44. TANDUAY DISTILLERS, INC. VS. GINEBRA SAN MIGUEL, INC.

(2009)

TANDUAY DISTILLERS, INC., petitioner, vs.

GINEBRA SAN MIGUEL, INC., respondent.
G.R. No. 164324, August 14, 2009.

FACTS:
Tanduay developed a new gin product distinguished by its sweet smell, smooth taste, and affordable price. The brand name eventually
chosen for the gin product was Ginebra Kapitan with the representation of a revolutionary Kapitan on horseback as the dominant
feature of its label. Tanduay points out that the label design of Ginebra Kapital in terms of color scheme, size and arrangement of text,
and other label features were precisely selected to distinguish it from the leading gin brand in the Philippine market, Ginebra San
Miguel. Tanduay filed a trademark application for Ginebra Kapitan with the Intellectual Property Office (IPO). After which, Tanduay
began selling Ginebra Kapitan in the Luzon areas including Metro Manila. Eventually, Tanduay received a letter from San Miguel
informing the former to immediately cease and desist from using the mark Ginebra. San Miguel filed a complaint for trademark
infringement, unfair competition and damages, with applications for the issuance of a TRO and a writ of preliminary injunction against
Tanduay before the RTC of Mandaluyong.

(Developments in the trial court and the CA I have laid out in bullet form for easy reading. The events could get a little confusing from
here.)
 The trial court issued a TRO prohibiting Tanduay from manufacturing, selling and advertising Ginebra Kapitan.
 Tanduay filed a petition for certiorari with the CA and an Urgent Motion to Defer Injunction Hearing before the trial court.
 Despite the motion filed by San Miguel, the trial court conducted hearings for Tanduay to show cause why no writ of
preliminary injunction should be issued.
 The trial court granted San Miguel’s application for issuance of a writ of preliminary injunction.
 Tanduay filed a supplemental petition in the CA assailing the injunction order.
 The CA issued a TRO enjoining the trial court from implementing the injunction order and further proceeding with the case.
 Finally, the CA rendered a decision dismissing Tanduay’s petition for certiorari and supplemental petition. Its motion for
reconsideration was likewise denied.

ISSUE:
Whether San Miguel is entitled to the writ of preliminary injunction granted by the trial court as affirmed by the CA

RULING:
No. (The Court decided to deal only with the questioned writ and not with the merits of the case pending before the trial court. Please
note that what was issued by the trial court was a writ of preliminary injunction. It had not yet disposed of the issues on unfair
competition and trademark infringement.)

San Miguel contends that Ginebra can be appropriated as a trademark, and there was no error in the trial courts provisional ruling
based on the evidence on record. Assuming that Ginebra is a generic word which is proscribed to be registered as a trademark under
Section 123.1(h) of Republic Act No. 8293 or the Intellectual Property Code (IP Code), it can still be appropriated and registered as a
trademark under Section 123.1(j) in relation to Section 123.2 of the IP Code, considering that Ginebra is also a mark which designates
the kind of goods produced by San Miguel. San Miguel alleges that although Ginebra, the Spanish word for gin, may be a term
originally incapable of exclusive appropriation, jurisprudence dictates that the mark has become distinctive of San Miguels products due
to its substantially exclusive and continuous use as the dominant feature of San Miguels trademarks since 1834. Hence, San Miguel is
entitled to a finding that the mark is deemed to have acquired a secondary meaning.
San Miguel states that Tanduay failed to present any evidence to disprove its claims; thus, there is no basis to set aside the grant of
the TRO and writ of preliminary injunction.

San Miguel states that its disclaimer of the word Ginebra in some of its registered marks is without prejudice to, and did not affect, its
existing or future rights over Ginebra, especially since Ginebra has demonstrably become distinctive of San Miguels products.
Tanduay asserts that not one of the requisites for the valid issuance of a preliminary injunction is present in this case. Tanduay argues
that San Miguel cannot claim the exclusive right to use the generic word Ginebra for its gin products based on its registration of the
composite marks Ginebra San Miguel, Ginebra S. Miguel 65, and La Tondea Cliq! Ginebra Mix, because in all of these registrations, San
Miguel disclaimed any exclusive right to use the non-registrable word Ginebra for gin products.

Tanduay explains that the word Ginebra, which is disclaimed by San Miguel in all of its registered trademarks, is an unregistrable
component of the composite mark Ginebra San Miguel. Tanduay argues that this disclaimer further means that San Miguel does not
have an exclusive right to the generic word Ginebra. Tanduay states that the word Ginebra does not indicate the source of the product,
but it is merely descriptive of the name of the product itself and not the manufacturer thereof.

Tanduay submits that it has been producing gin products under the brand names Ginebra 65, Ginebra Matador, and Ginebra Toro
without any complaint from San Miguel. Tanduay alleges that San Miguel has not filed any complaint against other liquor companies
which use Ginebra as part of their brand names such as Ginebra Pinoy, a registered trademark of Webengton Distillery; Ginebra
Presidente and Ginebra Luzon as registered trademarks of Washington Distillery, Inc.; and Ginebra Lucky Nine and Ginebra Santiago as
registered trademarks of Distileria Limtuaco & Co., Inc. Tanduay claims that the existence of these products, the use and registration of
the word Ginebra by other companies as part of their trademarks belie San Miguels claim that it has been the exclusive user of the
trademark containing the word Ginebra since 1834.

Tanduay argues that before a court can issue a writ of preliminary injunction, it is imperative that San Miguel must establish a clear
and unmistakable right that is entitled to protection. San Miguels alleged exclusive right to use the generic word Ginebra is far from
clear and unmistakable. Tanduay claims that the injunction issued by the trial court was based on its premature conclusion that
Ginebra Kapitan infringes Ginebra San Miguel.

The CA upheld the trial court’s ruling that San Miguel has sufficiently established its right to prior use and registration of the word
Ginebra as a dominant feature of its trademark. The CA ruled that based on San Miguel’s extensive, continuous, and substantially
exclusive use of the word Ginebra, it has become distinctive of San Miguels gin products; thus, a clear and unmistakable right was
shown.

We hold that the CA committed a reversible error. The issue in the main case is San Miguels right to the exclusive use of the mark
Ginebra. The two trademarks Ginebra San Miguel and Ginebra Kapitan apparently differ when taken as a whole, but according to San
Miguel, Tanduay appropriates the word Ginebra which is a dominant feature of San Miguels mark.

It is not evident whether San Miguel has the right to prevent other business entities from using the word Ginebra. It is not settled (1)
whether Ginebra is indeed the dominant feature of the trademarks, (2) whether it is a generic word that as a matter of law cannot be
appropriated, or (3) whether it is merely a descriptive word that may be appropriated based on the fact that it has acquired a
secondary meaning.

The issue that must be resolved by the trial court is whether a word like Ginebra can acquire a secondary meaning for gin products so
as to prohibit the use of the word Ginebra by other gin manufacturers or sellers. This boils down to whether the word Ginebra is a
generic mark that is incapable of appropriation by gin manufacturers.

In this case, a cloud of doubt exists over San Miguels exclusive right relating to the word Ginebra. San Miguels claim to the exclusive
use of the word Ginebra is clearly still in dispute because of Tanduays claim that it has, as others have, also registered the word
Ginebra for its gin products. This issue can be resolved only after a full-blown trial.

We find that San Miguels right to injunctive relief has not been clearly and unmistakably demonstrated. The right to the exclusive use
of the word Ginebra has yet to be determined in the main case. The trial courts grant of the writ of preliminary injunction in favor of
San Miguel, despite the lack of a clear and unmistakable right on its part, constitutes grave abuse of discretion amounting to lack of
jurisdiction.

We believe that the issued writ of preliminary injunction, if allowed, disposes of the case on the merits as it effectively enjoins the use
of the word ginebra without the benefit of a full-blown trial.

Skechers, U.S.A. vs. Inter Pacific Industrial Trading Corporation,

et.al. [GR No. 164321, March 23, 2011]
Post under case digests, Commercial Law at Friday, January 15, 2016 Posted by Schizophrenic Mind

FACTS: Petitioner Skechers USA has registered the trademark "Skechers" and the trademark "S" (with an oval design)
with the IPO. Pursuant to a search warrant, more than 6,000 pairs of shoes bearing the "S" logo were seized.
Respondents moved to quash the search warrant arguing that there was no confusing similarity between petitioner's
"Skechers" rubber shoes and its "Strong" rubber shoes. RTC applying the Holistic Test ordered the quashing of the
warrant which was affirmed by the CA. RTC noted the following differences: 1) the mark "S" is not enclosed in an oval
design; 2) the hang tags and labels bear the word "Strong" for respondent and "Skechers USA" for petitioner; 3) Strong
shoes are modestly priced compared to Skechers shoes.

ISSUE: Whether or not respondents are guilty of Infringement

RULING: Yes. Applying the Dominancy Test, even if respondents did not use the oval design, the mere fact that it used
the same stylized "S" (same font and size of the lettering) the same being the dominant feature of petitioner's trademark
constitutes infringement. Applying the Holistic Test, the dissimilarities between the shoes are too trifling and frivolous that
it is indubitable that respondent's products will cause confusion and mistakes in the eyes of the public. Respondent's
shoes may not be an exact replica of the petitioner's shoes, but the features and overall design are so similar and alike
that confusion is higly likely. Registeredtrademark 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
which scenario is plausible especially since both petitioner and respondent manufacture rubber shoes.

G.R. No. 192294 November 21, 2012

GREAT WHITE SHARK ENTERPRISES, INC., Petitioner,

vs.
DANILO M. CARALDE, JR., Respondent.

TOPIC: Registrability, Dominancy Test

FACTS:

Caralde, respondent, filed before the Bureau of Legal Affairs (BLA) IPO a trademark application for “SHARK & LOGO” for
his manufactured goods consisting of slippers, shoes and sandals. This was opposed by the petitioner, Great White Shark
Enterprises, Inc. (Great White Shark), a foreign corporation domiciled in Florida, USA and was issued a Certificate
Registration for trademark application for clothing, headgear and footwear, including socks, shoes and its components in
the Philippines. Petitioner alleges among other things that there is a confusing similarity between the two (2) marks
which is likely to deceive or confuse the purchasing public into believing that respondent’s goods are produced by or
originated from the petitioner, or are under its sponsorship, to the petitioner’s damage and prejudice; that since
petitioner was first in applying for registration of the mark, the same should be favoured with respondent’s mark to be
denied of its application.

BLA Director ruled in favour of petitioner. The BLA observed that prominent in both marks are the illustration of a shark,
that although there are some differences, dominant features are of such degree that overall it creates an impression of
striking similarity with one another.

IPO Director General on appeal by respondent, affirmed the decision by the BLA Director that there is indeed confusing
similarity between the two mark; that there is similarity between the two marks as to content, word, sound and meaning
barring respondent’s registration under Sec 123.1(d) of RA 8293 of the IP Code.

The Court of Appeals, upon petition for review by respondent, reversed and set aside the decision by the BLA Director
and IPO Director General on its finding that there is in fact no confusing similarity between the two marks; that
respondent’s mark is more fanciful and colourful and contains several elements which are easily distinguishable from
that on the petitioner.

The case was then elevated to the Supreme Court by petitioner, hence this petition.

ISSUES:

1. WON the two (2) marks can be considered identical, applying Sec. 123.1(d) of the IP Code, which is likely to
deceive or cause confusion.
HELD:

No. The two marks are not identical and there is no confusing similarity likely to deceive or cause confusion between
them.

“A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily

and is capable of identifying and distinguishing the goods of one manufacturer or seller
from those of another”. “Apart from its commercial utility, the benchmark of trademark
registrability is distinctiveness”. (Thus, a generic figure, as that of a shark in this case,
if employed and designed in a distinctive manner, can be a registrable trademark device,
subject to the provisions of the IP Code.)In connection with the registrability of
trademarks, Section 123.1(d) of the IP Code provides, among others, a mark which
cannot be registered, to wit:

Section 123. Registrability. –

123.1 A mark cannot be registered if it:

(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;

xxx

The mark will therefore be registrable if it is distinct or if it does not nearly resembles
another mark to deceive or cause confusion.

The court used Dominancy Test (although Holistic or Totality Test was defined in the
case, this was not used in the analysis) for this purpose and confirmed that there is no
confusing similarity between the marks; that, further, there was a distinct visual and
aural differences between them.

“In Great White Shark's "GREG NORMAN LOGO," there is an outline of a shark
formed with the use of green, yellow, blue and red 16lines/strokes; The shark in
Caralde's "SHARK & LOGO" mark 17 is illustrated in l et t er s outlined in the
form of a shark with the letter "S" forming the head, the letter "H" forming the
fins, the letters "A" and "R" forming the body, and the letter "K" forming the
tail. In addition, the latter mark includes several more elements such as the
word "SHARK" in a different font underneath the shark outline, layers of
waves, and a tree on the right side, and liberally used the color blue with
some parts in red, yellow, green and white. 18 The whole design is enclosed in
an elliptical shape with two linings”.
The visual dissimilarities between the two (2) marks are evident and significant, negating
the possibility of confusion in the minds of the ordinary purchaser, especially considering
the distinct aural difference between the marks.

APPENDIX

1. Great White Shark (GWS) also alleged that its trademark is a world famous and well-
known mark since its mark registered in different countries, in order to better his position
that Caralde just copied GWS’s mark to be able to ride on its goodwill. Both BLA Director
and IPO Director General however found the same without merit due to insufficiency of
evidence. IPO Dir-Gen further noted that it failed to meet the other criteria under Rule
102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names
and Marked or Stamped Containers to be considered as well-known. Finally, SC no
longer ruled on this matter (,being mooted,) since it already found that there was no
confusing similarity between the two marks.

2. The Dominancy Test focuses on the similarity of the dominant features of the
competing trademarks that might cause confusion, mistake, and deception in the mind
of the ordinary purchaser, and gives more consideration to the aural and visual
impressions created by the marks on the buyers of goods, giving little weight to factors
like prices, quality, sales outlets, and market segments.

The Holistic or Totality Test considers the entirety of the marks as applied to the
products, including the labels and packaging, and focuses not only on the predominant
words but also on the other features appearing on both labels to determine whether one
is confusingly similar to the other 14 as to mislead the ordinary purchaser. The "ordinary
purchaser" refers to one "accustomed to buy, and therefore to some extent familiar with,
the goods in question."15

Levi Strauss & Co. v. Clinton Apparelle, GR No. 138900 September 20, 2005

FACTS: The Complaint alleged that LS & Co., a foreign corporation duly organized and existing under the laws of the State
of Delaware, USA and engaged in the apparel business, is the owner by prior adoption and use since 1986 of the
internationally famous “Dockers and Design” trademark. This ownership is evidenced by its valid and existing
registrations in various member countries if Paris Convention. In the Philippines, it has a Certificate of Registration No.
46619 in the Principal Register for use of said trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and jackets
under Class 25. The “Dockers and Design” trademark was first used in the Philippines in or about May 1988, by LSPI, a
domestic corporation engaged in the manufacture, sale and distribution of various products bearing trademarks owned
by LS & Co. To date, LSPI continues to manufacture and sell Dockers Pants with the “Dockers and Design” Trademark. LS
& Co and LSPI alleged that they discovered the presence in the local market of jeans under the brand name “Paddocks”
using a device which is substantially, if not exactly, similar to the “Dockers and Design” trademark owned and registered
in their name, without their consent. Based on their belied, they added Clinton Apparelle manufactured and continues to
manufacture such “Paddocks” jeans and other apparel. However, since LS & Co. and LSPI are unsure if both or just one of
impleaded defendants is behind the manufacture and sale of the “Paddocks” jeans complained of, they brought this suit
under Sec. 13 Rule 3 of the 1997 Rules of Court.

The evidence considered by the trial court in granting injunctive relief were as follows: (1) a certified true copy of the
certificate of trademark registration for “Dockers and Design” (2) a pair of DOCKERS pants bearing the trademark (3) a
pair of “Paddocks” pants bearing the respondents assailed logo; (4) the trends MBL Survey Report purportedly proving
that there was confusing similarity between two marks; (5) the affidavit of one Bernabe Alajar which recounted
petitioners’ prior adoption, use and registration of the “Dockers and Design” Trademark and (6) the affidavit of Mercedes
Abad of Trends MBL Inc which detailed the methodology and procedure used in their survey and results thereof.

The trial court issued a writ of preliminary injunction, which prompted Clinton Apparelle to file a petition for certiorari,
prohibition and mandamus with the Court of Appeals. Whereby the Appellate Court granted the petition of Clinton
Apparelle’s petition; holding that the trial court did not follow the procedure required by law. Thus, holding the issuance
of the writ of preliminary injunction is questionable after petitioner’s failure to sufficiently establish its material and
substantial right to have the writ issued. Moreover, the Court of Appeals strongly believes that the implementation of the
questions writ would effectively shut down respondent’s shut down. Hence this petition.

ISSUE: whether or not the single registration of the trademark “Dockers and Design” confers on the owner the right to
prevent the use of a fraction thereof.

HELD: Given the single registration of the trademark “Dockers and Design” and considering that respondent only uses
the assailed device but a different word mark, the right to prevent the latter from using the challenged “Paddocks”
device is far from clear. Stated otherwise, it is not evident whether the single registration of the trademark “Dockers and
Design” confers on the owner the right to prevent the use of a fraction thereof in the course of trade. It is also unclear
whether the use without the owner’s consent of a portion of a trademark registered in its entirety constitutes material or
substantial invasion of the owner’s right.

It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant or central
feature of petitioners’ trademark—the feature that prevails or is retained in the minds of the public—an imitation of
which creates the likelihood of deceiving the public and constitutes trademark infringement. In sum, there are vital
matters which have yet and may only be established through a full-blown trial.

From the above discussion, we find that petitioners’ right to injunctive relief has not been clearly and unmistakably
demonstrated. The right has yet to be determined. Petitioners also failed to show proof that there is material and
substantial invasion of their right to warrant the issuance of an injunctive writ. Neither were petitioners able to show any
urgent and permanent necessity for the writ to prevent serious damage.

Petitioners wish to impress upon the Court the urgent necessity for injunctive relief, urging that the erosion or
dilution of their trademark is protectable. They assert that a trademark owner does not have to wait until the mark loses
its distinctiveness to obtain injunctive relief, and that the mere use by an infringer of a registered mark is already
actionable even if he has not yet profited thereby or has damaged the trademark owner.

Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services,
regardless of the presence or absence of: (1) competition between the owner of the famous mark and other parties; or
(2) likelihood of confusion, mistake or deception. Subject to the principles of equity, the owner of a famous mark is
entitled to an injunction “against another person’s commercial use in commerce of a mark or trade name, if such use
begins after the mark has become famous and causes dilution of the distinctive quality of the mark.” This is intended to
protect famous marks from subsequent uses that blur distinctiveness of the mark or tarnish or disparage it.

Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that: (1) the trademark
sought to be protected is famous and distinctive; (2) the use by respondent of “Paddocks and Design” began after the
petitioners’ mark became famous; and (3) such subsequent use defames petitioners’ mark. In the case at bar, petitioners
have yet to establish whether “Dockers and Design” has acquired a strong degree of distinctiveness and whether the
other two elements are present for their cause to fall within the ambit of the invoked protection. The Trends MBL Survey
Report which petitioners presented in a bid to establish that there was confusing similarity between two marks is not
sufficient proof of any dilution that the trial court must enjoin.

After a careful consideration of the facts and arguments of the parties, the Court finds that petitioners did not
adequately prove their entitlement to the injunctive writ. In the absence of proof of a legal right and the injury sustained
by the applicant, an order of the trial court granting the issuance of an injunctive writ will be set aside for having been
issued with grave abuse of discretion. Conformably, the Court of Appeals was correct in setting aside the assailed orders
of the trial court.