "PHILI", "PHILIPS" for
petitioner, and "PHILITES" for respondent. The marks are confusingly similar with each other such that an
ordinary purchaser can conclude an association or relation between the marks. The consuming public does not
have the luxury of time to ruminate the phonetic sounds of the trademarks, to find out which one has a short or
long vowel sound. At bottom, the letters "PHILI'' visually catch the attention of the consuming public and the
use of respondent's trademark will likely deceive or cause confusion. Most importantly, both trademarks are
used in the sale of the same goods, which are light bulbs.37

100
G.R. No. 198889
UFC PHILIPPINES, INC. (now merged with NUTRI-ASIA, INC., with NUTRI-ASIA, INC. as the
surviving entity),Petitioner,
vs.
BARRIO FIESTA MANUFACTURING CORPORATION, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
For our disposition is a petition for review on certiorari under Rule 45 seeking to annul and set aside the June
23, 2011 Decision1 and the October 4, 2011 Resolution2 of the Court of Appeals in CA-G.R. SP No. 107570,
which reversed and set aside the March 26, 2008 Decision3 of the Bureau of Legal Affairs of the Intellectual
Property Office (IPO-BLA) and the January 29, 2009 Decision4 of the Director General of the IPO.
Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized and existing under Philippine laws.5 It is
the emergent entity in a merger with UFC Philippines, Inc. that was completed on February 11,
2009.6 Respondent Barrio Fiesta Manufacturing Corporation (respondent) is likewise a corporation organized
and existing under Philippine laws.
On April 4, 2002, respondent filed Application No. 4-2002-002757 for the mark "PAPA BOY & DEVICE" for
goods under Class 30, specifically for "lechon sauce." 7 The Intellectual Property Office (IPO) published said
application for opposition in the IP Phil. e-Gazette released on September 8, 2006. The mark appears as follows:
On December 11, 2006, petitioner filed with the IPO-BLA a Verified Notice of Opposition to the above-
mentioned application and alleged that:
1. The mark "PAPA" for use on banana catsup and other similar goods was first used [in] 1954 by Neri Papa,
and thus, was taken from his surname;
101
2. After using the mark "PAP A" for about twenty-seven (27) years, Neri Papa subsequently assigned the mark
"PAPA" to Heman D. Reyes who, on September 17, 1981, filed an application to register said mark "PAP A"
for use on banana catsup, chili sauce, achara, banana chips, and instant ube powder;
3. On August 14, 1983, Heman D. Reyes was issued Certificate of Registration No. 32416;
4. [Certificate of] Registration No. 32416 was subsequently assigned to the following in successive fashion:
Acres & Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC Philippines, Inc., and Opposer UFC
Philippines, Inc.;
5. Last October 28, 2005, Heinz-UFC Philippines, Inc. filed Application Serial No. 4-2005-010788 which, in
effect, is a re-registration of Registration No. 32416 which expired on August 11, 2003;
6. Heman D. Reyes also filed on March 04, 1982 an application to register in the Supplemental Register the
"PAPA BANANA CATSUP Label";
7. On August 11, 1983, Heman D. Reyes was issued Certificate of Registration No. SR-6282 which was
subsequently assigned to Acres & Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC Philippines, Inc.;
8. After its expiration, Opposer filed on November 15, 2006 Trademark Application Serial No. 4-2006-012346
for the re-registration of the "PAP A Label Design";
9. The mark "PAP A KETSARAP" for use on banana sauce falling under Class 30 was also registered in favor
of Acres & Acres Food, Inc. under Registration No. 34681 issued on August 23, 1985 and renewed last August
23, 2005 by Heinz-UFC Philippines, Inc. for ten (10) years;
10. On November 07, 2006, Registration No. 34681 was assigned to Opposer;
11. Opposer has not abandoned the use of the mark "PAP A" and the variations thereof as Opposer has
continued their use up to the present;
12. The mark "PAPA BOY & DEVICE" is identical to the mark "PAPA" owned by Opposer and duly
registered in its favor, particularly the dominant feature thereof;
13. [With the] dominant feature of respondent-applicant's mark "PAPA BOY & DEVICE", which is Opposer's
"PAPA" and the variations thereof, confusion and deception is likely to result: The consuming public,
particularly the unwary customers, will be deceived, confused, and mistaken into believing that respondent-
applicant's goods come from Opposer or are authorized by Opposer to Opposer's prejudice, which is particularly
true considering that Opposer's sister company, Southeast Asia Food, Inc., and its predecessors-in-interest have
been major manufacturers and distributors of lechon sauce and other table sauces since 1965 under its registered
mark "Mang Tomas";
14. Respondent-applicant's mark "PAPA BOY & DEVICE" which nearly resembles Opposer's mark "PAPA"
and the variations thereof will impress upon the gullible or unsuspecting public that it is the same or related to
Opposer as to source because its dominant part is the same as Opposer's mark and, thus, will likely be mistaken
to be the mark, or related to, or a derivative or variation of, Opposer's mark;
15. The goods covered by respondent-applicant's application fall under Class 30, the same Class under which
Opposer's goods enumerated in its earlier issued registrations;
16. The test of dominancy is now explicitly incorporated into law in Section 155 .1 of the IP Code which
defines infringement as the colorable imitation of a registered mark or a dominant feature thereof, and is
provided for by jurisprudence;
17. As a corporation also engaged in the food business, Respondent-applicant knew and/or ought to know that
Opposer and its predecessors-in-interest have been using the mark "PAPA" and the variations thereof for the
last fifty-two (52) years while its sister company is engaged in the business of manufacturing and distributing
"lechon sauce" and other table sauces for the last forty-one (41) years;
18. The approval of the subject application will violate Opposer's right to the exclusive use of its registered
mark "PAPA" and the variations thereof per Section 138 of the IP Code;
19. The approval of the subject application has caused and will continue to cause great and irreparable damage
and injury to Opposer;
20. Respondent-applicant filed the subject application fraudulently and in bad faith; and
8 Opposer's mark "PAPA KETSARAP": Respondent-applicant's mark "PAPABOY & DEVICE" is an arbitrary
21. Respondent-applicant is not entitled to register the subject mark in its favor.
In its verified opposition before the IPO, petitioner contended that "PAPA BOY & DEVICE" is confusingly
similar with its "PAPA" marks inasmuch as the former incorporates the term "PAP A," which is the dominant
feature of petitioner's "PAPA" marks. Petitioner averred that respondent's use of "PAPA BOY & DEVICE"
mark for its lechon sauce product, if allowed, would likely lead the consuming public to believe that said lechon
sauce product originates from or is authorized by petitioner, and that the "PAPA BOY & DEVICE" mark is a
variation or derivative of petitioner's "PAPA" marks. Petitioner argued that this was especially true considering
that petitioner's ketchup product and respondent's lechon sauce product are related articles that fall under the
same Class 30.9
Petitioner alleged that the registration of respondent's challenged mark was also likely to damage the petitioner,
considering that its former sister company, Southeast Asia Food, Inc., and the latter's predecessors-in-interest,
had been major manufacturers and distributors of lechon and other table sauces since 1965, such as products
employing the registered "Mang Tomas" mark.
In its Verified Answer, respondent argued that there is no likelihood of confusion between petitioner's family of
"PAPA" trademarks and respondent's "PAPA BOY & DEVICE" trademark. Respondent raised affirmative
defenses and we quote the relevant ones below:
102
3. Opposer cites several of its following marks in support of its opposition to the application but an examination
of said marks [reveals] that these have already expired and/or that no confusing similarity exists x xx;
4. Assuming that the mark "PAPA KETSARAP" had been timely renewed on August 23, 2005 for "banana
sauce" under Class 30, the same is not a hindrance to the successful registration of the mark "PAPA BOY &
DEVICE": Jurisprudence provides that a certificate of registration confers upon the trademark owner the
exclusive right to use its own symbol only to those goods specified in the certificate subject to the conditions
and limitations stated therein;
5. As a result, Opposer's right to use the mark "PAPAKETSARAP" is limited to the products covered by its
certificate of registration which is Class 30 for banana sauce;
6. Contrary to Opposer's belief, the dominant features of Respondent-applicant's mark "PAPA BOY &
DEVICE" are the words "PAPA BOY" and the representation of a smiling hog-like character gesturing the
thumbs-up sign and wearing a traditional Filipino hat and scarf while the dominant feature of Opposer's mark
"PAPA KETSARAP" are the words "Papa" and "Ketsarap", not the word "Papa"; and the word "Ketsarap " is
more prominently printed and displayed in the foreground than the word "Papa" for which reasons opposer's
reference to the Dominancy Test fails;
7. Opposer's allegation that the registration of Respondent-applicant's mark "PAPA BOY & DEVICE" will
damage and prejudice the mark "MANG TOMAS" is irrelevant considering that Opposer's basis for filing this
opposition is the alleged confusing similarity between Respondent-applicant's mark and Opposer's mark "PAPA
KETSARAP", not the mark "MANG TOMAS";
8. Respondent-applicant's mark "PAPA BOY & DEVICE" is neither identical nor confusingly similar to
mark which differs in overall sound, spelling, meaning, style, configuration, presentation, and appearance from
Opposer's mark "PAPA KETSARAP";
9. The dissimilarities between the marks are so distinct, thus, confusion is very unlikely: While Opposer's mark
is a plain word mark, Respondent-applicant's mark "PAPA BOY & DEVICE" is much more intricate and
distinctive such as Opposer's mark not having the words "Lechon Sauce" printed inside a blue ribbon-like
device which is illustrated below the words "PAPA BOY", Opposer's mark not having a prominent smiling hog-
like character gesturing a thumbs-up sign and wearing a Filipino hat and scarf stands beside the words "PAPA
BOY", and Opposer's mark not having the words "Barrio Fiesta" albeit conspicuously displayed above the
mark, all which leave no doubt in the consumer's mind on the product that he is purchasing;
10. Aside from the fact that Respondent-applicant's mark "PAPA BOY & DEVICE" is distinct and different in
appearance, spelling, sound, meaning, and style from Opposer's mark "PAPA KETSARAP", the difference in
the goods covered by both marks is obvious: Since the goods covered by Respondent-applicant's mark is
unrelated and non-competing to those covered by Opposer's mark, the doctrine allowing the registrations of
marks covering unrelated and non-competing goods as enunciated by the Supreme Court is therefore applicable
in this case;
11. Respondent-applicant's mark cannot be confusingly similar to Opposer's mark considering that the products
covered by these marks are different: While Respondent-applicant's mark "PAPA BOY & DEVICE" covers
lechon sauce under Class 30, Opposer's mark "PAPA KETSARAP" covers banana sauce;

12. If a consumer is in the market for banana sauce, he will not buy lechon sauce and vice-versa and as a result,
the margin of error in the acquisition of one from the other is simply remote;

13. Respondent-applicant is the exclusive owner of the mark "PAPA BOY & DEVICE" for lechon sauce under
Class 30: The words "PAPA BOY" is a combination of the nickname of Bonifacio Ongpauco who is one of
Respondent-applicant's incorporators and founders" BOY"- and the word "PAPA" as Bonifacio Ongpauco's
mother, Sixta P. Evangelista, had been fondly known as "Mama Chit", making Respondent-applicant the prior
adopter, user, and applicant of the mark "PAPA BOY & DEVICE" in the Philippines;

14. To protect its ownership over the mark "PAPA BOY & DEVICE" considering that it is the first to adopt and
use said mark, Respondent-applicant applied for its registration under Application Serial No. 4-2002-002757 for
Class 30, and said application was found registrable by the Examiner as. a consequence of which the same was
recommended for allowance after undergoing a thorough process of examination, which recommendation was
then approved by the Director of the Bureau of Trademarks (BOT);

15. Respondent-applicant's mark "PAPA BOY & DEVICE" has been commercially used in the Philippines; 2. The mark "PAPA" as it appeared upon re-registration of Certificate No. 32416, under Application No. 4-
2005-010788 for Classes 29 and 30 goods;12
16. Respondent-applicant's mark "PAPA BOY & DEVICE" has been promoted and advertised for a
considerable duration of time and over wide geographical areas: Respondent-applicant has invested tremendous
amount of resources in the promotion of its mark "PAPA BOY & DEVICE" through various media including
print publications and promotional materials;

17. The widespread local commercial use of the subject mark by Respondent-applicant to distinguish and
identify its various high-quality consumer products has earned Respondent-applicant a well-deserved business
reputation and goodwill;

18. Respondent-applicant's mark is distinctive and capable of identifying its goods and distinguishing them
from those offered for sale by others in the market including Opposer's goods for which reason no confusion
will result because Respondent-applicant's mark is for lechon sauce while Opposer's mark is for banana sauce;
and

19. The presence of a common prefix "PAPA" in the marks of both parties does not render said marks identical
or confusingly similar: Opposer cannot exclusively appropriate said prefix considering that other marks such as
"Papa Heinz Pizza", "Papa Heinz Sausage", "Papa Beaver", "Papa Pop", "Pizza Papa John's & Design",
"Papadoods", and "Papa in Wine and Device" are valid and active. 10

Petitioner's mark and its variations appear as follows: 3. "PAPA LABEL DESIGN" under Registration No. 4-2006-012364·13 and

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

103
 The IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's Opposition and rejecting
respondent's application for "PAPA BOY & DEVICE." The fallo of said decision reads as follows:

WHEREFORE, the VERIFIED NOTICE OF OPPOSITION filed by UFC Philippines, Inc. is, as it is hereby,
SUSTAINED. Consequently, Application Serial No. 4-2002-002757 for the mark "PAPA BOY & DEVICE"
for lechon sauce under Class 30 filed on April 04, 2002 by Barrio Fiesta Manufacturing Corporation, is, as it is
hereby, REJECTED.

Let the file wrapper of PAPA BOY & Device subject matter of this case be forwarded to the Bureau of
Trademarks (BOT) for appropriate action in accordance with this Decision.15

Respondent filed an appeal before the IPO Director General, who found it unmeritorious, and disposed of the
case in the following manner:

WHEREFORE, the instant appeal is hereby DISMISSED. Let a copy of this Decision as well as the trademark
application and records be furnished and returned to the Director of the Bureau of Legal Affairs for appropriate
action. Further, let also the Director of the Bureau of Trademarks and the library of the Documentation,
Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance,
and records purposes."16
4. "PAPA KETSARAP" under Certificate of Registration No. 34681, for banana sauce (Class 30). 14
DECISION OF THE COURT OF APPEALS

Respondent then filed a petition with the Court of Appeals, questioning the above decision of the IPO Director
General that affirmed the decision of the IPO Bureau of Legal Affairs Director, which disallowed respondent's
application for trademark registration. Respondent's arguments before the Court of Appeals are quoted below:

A.

REGISTRATION NOS. 32416 AND 42005010788 ISSUED FOR THE "PAPA" MARK AND
REGISTRATION NOS. SR-6282 AND 42006012364 ISSUED FOR THE TRADEMARK "PAPA BANANA
CATSUP LABEL/PAPA LABEL DESIGN" SHOULD NOT BE USED AS BASIS IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY.

B.

THERE IS NO CONFUSING SIMILARITY BETWEEN PETITIONER-APPLICANT'S "PAPA BOY &

DEVICE" AND RESPONDENT'S "PAPA KETSARAP" MARK.

C.
PROCEEDINGS BEFORE THE INTELLECTUAL PROPERTY OFFICE
PETITIONER-APPLICANT IS ENTITLED TO THE REGISTRATION OF THE MARK "PAPA BOY &
The case was referred to mediation but the parties failed to arrive at an amicable settlement. The case was thus DEVICE."
set for preliminary conference. Subsequently, the IPO-BLA directed the parties to file their respective position
papers and draft decisions.
104
D.
THE OPPOSITION STATES NO CAUSE OF ACTION, AND HENCE, SHOULD BE DENIED
OUTRIGHT.17
As regards the first ground, the Court of Appeals held:
Records show that respondent UFC has Certificates of Registration for the trademarks PAPA, PAPA BANANA
CATSUP label and PAPA KETSARAP. A closer look at the respective Certificate[ s] of Registration of the
aforementioned marks, however, reveals that at the time the trademark application of petitioner was published
in the IPO e-Gazette on September 8, 2006, the duration of the trademark registration of respondent over the
marks PAPA and PAPA BANANA CATSUP have already expired. On the other hand, the mark PAPA
KETSARAP was timely renewed by respondent as shown by the Certificate of Renewal of Registration
issued on September 1, 2006 by the Director of the Bureau of Trademarks.
Under R.A. No. 8293, as amended by R.A. No. 9150, the duration of a trademark registration is 10 years,
renewable for periods of 10 years each renewal. The request for renewal must be made within 6 months before
or after the expiration of the registration. Respondent's PAPA mark was not renewed within the period provided
for under RA No. 8293. Its registered term ended on August 11, 2003 but was reapplied for registration only on
April 4, 2005. Meanwhile, the mark PAPA BANANA CATSUP was registered by respondent only in the
Supplemental Register, hence, was not provided any protection. x x x. It is noted that the PAPA BANANA
CATSUP label was applied for registration on November 15, 2006, over three years after the expiration of its
registration in the Supplemental Register of the Philippine Patent Office on August 11, 2003. Thus, while
petitioner has a point that the marks PAPA and PAPA BANANA CATSUP have already expired and the
latter having been afforded no protection at all and should not be juxtaposed with petitioner's
trademark, respondent can still use the marks PAPA KETSARAP and PAPA BANANA CATSUP, it
appearing that the Intellectual Property Office issued a Certificate of Registration No. 4-2006-012364 for
the latter on April 30, 2007, to bar the registration of petitioner's "PAPA BOY & DEVICE"
mark.18 (Emphases supplied, citations omitted.)
Anent the second ground, the Court of Appeals ruled in the following manner:
After taking into account the aforementioned doctrines and the factual circumstances of the case at bar,
this Court, after considering the trademarks involved as a whole, is of the view that petitioner's
trademark "PAP A BOY & DEVICE" is not confusingly similar to respondent's "PAPA KETSARAP"
and "PAPA BANANA CATSUP" trademark. Petitioner's trademark is "PAPA BOY" as a whole as opposed
to respondent's "PAPA". Although on its label the word "PAPA" is prominent, the trademark should be taken as
a whole and not piecemeal. The difference between the two marks are conspicuous and noticeable. While
respondent's products are both labeled as banana sauces, that of petitioner Barrio Fiesta is labeled as lechon
sauce.
Moreover, it appears on the label of petitioner's product that the said lechon sauce is manufactured by Barrio
Fiesta thus, clearly informing the public [of] the identity of _the manufacturer of the lechon sauce. As claimed
by respondent, its products have been in commercial use for decades. It is safe to assume then that the
105
consumers are already aware that "PAPA KETSARAP" and "PAPA BANANA CATSUP" are products of UFC
and not of petitioner or the other way around. In addition, as correctly pointed out by petitioner, if a consumer is
in the market for banana sauce, he will not buy lechon sauce and vice-versa because aside from the fact that the
labels of both parties' products contain the kind of sauce they are marketing, the color of the products is visibly
different. An ordinary consumer is familiar with the fact that the color of a banana sauce is red while a lechon
sauce is dark brown. There can be no deception as both products are marketed in bottles making the distinction
visible to the eye of the consumer and the likelihood of acquiring a wrong sauce, remote. Even if the products
are placed side by side, the dissimilarities between the two marks are conspicuous, noticeable and substantial
enough to matter especially in the light of the following variables that must be factored in.
Lastly, respondent avers that the word "PAPA" was coined after the surname of the person who first created and
made use of the mark. Admittedly, while "PAPA" is a surname, it is more widely known as a term of
endearment for one's father. Respondent cannot, therefore, claim exclusive ownership over and singular use of
[the] term. Petitioner was able to explain that it adopted the word "PAPA" in parallel to the nickname of the
founder of Barrio fiesta which is "MAMA CHIT". "PAPA BOY" was derived from the nickname of one of the
incorporators of herein petitioner, a certain Bonifacio Ongpauco, son of Mama Chit. 19 (Emphasis ours, citation
omitted.)
THEORY OF PETITIONER
Thus, petitioner came to this Court, seeking the reversal of the questioned decision and resolution of the Court
of Appeals, and the reinstatement of the decision of the IPO Director General affirming the decision of the IPO-
BLA. Petitioner raises the following grounds:
I.
The court a quo erred in applying the "holistic test" to determine whether there is confusing similarity between
the contending marks, and in reversing the IPO-BLA and the Director General's application of the "dominancy
test."
II.
The court a quo erred in holding that there is no likelihood of confusion between the contending marks given
that the "PAPA BOY & DEVICE" mark is used on lechon sauce, as opposed to ketchup products.
III.
The court a quo erred in holding that Petitioner cannot claim exclusive ownership and use of the "PAP A" mark
for its sauce products because "PAPA" is supposedly a common term of endearment for one's father. 20
Under the first ground, petitioner submitted the following arguments:
1. The findings of administrative agencies, if supported by substantial evidence, are binding upon the courts. 21
Petitioner alleges that the Court of Appeals should have respected the ruling of the IPO Director General, which
was consistent with the ruling of the IPO-BLA and supported by substantial evidence, instead of substituting its
findings of fact for those of the Director General and the IPO-BLA.
2. The dominancy test should have been applied to determine if there is confusing similarity between the
competing marks.22
Petitioner points out that the Director General and the IPO-BLA found that the dominant feature of the
competing marks is the word "PAP A" and the minor additions to respondent's "PAPA BOY & DEVICE" mark
do not negate likelihood of confusion caused by the latter's use of the dominant word "PAPA." Petitioner claims
that even compared solely to petitioner's "PAPA KETSARAP" mark (Registration No. 34681), which is
conceded to have been timely renewed and to have never expired, respondent's "PAPA BOY & DEVICE"
would still create the likelihood of confusion.23
According to petitioner, the Court of Appeals based its decision on Mead Johnson & Co. v. N.V.J. Van Dorp,
Ltd.,24 a case decided almost five decades ago, long before Republic Act No. 8293 or the 1998 Intellectual
Property Code was enforced. Thus, the Court of Appeals erroneously applied the holistic test since given the
nature of the products bearing the competing marks, the dominancy test should have been applied.
Petitioner claims that "[k]etchup and lechon sauce are common and inexpensive household products that are
sold in groceries and regularly encountered by the ordinary or common purchaser who is not expected to
examine, scrutinize, and compare the details of the competing marks." 25
Petitioner distinguishes this case from Mead Johnson and claims that the ordinary purchaser of ketchup or
lechon sauce is not likely to closely scrutinize each mark as a whole, for the latter is "undiscemingly rash" and
usually in a hurry, and cannot be expected to take note of the smiling hog-like character or the blue ribbon-like
device with the words "Lechon Sauce." Petitioner argues that under the Intellectual Property Code, it is not
necessary for one to colorably imitate the competing trademark as a whole. It is sufficient that one imitates a
"dominant feature" of the mark to constitute trademark infringement.
Petitioner asserts that as the IPO-BLA and the Director General observed that the ordinary purchaser is most
likely to notice the words "PAPA BOY," which, in turn, may lead him to believe that there is a connection
between respondent's lechon sauce and petitioner's ketchup products.
Under the second ground, petitioner argues that the Court of Appeals seemed to be unmindful that two kinds of
confusion may arise from the use of similar or colorable imitation marks, i.e., confusion of goods (product
confusion) and confusion of business (source or origin confusion). Petitioner claims that it is reasonable to
assume that it may expand its business to producing lechon sauce, inasmuch as it already produces food sauce
products and its Articles of Incorporation authorizes it to do so.
Petitioner alleges that the IPO-BLA recognized that confusion of business may arise from respondent's use of
its "PAPA BOY & DEVICE" mark for lechon sauce products, and that the Director-General agreed with the
IPO-BLA's findings on this issue.
106
Petitioner asserts that ketchup and lechon sauce are undeniably related goods; that they belong to the same
class, i.e., Class 30 of the Nice Classifications; that they serve practically the same purpose, i.e., to spice up
dishes; and that they are sold in similar bottles in the same shelves in grocery stores. Petitioner argues that the
Court of Appeals had absolutely no basis for stating that a person who is out to buy ketchup is not likely to buy
lechon sauce by mistake, as this analysis allegedly only applies to "product confusion" and does not consider
confusion of business. Petitioner alleges that "[t]here equally is actionable confusion when a buyer purchases
Respondent's 'PAPA BOY' lechon sauce believing that the said product is related to or associated with the
famous 'PAPA KETSUP' makers." Petitioner further alleges that "it is reasonable and likely for a consumer to
believe that Respondent's 'PAPA BOY' lechon sauce originated from or is otherwise connected with Petitioner's
line of sauces" and that this is "the precise evil that recognition of confusion of business seeks to prevent." 26
Petitioner avers that "PAPA" is a well-known mark and that it has been in commercial use as early as 1954 on
banana ketchup and similar goods. The "PAPA" mark is also registered as a trademark and in commercial use in
other parts of the world such as the United States of America and the Middle East. Petitioner claims that
"[b ]eing a trademark that is registered and well-known both locally and internationally, Petitioner's 'PAPA'
marks cannot be appropriated by another person or entity not only with respect to goods similar to those with
respect to which it is registered, but also with respect to goods which are not similar to those for which the
'PAPA' marks are registered."27
Under the third ground, petitioner claims that the fact that the word "PAPA" is a known term of endearment for
fathers does not preclude it from being used as a mark to identify goods. Petitioner claims that their mark falls
under a type of mark known as "arbitrary or fanciful marks," which are "marks that bear no logical relation to
the actual characteristics of the products they represent," are "highly distinctive and valid," and "are entitled to
the greatest protection."28
Petitioner claims that the mark "PAPA" falls under this class of arbitrary marks, even if "PAPA" is also a
common term of endearment for one's father. Petitioner states that there is no logical connection between one's
father and food sauces, such as ketchup; thus, with respect to ketchup, food sauces, and their related products,
and for the purpose of identifying its products, petitioner claims exclusive ownership of the term "PAPA" as an
arbitrary mark.
Petitioner alleges that if respondent "has a good faith and proud desire to unmistakably and distinctly identify its
lechon sauce product out in the market, it should have coined a mark that departs from and is distinguished from
those of its competitors." Petitioner claims that respondent, with full knowledge of the fame and the decades-
long commercial use of petitioner's "PAPA" marks, opted for "PAPA BOY & DEVICE," which obviously is
just a "colorable imitation."29
THEORY OF RESPONDENT
In its Comment,30 respondent claims that petitioner's marks have either expired and/or "that no confusing
similarity exists between them and respondent's "PAPA BOY & DEVICE' mark." Respondent alleges that
under Section 15 of Republic Act No. 166, a renewal application should be filed within six months before the
expiration of the period or within three months after such expiration. Respondent avers that the expiration of the
20-year term for the "PAPA" mark under Registration No. 32416 issued on August 11, 1983 was August 11,
2003. The sixth month before August 11, 2003 was February 11, 2003 and the third month after August 11,
2003 was November 11, 2003. Respondent claims that the application that petitioner filed on October 28, 2005
was almost two years late. Thus, it was not a renewal application, but could only be considered a new
application under the new Trademark Law, with the filing date reckoned on October 28, 2005. The registrability
of the mark under the new application was examined again, and any certificate issued for the registration of
"PAPA" could not have been a renewal certificate.
As for petitioner's other mark "PAPA BANANA CATSUP LABEL," respondent claims that its 20-year term
also expired on August 11, 2003 and that petitioner only filed its application for the new "PAPA LABEL
DESIGN" on November 15, 2006. Having been filed three years beyond the renewal application deadline,
petitioner was not able to renew its application on time, and cannot claim a "continuous existence of its rights
over the 'PAPA BANANA CATSUP LABEL."' Respondent claims that the two marks are different from each
other and that the registration of one is independent of the other. Respondent concludes that the certificate of
registration issued for "PAPA LABEL DESIGN" is "not and will never be a renewal certificate." 31
Respondent also avers as follows:
1.3. With regard to the two new registrations of petitioner namely: "PAPA" (Reg. No. 4-2005-010788) and
"PAPA LABEL DESIGN" (Reg. No. 4-2006-012364), these were filed on October 28, 2005 and November 15,
2006, respectively, under the Intellectual Property Code (RA 8293), which follows the "first to file" rule, and
were obviously filed later than respondent's "PAPA BOY & DEVICE" mark filed on April 4, 2002. These new
marks filed much later than the opposed "PAPA BOY & DEVICE" mark cannot, therefore, be used as basis for
the opposition and should in fact, be denied outrightly.
xxxx
A search of the Online Trademark Database of Intellectual Property Office (IPO) will show that only
Registration No. 34681 issued for "PAPA KETSARAP" was properly renewed on August 23, 2005. xx x
Clearly, the registrations of "PAPA" and "PAPA BANANA CATSUP LABEL" marks under registration nos.
32416 and SR-6282 respectively, have already expired when Petitioner filed its opposition proceeding against
Respondent's trademark on December 11, 2006. Having expired, and therefore, no longer legally existing, the
"PAPA" and "PAPA BANANA CATSUP LABEL" marks CANNOT BAR the registration of respondent's
mark. To allow petitioner's expired marks to prevent respondent's distinct "PAPA BOY & DEVICE" mark from
being registered would be the ultimate absurdity.32
Respondent posits that the Court of Appeals did not err in reversing the decisions of the administrative agencies,
alleging that "[while] it is true that the general rule is that the factual findings of administrative bodies deserve
utmost respect when supported by evidence, the same is subject to exceptions," 33 and that the Court of Appeals
had justifiable reasons to disregard the factual finding of the IPO. Here, the Court of Appeals wisely identified
certain material facts that were overlooked by the IPO-BLA and the IPO Director General which it opined,
when correctly appreciated, would alter the result of the case.
Respondent alleges that the IPO-BLA erroneously considered petitioner's marks "PAPA" and "PAPA
BANANA CATSUP LABEL" when it applied the dominancy test in determining whether petitioner's marks are
confusingly similar to those of respondent's mark "PAPA BOY & DEVICE."
107
Respondent avers that the IPO-BLA absurdly took emphasis on the mark "PAPA" to arrive at its decision and
did not take into consideration that petitioner's mark was already expired when respondent applied for the
registration of its "PAPA BOY & DEVICE" mark. Respondent compares its "PAPA BOY & DEVICE" with the
only mark that respondent allegedly has, "PAPA KETSARAP," and found no confusing similarity between the
two.
We quote below respondent's discussion of its application of the dominancy test to the marks in question:
Applying the Dominancy test, as correctly emphasized by the Court of Appeals, the dominant feature in
respondent's mark is "PAPA BOY" and not "PAPA". It can be gleaned from respondent's mark that the word
"PAPA" was written in the same font, style and color as the word "BOY". There is also the presence of a
"smiling hog-like character" which is positioned very prominently, both in size and location in said mark, at
glance (sic) even more dominant than the word "PAPA BOY".
xxxx
On the other hand, the dominant feature in petitioner's mark is "KETSARAP", not "PAPA". Even an ordinary
examiner could observe that the word "KETSARAP" in petitioner's mark is more prominently printed than the
word "PAPA".
xxxx
In a dominancy test, the prominent feature of the competing trademarks must be similar to cause confusion or
deception. x x x.34
Verily, respondent's dominant feature "PAPA BOY" and the smiling hog-like character and petitioner's
dominant feature "KETSARAP", being the word written in a larger font, are neither confusing nor deceiving to
the public. In fact, the differences between their dominant marks are very noticeable and conspicuous to every
purchaser.
Furthermore, the Supreme Court in Societe des Produits Nestle, SA. v. Dy [ 641 Phil. 345], applied the
dominancy test by taking into account the aural effects of the words and letters contained in the marks in
determining the issue of confusing similarity. Obviously, petitioners' "PAPA KETSARAP" mark does not in
any way sounds (sic) like respondent's "PAPA BOY" mark. The common prefix "PAPA" does not render the
marks aurally the same. As discussed above, the dominant feature in petitioner's mark is "KETSARAP" and the
dominant feature in respondent's mark is "PAPA BOY". Thus, the words "KETSARAP" and "PAP A BOY" in
petitioner's and respondent's respective marks are obviously different in sound, making "PAPA BOY &
DEVICE" even more distinct from petitioner's "PAPA KETSARAP" mark. 35
Using the holistic test, respondent further discusses the differences in the marks in this wise:
Even the use of the holistic test x x x takes into consideration the entirety of the marks in question [to] be
considered in resolving confusing similarity. The differences are again very obvious. Respondent's mark has (1)
the word "lechon sauce" printed inside a blue ribbon-like device which is illustrated below the word "PAPA
BOY"; (2) a prominent smiling hog-like character gesturing a thumbs-up sign and wearing a Filipino hat and
scarf stands beside the word "PAPA BOY"; and the word "BARRIO FIESTA" conspicuously displayed above
the said trademark which leaves no doubt in the consumer's mind on the product that he or she is purchasing.
On the other hand, petitioner's mark is the word "PAPA" enclosed by a cloud on top of the word "KETSARAP'
enclosed by a geometrical figure.
xxxx
In the instant case, the respective marks are obviously different in color scheme, logo, spelling, sound, meaning
and connotation. Thus, yet again, under the holistic test there can be no confusion or deception between these
marks.
It also bears stressing that petitioner's "PAPA KETSARAP" mark covers "banana catsup" while respondent's
"PAPA BOY & DEVICE" covers "lechon sauce'', thereby obliterating any confusion of products of both marks
as they travel different channels of trade. If a consumer is in the market for banana catsup, he or she will not
buy lechon sauce and vice-versa. As a result, the margin of error in the acquisition of one for the other is simply
remote. Lechon sauce which is liver sauce is distinct from catsup extracted/ made from banana fruit. The flavor
and taste of a lechon sauce are far from those of a banana catsup. Lechon sauce is sauce for "lechon" while
banana catsup is apparently catsup made from banana.36
Respondent also contends that "PAPA BOY & DEVICE" mark is not confusingly similar to petitioner's
trademark "PAPA KETSARAP" in terms of appearance, sound, spelling and meaning. The difference in nature,
usage, taste and appearance of products decreases the possibility of deception among buyers. 37
Respondent alleges that since petitioner merely included banana catsup as its product in its certificate, it cannot
claim any further right to the mark "PAPA KETSARAP" on products other than banana catsup. Respondent
also alleges that petitioner cannot raise "international notoriety of the mark" for the first time on appeal and that
there is no proof that petitioner's mark is internationally well-known.38
Furthermore, respondent argues that petitioner cannot claim exclusive ownership over the use of the word
"PAPA," a term of endearment for one's father. Respondent points out that there are several other valid and
active marks owned by third parties which use the word "PAPA," even in classes of goods similar to those of
petitioner's. Respondent avers that petitioner's claim that its "PAPA" mark is an arbitrary mark is belatedly
raised in the instant petition, and cannot be allowed because the "PAPA KETSARAP" mark would immediately
bring the consuming public to thinking that the product involved is catsup and the description of said catsup
is "masarap" (delicious) and due to the logical relation of the petitioner's mark to the actual product, it being
descriptive or generic, it is far from being arbitrary or fanciful. 39
Lastly, respondent claims that the Court of Appeals correctly ruled that respondent's product cannot be confused
as originating from the petitioner. Since it clearly appears in the product label of the respondent that it is
manufactured by Barrio Fiesta, the public is dutifully informed of the identity of the lechon sauce manufacturer.
The Court of Appeals further took into account the fact that petitioner's products have been in commercial use
for decades.40
108
Petitioner, in its Reply41 to respondent's Comment, contends that respondent cannot invoke a prior filing date
for the "PAPA BOY" mark as against Petitioner's "PAPA" and "PAPA BANANA CATSUP LABEL" marks,
because the latter marks were still registered when respondent applied for registration of its "PAPA BOY"
mark. Thus, the IPO-BLA and Director General correctly considered them in deciding whether the "PAPA
BOY" mark should be registered, using the "first to file" rule under Section 123.l(d) of Republic Act No. 8293,
or the Intellectual Property Code (IP Code).
Petitioner reiterates its argument that the Court of Appeals erred in applying the holistic test and that the proper
test under the circumstances is the dominancy test, which was correctly applied by the IPO-BLA and the
Director General.42
THIS COURT'S RULING
The petition has merit.
We find that the Court of Appeals erred in applying the holistic test and in reversing and setting aside the
decision of the IPO-BLA and that of the IPO Director General, both of which rejected respondent's application
for the mark "PAPA BOY & DEVICE."
In Dermaline, Inc. v. Myra Pharmaceuticals, Inc.,43 we defined 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 others." We held that a
trademark is "an intellectual property deserving protection by law."
The rights of the trademark owner are found in the Intellectual Property Code, which provides:
Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall have the exclusive right to
prevent all third parties not having the owner's consent from using in the course of trade identical or similar
signs or containers for goods or services which are identical or similar to those in respect of which the
trademark is registered where such use would result in a likelihood of confusion. In case of the use of an
identical sign for identical goods or services, a likelihood of confusion shall be presumed.
Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who has identified in
the mind of the public the goods he manufactures or deals in, his business or services from those of others,
whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or
services so identified, which will be protected in the same manner as other property rights.
The guideline for courts in determining likelihood of confusion is found in A.M. No. 10-3-10-SC, or the Rules
of Procedure for Intellectual Property Rights Cases, Rule 18, which provides:
RULE 18
Evidence in Trademark Infringement and Unfair Competition Cases
SECTION 1. Certificate of Registration. - A certificate of registration of a mark shall be prima facie evidence "Colorable imitation" denotes such a close or ingenious imitation as to be calculated to deceive ordinary
of: persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a
purchaser usually gives, as to cause him to purchase the one supposing it to be the other.
a) the validity of the registration;
SECTION 5. Determination of Similar and Dissimilar Goods or Services. - Goods or services may not be
b) the registrant's ownership of the mark; and considered as being similar or dissimilar to each other on the ground that, in any registration or publication by
the Office, they appear in different classes of the Nice Classification.
c) 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. In this case, the findings of fact of the highly technical agency, the Intellectual Property Office, which has the
expertise in this field, should have been given great weight by the Court of Appeals. As we held in Berris
Agricultural Co., Inc. v. Abyadang44:
xxxx

SECTION 3. Presumption of Likelihood of Confusion. - Likelihood of confusion shall be presumed in case an
identical sign or mark is used for identical goods or services.
SECTION 4. Likelihood of Confusion in Other Cases. - In determining whether one trademark is confusingly
similar to or is a colorable imitation of another, the court must consider 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. Visual, aural, connotative comparisons and overall impressions
engendered by the marks in controversy as they are encountered in the realities of the marketplace must be
taken into account. Where there are both similarities and differences in the marks, these must be weighed
against one another to see which predominates.
In determining likelihood of confusion between marks used on non-identical goods or services, several factors
may be taken into account, such as, but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendant's marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.
R.A. No. 8293 defines a "mark" as any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. It also defines a
"collective mark" as any visible sign designated as such in the application for registration and capable of
distinguishing the origin or any other common characteristic, including the quality of goods or services of
different enterprises which use the sign under the control of the registered owner of the collective mark.
On the other hand, 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.

109
xxxx
Verily, the protection of trademarks as intellectual property is intended not only to preserve the goodwill and
reputation of the business established on the goods bearing the mark through actual use over a period of time,
but also to safeguard the public as consumers against confusion on these goods. On this matter of particular
concern, administrative agencies, such as the IPO, by reason of their special knowledge and expertise
over matters falling under their jurisdiction, are in a better position to pass judgment thereon. Thus,
their findings of fact in that regard are generally accorded great respect, if not finality by the courts, as
long as they are supported by substantial evidence, even if such evidence might not be overwhelming or
even preponderant. It is not the task of the appellate court to weigh once more the evidence submitted
before the administrative body and to substitute its own judgment for that of the administrative agency
in respect to sufficiency of evidence. (Emphasis added, citations omitted.)
In trademark controversies, each case must be scrutinized according to its peculiar circumstances, such that
jurisprudential precedents should only be made to apply if they are specifically in point. 45 The cases discussed
below are mentioned only for purposes of lifting the applicable doctrines, laws, and concepts, but not for their
factual circumstances, because of the uniqueness of each case in controversies such as this one.
There are two tests used in jurisprudence to determine likelihood of confusion, namely the dominancy test used
by the IPO, and the holistic test adopted by the Court of Appeals. In Skechers, U.S.A., Inc. v. Inter Pacific
Industrial Trading Corp.,46 we held:
The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause
confusion. In determining similarity and likelihood of confusion, jurisprudence has developed tests - 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.
xxxx
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types of
confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of business
(source or origin confusion), where, although the goods of" the parties are different, the product, the mark of
which registration is applied for by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into that belief or into the belief
that there is some connection between the two parties, though inexistent.
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by respondent
in its Strong rubber shoes infringes on the mark already registered by petitioner with the IPO. While it is
undisputed that petitioner's stylized "S" is within an oval design, to this Court's mind, the dominant feature of
110
the trademark is the stylized "S," as it is precisely the stylized "S" which catches the eye of the purchaser. Thus,
even if respondent did not use an oval design, the mere fact that it used the same stylized "S", the same being
the dominant feature of petitioner's trademark, already constitutes infringement under the Dominancy Test.
This Court cannot agree with the observation of the CA that the use of the letter "S" could hardly be considered
as highly identifiable to the products of petitioner alone. The CA even supported its conclusion by stating that
the letter "S" has been used in so many existing trademarks, the most popular of which is the trademark "S"
enclosed by an inverted triangle, which the CA says is identifiable to Superman. Such reasoning, however,
misses the entire point, which is that respondent had used a stylized "S," which is the same stylized "S" which
petitioner has a registered trademark for. The letter "S" used in the Superman logo, on the other hand, has a
block-like tip on the upper portion and a round elongated tip on the lower portion. Accordingly, the comparison
made by the CA of the letter "S" used in the Superman trademark with petitioner's stylized "S" is not
appropriate to the case at bar.
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on the font and
the size of the lettering, the stylized "S" utilized by respondent is the very same stylized "S" used by petitioner;
a stylized "S" which is unique and distinguishes petitioner's trademark. Indubitably, the likelihood of confusion
is present as purchasers will associate the respondent's use of the stylized "S" as having been authorized by
petitioner or that respondent's product is connected with petitioner's business.
xxxx
While there may be dissimilarities between the appearances of the shoes, to this Court's mind such
dissimilarities do not outweigh the stark and blatant similarities in their general features.xx x.
Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic test, ruled
that there was no colorable imitation, when it cannot be any more clear and apparent to this Court that there is
colorable imitation. The dissimilarities between the shoes are too trifling and frivolous that it is indubitable that
respondent's products will cause confusion and mistake in the eyes of the public. Respondent's shoes may not be
an exact replica of petitioner's shoes, but the features and overall design are so similar and alike that confusion
is highly likely.
xxxx
Neither can the difference in price be a complete defense in trademark infringement. In McDonald's
Corporation v. L.C Big Mak Burger, Inc., this Court held:
Modem law recognizes that the protection to which the owner of a trademark is entitled is not limited to
guarding his goods or business from actual market competition with identical or similar products of the parties,
but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead
to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining
party has extended his business into the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business
(v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). xx x.
Indeed, the registered trademark owner may use its mark on the same or similar products, in different segments
of the market, and at different price levels depending on variations of the products for specific segments of the
market. The purchasing public might be mistaken in thinking that petitioner had ventured into a lower market
segment such that it is not inconceivable for the public to think that Strong or Strong Sport Trail might be
associated or connected with petitioner's brand, which scenario is plausible especially since both petitioner and
respondent manufacture rubber shoes.
Withal, the protection of trademarks as intellectual property is intended not only to preserve the goodwill and
reputation of the business established on the goods bearing the mark through actual use over a period of time,
but also to safeguard the public as consumers against confusion on these goods. While respondent's shoes
contain some dissimilarities with petitioner's shoes, this Court cannot close its eye to the fact that for all intents
and purpose, respondent had deliberately attempted to copy petitioner's mark and overall design and features of
the shoes. Let it be remembered, that defendants in cases of infringement do not normally copy but only make
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. (Citations omitted.)
The Court discussed the concept of confusion of business in the case of Societe Des Produits Nestle, S.A. v. Dy,
Jr.,47 as quoted below:
Among the elements, the element of likelihood of confusion is the gravamen of trademark infringement. There
are two types of confusion in trademark infringement: confusion of goods and confusion of business. In Sterling
Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, the Court distinguished the two types
of confusion:
Callman notes two types of confusion. The first is the 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." In which
case, "defendant's goods are then bought as the plaintiff's, and the poorer quality of the former reflects adversely
on the plaintiff's reputation." The other is the confusion of business: "Here though the goods of the parties are
different, the defendant's product is such as might reasonably be 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."
There are two tests to determine likelihood of confusion: the dominancy test and holistic test. The dominancy
test focuses on the similarity of the main, prevalent or essential features of the competing trademarks that might
cause confusion. Infringement takes place when the competing trademark contains the essential features of
another. Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to
cause confusion or deceive purchasers.
xxxx
In cases involving trademark infringement, no set of rules can be deduced. Each case must be decided on its
own merits. Jurisprudential precedents must be studied in the light of the facts of each particular case.
In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court held:
111
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another, no set
rules can be deduced because each case must be decided on its merits. In such cases, even more than in any
other litigation, precedent must be studied in the light of the facts of the particular case. That is the reason why
in trademark cases, jurisprudential precedents should be applied only to a case if they are specifically in point.
In the light of the facts of the present case, the Court holds that the dominancy test is applicable. In recent cases
with similar factual milieus, the Court has consistently applied the dominancy test. x x x.
xxxx
In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy test in holding
that "MACJOY" is confusingly similar to "MCDONALD'S." The Court held:
While we agree with the CA's detailed enumeration of differences between the two (2) competing trademarks
herein involved, we believe that the holistic test is not the one applicable in this case, the dominancy test being
the one more suitable. In recent cases with a similar factual milieu as here, the Court has consistently used and
applied the dominancy test in determining confusing similarity or likelihood of confusion between competing
trademarks.
xxxx
Applying the dominancy test to the instant case, the Court finds that herein petitioner's "MCDONALD'S" and
respondent's "MACJOY" marks are confusingly similar with each other that an ordinary purchaser can conclude
an association or relation between the marks.
To begin with, both marks use the corporate "M" design logo and the prefixes "Mc" and/or "Mac" as dominant
features. x x x.
For sure, it is the prefix "Mc," and abbreviation of "Mac," which visually and aurally catches the attention of the
consuming public. Verily, the word "MACJOY" attracts attention the same way as did "McDonalds," "Mac
Fries," "Mc Spaghetti," "McDo," "Big Mac" and the rest of the MCDONALD'S marks which all use the
prefixes Mc and/or Mac.
Besides and most importantly, both trademarks are used in the sale of fastfood products. Indisputably, the
respondent's trademark application for the "MACJOY & DEVICE" trademark covers goods under Classes 29
and 30 of the International Classification of Goods, namely, fried chicken, chicken barbeque, burgers, fries,
spaghetti, etc. Likewise, the petitioner's trademark registration for the MCDONALD'S marks in the Philippines
covers goods which are similar if not identical to those covered by the respondent's application.
In McDonald's Corporation v. L. C. Big Mak Burger, Inc., the Court applied the dominancy test in holding that
"BIG MAK" is confusingly similar to "BIG MAC." The Court held:
This Court x x x has relied on the dominancy test rather than the holistic test. The dominancy test considers the
dominant features in the competing marks in determining whether they are confusingly similar. Under the
dominancy test, courts give greater weight to the similarity of the appearance of the product arising from the
adoption of the dominant features of the registered mark, disregarding minor differences. Courts will consider
more the aural and visual impressions created by the marks in the public mind, giving little weight to factors
like prices, quality, sales outlets and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled:
x x x 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, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co., 191
F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The question at issue in cases of
infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or
mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Hanover Rubber
Co., 107 F. 2d 588; xx x)
xxxx
The test of dominancy is now explicitly incorporated into law in Section 155.l of the Intellectual Property Code
which defines infringement as the "colorable imitation of a registered mark x x x or a dominant feature thereof."
Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark results in likelihood
of confusion. First, "Big Mak" sounds exactly the same as "Big Mac." Second, the first word in "Big Mak" is
exactly the same as the first word in "Big Mac." Third, the first two letters in "Mak" are the same as the first
two letters in "Mac." Fourth, the last letter "Mak" while a "k" sounds the same as "c" when the word "Mak" is
pronounced. Fifth, in Filipino, the letter "k" replaces "c" in spelling, thus "Caloocan" is spelled "Kalookan."
In Societe Des Produits Nestle, SA. v. Court of Appeals, the Court applied the dominancy test in holding that
"FLAVOR MASTER" is confusingly similar to "MASTER ROAST" and "MASTER BLEND." The Court held:
While this Court agrees with the Court of Appeals' detailed enumeration of differences between the respective
trademarks of the two coffee products, this Court cannot agree that totality test is the one applicable in this case.
Rather, this Court believes that the dominancy test is more suitable to this case in light of its peculiar factual
milieu.
Moreover, the totality or holistic test is contrary to the elementary postulate of the law on trademarks and unfair
competition that confusing similarity is to be determined on the basis of visual, aural, connotative comparisons
and overall impressions engendered by the marks in controversy as they are encountered in the realities of the
marketplace. The totality or holistic test only relies on visual comparison between two trademarks whereas the
dominancy test relies not only on the visual but also on the aural and connotative comparisons and overall
impressions between the two trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and held that:
112
xxxx
The scope of protection afforded to registered trademark owners is not limited to protection from.
infringers with identical goods.1âwphi1 The scope of protection extends to protection from infringers
with related goods, and to market areas that are the normal expansion of business of the registered
trademark owners. Section 138 of R.A. No. 8293 states:
Certificates of Registration. - A certificate of registration of a mark shall be prima facie evidence of validity of
the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in the certificate. x x x.
In Mighty Corporation v. E. & J Gallo Winery, the Court held that, "Non-competing goods may be those which,
though they are not in actual competition, are so related to each other that it can reasonably be assumed that
they originate from one manufacturer, in which case, confusion of business can arise out of the use of similar
marks." In that case, the Court enumerated factors in determining whether goods are related: (1) classification
of the goods; (2) nature of the goods; (3) descriptive properties, physical attributes or essential characteristics of
the goods, with reference to their form, composition, texture or quality; and (4) style of distribution and
marketing of the goods, including how the goods are displayed and sold.
xxxx
x x x. However, as the registered owner of the "NAN" mark, Nestle should be free to use its mark on
similar products, in different segments of the market, and at different price levels. In McDonald's
Corporation v. L.C. Big Mak Burger, Inc., the Court held that the scope of protection afforded to registered
trademark owners extends to market areas that are the normal expansion of business:
xxxx
Even respondent's 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.
The registered trademark owner may use his mark on the same or similar products, in different segments
of the market, and at different price levels depending on variations of the products for specific segments
of the market. The Court has recognized that the registered trademark owner enjoys protection in
product and market areas that are the normal potential expansion of his business. Thus, the Court has
declared:
Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to
guarding his goods or business from actual market competition with identical or similar products of the parties,
but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead
to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining
party has extended his business into the field (see 148 ALR 56 et sq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business
(v. 148 ALR, 77, 84; 52 Arn. Jur. 576, 577). (Emphases supplied, citations omitted.)
Again, this Court discussed the dominancy test and confusion of business in Dermaline, Inc. v. Myra
Pharmaceuticals, Inc.,48 and we quote:
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might
cause confusion or deception. It is applied when the trademark sought to be registered contains the main,
essential and dominant features of the earlier registered trademark, and confusion or deception is likely to result.
Duplication or imitation is not even required; neither is it necessary that the label of the applied mark for
registration should suggest an effort to imitate. The important issue is whether the use of the marks involved
would likely cause confusion or mistake in the mind of or deceive the ordinary purchaser, or one who is
accustomed to buy, and therefore to some extent familiar with, the goods in question. Given greater
consideration are the aural and visual impressions created by the marks in the public mind, giving little weight
to factors like prices, quality, sales outlets, and market segments. The test of dominancy is now explicitly
incorporated into law in Section 155.l of R.A. No. 8293 which provides-
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive xx x.
xxxx
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types of
confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of business
(source or origin confusion), where, although the goods of the parties are different, the product, the mark of
which registration is applied for by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into that belief or into the belief
that there is some connection between the two parties, though inexistent.
xxxx
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while there are no set rules
that can be deduced as what constitutes a dominant feature with respect to trademarks applied for registration;
usually, what are taken into account are signs, color, design, peculiar shape or name, or some special, easily
remembered earmarks of the brand that readily attracts and catches the attention of the ordinary consumer.
xxxx
Further, Dermaline's stance that its product belongs to a separate and different classification from Myra's
products with the registered trademark does not eradicate the possibility of mistake on the part of the purchasing
public to associate the former with the latter, especially considering that both classifications pertain to
treatments for the skin.
113
Indeed, the registered trademark owner may use its mark on the same or similar products, in different segments
of the market, and at different price levels depending on variations of the products for specific segments of the
market. The Court is cognizant that the registered trademark owner enjoys protection in product and market
areas that are the normal potential expansion of his business. Thus, we have held-
Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited
to guarding his goods or business from actual market competition with identical or similar products of
the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-
name is likely to lead to a confusion of source, as where prospective purchasers would be misled
into thinking that the complaining party has extended his business into the field (see 148 ALR
56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576,
577).
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such that,
considering the current proliferation of health and beauty products in the market, the purchasers would likely be
misled that Myra has already expanded its business through Dermaline from merely carrying pharmaceutical
topical applications for the skin to health and beauty services.
Verily, when one applies for the registration of a trademark or label which is almost the same or that very
closely resembles one already used and registered by another, the application should be rejected and dismissed
outright, even without any opposition on the part of the owner and user of a previously registered label or
trademark. This is intended not only to avoid confusion on the part of the public, but also to protect an already
used and registered trademark and an established goodwill. (Citations omitted.)
Section 123.l(d) of the IP Code provides:
A mark cannot be registered if it:
xxxx
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or
priority date, in respect of:
i. The same goods or services, or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be likely to deceive or cause confusion[.]
A scrutiny of petitioner's and respondent's respective marks would show that the IPO-BLA and the IPO Director
General correctly found the word "PAPA" as the dominant feature of petitioner's mark "PAPA KETSARAP."
Contrary to respondent's contention, "KETSARAP" cannot be the dominant feature of the mark as it is merely
descriptive of the product. Furthermore, it is the "PAPA" mark that has been in commercial use for decades and
has established awareness and goodwill among consumers.
We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature of respondent's
"PAPA BOY & DEVICE" mark subject of the application, such that "the word 'PAPA' is written on top of and
before the other words such that it is the first word/figure that catches the eyes." 49 Furthermore, as the IPO
Director General put it, the part of respondent's mark which appears prominently to the eyes and ears is the
phrase "PAPA BOY" and that is what a purchaser of respondent's product would immediately recall, not the
smiling hog.
We quote the relevant portion of the IPO-BLA decision on this point below:
A careful examination of Opposer's and Respondent-applicant's respective marks shows that the word "PAPA"
is the dominant feature: In Opposer's marks, the word "PAPA" is either the mark by itself or the predominant
word considering its stylized font and the conspicuous placement of the word "PAPA" before the other words.
In Respondent-applicant's mark, the word "PAPA" is written on top of and before the other words such that it is
the first word figure that catches the eyes. The visual and aural impressions created by such dominant word
"PAPA" at the least is that the respective goods of the parties originated from the other, or that one party has
permitted or has been given license to the other to use the word "PAPA" for the other party's product, or that
there is a relation/connection between the two parties when, in fact, there is none. This is especially true
considering that the products of both parties belong to the same class and are closely related: Catsup and lechon
sauce or liver sauce are both gravy-like condiments used to spice up dishes. Thus, confusion of goods and of
business may likely result.
Under the Dominancy Test, the dominant features of the competing marks are considered in determining
whether these competing marks are confusingly similar. Greater weight is given to the similarity of the
appearance of the products arising from the adoption of the dominant features of the registered mark,
disregarding minor differences. The visual, aural, connotative, and overall comparisons and impressions
engendered by the marks in controversy as they are encountered in the realities of the marketplace are the main
considerations (McDonald's Corporation, et al., v. L. C. Big Mak Burger, Inc., et al., G. R. No.143993, August
18, 2004; Societe Des Produits Nestle, S. A." et al. v. Court of Appeals, et al., G. R. No. 112012, April 4, 2001).
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. (Lim Hoa v. Director of Patents, 100 Phil. 214 [1956]);
Co Tiong Sa v. Director of Patents, et al., G. R. No. L-5378, May 24, 1954). Duplication or imitation is not
necessary; nor is it necessary that the infringing label should suggest an effort to imitate (Lim Hoa v. Director of
Patents, supra, and Co Liang Sa v. Director of Patents, supra). Actual confusion is not required: Only
likelihood of confusion on the part of the buying public is necessary so as to render two marks confusingly
similar so as to deny the registration of the junior mark (Sterling Products International, Inc. v. Farbenfabriken
Bayer Aktiengesellschaft, 137 Phil. 838 [1969]).
As to the first issue of whether PAPA BOY is confusingly similar to Opposer's PAPA mark, this Bureau rules
in the affirmative.
The records bear the following:
114
1. Registration No. 32416 issued for the mark "PAPA" under Class 29 goods was deemed expired as of
February 11, 2004 (Exhibit "A" attached to the VERIFIED NOTICE OF OPPOSITION). Application
Serial No. 4-2005-010788 was filed on October 28, 2005 for the same mark "PAPA" for Class 30
goods and Registration No. 42005010788 was issued on March 19, 2007;
2. Opposer was issued for the mark "PAPA BANANA CATSUP LABEL" on August 11, 1983
Registration No. SR-6282 for Class 30 goods in the Supplemental Register, which registration expired
in 2003. Application Serial No. 4-2006-012364 was filed for the mark "PAPA LABEL DESIGN" for
Class 30 goods on November 15, 2006, and Registration No. 42006012364 was issued on April 30,
2007; and
3. Lastly, Registration No. 34681 for the mark "PAPA KETSARAP" for Class 30 goods was issued on
August 23, 1985 and was renewed on August 23, 2005.
Though Respondent-applicant was first to file the subject application on April 04, 2002 vis-a-vis the mark "PAP
A" the filing date of which is reckoned on October 28, 2005, and the mark "PAPA LABEL DESIGN" the filing
date of which is reckoned on November 15, 2006, Opposer was able to secure a registration for the mark
"PAPA KETSARAP" on August 23, 1985 considering that Opposer was the prior registrant and that its renewal
application timely filed on August 23, 2005.
xxxx
Pursuant to [Section 123 .1 (d) of the IP Code], the application for registration of the subject mark cannot be
allowed considering that Opposer was earlier registrant of the marks PAPA and PAPA KETSARAP which
registrations were timely renewed upon its expiration. Respondent-applicant's mark "PAPA BOY & DEVICE"
is confusingly similar to Opposer's mark "PAPA KETSARAP" and is applied to goods that are related to
Opposer's goods, but Opposer's mark "PAPA KETSARAP" was registered on August 23, 1985 per Certificate
of Registration No. 34681, which registration was renewed for a period of 10 years counted from August 23,
2005 per Certificate of Renewal of Registration No. 34681 issued on August 23, 2005. To repeat, Opposer has
already registered a mark which Respondent-applicant's mark nearly resembles as to likely deceive or cause
confusion as to origin and which is applied to goods to which respondent-applicant's goods under Class 30 are
closely related.1âwphi1
Section 138 of the IP Code provides that a certificate of registration of a mark is prima facie evidence of the
validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use
the same in connection with the goods and those that are related thereto specified in the certificate. 50
We agree that respondent's mark cannot be registered. Respondent's mark is related to a product, lechon sauce,
an everyday all-purpose condiment and sauce, that is not subjected to great scrutiny and care by the casual
purchaser, who knows from regular visits to the grocery store under what aisle to find it, in which bottle it is
contained, and approximately how much it costs. Since petitioner's product, catsup, is also a household product
found on the same grocery aisle, in similar packaging, the public could think that petitioner had expanded its
product mix to include lechon sauce, and that the "PAPA BOY" lechon sauce is now part of the "PAPA" family
of sauces, which is not unlikely considering the nature of business that petitioner is in. Thus, if allowed.
registration, confusion of business may set in, and petitioner's hard-earned goodwill may be associated to the
newer product introduced by respondent, all because of the use of the dominant feature of petitioner's mark on
respondent's mark, which is the word "PAPA." The words "Barrio Fiesta" are not included in the mark, and
although printed on the label of respondent's lechon sauce packaging, still do not remove the impression that
"PAPA BOY" is a product owned by the manufacturer of "PAPA" catsup, by virtue of the use of the dominant
feature. It is possible that petitioner could expand its business to include lechon sauce, and that would be well
within petitioner's rights, but the existence of a "PAPA BOY" lechon sauce would already eliminate this
possibility and deprive petitioner of its rights as an owner of a valid mark included in the Intellectual Property
Code.

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

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

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

SO ORDERED.

115
G.R. No. 188996
SERI SOMBOONSAKDIKUL, Petitioner
vs.
ORLANE S.A., Respondent
DECISION
JARDELEZA, J.:
Assailed in this petition is the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 105229 dated July
14, 2009 which affirmed the decision of the Director General of the Intellectual Property Office (IPO) denying
the application for the mark "LOLANE."
Facts
On September 23, 2003, petitioner Seri Somboonsakdikul (petitioner) filed an application for registration2 of the
mark LOLANE with the IPO for goods3 classified under Class 3 (personal care products) of the International
Classification of Goods and Services for the Purposes of the Registration of Marks (International Classification
of Goods).4 Orlane S.A. (respondent) filed an opposition to petitioner's application, on the ground that the mark
LOLANE was similar to ORLANE in presentation, general appearance and pronunciation, and thus would
amount to an infringement of its mark.5 Respondent alleged that: (1) it was the rightful owner of the ORLANE
mark which was first used in 1948; (2) the mark was earlier registered in the Philippines on July 26, 1967 under
Registration No. 129961 for the following goods:6
x x x perfumes, toilet water, face powders, lotions, essential oils, cosmetics, lotions for the hair, dentrifices,
eyebrow pencils, make-up creams, cosmetics & toilet preparations under Registration No. 12996. 7
and (3) on September 5, 2003, it filed another application for use of the trademark on its additional products:
x x x toilet waters; revitalizing waters, perfumes, deodorants and body deodorants, anti-perspiration toiletries;
men and women perfume products for face care and body care; face, eye, lips, nail, hand make-up products and
make-up removal products, towels impregnated with cosmetic lotions; tanning and instant tanning sunproducts,
sunprotection products, (not for medical use), after-suncosmetic products; cosmetic products; slimming
cosmetic aids; toiletries; lotions, shampoos and hair care products; shave and after shave products, shaving and
hair removing products; essential oils; toothpastes; toiletry, cosmetic and shaving kits for travel, filled or fitted
vanity-cases[.]8
Respondent adds that by promotion, worldwide registration, widespread and high standard use, the mark had
acquired distinction, goodwill, superior quality image and reputation and was now well-known.9 Imputing bad
faith on the petitioner, respondent claimed that LOLANE' s first usage was only on August 19, 2003. 10
In his answer,11 petitioner denied that the LOLANE mark was confusingly similar to the mark ORLANE. He
averred that he was the lawful owner of the mark LOLANE which he has used for various personal care
116
products sold worldwide. He alleged that the first worldwide use of the mark was in Vietnam on July 4, 1995.
Petitioner also alleged that he had continuously marketed and advertised Class 3 products bearing LOLANE
mark in the Philippines and in different parts of the world and that as a result, the public had come to associate
the mark with him as provider of quality personal care products. 12
Petitioner maintained that the marks were distinct and not confusingly similar either under the dominancy test
or the holistic test. The mark ORLANE was in plain block upper case letters while the mark LOLANE was
printed in stylized word with the second letter L and the letter A co-joined. Furthermore, the similarity in one
syllable would not automatically result in confusion even if used in the same class of goods since his products
always appear with Thai characters while those of ORLANE always had the name Paris on it. The two marks
are also pronounced differently. Also, even if the two marks contained the word LANE it would not make them
confusingly similar since the IPO had previously allowed the co-existence of trademarks containing the syllable
"joy" or "book" and that he also had existing registrations and pending applications for registration in other
countries.13
The Bureau of Legal Affairs (BLA) rejected petitioner's application in a Decision14 dated February 27, 2007,
finding that respondent's application was filed, and its mark registered, much earlier. 15 The BLA ruled that there
was likelihood of confusion based on the following observations: (1) ORLANE and LOLANE both consisted of
six letters with the same last four letters - LANE; (2) both were used as label for similar products; (3) both
marks were in two syllables and that there was only a slight difference in the first syllable; and (4) both marks
had the same last syllable so that if these marks were read aloud, a sound of strong similarity would be
produced and such would likely deceive or cause confusion to the public as to the two trademarks. 16
Petitioner filed a motion for reconsideration but this was denied by the Director of the BLA on May 7,
2007.17 The BLA ruled that the law did not require the marks to be so identical as to produce actual error or
mistake as the likelihood of confusion was enough. The BLA also found that the dominant feature in both
marks was the word LANE; and that the marks had a strong visual and aural resemblance that could cause
confusion to the buying public. This resemblance was amplified by the relatedness of the goods. 18
On appeal, the Director General of the IPO affirmed the Decision of the BLA Director. Despite the difference in
the first syllable, there was a strong visual and aural resemblance since the marks had the same last four
letters, i.e., LANE, and such word is pronounced in this jurisdiction as in "pedestrian lane." 19 Also, the mark
ORLANE is a fanciful mark invented by the owner for the sole purpose of functioning as a trademark and is
highly distinctive. Thus, the fact that two or more entities would accidentally adopt an identical or similar
fanciful mark was too good to be true especially when they dealt with the same goods or services. 20 The
Director General also noted that foreign judgments invoked by petitioner for the grant of its application are not
judicial precedents.21
Thus, petitioner filed a petition for review22 before the CA arguing that there is no confusing similarity between
the two marks. Petitioner maintained that LANE is not the dominant feature of the mark and that the dominancy
test did not apply since the trademarks are only plain word marks and the dominancy test presupposes that the
marks involved are composite marks.23 Petitioner pointed out that the IPO had previously allowed the mark
GIN LANE under Registration No. 4-2004-006914 which also involved products under Class 3. 24 While
petitioner admitted that foreign judgments are not judicial precedents, he argued that the IPO failed to recognize
relevant foreign judgments, i.e., the Australian Registrar of Trademarks and the IPO of Singapore which ruled
that there was no confusing similarity between the marks LOLANE and ORLANE. 25 Lastly, the Director
General should have deferred to the findings of the Trademark Examiner who made a substantive examination
of the application for trademark registration, and who is an expert in the field and is in the best position to
determine whether there already exists a registered mark or mark for registration. Since petitioner's application
for registration of the mark LOLANE proceeded to allowance and publication without any adverse citation of a
prior confusingly similar mark, this meant that the Trademark Examiner was of the view that LO LANE was
not confusingly similar to ORLANE.26
The CA Ruling
The CA denied the petition and held that there exists colorable imitation of respondent's mark by LOLANE. 27
The CA accorded due respect to the Decision of the Director General and ruled that there was substantial
evidence to support the IPO's findings of fact. Applying the dominancy test, the CA ruled that LOLANE' s mark
is confusingly or deceptively similar to ORLANE. There are predominantly striking similarities in the two
marks including LANE, with only a slight difference in the first letters, thus the two marks would likely cause
confusion to the eyes of the public. The similarity is highlighted when the two marks are pronounced
considering that both are one word consisting of two syllables. The CA ruled that when pronounced, the two
marks produce similar sounds. 28 The CA did not heed petitioner's contention that since the mark ORLANE is of
French origin, the same is pronounced as "ORLAN." Filipinos would invariably pronounce it as "OR-
LEYN."29 The CA also noted that the trademark ORLANE is a fanciful name and petitioner was not able to
explain why he chose the word LOLANE as trademark for his personal care products. Thus, the only logical
conclusion is that he would want to benefit from the established reputation and goodwill of the ORLANE
mark.30
The CA rejected petitioner's assertion that his products' cheaper price and low-income market eliminates the
likelihood of confusion. Low-income groups, and even those who usually purchased ORLANE products despite
the higher cost, may be led to believe that LOLANE products are low-end personal care products also marketed
by respondent.31
The CA upheld the applicability of the dominancy test in this case. According to the CA, the dominancy test is
already recognized and incorporated in Section 155.1 of Republic Act No. 8293 (RA 8293), otherwise known as
the Intellectual Property Code of the Philippines.32 Citing McDonald's Corporation v. MacJoy Fastfood
Corporation,33 the CA ruled that the dominancy test is also preferred over the holistic test. This is because the
latter relies only on the visual comparison between two trademarks, whereas the dominancy test relies not only
on the visual, but also on their aural and connotative comparisons, and their overall impressions
created.34 Nonetheless, the CA stated that there is nothing in this jurisdiction dictating that the dominancy test is
applicable for composite marks.35
The CA was not swayed by the alleged favorable judgment by the IPO in the GIN LANE application, ruling
that in trademark cases, jurisprudential precedents should be applied only to a case if they are specifically in
point.36 It also did not consider the ruling of the IPOs in Australia, South Africa, Thailand and Singapore which
found no confusing similarity between the marks LOLANE and ORLANE, stating that foreign judgments do
not constitute judicial precedent in this jurisdiction.37
117
Finally, the CA did not give merit to petitioner's contention that the Director General should have deferred to
the findings of the Trademark Examiner. According to the CA, the proceedings before the Trademark Examiner
are ex-parte,38 and his findings are merely prima facie. Whatever his decision may be is still subject to review
and/or appeal.39
The Petition40
Petitioner maintains that the CA erred in its interpretation of the dominancy test, when it ruled that the dominant
feature of the contending marks is the suffix "LANE." 41 The CA failed to consider that in determining the
dominant portion of a mark, significant weight must be given to whether the buyer would be more likely to
remember and use one part of a mark as indicating the origin of the goods. 42 Thus, that part which will likely
make the most impression on the ordinary viewer will be treated as the dominant portion of conflicting marks
and given greater weight in the comparison.43
Petitioner argues that both LOLANE and ORLANE are plain word marks which are devoid of features that will
likely make the most impression on the ordinary viewer. If at all, the very word marks themselves, LOLANE
and ORLANE are each to be regarded as dominant features. 44 Moreover, the suffix LANE is a weak mark,
being "in common use by many other sellers in the market. "45 Thus, LANE is also used in the marks
SHELLANE and GIN LANE, the latter covering goods under Class 3. Moreover, the two marks are aurally
different since respondent's products originate from France and is read as "OR-LAN" and not "OR-LEYN."46
Petitioner also claims that the CA completely disregarded the holistic test, thus ignoring the dissimilarity of
context between LOLANE and ORLANE. Assuming that the two marks produce similar sounds when
pronounced, the differences in marks in their entirety as they appear in their respective product labels should
still be the controlling factor in determining confusing similarity. 47
Besides, there has been no explicit declaration abandoning the holistic test.48 Thus, petitioner urges us to go
beyond the similarities in spelling and instead consider how the marks appear in their respective labels, the
dissimilarities in the size and shape of the containers, their color, words appearing thereon and the general
appearance,49 hence: (1) the commonality of the marks ORLANE and LOLANE starts from and ends with the
four-letter similarity-LANE and nothing else;50 (2) ORLANE uses "safe" or conventional colors while
LOLANE uses loud or psychedelic colors and designs with Thai characters;51 and (3) ORLANE uses the term
"Paris," indicating the source of origin of its products.52
Petitioner likewise claims that consumers will be more careful in their choice because the goods in question are
directly related to personal hygiene and have direct effects on their well-being, health and safety.53 Moreover,
with the huge price difference between ORLANE and LOLANE products, relevant purchasers are less likely to
be confused.54
Finally, petitioner notes that respondent has neither validly proven nor presented sufficient evidence that the
mark ORLANE is in actual commercial use in the Philippines. Respondent failed to allege in any of its
pleadings submitted to the IPO's BLA and the IPO Director General the names of local outlets that products
bearing the mark ORLANE are being marketed or sold to the general consuming public.55
Respondent's Comment56
Respondent reiterates the decisions of the CA and the IPO.57 It maintains that ORLANE is entitled to protection
under RA 8293 since it is registered with the IPO with proof of actual use. 58 Respondent posits that it has
established in the world59 and in the Philippines an image and reputation for manufacturing and selling quality
beauty products. Its products have been sold in the market for 61 years and have been used in the Philippines
since 1972.60 Thus, to allow petitioner's application would unduly prejudice respondent's right over its
registered trademark.61 Lastly, respondent argues that decisions of administrative agencies such as the IPO shall
not be disturbed by the courts, absent any showing that the former have acted without or in excess of their
jurisdiction, or with grave abuse of discretion.62
Issue
We resolve the issue of whether there is confusing similarity between ORLANE and LOLANE which would
bar the registration of LOLANE before the IPO.
Our Ruling
We find that the CA erred when it affirmed the Decision of the IPO.
While it is an established rule in administrative law that the courts of justice should respect the findings of fact
of administrative agencies, the courts may not be bound by such findings of fact when there is absolutely no
evidence in support thereof or such evidence is clearly, manifestly and patently insubstantial; and when there is
a clear showing that the administrative agency acted arbitrarily or with grave abuse of discretion or in a
capricious and whimsical manner, such that its action may amount to an excess or lack of
jurisdiction.63 Moreover, when there is a showing that the findings or conclusions, drawn from the same pieces
of evidence, were arrived at arbitrarily or in disregard of the evidence on record, they may be reviewed by the
courts.64 Such is the case here.
There is no colorable imitation between the marks LOLANE and ORLANE which would lead to any likelihood
of confusion to the ordinary purchasers.
A trademark is defined under Section 121.1 of RA 8293 as any visible sign capable of distinguishing the goods.
It is susceptible to registration if it is crafted fancifully or arbitrarily and is capable of identifying and
distinguishing the goods of one manufacturer or seller from those of another. 65 Thus, the mark must be
distinctive.66 The registrability of a trademark is governed by Section 123 of RA 8293. Section 123.1 provides:
Section 123. Registrability. -
123 .1. A mark cannot be registered if it:
xxx
118
d. Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or
priority date, in respect of:
i. The same goods or services, or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be likely to deceive or cause confusion;
e. Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the
competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it
is registered here, as being already the mark of a person other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the promotion of the mark;
xxx
In Mighty Corporation v. E. & J Gallo Winery,67 we laid down the
requirements for a finding of likelihood of confusion, thus:
There are two types of confusion in trademark infringement. The first is "confusion of goods" when an
otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing another, in
which case defendant's goods are then bought as the plaintiffs and its poor quality reflects badly on the plaintiffs
reputation. The other is "confusion of business" wherein the goods of the parties are different but the
defendant's product can reasonably (though mistakenly) be assumed to originate from the plaintiff, thus
deceiving the public into believing that there is some connection between the plaintiff and defendant which, in
fact, does not exist.
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the
trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect on
the purchaser and [d] the registrant's express or implied consent and other fair and equitable
considerations. (Citations omitted, emphasis supplied.)68
While Mighty Corporation enumerates four requirements, the most essential requirement, to our mind, for the
determination of likelihood of confusion is the existence of resemblance between the trademarks, i.e., colorable
imitation. Absent any finding of its existence, there can be no likelihood of confusion. Thus we held:
Whether a trademark causes confusion and is likely to deceive the public hinges on "colorable imitation" which
has been defined as "such similarity in form, content, words, sound, meaning, special arrangement or general
appearance of the trademark or trade name in their overall presentation or in their essential and substantive and
distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine
article." (Citations omitted.)69
We had the same view in Emerald Garment Manufacturing Corporation v. Court of Appeals,70 where we
stated:
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. x x x (Citation omitted, emphasis supplied.) 71
In determining colorable imitation, we have used either the dominancy test or the holistic or totality test. The
dominancy test considers 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. More consideration is
given on the aural and visual impressions created by the marks on the buyers of goods, giving little weight to
factors like process, quality, sales outlets, and market segments. 72 On the other hand, the holistic test considers
the entirety of the marks as applied to the products, including the labels and packaging, in determining
confusing similarity. The focus is not only on the predominant words but also on the other features appearing on
the labels.73
The CA's use of the dominancy test is in accord with our more recent ruling in UFC Philippines, Inc. (now
merged with Nutria-Asia, Inc. as the surviving entity) v. Barrio Fiesta Manufacturing Corporation. 74 In UFC
Philippines, Inc., we relied on our declarations in McDonald's Corporation v. L.C. Big Mak Burger, Inc.,75 Co
Tiong Sa v. Director of Patents,76 and Societe Des Produits Nestle, S.A. v. Court of Appeals77 that the
dominancy test is more in line with the basic rule in trademarks that confusing similarity is determined by the
aural, visual and connotative and overall impressions created by the marks. Thus, based on the dominancy test,
we ruled that there is no confusing similarity between "PAPA BOY & DEVICE" mark, and "PAPA
KETSARAP" and "PAPA BANANA CATSUP."
While there are no set rules as what constitutes a dominant feature with respect to trademarks applied for
registration, usually, what are taken into account are signs, color, design, peculiar shape or name, or some
special, easily remembered earmarks of the brand that readily attracts and catches the attention of the ordinary
consumer.78In UFC Philippines, Inc., what we considered as the dominant feature of the mark is the first
word/figure that catches the eyes or that part which appears prominently to the eyes and ears. 79
However, while we agree with the CA's use of the dominancy test, we arrive at a different conclusion. Based on
the distinct visual and aural differences between LOLANE and ORLANE, we find that there is no confusing
similarity between the two marks.
The suffix LANE is not the dominant feature of petitioner's mark. Neither can it be considered as the dominant
feature of ORLANE which would make the two marks confusingly similar.
119
First, an examination of the appearance of the marks would show that there are noticeable differences in the
way they are written or printed as shown below:80
As correctly argued by petitioner in his answer before the BLA, there are visual differences between LOLANE
and ORLANE since the mark ORLANE is in plain block upper case letters while the mark LOLANE was
rendered in stylized word with the second letter L and the letter A co-joined.81
Second, as to the aural aspect of the marks, LOLANE and ORLANE do not sound alike. Etepha v. Director of
Patents, et al.82 finds application in this case. In Etepha, we ruled that there is no confusing similarity between
PERTUSSIN and ATUSSIN. The Court considered among other factors the aural differences between the two
marks as follows:
5. As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two words do
not sound alike-when pronounced. There is not much phonetic similarity between the two. The Solicitor
General well-observed that in Pertussin the pronunciation of tbe prefix "Per", whether correct or incorrect,
includes a combination of three letters
P, e and r; whereas, in Atussin the whole starts with the single letter A added to suffix
"tussin".1âwphi1 Appeals to the ear are dissimilar. And this, because in a word combination, the part that comes
first is the most pronounced. An expositor of the applicable rule here is the decision in the Syrocol-Cheracol
controversy. There, the ruling is that trademark Syrocol (a cough medicine preparation) is not confusedly
similar to trademark Cheracol (also a cough medicine preparation). Reason: the two words "do not look or
sound enough alike to justify a holding of trademark infringement", and the "only similarity is in the last
syllable, and that is not uncommon in names given drug compounds". (Citation omitted, emphasis supplied.)83
Similar to Etepha, appeals to the ear in pronouncing ORLANE and LOLANE are dissimilar. The first syllables
of each mark, i.e., OR and LO do not sound alike, while the proper pronunciation of the last syllable LANE-
"LEYN" for LOLANE and "LAN" for ORLANE, being of French origin, also differ. We take exception to the
generalizing statement of the Director General, which was affirmed by the CA, that Filipinos would invariably
pronounce ORLANE as "ORLEYN." This is another finding of fact which has no basis, and thus, justifies our
reversal of the decisions of the IPO Director General and the CA. While there is possible aural similarity when
certain sectors of the market would pronounce ORLANE as "ORLEYN," it is not also impossible that some
would also be aware of the proper pronunciation--especially since, as respondent claims, its trademark
ORLANE has been sold in the market for more than 60 years and in the Philippines, for more than 40 years.84
Respondent failed to show proof that the suffix LANE has registered in the mind of consumers that such suffix
is exclusively or even predominantly associated with ORLANE products. Notably and as correctly argued by
petitioner, the IPO previously allowed the registration of the mark GIN LANE for goods also falling under
Class 3, i.e., perfume, cologne, skin care preparations, hair care preparations and toiletries. 85

We are mindful that in the earlier cases of Mighty Corporation and Emerald, despite a finding that there is no
colorable imitation, we still discussed the nature of the goods using the trademark and whether the goods are
identical, similar, competing or related. We need not belabor a similar discussion here considering that the
essential element in determining likelihood of confusion, i.e., colorable imitation by LO LANE of the mark
ORLANE, is absent in this case. Resemblance between the marks is a separate requirement from, and must not
be confused with, the requirement of a similarity of the goods to which the trademarks are attached. In Great
White Shark Enterprises, Inc v. Caralde, Jr.,86 after we ruled that there was no confusing similarity between
Great White Shark's "GREG NORMAN LOGO" and Caralde's "SHARK & LOGO" mark due to the visual and
aural dissimilarities between the two marks, we deemed it unnecessary to resolve whether Great White Shark's
mark has gained recognition as a well-known mark.

Finding that LOLANE is not a colorable imitation of ORLANE due to distinct visual and aural differences
using the dominancy test, we no longer find it necessary to discuss the contentions of the petitioner as to the
appearance of the marks together with the packaging, nature of the goods represented by the marks and the
price difference, as well as the applicability of foreign judgments. We rule that the mark LOLANE is entitled to
registration.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated July 14, 2009
is REVERSED and SET ASIDE. Petitioner's application of the mark LOLANE for goods classified under
Class 3 of the International Classification of Goods is GRANTED.

SO ORDERED.

120
G.R. No. L-53672 May 31, 1982
BATA INDUSTRIES, LTD., petitioner,
vs.
THE HONORABLE COURT OF APPEALS; TIBURCIO S. EVALLE, DIRECTOR OF PATENTS,
NEW OLYMPIAN RUBBER PRODUCTS CO., INC., respondents.
RESOLUTION
ABAD SANTOS, J.:
On October 27, 1980, the petition in this case was denied for lack of merit. Petitioner moved to reconsider and
as required, private respondent submitted comments. A hearing on the motion for reconsideration was held on
June 7, 1982. This is Our resolution on the motion for reconsideration.
In Inter Partes Case No. 654 of the Philippine Patent Office, New Olympian Rubber Products Co., Inc. sought
the registration of the mark BATA for casual rubber shoes. It alleged that it has used the mark since July 1,
1970.
Registration was opposed by Bata Industries, Ltd., a Canadian corporation, which alleged that it owns and has
not abandoned the trademark BATA.
Stipulated by the parties were the following:
1. Bata Industries, Ltd. has no license to do business in the Philippines;
2. It is not presently selling footwear under the trademark BATA in the Philippines; and
3. It has no licensing agreement with any local entity or firm to sell its products in the Philippines.
Evidence received by the Philippine Patent Office showed that Bata shoes made by Gerbec and Hrdina of
Czechoslovakia were sold in the Philippines prior to World War II. Some shoes made by Bata of Canada were
perhaps also sold in the Philippines until 1948. However, the trademark BATA was never registered in the
Philippines by any foreign entity. Under the circumstances, it was concluded that "opposer has, to all intents
and purposes, technically abandoned its trademark BATA in the Philippines."
Upon the other hand, the Philippine Patent Office found that New Olympian Rubber Products Co., Inc.:
... has overwhelmingly and convincingly established its right to the trademark BATA and consequently, its use
and registration in its favor. There is no gainsaying the truth that the respondent has spent a considerable
amount of money and effort in popularizing the trademark BATA for shoes in the Philippines through the
advertising media since it was lawfully used in commerce on July 1, 1970. It can not be denied, therefore, that it
is the respondent-applicant's expense that created the enormous goodwill of the trademark BATA in the
121
Philippines and not the opposer as claimed in its opposition to the registration of the BATA mark by the
respondent.
Additionally, on evidence of record, having also secured (three) copyright registrations for the word BATA,
respondent-applicant's right to claim ownership of the trademark BATA in the Philippines, which it claims to be
a Tagalog word which literally means "a little child" (Exh. 5), is all the more fortified.
The Philippine Patent Office dismissed the opposition and ordered the registration of the trademark BATA in
favor of the domestic corporation.
Appeal from the decision of the Philippine Patent Office was made to the Court of Appeals by Bata Industries,
Ltd. In a decision penned by Justice Justiniano P. Cortez dated August 9, 1979, with Justices Mariano Serrano
and Jose B. Jimenez concurring, the PPO decision was reversed. A motion for reconsideration filed by New
Olympian Rubber Products Co., Inc. was denied on October 17, 1979, by the same justices.
However, in a resolution on a second motion for reconsideration penned by Justice Hugo E. Gutierrez who is
now a member of this Court, to which Justices Corazon J. Agrava and Rodolfo A. Nocon concurred (with the
former filing a separate opinion), the decision of August 9, 1979, was set aside and that of the Director of
Patents was affirmed.
In addition to points of law, Bata Industries, Ltd. questions "the circumstances surrounding the issuance of the
questioned resolutions of the respondent Court of Appeals." In effect, it insinuates that there was something
wrong when a new set of justices rendered a completely different decision.
It should be stated that there is nothing wrong and unusual when a decision is reconsidered. This is so when the
reconsideration is made by a division composed of the same justices who rendered the decision but much more
so when the reconsideration is made by a different set of justices as happened in this case. Obviously, the new
set of justices would have a fresh perspective unencumbered by the views expressed in the decision sought to be
reconsidered. Nor should it be a cause for wonder why Justices Gutierrez, Agrava and Nocon had replaced the
original justices. Justice Cortez resigned to become a candidate for the governorship of Cagayan (he was
elected), while Justices Serrano and Jimenez retired upon reaching the age of 65.
On the merits, the extended resolution penned by Justice Gutierrez does not have to be fortified by Us. We
agree with Mr. Justice Gutierrez when he says:
We are satisfied from the evidence that any slight goodwill generated by the Czechoslovakian product during
the Commonwealth years was completely abandoned and lost in the more than 35 years that have passed since
the liberation of Manila from the Japanese troops.
The applicant-appellee has reproduced excerpts from the testimonies of the opposer-appellant's witnesses to
prove that the opposer-appellant was never a user of the trademark BATA either before or after the war, that the
appellant is not the successor-in-interest of Gerbec and Hrdina who were not is representatives or agents, and
could not have passed any rights to the appellant, that there was no privity of interest between the
Czechoslovakian owner and the Canadian appellant and that the Czechoslovakian trademark has been
abandoned in Czechoslovakia.

We agree with the applicant-appellee that more than substantial evidence supports the findings and conclusions
of the Director of Patents. The appellant has no Philippine goodwill that would be damaged by the registration
of the mark in the appellee's favor. We agree with the decision of the Director of Patents which sustains, on the
basis of clear and convincing evidence, the right of the appellee to the registration and protection of its
industrial property, the BATA trademark.

WHEREFORE, the motion for reconsideration is hereby denied for lack of merit. No special pronouncement as
to costs. SO ORDERED.

122
[G.R. No. 114508. November 19, 1999]
PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF PATENTS and the
BARBIZON CORPORATION, respondents.
DECISION
PUNO, J.:
The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the
Philippines bound itself to honor and enforce in this country. As to whether or not the treaty affords protection
to a foreign corporation against a Philippine applicant for the registration of a similar trademark is the principal
issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed
an application with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieres
and ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the
firm name "L & BM Commercial" since March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of
New York, U.S.A., opposed the application. It claimed that:
"The mark BARBIZON of respondent-applicant is confusingly similar to the trademark BARBIZON which
opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON and its business reputation and
goodwill will suffer great and irreparable injury.
That the respondent-applicant's use of the said mark BARBIZON which resembles the trademark used and
owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not
abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, as amended." [1]
This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the pleadings, the parties
submitted the case for decision.
On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition and giving due
course to Escobar's application, thus:
"WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No.
19010 for the registration of the trademark BARBIZON, of respondent Lolita R. Escobar, is given due course.
IT IS SO ORDERED."[2]
123
This decision became final and on September 11, 1974, Lolita Escobar was issued a certificate of
registration for the trademark "Barbizon." The trademark was "for use in "brassieres and lady's underwear
garments like panties."[3]
Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas J. Mirpuri who,
under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's
"Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of the trademark
required under Section 12 of Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure,
the Bureau of Patents cancelled Escobar's certificate of registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own
application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner
and this application was opposed by private respondent. The case was docketed as Inter Partes Case No. 2049
(IPC No. 2049).
In its opposition, private respondent alleged that:
"(a) The Opposer has adopted the trademark BARBIZON (word), sometime in June 1933 and has then used it
on various kinds of wearing apparel. On August 14, 1934, Opposer obtained from the United States Patent
Office a more recent registration of the said mark under Certificate of Registration No. 316,161. On March 1,
1949, Opposer obtained from the United States Patent Office a more recent registration for the said trademark
under Certificate of Registration No. 507,214, a copy of which is herewith attached as Annex `A.' Said
Certificate of Registration covers the following goods-- wearing apparel: robes, pajamas, lingerie, nightgowns
and slips;
(b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON and Bee design and used the
said mark in various kinds of wearing apparel. On March 15, 1977, Opposer secured from the United States
Patent Office a registration of the said mark under Certificate of Registration No. 1,061,277, a copy of which is
herein enclosed as Annex `B.' The said Certificate of Registration covers the following goods: robes, pajamas,
lingerie, nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON and a Representation of a
Woman and thereafter used the said trademark on various kinds of wearing apparel. Opposer obtained from the
United States Patent Office registration of the said mark on April 5, 1983 under Certificate of Registration No.
1,233,666 for the following goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy of the
said certificate of registration is herewith enclosed as Annex `C.'
(d) All the above registrations are subsisting and in force and Opposer has not abandoned the use of the said
trademarks. In fact, Opposer, through a wholly-owned Philippine subsidiary, the Philippine Lingerie
Corporation, has been manufacturing the goods covered by said registrations and selling them to various
countries, thereby earning valuable foreign exchange for the country. As a result of respondent-applicant's
misappropriation of Opposer's BARBIZON trademark, Philippine Lingerie Corporation is prevented from
selling its goods in the local market, to the damage and prejudice of Opposer and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been used in many countries, including the
Philippines, for at least 40 years and has enjoyed international reputation and good will for their quality. To
protect its registrations in countries where the goods covered by the registrations are being sold, Opposer has
procured the registration of the trademark BARBIZON in the following countries:Australia, Austria, Abu
Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia, Denmark, Ecuador, France, West
Germany, Greece, Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco, Panama,
New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador, South Africa, Zambia, Egypt, and Iran, among
others;
(f) To enhance its international reputation for quality goods and to further promote goodwill over its name,
marks and products, Opposer has extensively advertised its products, trademarks and name in various
publications which are circulated in the United States and many countries around the world, including the
Philippines;
(g) The trademark BARBIZON was fraudulently registered in the Philippines by one Lolita R. Escobar under
Registration No. 21920, issued on September 11, 1974, in violation of Article 189 (3) of the Revised Penal
Code and Section 4 (d) of the Trademark Law. Herein respondent applicant acquired by assignment the `rights'
to the said mark previously registered by Lolita Escobar, hence respondent-applicant's title is vitiated by the
same fraud and criminal act. Besides, Certificate of Registration No. 21920 has been cancelled for failure of
either Lolita Escobar or herein respondent-applicant, to seasonably file the statutory affidavit of use. By
applying for a re-registration of the mark BARBIZON subject of this opposition, respondent-applicant seeks to
perpetuate the fraud and criminal act committed by Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and Representation of a
Woman trademarks qualify as well-known trademarks entitled to protection under Article 6bisof the
Convention of Paris for the Protection of Industrial Property and further amplified by the Memorandum of the
Minister of Trade to the Honorable Director of Patents dated October 25, 1983 [sic],[4]Executive Order No. 913
dated October 7, 1963 and the Memorandum of the Minister of Trade and Industry to the Honorable Director of
Patents dated October 25, 1983.
(i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON trademark and
constitutes the dominant part of Opposer's two other marks namely, BARBIZON and Bee design and
BARBIZON and a Representation of a Woman. The continued use by respondent-applicant of Opposer's
trademark BARBIZON on goods belonging to Class 25 constitutes a clear case of commercial and criminal
piracy and if allowed registration will violate not only the Trademark Law but also Article 189 of the Revised
Penal Code and the commitment of the Philippines to an international treaty." [5]
Replying to private respondent's opposition, petitioner raised the defense of res judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business name "Barbizon International."
Petitioner registered the name with the Department of Trade and Industry (DTI) for which a certificate of
registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition for cancellation
of petitioner's business name.
124
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate of registration,
and declared private respondent the owner and prior user of the business name "Barbizon International." Thus:
"WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and prior user of the
business name "BARBIZON INTERNATIONAL" under Certificate of Registration No. 87-09000 dated March
10, 1987 and issued in the name of respondent, is [sic] hereby ordered revoked and cancelled. x x x."[6]
Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director of Patents. On
June 18, 1992, the Director rendered a decision declaring private respondent's opposition barred by res
judicata and giving due course to petitioner's application for registration, to wit:
"WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby DECLARED BARRED by res
judicata and is hereby DISMISSED. Accordingly, Application Serial No. 45011 for trademark BARBIZON
filed by Pribhdas J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED."[7]
Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP No. 28415. On
April 30, 1993, the Court of Appeals reversed the Director of Patents finding that IPC No. 686 was not barred
by judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further
proceedings, viz:
"WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of Patents in Inter Partes
Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded to the Bureau of Patents for further
proceedings, in accordance with this pronouncement. No costs."[8]
In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its
decision.[9] Hence, this recourse.
Before us, petitioner raises the following issues:
"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS IN INTER PARTES CASE
NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO
FAR AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY APPLIED THE PRINCIPLE OF
RES JUDICATA IN DISMISSING PRIVATE RESPONDENT BARBIZON'S OPPOSITION TO
PETITIONER'S APPLICATION FOR REGISTRATION FOR THE TRADEMARK BARBIZON, WHICH
HAS SINCE RIPENED TO CERTIFICATE OF REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE MERITS' REQUIRED A
'HEARING WHERE BOTH PARTIES ARE SUPPOSED TO ADDUCE EVIDENCE' AND WHETHER THE
JOINT SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR RESPECTIVE
PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS
WITHIN THE MEANING OF 'JUDGMENT ON THE MERITS' AS ONE OF THE REQUISITES TO
CONSTITUTE RES JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND INDUSTRY CANCELLING
PETITIONER'S FIRM NAME 'BARBIZON INTERNATIONAL' AND WHICH DECISION IS STILL
PENDING RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE DIRECTOR OF
PATENTS IN INTER PARTES CASE NO. 2049 HAS THE RIGHT TO DECIDE SUCH CANCELLATION
NOT ON THE BASIS OF THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION AND THE TRADEMARK
LAW (R.A. 166) WHICH IS WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE
DIRECTOR OF PATENTS."[10]
Before ruling on the issues of the case, there is need for a brief background on the function and historical
development of trademarks and 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." [11] This definition has been
simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as
"any visible sign capable of distinguishing goods." [12] In Philippine 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. [13]
Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they
indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles
come up to a certain standard of quality; and (3) they advertise the articles they symbolize. [14]
Symbols have been used to identify the ownership or origin of articles for several centuries.[15] As early as
5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe
show bison with symbols on their flanks.[16] Archaeological discoveries of ancient Greek and Roman
inscriptions on sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some features
which are thought to be marks or symbols. These marks were affixed by the creator or maker of the article, or
by public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the
settlement of accounts between an entrepreneur and his workmen.[17]
In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth
century England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on
bread, bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. [18] Every guild had its own
mark and every master belonging to it had a special mark of his own. The marks were not trademarks but police
marks compulsorily imposed by the sovereign to let the public know that the goods were not "foreign" goods
smuggled into an area where the guild had a monopoly, as well as to aid in tracing defective work or poor
craftsmanship to the artisan.[19] For a similar reason, merchants also used merchants' marks. Merchants dealt in
goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon
recovery after shipwreck or piracy.[20]
125
With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to
create or continue monopoly but to give the customer an index or guarantee of quality. [21] It was in the late 18th
century when the industrial revolution gave rise to mass production and distribution of consumer goods that the
mark became an important instrumentality of trade and commerce.[22] By this time, trademarks did not merely
identify the goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further
purchases by the consuming public.[23] Eventually, they came to symbolize the goodwill and business reputation
of the owner of the product and became a property right protected by law.[24] The common law developed the
doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from
getting another's business or injuring his reputation by unfair means, and, from defrauding the
public."[25] Subsequently, England and the United States enacted national legislation on trademarks as part of
the law regulating unfair trade.[26] It became the right of the trademark owner to exclude others from the use of
his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury. At
the same time, the trademark served as a warning against the imitation or faking of products to prevent the
imposition of fraud upon the public.[27]
Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for
the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal
guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the
goods.[28] The mark has become the "silent salesman," the conduit through which direct contact between the
trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it
has become a more convincing selling point than even the quality of the article to which it refers.[29] In the last
half century, the unparalleled growth of industry and the rapid development of communications technology
have enabled trademarks, tradenames and other distinctive signs of a product to penetrate regions where the
owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of
actual market penetration; it extends to zones where the marked article has been fixed in the public mind
through advertising.[30] Whether in the print, broadcast or electronic communications medium, particularly on
the Internet,[31]advertising has paved the way for growth and expansion of the product by creating and earning a
reputation that crosses over borders, virtually turning the whole world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this action claiming that "Barbizon"
products have been sold in the Philippines since 1970. Petitioner developed this market by working long hours
and spending considerable sums of money on advertisements and promotion of the trademark and its
products. Now, almost thirty years later, private respondent, a foreign corporation, "swaggers into the country
like a conquering hero," usurps the trademark and invades petitioner's market. [32] Justice and fairness dictate that
private respondent be prevented from appropriating what is not its own. Legally, at the same time, private
respondent is barred from questioning petitioner's ownership of the trademark because of res judicata.[33]
Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter
settled by judgment.[34] In res judicata, the judgment in the first action is considered conclusive as to every
matter offered and received therein, as to any other admissible matter which might have been offered for that
purpose, and all other matters that could have been adjudged therein. [35] Res judicatais an absolute bar to
a subsequent action for the same cause; and its requisites are: (a) the former judgment or order must be final;
(b) the judgment or order must be one on the merits; (c) it must have been rendered by a court having
jurisdiction over the subject matter and parties; (d) there must be between the first and second actions, identity
of parties, of subject matter and of causes of action.[36]
 The Solicitor General, on behalf of respondent Director of Patents, has joined cause with petitioner. Both
claim that all the four elements of res judicata have been complied with: that the judgment in IPC No. 686 was
final and was rendered by the Director of Patents who had jurisdiction over the subject matter and parties; that
the judgment in IPC No. 686 was on the merits; and that the lack of a hearing was immaterial because
substantial issues were raised by the parties and passed upon by the Director of Patents. [37]
The decision in IPC No. 686 reads as follows:
"x x x.
Neither party took testimony nor adduced documentary evidence. They submitted the case for decision based on
the pleadings which, together with the pertinent records, have all been carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein opposer would probably be damaged
by the registration of the trademark BARBIZON sought by the respondent-applicant on the ground that it so
resembles the trademark BARBIZON allegedly used and owned by the former to be `likely to cause confusion,
mistake or to deceive purchasers.'
On record, there can be no doubt that respondent-applicant's sought-to-be-registered trademark BARBIZON is
similar, in fact obviously identical, to opposer's alleged trademark BARBIZON, in spelling and
pronunciation. The only appreciable but very negligible difference lies in their respective appearances or
manner of presentation. Respondent-applicant's trademark is in bold letters (set against a black background),
while that of the opposer is offered in stylish script letters.
It is opposer's assertion that its trademark BARBIZON has been used in trade or commerce in the Philippines
prior to the date of application for the registration of the identical mark BARBIZON by the respondent-
applicant. However, the allegation of facts in opposer's verified notice of opposition is devoid of such material
information. In fact, a reading of the text of said verified opposition reveals an apparent, if not deliberate,
omission of the date (or year) when opposer's alleged trademark BARBIZON was first used in trade in the
Philippines (see par. No. 1, p. 2, Verified Notice of Opposition, Rec.).Thus, it cannot here and now be
ascertained whether opposer's alleged use of the trademark BARBIZON could be prior to the use of the
identical mark by the herein respondent-applicant, since the opposer attempted neither to substantiate its claim
of use in local commerce with any proof or evidence. Instead, the opposer submitted the case for decision based
merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended application for registration that she first used
the trademark BARBIZON for brassiere (or 'brasseire') and ladies underwear garments and panties as early as
March 3, 1970. Be that as it may, there being no testimony taken as to said date of first use, respondent-
applicant will be limited to the filing date, June 15, 1970, of her application as the date of first use (Rule 173,
Rules of Practice in Trademark Cases).
From the foregoing, I conclude that the opposer has not made out a case of probable damage by the registration
of the respondent-applicant's mark BARBIZON.
126
WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No.
19010, for the registration of the trademark BARBIZON of respondent Lolita R. Escobar, is given due
course."[38]
The decision in IPC No. 686 was a judgment on the merits and it was error for the Court of Appeals to rule
that it was not. A judgment is on the merits when it determines the rights and liabilities of the parties based on
the disclosed facts, irrespective of formal, technical or dilatory objections. [39] It is not necessary that a trial
should have been conducted. If the court's judgment is general, and not based on any technical defect or
objection, and the parties had a full legal opportunity to be heard on their respective claims and contentions, it is
on the merits although there was no actual hearing or arguments on the facts of the case. [40] In the case at bar,
the Director of Patents did not dismiss private respondent's opposition on a sheer technicality. Although no
hearing was conducted, both parties filed their respective pleadings and were given opportunity to present
evidence. They, however, waived their right to do so and submitted the case for decision based on their
pleadings. The lack of evidence did not deter the Director of Patents from ruling on the case, particularly on the
issue of prior use, which goes into the very substance of the relief sought by the parties. Since private
respondent failed to prove prior use of its trademark, Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General allege that IPC No.
686 and IPC No. 2049 also comply with the fourth requisite of res judicata, i.e., they involve the same parties
and the same subject matter, and have identical causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same subject
matter. Petitioner herein is the assignee of Escobar while private respondent is the same American corporation
in the first case. The subject matter of both cases is the trademark "Barbizon." Private respondent counter-
argues, however, that the two cases do not have identical causes of action. New causes of action were allegedly
introduced in IPC No. 2049, such as the prior use and registration of the trademark in the United States and
other countries worldwide, prior use in the Philippines, and the fraudulent registration of the mark in violation
of Article 189 of the Revised Penal Code. Private respondent also cited protection of the trademark under the
Convention of Paris for the Protection of Industrial Property, specifically Article 6bis thereof, and the
implementation of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the
Minister of Trade and Industry to the Director of Patents, as well as Executive Order (E.O.) No. 913.
The Convention of Paris for the Protection of Industrial Property, otherwise known as the 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.[41] The Convention is essentially a compact among
various countries which, as members of the Union, have pledged to accord to citizens of the other member
countries trademark and other rights comparable to those accorded their own citizens by their domestic laws for
an effective protection against unfair competition.[42] In short, foreign nationals are to be given the same
treatment in each of the member countries as that country makes available to its own citizens. [43] Nationals of
the various member nations are thus assured of a certain minimum of international protection of their industrial
property.[44]
The Convention was first signed by eleven countries in Paris on March 20, 1883. [45] It underwent several
revisions-- at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in
1958,[46] and at Stockholm in 1967. Both the Philippines and the United States of America, herein private
respondent's country, are signatories to the Convention. The United States acceded on May 30, 1887 while the
Philippines, through its Senate, concurred on May 10, 1965. [47] The Philippines' adhesion became effective on
September 27, 1965,[48] and from this date, the country obligated itself to honor and enforce the provisions of
the Convention.[49]
In the case at bar, private respondent anchors its cause of action on the first paragraph of Article 6bis of
the Paris Convention which reads as follows:
"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." [50]
This Article governs protection of well-known trademarks. Under the first paragraph, 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 mark of a person entitled to the benefits of the
Convention, and used for identical or similar goods.
Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952. [51] It is a self-
executing provision and does not require legislative enactment to give it effect in the member country.[52] It may
be applied directly by the tribunals and officials of each member country by the mere publication or
proclamation of the Convention, after its ratification according to the public law of each state and the order for
its execution.[53]
The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" in
the country where protection is sought. The power to determine whether a trademark is well-known lies in the
"competent authority of the country of registration or use." This competent authority would be either the
registering authority if it has the power to decide this, or the courts of the country in question if the issue comes
before a court.[54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the Ministry of Trade
issued a Memorandum to the Director of Patents. The Minister ordered the Director that:
127
"Pursuant to the Paris Convention for the Protection of Industrial Property to which the Philippines is a
signatory, you are hereby directed to reject all pending applications for Philippine registration of signature and
other world-famous trademarks by applicants other than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands as Lacoste, Jordache,
Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to
surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the
trademarks' foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance."[55]
Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another Memorandum to the
Director of Patents, viz:
"Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rule-making and
adjudicatory powers of the Minister of Trade and Industry and provides inter alia, that `such rule-making and
adjudicatory powers should be revitalized in order that the Minister of Trade and Industry can x x x apply more
swift and effective solutions and remedies to old and new problems x x x such as infringement of
internationally-known tradenames and trademarks x x x' and in view of the decision of the Intermediate
Appellate Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO.
13359 (17) June 1983][56] which affirms the validity of the MEMORANDUM of then Minister Luis R.
Villafuerte dated 20 November 1980 confirming our obligations under the PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is a signatory, you are
hereby directed to implement measures necessary to effect compliance with our obligations under said
Convention in general, and, more specifically, to honor our commitment under Section 6bis[57] thereof, as
follows:
1. Whether the trademark under consideration is well-known in the Philippines or is a mark already belonging
to a person entitled to the benefits of the CONVENTION, this should be established, pursuant to Philippine
Patent Office procedures in inter partes and ex parte cases, according to any of the following criteria or any
combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark being considered is already well-
known in the Philippines such that permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof that goods bearing the trademark
are sold on an international scale, advertisements, the establishment of factories, sales offices, distributorships,
and the like, in different countries, including volume or other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of another country or countries,
taking into consideration the date of such registration;
(d) that the trademark has long been established and obtained goodwill and international consumer recognition
as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming ownership and has the right to registration under the
provisions of the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service marks, logos, signs,
emblems, insignia or other similar devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of, trademarks which
constitute a reproduction, translation or imitation of a trademark owned by a person, natural or corporate, who is
a citizen of a country signatory to the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL
PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in cases already or hereafter filed against
the registration of trademarks entitled to protection of Section 6 bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not entitled to such protection for final disallowance by the
Examination Division.
5. All pending applications for Philippine registration of signature and other world-famous trademarks filed by
applicants other than their original owners or users shall be rejected forthwith. Where such applicants have
already obtained registration contrary to the abovementioned PARIS CONVENTION and/or Philippine Law,
they shall be directed to surrender their Certificates of Registration to the Philippine Patent Office for
immediate cancellation proceedings.
x x x."[58]
In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all
pending applications for Philippine registration of signature and other world-famous trademarks by applicants
other than their original owners or users. The Minister enumerated several internationally-known trademarks
and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates
of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-known
trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark
is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris
Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex
parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse
applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications
for registration of world-famous trademarks by persons other than their original owners were to be rejected
forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of
128
then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade
and Industry for the effective protection of consumers and the application of swift solutions to problems in trade
and industry.[59]
Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark
case of La Chemise Lacoste, S.A. v. Fernandez.[60] This court ruled therein that under the provisions of Article
6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine
whether a trademark is well-known in this country.[61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption of the Paris
Convention in 1965. In the case at bar, the first inter partes case, IPC No. 686, was filed in 1970, before the
Villafuerte Memorandum but five (5) years after the effectivity of the Paris Convention. Article 6bis was
already in effect five years before the first case was instituted. Private respondent, however, did not cite the
protection of Article 6bis, neither did it mention the Paris Convention at all. It was only in 1981 when IPC No.
2049 was instituted that the Paris Convention and the Villafuerte Memorandum, and, during the pendency of the
case, the 1983 Ongpin Memorandum were invoked by private respondent.
The Solicitor General argues that the issue of whether the protection of Article 6bis of the Convention and
the two Memoranda is barred by res judicata has already been answered in Wolverine Worldwide, Inc. v. Court
of Appeals.[62] In this case, petitioner Wolverine, a foreign corporation, filed with the Philippine Patent Office a
petition for cancellation of the registration certificate of private respondent, a Filipino citizen, for the trademark
"Hush Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationally-known
trademark in the United States and other countries, and cited protection under the Paris Convention and the
Ongpin Memorandum. The petition was dismissed by the Patent Office on the ground of res judicata. It was
found that in 1973 petitioner's predecessor-in-interest filed two petitions for cancellation of the same trademark
against respondent's predecessor-in-interest. The Patent Office dismissed the petitions, ordered the cancellation
of registration of petitioner's trademark, and gave due course to respondent's application for registration. This
decision was sustained by the Court of Appeals, which decision was not elevated to us and became final and
executory.[63]
Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the Trademark Law, its
subsequent petition was based on a new cause of action, i.e., the Ongpin Memorandum and E.O. No. 913 issued
in 1983, after finality of the previous decision. We held that the said Memorandum and E.O. did not grant a new
cause of action because it did "not amend the Trademark Law," x x x "nor did it indicate a new policy with
respect to the registration in the Philippines of world-famous trademarks."[64] This conclusion was based on the
finding that Wolverine's two previous petitions and subsequent petition dealt with the same issue of ownership
of the trademark.[65] In other words, since the first and second cases involved the same issue of ownership, then
the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in IPC No.
686. Private respondent's opposition therein was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage to private respondent's business
reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a mark previously used in the
Philippines which act is penalized under Section 4 (d) of the Trademark Law.
In IPC No. 2049, private respondent's opposition set forth several issues summarized as follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its products such as robes, pajamas,
lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States Patent Office in 1934 and 1949; and
that variations of the same trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the
representation of a woman were also registered with the U.S. Patent Office in 1961 and 1976;
(c) that these marks have been in use in the Philippines and in many countries all over the world for over forty
years. "Barbizon" products have been advertised in international publications and the marks registered in 36
countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was based on fraud; and this
fraudulent registration was cancelled in 1979, stripping Escobar of whatsoever right she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-known mark under Article 6bis of the Paris
Convention, Executive Order No. 913, and the two Memoranda dated November 20, 1980 and October 25,
1983 of the Minister of Trade and Industry to the Director of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on the same class of goods as the latter's
amounts to a violation of the Trademark Law and Article 189 of the Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the trademark in
the United States and other countries, and the international recognition and reputation of the trademark
established by extensive use and advertisement of private respondent's products for over forty years here and
abroad. These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of
prior use may have been raised in IPC No. 686 but this claim was limited to prior use in the Philippines
only. Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol
"Barbizon,"[66] as the first and registered user of the mark attached to its products which have been sold and
advertised worldwide for a considerable number of years prior to petitioner's first application for registration of
her trademark in the Philippines. Indeed, these are substantial allegations that raised new issues and necessarily
gave private respondent a new cause of action.Res judicata does not apply to rights, claims or demands,
although growing out of the same subject matter, which constitute separate or distinct causes of action and were
not put in issue in the former action.[67]
Respondent corporation also introduced in the second case a fact that did not exist at the time the first case
was filed and terminated. The cancellation of petitioner's certificate of registration for failure to file the affidavit
of use arose only after IPC No. 686. It did not and could not have occurred in the first case, and this gave
respondent another cause to oppose the second application. Res judicata extends only to facts and conditions as
they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the
facts so determined.[68] When new facts or conditions intervene before the second suit, furnishing a new basis
129
for the claims and defenses of the parties, the issues are no longer the same, and the former judgment cannot be
pleaded as a bar to the subsequent action.[69]
It is also noted that the oppositions in the first and second cases are based on different laws. The
opposition in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d) [70]on
confusing similarity of trademarks and Section 8 [71] on the requisite damage to file an opposition to a petition
for registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof,
E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked
Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law. [72] 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
others.[73] The mere fact that the same relief is sought in the subsequent action will not render the judgment in
the prior action operative as res judicata, such as where the two actions are based on different statutes. [74] Res
judicata therefore does not apply to the instant case and respondent Court of Appeals did not err in so ruling.
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. [75]Trademarks play a
significant role in communication, commerce and trade, and serve valuable and interrelated business functions,
both nationally and internationally. For this reason, all agreements concerning industrial property, like those on
trademarks and tradenames, are intimately connected with economic development. [76] 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.[77] These advantages have been acknowledged by the Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an effective intellectual and industrial property system is vital to
the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our products." [78] The Intellectual Property Code took effect on
January 1, 1998 and by its express provision,[79] repealed the Trademark Law,[80] the Patent Law,[81] Articles 188
and 189 of the Revised Penal Code, the Decree on Intellectual Property,[82] and the Decree on Compulsory
Reprinting of Foreign Textbooks.[83] The Code was enacted to strengthen the intellectual and industrial property
system in the Philippines as mandated by the country's accession to the Agreement Establishing the World
Trade Organization (WTO).[84]
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.[85] The
WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements
and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on Trade-Related
Aspects of Intellectual Property Rights or TRIPs. [86] 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. [87] These Conventions
are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the
International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention
(1967), as revised in Stockholm on July 14, 1967.[88]
 A major proportion of international trade depends on the protection of intellectual property rights. [89] Since
the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a
considerable adverse impact on domestic and international trade revenues. [90] The TRIPs Agreement seeks to
grant adequate protection of intellectual property rights by creating a favorable economic environment to
encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about
economic, cultural and technological independence.[91] The Philippines and the United States of America have
acceded to the WTO Agreement. This Agreement has revolutionized international business and economic
relations among states, and has propelled the world towards trade liberalization and economic
globalization.[92] Protectionism and isolationism belong to the past. Trade is no longer confined to a bilateral
system. There is now "a new era of global economic cooperation, reflecting the widespread desire to operate in
a fairer and more open multilateral trading system." [93] Conformably, the State must reaffirm its commitment to
the global community and take part in evolving a new international economic order at the dawn of the new
millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.

130
G.R. No. 204605
INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINES, Petitioner,
vs.
HON. PAQUITO OCHOA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. ALBERT DEL
ROSARIO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS,
AND HON. RICARDO BLANCAFLOR, IN HIS CAPACITY AS THE DIRECTOR GENERAL OF
THE INTELLECTUAL PROPERTY OFFICE OF THE PHILIPPINES, Respondents.
DECISION
BERSAMIN, J.:
In this special civil action for certiorari and prohibition, the Intellectual Property Association of the Philippines
(IPAP) seeks to declare the accession of the Philippines to the Protocol Relating to the Madrid Agreement
Concerning the International Registration of Marks (Madrid Protocol) unconstitutional on the ground of the
lack of concurrence by the Senate, and in the alternative, to declare the implementation thereof as
unconstitutional because it conflicts with Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines (IP Code).1
We find and declare that the President's ratification is valid and constitutional because the Madrid
Protocol, being an executive agreement as determined by the Department of Foreign Affairs, does not require
the concurrence of the Senate.
Antecedents
The Madrid System for the International Registration of Marks (Madrid System), which is the centralized
system providing a one-stop solution for registering and managing marks worldwide, allows the trademark
owner to file one application in one language, and to pay one set of fees to protect his mark in the territories of
up to 97 member-states.2 The Madrid System is governed by the Madrid Agreement, concluded in 1891, and
the Madrid Protocol, concluded in 1989.3
The Madrid Protocol, which was adopted in order to remove the challenges deterring some countries from
acceding to the Madrid Agreement, has two objectives, namely: (1) to facilitate securing protection for marks;
and (2) to make the management of the registered marks easier in different countries. 4
In 2004; the Intellectual Property Office of the Philippines (IPOPHL), the government agency mandated to
administer the intellectual property system of the country and to implement the state policies on intellectual
property; began considering the country's accession to the Madrid Protocol. However, based on its assessment
in 2005, the IPOPHL needed to first improve its own operations before making the recommendation in favor of
accession. The IPOPHL thus implemented reforms to eliminate trademark backlogs and to reduce the
turnaround time for the registration of marks.5
131
In the meanwhile, the IPOPHL mounted a campaign for information dissemination to raise awareness of
the Madrid Protocol. It launched a series of consultations with stakeholders and various business groups
regarding the Philippines' accession to the Madrid Protocol. It ultimately arrived at the conclusion that
accession would benefit the country and help raise the level of competitiveness for Filipino brands. Hence, it
recommended in September 2011 to the Department of Foreign Affairs (DFA) that the Philippines should
accede to the Madrid Protocol.6
After its own review, the DFA endorsed to the President the country's accession to the Madrid
Protocol. Conformably with its express authority under Section 9 of Executive Order No. 459 (Providing for
the Guidelines in the Negotiation of International Agreements and its Ratification) dated November 25, 1997,
the DFA determined that the Madrid Protocol was an executive agreement.1âwphi1 The IPOPHL, the
Department of Science and Technology, and the Department of Trade and Industry concurred in the
recommendation of the DFA.7
On March 27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, The instrument of accession was deposited with the Director General of the World Intellectual
Property Organization (WIPO) on April 25, 2012. 8 The Madrid Protocol entered into force in the Philippines on
July 25, 2012.9
Petitioner IP AP, an association of more than 100 law firms and individual practitioners in Intellectual Property
Law whose main objective is to promote and protect intellectual property rights in the Philippines through
constant assistance and involvement in the legislation of intellectual property law, 10 has commenced this special
civil action for certiorari and prohibition11 to challenge the validity of the President's accession to the Madrid
Protocol without the concurrence of the Senate. Citing Pimentel, Jr. v. Office of the Executive Secretary, the
IPAP has averred:
Nonetheless, while the President has the sole authority to negotiate and enter into treaties, the Constitution
provides a limitation to his power by requiring the concurrence of 2/3 of all the members of the Senate for the
validity of the treaty entered into by him. Section 21, Article VII of the 1987 Constitution provides that "no
treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the
Members of the Senate." The 1935 and the 1973 Constitution also required the concurrence by the legislature to
the treaties entered into by the executive.12
According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement; hence, respondent DFA
Secretary Albert Del Rosario acted with grave abuse of discretion in determining the Madrid Protocol as an
executive agreement.13
The IPAP has argued that the implementation of the Madrid Protocol in the Philippines; specifically the
processing of foreign trademark applications, conflicts with the IP Code, 14 whose Section 125 states:
Sec. 125. Representation; Address for Service. - If the applicant is not domiciled or has no real and effective
commercial establishment in the Philippines; he shall designate by a written document filed in the office, the
name and address of a Philippine resident who may be served notices or process in proceedings affecting the
mark. Such notices or services may be served upon the person so designated by leaving a copy thereof at the
address specified in the last designation filed. If the person so designated cannot be found at the address given
in the last designation, such notice or process may be served upon the Director. (Sec. 3; R.A. No. 166 a)
It has posited that Article 2 of the Madrid Protocol provides in contrast:
Article 2
Securing Protection through International Registration
(1) Where an application for the registration of a mark has been filed with the Office of a Contracting Party, or
where a mark has been registered in the register of the Office of a Contracting Party, the person in whose name
that application (hereinafter referred to as "the basic application;') or that registration (hereinafter referred to as
"the basic registration") stands may, subject to the provisions of this Protocol secure protection for his mark in
the territory of the Contracting Parties, by obtaining the registration of that mark in the register of the
International Bureau of the World Intellectual Property Organization (hereinafter referred to as "the
international registration," "the International Register," "the International Bureau" and "the Organization'',
respectively), provided that,
(i) where the basic application has been filed with the Office of a Contracting State or where the basic
registration has been made by such an Office, the person in whose name that application or registration stands is
a national of that Contracting State, or is domiciled, or has a real and effective industrial or commercial
establishment, in the said Contracting State,
(ii) where the basic application has been filed with the Office of a Contracting Organization or where the basic
registration has been made by such an Office, the person in whose name that application or registration stands is
a national of a State member of that Contracting Organization, or is domiciled, or has a real and effective
industrial or commercial establishment, in the territory of the said Contracting Organization.
(2) The application for international registration (hereinafter referred to as "the international application") shall
be filed with the International Bureau through the intermediary of the Office with which the basic application
was filed or by which the basic registration was made (hereinafter referred to as "the Office of origin"), as the
case may be.
(3) Any reference in this Protocol to an "Office" or an "Office of a Contracting Party" shall be construed as a
reference to the office that is in charge, on behalf of a Contracting Party, of the registration of marks, and any
reference in this Protocol to "marks" shall be construed as a reference to trademarks and service marks.
(4) For the purposes of this Protocol, "territory of a Contracting Party" means, where the Contracting Party is a
State, the territory of that State and, where the Contracting Party is an intergovernmental organization, the
territory in which the constituting treaty of that intergovernmental organization applied.
The IPAP has insisted that Article 2 of the Madrid Protocol means that foreign trademark applicants may file
their applications through the International Bureau or the WIPO, and their applications will be automatically
granted trademark protection without the need for designating their resident agents in the country. 15
132
Moreover, the IPAP has submitted that the procedure outlined in the Guide to the International Registration of
Marks relating to representation before the International Bureau is the following, to wit:
Rule 3(1)(a) 09.02 References in the Regulations, Administrative Instructions or in this Guide to representation
relate only to representation before the International Bureau. The questions of the need for a representative
before the Office of origin or the Office of a designated Contracting Party (for example, in the event of a refusal
of protection issued by such an Office), who may act as a representative in such cases and the method of
appointment, are outside the scope of the Agreement, Protocol and Regulations and are governed by the law and
practice of the Contracting Party concerned.
which procedure is in conflict with that under Section 125 of the IP Code, and constitutes in effect an
amendment of the local law by the Executive Department.16
The IPAP has prayed that the implementation of the Madrid Protocol in the Philippines be restrained in order to
prevent future wrongs considering that the IP AP and its constituency have a clear and unmistakable right not to
be deprived of the rights granted them by the IP Code and existing local laws.17
In its comment in behalf of the respondents, the Office of the Solicitor General (OSG) has stated that the IPAP
does not have the locus standi to challenge the accession to the Madrid Protocol; that the IPAP cannot invoke
the Court's original jurisdiction absent a showing of any grave abuse of discretion on the part of the
respondents; that the President's ratification of the Madrid Protocol as an executive agreement is valid because
the Madrid Protocol is only procedural, does not create substantive rights, and does not require the amendment
of the IP Code; that the IPAP is not entitled to the restraining order or injunction because it suffers no damage
from the ratification by the President, and there is also no urgency for such relief; and the IPAP has no clear
unmistakable right to the relief sought.18
Issues
The following issues are to be resolved, namely:
I. Whether or not the IP AP has locus standi to challenge the President's ratification of the Madrid Protocol;
II. Whether or not the President's ratification of the Madrid Protocol is valid and constitutional; and
III. Whether or not the Madrid Protocol is in conflict with the IP Code.
Ruling of the Court
The petition for certiorari and prohibition is without merit.
A.
The issue of legal standing to sue, or locus standi
The IPAP argues in its reply19 that it has the locus standi to file the present case by virtue of its being an
association whose members stand to be injured as a result of the enforcement of the Madrid Protocol in the
Philippines; that the injury pertains to the acceptance and approval of applications submitted through
the Madrid Protocol without local representation as required by Section 125 of the IP Code;20 and that such will
diminish the rights granted by the IP Code to Intellectual Property Law practitioners like the members of the
IPAP.21
The argument of the IPAP is untenable.
Legal standing refers to "a right of appearance in a court of justice on a given question." 22 According to Agan,
Jr. v. Philippine International Air Terminals Co., Inc.,23standing is "a peculiar concept in constitutional law
because in some cases, suits are not brought by parties who have been personally injured by the operation of a
law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public
interest."
The Court has frequently felt the need to dwell on the issue of standing in public or constitutional litigations to
sift the worthy from the unworthy public law litigants seeking redress or relief. The following elucidation in De
Castro v. Judicial and Bar Council24offers the general understanding of the context of legal standing, or locus
standi for that purpose, viz. :
In public or constitutional litigations, the Court is often burdened with the determination of the locus standi of
the petitioners due to the ever-present need to regulate the invocation of the intervention of the Court to correct
any official action or policy in order to avoid obstructing the efficient functioning of public officials and offices
involved in public service. It is required, therefore, that the petitioner must have a personal stake in the outcome
of the controversy, for, as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "'alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends for illumination of difficult constitutional questions,"
Accordingly, it has been held that the interest of a person assailing the constitutionality of a statute must
be direct and personal. He must be able to show, not only that the law or any government act is invalid,
but also that he sustained or is in imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the
person complaining has been or is about to be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act
complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for determining
whether a petitioner in a public action had locus standi. There, the Court held that the person who would assail
the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or
will sustain direct injury as a result." Vera was followed in Custodio v. President of the Senate, Manila Race
Horse Trainers' Association v. De la Fuente, Anti-Chinese League of the Philippines v. Felix, and Pascual v.
Secretary of Public Works.
133
Yet, the Court has also held that the requirement of locus standi, being a mere procedural technicality, can be
waived by the Court in the exercise of its discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court
liberalized the approach when the cases had "transcendental importance." Some notable controversies whose
petitioners did not pass the direct injury test were allowed to be treated in the same way as in Araneta v.
Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the issues raised by
the petition due to their "farreaching implications,'; even if the petitioner had no personality to file the suit. The
liberal approach of Aquino v. Commission on Elections has been adopted in several notable cases, permitting
ordinary citizens, legislators, and civic organizations to bring their suits involving the constitutionality or
validity of laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional
executive or legislative action rests on the theory that the petitioner represents the public in general. Although
such petitioner may not be as adversely affected by the action complained against as are others, it is enough that
he sufficiently demonstrates in his petition that he is entitled to protection or relief from the Court in the
vindication ofa public right.25
The injury that the IPAP will allegedly suffer from the implementation of the Madrid Protocol is imaginary,
incidental and speculative as opposed to a direct and material injury required by the foregoing tenets on locus
standi. Additionally, as the OSG points out in the comment, 26 the IPAP has misinterpreted Section 125 of the IP
Code on the issue of representation. The provision only states that a foreign trademark applicant "shall
designate by a written document filed in the office, the name and address of a Philippine resident who may be
served notices or process in proceedings affecting the mark;" it does not grant anyone in particular the right to
represent the foreign trademark applicant. Hence, the IPAP cannot justly claim that it will suffer irreparable
injury or diminution of rights granted to it by Section 125 of the IP Code from the implementation of
the Madrid Protocol.
Nonetheless, the IPAP also emphasizes that the paramount public interest involved has transcendental
importance because its petition asserts that the Executive Department has overstepped the bounds of its
authority by thereby cutting into another branch's functions and responsibilities.27 The assertion of the IPAP
may be valid on this score. There is little question that the issues raised herein against the implementation of
the Madrid Protocol are of transcendental importance. Accordingly, we recognize IPAP's locus standi to bring
the present challenge. Indeed, the Court has adopted a liberal attitude towards locus standi whenever the issue
presented for consideration has transcendental significance to the people, or whenever the issues raised are of
paramount importance to the public.28
B.
Accession to the
Madrid Protocol was constitutional
The IP AP submits that respondents Executive Secretary and DFA Secretary Del Rosario gravely abused their
discretion in determining that there was no need for the Philippine Senate's concurrence with the Madrid
Protocol; that the Madrid Protocol involves changes of national policy, and its being of a permanent character
requires the Senate's concurrence,29 pursuant to Section 21, Article VII of the Constitution, which states that "no
treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the
Members of the Senate."
Before going further, we have to distinguish between treaties and international agreements, which require the
Senate's concurrence, on one hand, and executive agreements, which may be validly entered into without the
Senate's concurrence. Executive Order No. 459, Series of 1997, 30 notes the following definitions, to wit:
Sec. 2. Definition of Terms.
a. International agreement - shall refer to a contract or understanding, regardless of nomenclature, entered into
between the Philippines and another government in written form and governed by international law, whether
embodied in a single instrument or in two or more related instruments.
b. Treaties - international agreements entered into by the Philippines which require legislative concurrence after
executive ratification. This term may include compacts like conventions, declarations, covenants and acts.
c. Executive Agreements - similar to treaties except that they do not require legislative concurrence.
The Court has highlighted the difference between treaties and executive agreements in Commissioner of
Customs v. Eastern Sea Trading,31 thusly:
International agreements involving political issues or changes of national policy and those involving
international arrangements of a permanent character usually take the form of treaties. But international
agreements embodying adjustments of detail carrying out well-established national policies and traditions and
those involving arrangements of a more or less temporary nature usually take the form of executive agreements.
In the Philippines, the DFA, by virtue of Section 9, Executive Order No. 459, 32 is initially given the power to
determine whether an agreement is to be treated as a treaty or as an executive agreement. To determine the issue
of whether DFA Secretary Del Rosario gravely abused his discretion in making his determination relative to
the Madrid Protocol, we review the jurisprudence on the nature of executive agreements, as well as the subject
matters to be covered by executive agreements.
The pronouncement in Commissioner of Customs v. Eastern Sea Trading33is instructive, to wit:
x x x The concurrence of said House of Congress is required by our fundamental law in the making of "treaties"
(Constitution of the Philippines; Article VII, Section 10[7]), which are, however, distinct and different from
"executive agreements," which may be validly entered into without such concurrence.
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"Treaties are formal documents which require ratification with the approval of two thirds of the Senate.
Executive agreements become binding through executive action without the need of a vote by the Senate or by
Congress.
xxxx
"x x x the right of the Executive to enter into binding agreements without the necessity of subsequent
Congressional approval has been confirmed by long usage. From the earliest days of our history we have
entered into executive agreements covering such subjects as commercial and consular relations, most-favored-
nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements and the
settlement of claims. The validity of these has never been seriously questioned by our courts.
xxxx
Agreements with respect to the registration of trademarks have been concluded by the Executive with
various countries under the Act of Congress of March 3, 1881 (21 Stat. 502), x x x
xxxx
In this connection, Francis B. Sayre, former U.S. High Commissioner to the Philippines, said in his work on
"The Constitutionality of Trade Agreement Acts":
Agreements concluded by the President which fall short of treaties are commonly referred to as executive
agreements and are no less common in our scheme of government than are the more formal instruments -
treaties and conventions. They sometimes take the form of exchanges of notes and at other times that or more
formal documents denominated 'agreements' or 'protocols'. The point where ordinary correspondence between
this and other governments ends and agreements - whether denominated executive agreements or exchanges of
notes or otherwise - begin, may sometimes be difficult of ready ascertainment. It would be useless to undertake
to discuss here the large variety of executive agreements as such, concluded from time to time. Hundreds of
executive agreements, other than those entered into under the trade-agreements act, have been negotiated with
foreign governments. x x x It would seem to be sufficient, in order to show that the trade agreements under the
act of 1934 are not anomalous in character, that they are not treaties, and that they have abundant precedent in
our history, to refer to certain classes of agreements heretofore entered into by the Executive without the
approval of the Senate. They cover such subjects as the inspection of vessels, navigation dues, income tax
on shipping profits, the admission of civil aircraft, customs matters, and commercial relations generally,
international claims, postal matters, the registration of trademarks and copyrights, etcetera. Some of
them were concluded not by specific congressional authorization but in conformity with policies declared
in acts of Congress with respect to the general subject matter, such as tariff acts; while still others,
particularly those with respect of the settlement of claims against foreign governments, were concluded
independently of any legislation. (Emphasis ours)
As the foregoing pronouncement indicates, the registration of trademarks and copyrights have been the subject
of executive agreements entered into without the concurrence of the Senate. Some executive agreements have
been concluded in conformity with the policies declared in the acts of Congress with respect to the general the IP Code; and that the Madrid Protocol is unconstitutional for being in conflict with the local law, which it
subject matter. cannot modify.

It then becomes relevant to examine our state policy on intellectual property in general, as reflected in Section 2
of our IP Code, to wit:
Section 2. Declaration of State Policy. - The State recognizes that an effective intellectual and industrial
property system is vital to the development of domestic and creative activity, facilitates transfer of
technology, attracts foreign investments, and ensures market access for our products. It shall protect and
secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual
property and creations, particularly when beneficial to the people, for such periods as provided in this
Act.
The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of
knowledge and information for the promotion of national development and progress and the common good.
It is also the policy of the State to streamline administrative procedures of registering patents,
trademarks and copyright, to liberalize the registration on the transfer of technology; and to enhance the
enforcement of intellectual property rights in the Philippines.
In view of the expression of state policy having been made by the Congress itself, the IPAP is plainly mistaken
in asserting that "there was no Congressional act that authorized the accession of the Philippines to the Madrid
Protocol."34
Accordingly, DFA Secretary Del Rosario’s determination and treatment of the Madrid Protocol as an executive
agreement; being in apparent contemplation of the express state policies on intellectual property as well as
within his power under Executive Order No. 459, are upheld. We observe at this point that there are no hard and
fast rules on the propriety of entering into a treaty or an executive agreement on a given subject as an instrument
of international relations. The primary consideration in the choice of the form of agreement is the parties' intent
and desire to craft their international agreement in the form they so wish to further their respective interests. The
matter of form takes a back seat when it comes to effectiveness and binding effect of the enforcement of a treaty
or an executive agreement; inasmuch as all the parties; regardless of the form, become obliged to comply
conformably with the time-honored principle of pacta sunt servanda.35The principle binds the parties to perform
in good faith their parts in the agreements.36
The IPAP's contentions stand on a faulty premise. The method of registration through the IPOPHL, as laid
down by the IP Code, is distinct and separate from the method of registration through the WIPO, as set in
the Madrid Protocol. Comparing the two methods of registration despite their being governed by two separate
systems of registration is thus misplaced.
In arguing that the Madrid Protocol conflicts with Section 125 of the IP Code, the IP AP highlights the
importance of the requirement for the designation of a resident agent. It underscores that the requirement is
intended to ensure that non-resident entities seeking protection or privileges under Philippine Intellectual
Property Laws will be subjected to the country's jurisdiction. It submits that without such resident agent, there
will be a need to resort to costly, time consuming and cumbersome extraterritorial service of writs and
processes.37
The IPAP misapprehends the procedure for examination under the Madrid Protocol, The difficulty, which the
IPAP illustrates, is minimal, if not altogether inexistent. The IPOPHL actually requires the designation of the
resident agent when it refuses the registration of a mark. Local representation is further required in the
submission of the Declaration of Actual Use, as well as in the submission of the license contract. 38 The Madrid
Protocol accords with the intent and spirit of the IP Code, particularly on the subject of the registration of
trademarks. The Madrid Protocol does not amend or modify the IP Code on the acquisition of trademark rights
considering that the applications under the Madrid Protocol are still examined according to the relevant
national law, In that regard, the IPOPHL will only grant protection to a mark that meets the local registration
requirements.
WHEREFORE, this Court DISMISSES the petition for certiorari and prohibition for lack of merit;
and ORDERS the petitioner to pay the costs of suit. SO ORDERED.

c.

There is no conflict between the

Madrid Protocol and the IP Code.

The IPAP also rests its challenge on the supposed conflict between the Madrid Protocol and the IP Code,
contending that the Madrid Protocol does away with the requirement of a resident agent under Section 125 of

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