G.R. No. 154342 July 14, 2004 Mighty Corporation and La Campana Fabrica de Tabaco, INC., E. & J. Gallo Winery and The Andresons Group, Inc., Facts

G.R. No.
154342
July 14, 2004
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO,
INC.,
petitioner,
vs.
E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC.,
respondents.
FACTS
Respondent Gallo Winery is a foreign corporation not doing business
in the Philippines but organized and existing under the laws of the
State of California, United States of America (U.S.), where all its
wineries are located. Gallo Winery produces different kinds of wines
and brandy products and sells them in many countries under
different registered trademarks, including the GALLO and ERNEST &
JULIO GALLO wine trademarks.
Respondent domestic corporation, Andresons, has been Gallo
Winerys exclusive wine importer and distributor in the Philippines
since 1991, selling these products in its own name and for its own
account.
Gallo Winerys GALLO wine trademark was registered in the principal
register of the Philippine Patent Office (now Intellectual Property
Office) on November 16, 1971 under Certificate of Registration No.
17021 which was renewed on November 16, 1991 for another 20
years. Gallo Winery also applied for registration of its ERNEST &
JULIO GALLO wine trademark on October 11, 1990 under
Application Serial No. 901011-00073599-PN but the records do not
disclose if it was ever approved by the Director of Patents.
On the other hand, petitioners Mighty Corporation and La Campana
and their sister company, Tobacco Industries of the Philippines
(Tobacco Industries), are engaged in the cultivation, manufacture,
distribution and sale of tobacco products for which they have been
using the GALLO cigarette trademark since 1973.
The Bureau of Internal Revenue (BIR) approved Tobacco Industries
use of GALLO 100s cigarette mark on September 14, 1973 and
GALLO filter cigarette mark on March 26, 1976, both for the
manufacture and sale of its cigarette products. In 1976, Tobacco
Industries filed its manufacturers sworn statement as basis for BIRs
collection of specific tax on GALLO cigarettes.
On February 5, 1974, Tobacco Industries applied for, but eventually

did not pursue, the registration of the GALLO cigarette trademark in
the principal register of the then Philippine Patent Office.
In May 1984, Tobacco Industries assigned the GALLO cigarette
trademark to La Campana which, on July 16, 1985, applied for
trademark registration in the Philippine Patent Office. On July 17,
1985, the National Library issued Certificate of Copyright
Registration No. 5834 for La Campanas lifetime copyright claim over
GALLO cigarette labels.
Subsequently, La Campana authorized Mighty Corporation to
manufacture and sell cigarettes bearing the GALLO trademark. BIR
approved Mighty Corporations use of GALLO 100s cigarette brand,
under licensing agreement with Tobacco Industries, on May 18, 1988,
and GALLO SPECIAL MENTHOL 100s cigarette brand on April 3,
1989.
Petitioners claim that GALLO cigarettes have been sold in the
Philippines since 1973, initially by Tobacco Industries, then by La
Campana and finally by Mighty Corporation.
On the other hand, although the GALLO wine trademark was
registered in the Philippines in 1971, respondents claim that they
first introduced and sold the GALLO and ERNEST & JULIO GALLO
wines in the Philippines circa 1974 within the then U.S. military
facilities only. By 1979, they had expanded their Philippine market
through authorized distributors and independent outlets.
Respondents claim that they first learned about the existence of
GALLO cigarettes in the latter part of 1992 when an Andresons
employee saw such cigarettes on display with GALLO wines in a
Davao supermarket wine cellar section. Forthwith, respondents sent
a demand letter to petitioners asking them to stop using the GALLO
trademark, to no avail.
On March 12, 1993, respondents sued petitioners in the Makati RTC
for trademark and tradename infringement and unfair competition,
with a prayer for damages and preliminary injunction.
Respondents charged petitioners with violating Article 6 of the Paris
Convention for the Protection of Industrial Property (Paris
Convention) and RA 166 (Trademark Law), specifically, Sections 22
and 23 (for trademark infringement), 29 and 30 (for unfair
competition and false designation of origin) and 37 (for tradename
comrev2 mighty corporation vs e & j gallo winery Page 1 of 6
infringement). They claimed that petitioners adopted the GALLO

trademark to ride on Gallo Winerys GALLO and ERNEST & JULIO
GALLO trademarks established reputation and popularity, thus
causing confusion, deception and mistake on the part of the
purchasing public who had always associated GALLO and ERNEST &
JULIO GALLO trademarks with Gallo Winerys wines. Respondents
prayed for the issuance of a writ of preliminary injunction and ex
parte restraining order, plus P2 million as actual and compensatory
damages, at least P500,000 as exemplary and moral damages, and at
least P500,000 as attorneys fees and litigation expenses.
In their answer, petitioners alleged, among other affirmative defenses,
that: petitioners GALLO cigarettes and Gallo Winerys wines were
totally unrelated products; Gallo Winerys GALLO trademark
registration certificate covered wines only, not cigarettes; GALLO
cigarettes and GALLO wines were sold through different channels of
trade; GALLO cigarettes, sold at P4.60 for GALLO filters and P3 for
GALLO menthols, were low-cost items compared to Gallo Winerys
high-priced luxury wines which cost between P98 to P242.50; the
target market of Gallo Winerys wines was the middle or high-income
bracket with at least P10,000 monthly income while GALLO cigarette
buyers were farmers, fishermen, laborers and other low-income
workers; the dominant feature of the GALLO cigarette mark was the
rooster device with the manufacturers name clearly indicated as
MIGHTY CORPORATION while, in the case of Gallo Winerys wines, it
was the full names of the founders-owners ERNEST & JULIO GALLO
or just their surname GALLO; by their inaction and conduct,
respondents were guilty of laches and estoppel; and petitioners acted
with honesty, justice and good faith in the exercise of their right to
manufacture and sell GALLO cigarettes.
RTC denied, for lack of merit, respondents prayer for the issuance of
a writ of preliminary injunction, holding that respondents GALLO
trademark registration certificate covered wines only, that
respondents wines and petitioners cigarettes were not related goods
and respondents failed to prove material damage or great irreparable
injury as required by Section 5, Rule 58 of the Rules of Court.
RTC denied, for lack of merit, respondents motion for
reconsideration.
After trial on the merits, however, the Makati RTC, held petitioners
liable for, and permanently enjoined them from, committing
trademark infringement and unfair competition with respect to the
GALLO trademark.
On appeal, the CA affirmed the Makati RTC decision and
subsequently denied petitioners motion for reconsideration.
ISSUE
Whether or not petitioners were liable for trademark infringement,
unfair competition and damages. (No)
RULING
THE TRADEMARK LAW AND THE PARIS CONVENTION ARE THE
APPLICABLE LAWS, NOT THE INTELLECTUAL PROPERTY CODE
We note that respondents sued petitioners on March 12, 1993 for
trademark infringement and unfair competition committed during the
effectivity of the Paris Convention and the Trademark Law.
Yet, in the Makati RTC decision of November 26, 1998, petitioners
were held liable not only under the aforesaid governing laws but also
under the IP Code which took effect only on January 1, 1998,
The CA apparently did not notice the error and affirmed the Makati
RTC decision.
We therefore hold that the courts a quo erred in retroactively applying
the IP Code in this case.
It is a fundamental principle that the validity and obligatory force of a
law proceed from the fact that it has first been promulgated. A law
that is not yet effective cannot be considered as conclusively known
by the populace. To make a law binding even before it takes effect
may lead to the arbitrary exercise of the legislative power.
DISTINCTIONS BETWEEN TRADEMARK INFRINGEMENT AND
UNFAIR COMPETITION
In Del Monte Corporation vs. Court of Appeals, we distinguished
trademark infringement from unfair competition:
(1) Infringement of trademark is the unauthorized use of a
trademark, whereas unfair competition is the passing off of one's
goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary,
whereas in unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the

trademark is a prerequisite to the action, whereas in unfair
competition registration is not necessary.
Pertinent Provisions on Trademark Infringement under the Paris
Convention and the Trademark Law
Under Article 6 of the Paris Convention, the following are the
elements of trademark infringement:
(a) registration or use by another person of a trademark which is a
reproduction, imitation or translation liable to create confusion,
(b) of a mark considered by the competent authority of the country of
registration or use to be well-known in that country and is already
the mark of a person entitled to the benefits of the Paris Convention,
and
(c) such trademark is used for identical or similar goods.
Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law
therefore, the following constitute the elements of trademark
infringement:
(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
(d) such act is done without the consent of the trademark registrant
or assignee.
In summary, the Paris Convention protects well-known trademarks
only (to be determined by domestic authorities), while the Trademark
Law protects all trademarks, whether well-known or not, provided
that they have been registered and are in actual commercial use in
the Philippines. Following universal acquiescence and comity, in case
of domestic legal disputes on any conflicting provisions between the

Paris Convention (which is an international agreement) and the
Trademark law (which is a municipal law) the latter will prevail.
Under both the Paris Convention and the Trademark Law, the
protection of a registered trademark is limited only to goods identical
or similar to those in respect of which such trademark is registered
and only when there is likelihood of confusion. Under both laws, the
time element in commencing infringement cases is material in
ascertaining the registrants express or implied consent to anothers
use of its trademark or a colorable imitation thereof. This is why
acquiescence, estoppel or laches may defeat the registrants otherwise
valid cause of action.
Hence, proof of all the elements of trademark infringement is a
condition precedent to any finding of liability.
THE ACTUAL COMMERCIAL USE IN THE PHILIPPINES OF GALLO
CIGARETTE
TRADEMARK PRECEDED THAT OF GALLO WINE TRADEMARK.
By respondents own judicial admission, the GALLO wine trademark
was registered in the Philippines in November 1971 but the wine
itself was first marketed and sold in the country only in 1974 and
only within the former U.S. military facilities, and outside thereof,
only in 1979. To prove commercial use of the GALLO wine trademark
in the Philippines, respondents presented sales invoice no. 29991
dated July 9, 1981.
On the other hand, by testimonial evidence supported by the BIR
authorization letters, forms and manufacturers sworn statement, it
appears that petitioners and its predecessor-in-interest, Tobacco
Industries, have indeed been using and selling GALLO cigarettes in
the Philippines since 1973 or before July 9, 1981.
In Emerald Garment Manufacturing Corporation vs. Court of Appeals,
we reiterated our ruling of giving utmost importance to the actual
commercial use of a trademark in the Philippines prior to its
registration, notwithstanding the provisions of the Paris Convention.
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) x x x
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 the 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
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.
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.
In view of the foregoing jurisprudence and respondents judicial
admission that the actual commercial use of the GALLO wine
trademark was subsequent to its registration in 1971 and to Tobacco
Industries commercial use of the GALLO cigarette trademark in
1973, we rule that, on this account, respondents never enjoyed the
exclusive right to use the GALLO wine trademark to the prejudice of
Tobacco Industries and its successors-in-interest, herein petitioners,
either under the Trademark Law or the Paris Convention.
Respondents GALLO trademark registration is limited to wines
only
We also note that the GALLO trademark registration certificates in

the Philippines and in other countries expressly state that they cover
wines only, without any evidence or indication that registrant Gallo
Winery expanded or intended to expand its business to cigarettes.
Thus, by strict application of Section 20 of the Trademark Law, Gallo
Winerys exclusive right to use the GALLO trademark should be
limited to wines, the only product indicated in its registration
certificates.
Yet, it is equally true that as aforesaid, the protective mantle of
the Trademark Law extends only to the goods used by the first
user as specified in the certificate of registration following the
clear message conveyed by Section 20.
NO LIKELIHOOD OF CONFUSION, MISTAKE OR DECEIT AS TO
THE IDENTITY OR SOURCE OF PETITIONERS AND
RESPONDENTS GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood
of confusion, mistake or deceit as to the identity, source or origin of
the goods or identity of the business as a consequence of using a
certain mark. Likelihood of confusion is admittedly a relative term, to
be determined rigidly according to the particular (and sometimes
peculiar) circumstances of each case.
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 defendants 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 defendants 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 registrants express or implied consent and
other fair and equitable considerations.
Petitioners and respondents both use "GALLO" in the labels of their

respective cigarette and wine products. But, as held in the following
cases, the use of an identical mark does not, by itself, lead to a legal
conclusion that there is trademark infringement.
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
tradename 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."
Jurisprudence has developed two tests in determining similarity and
likelihood of confusion in trademark resemblance:
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion
or deception, and thus infringement. If the competing trademark
contains the main, essential or dominant features of another, and
confusion or deception is likely to result, infringement takes place.
The question is whether the use of the marks involved is likely to
cause confusion or mistake in the mind of the public or deceive
purchasers.
On the other hand, the Holistic Test requires that the entirety of the
marks in question be considered in resolving confusing similarity.
Comparison of words is not the only determining 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.
Applying the Dominancy and Holistic Tests, we find that the
dominant feature of the GALLO cigarette trademark is the device of a
large rooster facing left, outlined in black against a gold background.
The roosters color is either green or red green for GALLO menthols
and red for GALLO filters. Directly below the large rooster device is
the word GALLO. The rooster device is given prominence in the
GALLO cigarette packs in terms of size and location on the labels.84
The GALLO mark appears to be a fanciful and arbitrary mark for the
cigarettes as it has no relation at all to the product but was chosen
merely as a trademark due to the fondness for fighting cocks of the

son of petitioners president. Furthermore, petitioners adopted
GALLO, the Spanish word for rooster, as a cigarette trademark to
appeal to one of their target markets, the sabungeros (cockfight
aficionados).85
Also, as admitted by respondents themselves, 86 on the side of the
GALLO cigarette packs are the words "MADE BY MIGHTY
CORPORATION," thus clearly informing the public as to the identity
of the manufacturer of the cigarettes.
On the other hand, GALLO Winerys wine and brandy labels are
diverse. In many of them, the labels are embellished with sketches of
buildings and trees, vineyards or a bunch of grapes while in a few,
one or two small roosters facing right or facing each other (atop the
EJG crest, surrounded by leaves or ribbons), with additional designs
in green, red and yellow colors, appear as minor features thereof. 87
Directly below or above these sketches is the entire printed name of
the founder-owners, "ERNEST & JULIO GALLO" or just their
surname "GALLO,"88 which appears in different fonts, sizes, styles
and labels, unlike petitioners uniform casque-font bold-lettered
GALLO mark.
Moreover, on the labels of Gallo Winerys wines are printed the words
"VINTED AND BOTTLED BY ERNEST & JULIO GALLO, MODESTO,
CALIFORNIA."89
The many different features like color schemes, art works and other
markings of both products drown out the similarity between them the
use of the word GALLO a family surname for the Gallo Winerys
wines and a Spanish word for rooster for petitioners cigarettes.
WINES AND CIGARETTES ARE NOT IDENTICAL, SIMILAR,
COMPETING OR RELATED GOODS
Confusion of goods is evident where the litigants are actually in
competition; but confusion of business may arise between noncompeting interests as well.90
Thus, apart from the strict application of Section 20 of the
Trademark Law and Article 6bis of the Paris Convention which
proscribe trademark infringement not only of goods specified in the
certificate of registration but also of identical or similar goods, we
have also uniformly recognized and applied the modern concept of
"related goods."91 Simply stated, when goods are so related that the
public may be, or is actually, deceived and misled that they come
from the same maker or manufacturer, trademark infringement
occurs.92
In resolving whether goods are related, 96 several factors come into
play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the
package, wrapper or container 97
(d) the nature and cost of the articles98
(e) the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or
quality
(f) the purpose of the goods99
(g) whether the article is bought for immediate consumption, 100 that
is, day-to-day household items101
(h) the fields of manufacture102
(i) the conditions under which the article is usually purchased103 and
(j) the channels of trade through which the goods flow, 104 how they
are distributed, marketed, displayed and sold.105
Hence, in the adjudication of trademark infringement, we give due
regard to the goods usual purchasers character, attitude, habits,
age, training and education. 111
Applying these legal precepts to the present case, petitioners use of
the GALLO cigarette trademark is not likely to cause confusion or
mistake, or to deceive the "ordinarily intelligent buyer" of either wines
or cigarettes or both as to the identity of the goods, their source and
origin, or identity of the business of petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing
products. Neither do they belong to the same class of goods.
Respondents GALLO wines belong to Class 33 under Rule 84[a]
Chapter III, Part II of the Rules of Practice in Trademark Cases while
petitioners GALLO cigarettes fall under Class 34.
Both the Makati RTC and the CA held that wines and cigarettes are
related products because: (1) "they are related forms of vice, harmful
when taken in excess, and used for pleasure and relaxation" and (2)
"they are grouped or classified in the same section of supermarkets
and groceries."
We find these premises patently insufficient and too arbitrary to

support the legal conclusion that wines and cigarettes are related
products within the contemplation of the Trademark Law and the
Paris Convention.
First, anything - not only wines and cigarettes can be used for
pleasure and relaxation and can be harmful when taken in excess.
Second, it is common knowledge that supermarkets sell an infinite
variety of wholly unrelated products and the goods here involved,
wines and cigarettes, have nothing whatsoever in common with
respect to their essential characteristics, quality, quantity, size,
including the nature of their packages, wrappers or containers.
Accordingly, the U.S. patent office and courts have consistently held
that the mere fact that goods are sold in one store under the same
roof does not automatically mean that buyers are likely to be
confused as to the goods respective sources, connections or
sponsorships. The fact that different products are available in the
same store is an insufficient standard, in and of itself, to warrant a
finding of likelihood of confusion.
Wines and cigarettes are non-competing and are totally unrelated
products not likely to cause confusion vis--vis the goods or the
business of the petitioners and respondents.
Wines are bottled and consumed by drinking while cigarettes are
packed in cartons or packages and smoked. There is a whale of a
difference between their descriptive properties, physical attributes or
essential characteristics like form, composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not.
GALLO wines are patronized by middle-to-high-income earners while
GALLO cigarettes appeal only to simple folks like farmers, fishermen,
laborers and other low-income workers.116 Indeed, the big price
difference of these two products is an important factor in proving that
they are in fact unrelated and that they travel in different channels of
trade. There is a distinct price segmentation based on vastly different
social classes of purchasers.117
GALLO cigarettes and GALLO wines are not sold through the same
channels of trade. GALLO cigarettes are Philippine-made and
petitioners neither claim nor pass off their goods as imported or
emanating from Gallo Winery. GALLO cigarettes are distributed,
marketed and sold through ambulant and sidewalk vendors, small
local sari-sari stores and grocery stores in Philippine rural areas,

mainly in Misamis Oriental, Pangasinan, Bohol, and Cebu. 118 On the
other hand, GALLO wines are imported, distributed and sold in the
Philippines through Gallo Winerys exclusive contracts with a
domestic entity, which is currently Andresons. By respondents own
testimonial evidence, GALLO wines are sold in hotels, expensive bars
and restaurants, and high-end grocery stores and supermarkets, not
through sari-sari stores or ambulant vendors.119
In short, tobacco and alcohol products may be considered related
only in cases involving special circumstances which exist only if a
famous mark is involved and there is a demonstrated intent to
capitalize on it. Both of these are absent in the present case.
THE GALLO WINE TRADEMARK IS NOT A WELL-KNOWN MARK
IN THE CONTEXT OF THE PARIS CONVENTION IN THIS CASE
SINCE WINES AND CIGARETTES ARE NOT IDENTICAL OR
SIMILAR GOODS
First, the records bear out that most of the trademark registrations
took place in the late 1980s and the 1990s, that is, after Tobacco
Industries use of the GALLO cigarette trademark in 1973 and
petitioners use of the same mark in 1984.
GALLO wines and GALLO cigarettes are neither the same, identical,
similar nor related goods, a requisite element under both the
Trademark Law and the Paris Convention.
Second, the GALLO trademark cannot be considered a strong and
distinct mark in the Philippines. Respondents do not dispute the
documentary evidence that aside from Gallo Winerys GALLO
trademark registration, the Bureau of Patents, Trademarks and
Technology Transfer also issued on September 4, 1992 Certificate of
Registration No. 53356 under the Principal Register approving
Productos Alimenticios Gallo, S.As April 19, 1990 application for
GALLO trademark registration and use for its "noodles, prepared food
or canned noodles, ready or canned sauces for noodles, semolina,
wheat flour and bread crumbs, pastry, confectionery, ice cream,
honey, molasses syrup, yeast, baking powder, salt, mustard, vinegar,
species and ice."122
Third and most important, pursuant to our ruling in Canon Kabushiki
Kaisha vs. Court of Appeals and NSR Rubber Corporation,123 "GALLO"
cannot be considered a "well-known" mark within the contemplation
and protection of the Paris Convention in this case since wines and
cigarettes are not identical or similar goods:
Consent of the Registrant and Other air, Just and Equitable
Considerations
Each trademark infringement case presents a unique problem which
must be answered by weighing the conflicting interests of the
litigants.124
Respondents claim that GALLO wines and GALLO cigarettes flow
through the same channels of trade, that is, retail trade. If
respondents assertion is true, then both goods co-existed peacefully
for a considerable period of time. It took respondents almost 20 years
to know about the existence of GALLO cigarettes and sue petitioners
for trademark infringement. Given, on one hand, the long period of
time that petitioners were engaged in the manufacture, marketing,
distribution and sale of GALLO cigarettes and, on the other,
respondents delay in enforcing their rights (not to mention implied
consent, acquiescence or negligence) we hold that equity, justice and
fairness require us to rule in favor of petitioners. The scales of
conscience and reason tip far more readily in favor of petitioners than
respondents.
Moreover, there exists no evidence that petitioners employed malice,
bad faith or fraud, or that they intended to capitalize on respondents
goodwill in adopting the GALLO mark for their cigarettes which are
totally unrelated to respondents GALLO wines. Thus, we rule out
trademark infringement on the part of petitioners.
PETITIONERS
ARE
ALSO
NOT
LIABLE
FOR
UNFAIR
COMPETITION
Under Section 29 of the Trademark Law, any person who employs
deception or any other means contrary to good faith by which he
passes off the goods manufactured by him or in which he deals, or
his business, or services for those of the one having established such
goodwill, or who commits any acts calculated to produce said result,
is guilty of unfair competition. It includes the following acts:
(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;
(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.
The universal test question is whether the public is likely to be
deceived. Nothing less than conduct tending to pass off one mans
goods or business as that of another constitutes unfair competition.
Actual or probable deception and confusion on the part of customers
by reason of defendants practices must always appear.125 On this
score, we find that petitioners never attempted to pass off their
cigarettes as those of respondents. There is no evidence of bad faith
or fraud imputable to petitioners in using their GALLO cigarette
mark.
All told, after applying all the tests provided by the governing laws as
well as those recognized by jurisprudence, we conclude that
petitioners are not liable for trademark infringement, unfair
competition or damages.
WHEREFORE, finding the petition for review meritorious, the same is
hereby GRANTED. The questioned decision and resolution of the
Court of Appeals in CA-G.R. CV No. 65175 and the November 26,
1998 decision and the June 24, 1999 order of the Regional Trial
Court of Makati, Branch 57 in Civil Case No. 93-850 are hereby
REVERSED and SET ASIDE and the complaint against petitioners
DISMISSED.
ELIDAD KHO vs. CA

379 SCRA 410 Mercantile Law Intellectual Property Law on
Copyright Proper Subjects of Copyright
Elidad Kho is the owner of KEC Cosmetics Laboratory and she was
also the holder of copyrights over Chin Chun Su and its Oval Facial
Cream Container/Case. She also bought the patent rights over the
Chin Chun Su & Device and Chin Chun Su for medicated cream
from one Quintin Cheng, who was the assignee of Shun Yi Factory
a Taiwanese factory actually manufacturing Chin Chun Su products.
Kho filed a petition for injunction against Summerville General
Merchandising and Company to enjoin the latter from advertising
and selling Chin Chun Su products, in similar containers as that of
Kho, for this is misleading the public and causing Kho to lose
income; the petition is also to enjoin Summerville from infringing
upon Khos copyrights.
Summerville in their defense alleged that they are the exclusive
and authorized importer, re-packer and distributor of Chin Chun Su
products; that Shun Yi even authorized Summerville to register its
trade name Chin Chun Su Medicated Cream with the Philippine
Patent Office; that Quintin Cheng, from whom Kho acquired her
patent rights, had been terminated (her services) by Shun Yi.
ISSUE: Whether or not Kho has the exclusive right to use the trade
name and its container.
HELD: No. Kho has no right to support her claim for the exclusive
use of the subject trade name and its container. The name and
container of a beauty cream product are proper subjects of a
trademark (not copyright like what she registered for) inasmuch
as the same falls squarely within its definition. In order to be
entitled to exclusively use the same in the sale of the beauty cream
product, the user must sufficiently prove that she registered or
used it before anybody else did. Khos copyright and patent

registration of the name and container would not guarantee her the
right to the exclusive use of the same for the reason that they are
not appropriate subjects of the said intellectual rights.
Consequently, a preliminary injunction order cannot be issued for
the reason that the petitioner has not proven that she has a clear
right over the said name and container to the exclusion of others,
not having proven that she has registered a trademark thereto or
used the same before anyone did.
PEARL & DEAN vs. SHOEMART

409 SCRA 231 Mercantile Law Intellectual Property Law on
Copyright Copyrightable Subject
Pearl & Dean (Phil), Inc. is a corporation engaged in the
manufacture of advertising display units called light boxes. In
January 1981, Pearl & Dean was able to acquire copyrights over the
designs of the display units. In 1988, their trademark application for
Poster Ads was approved; they used the same trademark to
advertise their light boxes.
In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that
the former may be contracted to install light boxes in the ad spaces
of SM. Eventually, SM rejected Pearl & Deans proposal.
Two years later, Pearl & Dean received report that light boxes,
exactly the same as theirs, were being used by SM in their ad
spaces. They demanded SM to stop using the light boxes and at the
same time asked for damages amounting to P20 M. SM refused to
pay damages though they removed the light boxes. Pearl & Dean
eventually sued SM. SM argued that it did not infringe on Pearl
& Deans trademark because Pearl & Deans trademark is only
applicable to envelopes and stationeries and not to the type of ad
spaces owned by SM. SM also averred that Poster Ads is a generic
term hence it is not subject to trademark registration. SM also
averred that the actual light boxes are not copyrightable. The RTC
ruled in favor of Pearl & Dean. But the Court of Appeals ruled in
favor of SM.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: Yes. The light boxes cannot, by any stretch of the
imagination, be considered as either prints, pictorial illustrations,
advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable; what was copyrighted were the
technical drawings only, and not the light boxes themselves. In
other cases, it was held that there is no copyright infringement
when one who, without being authorized, uses a copyrighted
architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.
On the trademark infringement allegation, the words Poster Ads
are a simple contraction of the generic term poster advertising. In
the absence of any convincing proof that Poster Ads has acquired
a secondary meaning in this jurisdiction, Pearl & Deans exclusive
right to the use of Poster Ads is limited to what is written in its
certificate of registration, namely, stationeries.
MIRPURI vs. CA
FACTS
LolitaEscobarappliedwiththeBureauofPatentsfortheregistrationofthe
trademarkBarbizon,allegingthatshehadbeenmanufacturingandsellingthese
productssince1970.privaterespondentBarbizonCorpopposedtheapplicationin
IPCNo.686.TheBureaugrantedtheapplicationandacertificateofregistrationwas
issuedforthetrademarkBarbizon.Escobarlaterassignedallherrightsandinterest
overthetrademarktopetitionerMirpuri.In1979,Escobarfailedtofilewiththe
BureautheAffidavitofUseofthetrademark.Duetohisfailure,theBureau
cancelledthecertificateofregistration.EscobarreappliedandMirpurialsoapplied
andthisapplicationwasalsoopposedbyprivaterespondentinIPCNo.2049,
claimingthatitadoptedsaidtrademarkin1933andhasbeenusingit.Itobtaineda
certificatefromtheUSPatentOfficein1934.Thenin1991,DTIcancelled
petitionersregistrationanddeclaredprivaterespondenttheownerandprioruserof
thebusinessnameBarbizonInternational.
ISSUE
Whetherornotthetreaty(ParisConvention)affordsprotectiontoaforeign
corporationagainstaPhilippineapplicantfortheregistrationofasimilartrademark.
HELD
TheCourtheldintheaffirmative.RA8293definestrademarkasanyvisible
signcapableofdistinguishinggoods.TheParisConventionisamultilateraltreaty
thatseekstoprotectindustrialpropertyconsistingofpatents,utilitymodels,
industrialdesigns,trademarks,servicemarks,tradenamesandindicationsofsource
orappellationsoforigin,andatthesametimeaimstorepressunfaircompetition.In
short,foreignnationalsaretobegiventhesametreatmentineachofthemember
countriesasthatcountrymakesavailabletoitsowncitizens.Nationalsofthevarious
membernationsarethusassuredofacertainminimumofinternationalprotectionof
theirindustrialproperty.
Facts:
Respondent Toribio Teodoro has continuously used "Ang Tibay," both as a
trade-mark and as a trade-name, in the manufacture and sale of slippers,
shoes, and indoor baseballs since 1910. On September 29, 1915, he
formally registered it as trade-mark and as trade-name on January 3, 1933.
Petitioner Ana Ang 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.
The Court of First Instance of Manila absolved the defendant (Ms. Ang) 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 trademark 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 Court of Appeals reversed said judgment, directing the Director of
Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of
petitioner, and perpetually enjoining the latter from using said trade-mark on
goods manufactured and sold by her.
Thus, this case, a petition for certiorari.
Issue:
Are the goods or articles or which the two trademarks are used similar or
belong to the same class of merchandise?
Ruling:
ANA ANG vs. TORIBIO TEODORO
Yes, pants and shirts are goods closely similar to shoes and slippers. They
belong to the same class of merchandise as shoes and slippers. They are
closely related goods.
The Supreme Court affirmed the judgment of the Court of Appeals and added
that although two non-competing articles may be classified under to 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 trademarks would be likely to cause confusion as to the origin,
or personal source, of the second users 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 that the
first user made the second users goods.
ISSUE:
HELD:
ARCE SONS AND COMPANY vs. SELECTA BISCUIT COMPANY,INC., ET AL.,

FACTS:
On August 31, 1955, Selecta Biscuit Company, Inc., filed
with the PhilippinePatent 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 usesaid trade-mark in
the Philippines, either in the identical form or in any such near
resemblance thereto, as might becalculated 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 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.
The Patent Office ordered the publication of the application
for purposes of opposition. The Arce Sons and Company then filed
their opposition claiming that the mark Selecta has already
become identified with the name of Ramon Arce and its business.
Moreover, that the mark was used continuously since 1933 while
the respondent herein only used it during 1955.
Is the word Selecta registrable?
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 theproducts to which it is
attached."
The word 'SELECTA', it is true, may be an ordinary or
common word in the sense that may be used or employed by any
onein promoting his business or enterprise, but once adopted or
coined in connection with one's business as an emblem, signor
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. 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 trademark.
MCDONALDS CORP vs. LC BIG MAK

Petitioner McDonald's Corporation ("McDonald's") is a US corporation that
operates a global chain of fast-food restaurants, with Petitioner McGeorge

Food Industries ("McGeorge"), as the Philippine franchisee.
McDonald's owns the "Big Mac" mark for its "double-decker hamburger
sandwich." with the US Trademark Registry on 16 October 1979.
Based on this Home Registration, McDonald's applied for the registration of
the same mark in the Principal Register of the then Philippine Bureau of
Patents, Trademarks and Technology ("PBPTT") (now IPO). On 18 July
1985, the PBPTT allowed registration of the "Big Mac."
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.
To establish trademark infringement, the following elements must be shown:
(1) the validity of plaintiff's mark; (2) the plaintiff's ownership of the mark; and
(3) the use of the mark or its colorable imitation by the alleged infringer
results in "likelihood of confusion." Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.
1st element:
A mark is valid if it is distinctive and not merely generic and descriptive.
Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which

operates fast-food outlets and snack vans in Metro Manila and nearby
provinces. Respondent corporation's menu includes hamburger sandwiches
and other food items.
On 21 October 1988, respondent corporation applied with the PBPTT for the
registration of the "Big Mak" mark for its hamburger sandwiches, which was
opposed by McDonald's. McDonald's also informed LC Big Mak chairman of
its exclusive right to the "Big Mac" mark and requested him to desist from
using the "Big Mac" mark or any similar mark.
Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its
directors before Makati RTC Branch 137 ("RTC"), for trademark infringement
and unfair competition.
RTC rendered a Decision finding respondent corporation liable for trademark
infringement and unfair competition. CA reversed RTC's decision on appeal.
The "Big Mac" mark, which should be treated in its entirety and not dissected
word for word, is neither generic nor descriptive. Generic marks are
commonly used as the name or description of a kind of goods, such as "Lite"
for beer. Descriptive marks, on the other hand, convey the characteristics,
functions, qualities or ingredients of a product to one who has never seen it
or does not know it exists, such as "Arthriticare" for arthritis medication. On
the contrary, "Big Mac" falls under the class of fanciful or arbitrary marks as it
bears no logical relation to the actual characteristics of the product it
represents. As such, it is highly distinctive and thus valid.
2nd element:
Petitioners have duly established McDonald's exclusive ownership of the "Big
Mac" mark. Prior valid registrants of the said mark had already assigned his
rights to McDonald's.
3rd element:
1ST ISSUE:W/N respondent corporation is liable for trademark infringement

and unfair competition.
Ruling: Yes
Section 22 of Republic Act No. 166, as amended, defines trademark
infringement as follows:
Infringement, what constitutes. - Any person who [1] 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 [2] 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
Section 22 covers two types of confusion arising from the use of similar or
colorable imitation marks, namely, confusion of goods (confusion in which the
ordinarily prudent purchaser would be induced to purchase one product in
the belief that he was purchasing the other) and confusion of business
(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 is confusion of goods in this case since respondents used the "Big
Mak" mark on the same goods, i.e. hamburger sandwiches, that petitioners'
"Big Mac" mark is used.
There is also confusion of business due to Respondents' use of the "Big
Mak" mark in the sale of hamburgers, the same business that petitioners are
engaged in, also results in confusion of business. 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 registered trademark
owner enjoys protection in product and market areas that are the normal
potential expansion of his business.
Furthermore, In determining likelihood of confusion, the SC has relied on the
dominancy test (similarity of the prevalent features of the competing
trademarks that might cause confusion) over the holistic test (consideration
of the entirety of the marks as applied to the products, including the labels
and packaging).
SOCIETE DES PRODUITS NESTLE vs. CA
Applying the dominancy test, Respondents' use of the "Big Mak" mark results
in likelihood of confusion. Aurally the two marks are the same, with the first
word of both marks phonetically the same, and the second word of both
marks also phonetically the same. Visually, the two marks have both two
words and six letters, with the first word of both marks having the same
letters and the second word having the same first two letters.
Lastly, since Section 22 only requires the less stringent standard of
"likelihood of confusion," Petitioners' failure to present proof of actual
confusion does not negate their claim of trademark infringement.
2ND ISSUE: W/N Respondents committed Unfair Competition
Ruling: Yes.
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
Any person who will employ deception or any other means contrary to good
faith by which he shall pass off the goods manufactured by him or in which
he deals, or his business, or services for those of the one having established
such goodwill, or who shall commit any acts calculated to produce said
result, shall be guilty of unfair competition, and shall be subject to an action
therefor.
The essential elements of an action for unfair competition are (1) confusing
similarity in the general appearance of the goods, and (2) intent to deceive
the public and defraud a competitor.
In the case at bar, Respondents have applied on their plastic wrappers and
bags almost the same words that petitioners use on their styrofoam box.
Further, Respondents' goods are hamburgers which are also the goods of
petitioners. Moreover, there is actually no notice to the public that the "Big
Mak" hamburgers are products of "L.C. Big Mak Burger, Inc." This clearly
shows respondents' intent to deceive the public.
In 1984, CFC Corporation filed with the Bureau of Patents,

Trademarks, and Technology Transfers an application for the
registration of its trademark Flavor Master an instant coffee.
Nestle opposed the application as it alleged that Flavor Master is
confusingly similar to Nestle coffee products like Master Blend and
Master Roast. Nestle alleged that in promoting their products, the
word Master has been used so frequently so much so that when
one hears the word Master it connotes to a Nestle product. They
provided as examples the fact that theyve been using Robert
Jaworski and Ric Puno Jr. as their commercial advertisers; and that
in those commercials Jaworski is a master of basketball and that
Puno is a master of talk shows; that the brand of coffee equitable or
fit to them is Master Blend and Master Roast. CFC Corporation on
the other hand alleged that the word Master is a generic and a
descriptive term, hence not subject to trademark. The Director of
Patents ruled in favor of Nestle but the Court of Appeals, using the
Holistic Test, reversed the said decision.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The proper test that should have been used is the
Dominancy Test. The application of the totality or holistic test is
improper since the ordinary purchaser would not be inclined to
notice the specific features, similarities or dissimilarities,
considering that the product is an inexpensive and common
household item. The use of the word Master by Nestle in its
products and commercials has made Nestle acquire a connotation
that if its a Master product it is a Nestle product. As such, the use
by CFC of the term MASTER in the trademark for its coffee
product FLAVOR MASTER is likely to cause confusion or mistake or

even to deceive the ordinary purchasers.
In addition, the word MASTER is neither a generic nor a
descriptive term. As such, said term can not be invalidated as a
trademark and, therefore, may be legally protected.
Generic terms are those which constitute the common descriptive
name of an article or substance, or comprise the genus of which
the particular product is a species, or are commonly used as the
name or description of a kind of goods, or imply reference to
every member of a genus and the exclusion of individuating
characters, or refer to the basic nature of the wares or services
provided rather than to the more idiosyncratic characteristics of a
particular product, and are not legally protectable.
On the other hand, a term is descriptive and therefore invalid as a
trademark if, as understood in its normal and natural sense, it
forthwith conveys the characteristics, functions, qualities or
ingredients of a product to one who has never seen it and does not
know what it is, or if it forthwith conveys an immediate idea of
the ingredients, qualities or characteristics of the goods, or if it
clearly denotes what goods or services are provided in such a way
that the consumer does not have to exercise powers of perception
or imagination.
Rather, the term MASTER is a suggestive term brought about by
the advertising scheme of Nestle. Suggestive terms are those
which, in the phraseology of one court, require imagination,
thought and perception to reach a conclusion as to the nature of
the goods. Such terms, which subtly connote something about
the product, are eligible for protection in the absence of secondary
meaning. While suggestive marks are capable of shedding some
light upon certain characteristics of the goods or services in
dispute, they nevertheless involve an element of incongruity,
figurativeness, or imaginative effort on the part of the
observer.
246 CORP vs. DAWAY

FACTS:
Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of
Rolex and Crown Device, filed against 246 Corporation the instant suit for
trademark infringement and damages with prayer for the issuance of a
restraining order or writ of preliminary injunctionbefore the RTC of QC
o July 1996: 246 adopted and , since then, has been using without
authority the mark Rolex in its business name Rolex Music Lounge as well
as in its newspaper advertisements as Rolex Music Lounge, KTV, Disco &
Party Club.
246 answered special affirmative defences: no confusion would arise from
the use by petitioner of the mark Rolex considering that its entertainment
business is totally unrelated to the items catered by respondents such as
watches, clocks, bracelets and parts thereof
RTC: quashed the subpoena ad testificandum and denied petitioners
motion for preliminary hearing on affirmative defenses with motion to dismiss
CA: affirmed
ISSUE: W/N RTC performed a grave abuse of discretion
HELD: NO. petition denied. RTC affirmed
The issue of whether or not a trademark infringement exists, is a question
of fact that could best be determined by the trial court.
Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293)
o (f)
Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance with the
preceding paragraph, which is registered in the Philippines with respect to
goods or services which are not similar to those with respect to which
registration is applied for: Provided, That use of the 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
interest of the owner of the registered mark are likely to be damaged by such
use
Section 123.1(f) is clearly in point because the Music Lounge of petitioner
is entirely unrelated to respondents business involving watches, clocks,
bracelets, etc. However, the Court cannot yet resolve the merits of the
present controversy considering that the requisites for the application of
Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The
existence or absence of these requisites should be addressed in a full blown
hearing and not on a mere preliminary hearing. The respondent must be
registered diamond design is not an index of

origin.
given ample opportunity to prove its claim, and the petitioner to debunk the
same.
2.
Victorias Milling Company, Inc. vs. Ong Su and the

Honorable Tiburcio S. Evalle (G.R. No. L-28499)
PROCEDURE AND FACTS
On October 4,1963, Victorias Milling Company, Inc. filed
with the Philippine Patent office a petition to cancel the
registration of Ong Su trademark Valentine.
The petitioner allied that its trademark Victorias which
was registered on November 9,1961 and diamond design
has distinctive of its sugar long before the respondent used
its trademark; that the registration of Valentine and
design has caused and will cause great damage to
petitioner by reason of mistake, confusion, or deception
among the purchasers because it is similar to its Victorias
trademark; that registration was fraudulently obtained by
Ong Su and that Valentine falsely suggest a connection
with Saint Valentine or with an institution or belief.
The respondent averred that he is doing business under the
name and style Valentine Packaging and has registered
the trademark Valentine with a design for sugar and was
registered on June 20,1961; that the trademark Victorias
with diamond design and the trademark Valentine with a
design are two different marks; and that there is absolutely
no likelihood of confusion, mistake or deception to
purchasers through the concurrent use of the petitioners
mark Victorias.
The Director of Patents denied the petition to cancel the
certificate of registration of the respondent Ong Su
covering the trademark Valentine. The decision of the
Director of Patents was also affirmed by the Supreme Court.
LEGAL ISSUES
1. Whether or not the respondent director of
patents erred in holding that petitioners
Whether or not the respondent director of

patents erred in holding that petioner is required
to establish that its diamond design has acquired
a secondary meaning.
3. Whether or not the respondent director of patents

erred in holding petitioners diamond design has
not acquired a secondary meaning.
erred in confining his comparison of petitioners
and respondents respective trademarks to one
sole item of their design, ignoring the complete
labels as actually used in trade and seen by
consumers.
erred in taking the position that in cases of
trademark cancellation involving among others
erred in holding that because the literal portions
of the respective trademarks in question, namely,
the respective names Victorias and Valentine,
have no similarity, there is no reasonable
likelihood of purchaser confusion.
7.

patents erred in assuming that petioner, or the
owner of any imitated or infringed trademark for
that matter must establish actual purchaser
confusion.
8.

patents erred in holding that the registration of
the Valentine trademark by respondent Ong Su
was not prudulently obtained.
9.

patents, acting through hearing officer Amando
Marquez, erred in admitting respondent Ong Sus
exhibits pertaining to one Mariano Ang said name
not having been clearly established as an alias,
although admittedly unauthorized, of respondent
Ong Su.
HOLDING
1. The contention of petitioner that the diamond
design in its trademark is an index of origin has
no merit.
2. The petitioner was not able to establish a
secondary meaning. The petioners has not shown
that the design portion of the mark has been so
used that purchasers recognize the design,
standing alone, as indicating goods coming from
registrant.
3.
No, as correctly stated by the Director of Patents,

common geometric shapes such as diamonds
ordinarily are not regarded as index of origin for
goods to which the remarks are applied. There is
no evidence that the diamond design in the
trademark of the petitioner has acquired a
secondary meaning with respect to its sugar
business.
4. No, The word Victorias is what identifies the sugar

contained in the bag as the product of the
petitioner.
5. No, the respondent trademark cannot be
cancelled. The evidence is that Ong Su has been
using his trademark since prior to the last World
War and he obtained the registration therof on
June 20,1961 while petitioner registered on
November 9,1961.
6. No, it is clear that the words Valentine and

Victorias are not similar in spelling and do not
have a similar sound when pronounced.
7.
No, The proposed testimony of Ernesto Duran

that in February 1963 he went to Arangue market
and bought one bag of sugar which he thought
was Victorias and when he went home he found
out that the sugar was marked Valentine is not
sufficient evidence that the two trademarks ar so
similar that buyers are confused.
8. No, there is no evidence that the respondent Ong

Su had obtained the registration of his trademark
Valentine and design by means of fraud. The
said trademark was registered in the Philippines
Patent Office before the petitioner registered its
trademark.
9. No, the counsel of petitioner had already
extensively cross-examined Ong Su as to a
citizenship, alien certificate of registration and
the other name Mariano Ang. It seems immaterial
whether or not Ong Su has judicial authority to
use Mariano Ang as an alias. There is evidence
that even before the last World War, the
trademark Valentine and design had been used
under the name of either Ong Su or Mariano Ang.
REASON FOR A DECISION
There is no violation of trademark in this case. The
petitioner never acquired secondary meaning in trademark
used. There is no reasonable likelihood of purchasers
confusion. Color alone, unless displayed in distinct or
arbitrary design, does not function as trademark. Also, the
printing sequences or arrangement of such legends as
weight, contents and manufacturer packing, it is merely a
matter pertaining to goods. A matter of unfair competition
which the Patent office has no jurisdiction.
other name already protected by law or is patently deceptive,

confusing or contrary to existing laws. The policy behind this
provision is to avoid fraud upon the public, which would have the
occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of
administration and supervision over corporations.
LYCEUM vs CA.
FACTS:
1. Petitioner had sometime commenced before in the SEC a
complaint against Lyceum of Baguio, to require it to change its
corporate name and to adopt another name not similar or identical
with that of petitioner. SEC decided in favor of petitioner. Lyceum of
Baguio filed petition for certiorari but was denied forlack of merit.
2. Armed with the resolution of the Court, petitioner instituted
before the SEC to compel private respondents, which are also
educational institutions, to delete word Lyceum from their
corporate names and permanently to enjoin them from using such
as part of their respective names.
3. Hearing officer sustained the claim of petitioner and held that
the word Lyceum was capable of appropriation and that petitioner
had acquired an enforceable right to the use of that word.
4. In an appeal, the decision was reversed by the SEC En Banc.
They held that the word Lyceum to have become identified with
petitioner as to render use thereof of other institutions as
productive of consfusion about the identity of the schools
concerned in the mind of the general public.
5. Petitioner went to appeal with the CA but the latter just affirmed
the decision of the SEC En Banc.
HELD:
Under the corporation code, no corporate name may be allowed by
the SEC if the proposed name is identical or deceptively or
confusingly similar to that of any existing corporation or to any
The corporate names of private respondents are not identical or

deceptively or confusingly similar to that of petitioners. Confusion
and deception has been precluded by the appending of geographic
names to the word Lyceum. Furthermore, the word Lyceum has
become associated in time with schools and other institutions
providing public lectures, concerts, and public discussions. Thus, it
generally refers to a school or an institution of learning.
Petitioner claims that the word has acquired a secondary meaning
in relation to petitioner with the result that the word, although
originally generic, has become appropriable by petitioner to the
exclusion of other institutions.
The doctrine of secondary meaning is a principle used in trademark
law but has been extended to corporate names since the right to
use a corporate name to the exclusion of others is based upon the
same principle, which underlies the right to use a particular
trademark or tradename. Under this doctrine, a word or phrase
originally incapable of exclusive appropriation with reference to an
article in the market, because geographical or otherwise
descriptive might nevertheless have been used for so long and so
exclusively by one producer with reference to this article that, in
that trade and to that group of purchasing public, the word or
phrase has come to mean that the article was his produce. The
doctrine cannot be made to apply where the evidence didn't prove
that the business has continued for so long a time that it has
become of consequence and acquired good will of considerable
value such that its articles and produce have acquired a well known
reputation, and confusion will result by the use of the disputed
name.
Petitioner didn't present evidence, which provided that the word
Lyceum acquired secondary meaning. The petitioner failed to
adduce evidence that it had exclusive use of the word. Even if
petitioner used the word for a long period of time, it hadnt
acquired any secondary meaning in its favor because the appellant
failed to prove that it had been using the same word all by itself to
the exclusion of others.
For the prohibition to apply, 2 requisites must be present:(1) the

complainant corporation must have acquired a prior right over the
use of such corporate name and
(2) the proposed name is either identical or deceptively or
confusingly similar to that of any existing corporation or to any
other name already protected by law or patently deceptive,
confusing or contrary to existing law.
PHILIPS EXPORT BV vs. CA

FACTS:
Philips Export B.V. (PEBV) filed with the SEC for the cancellation of
the word Philips the corporate name of Standard Philips
Corporation in view of its prior registration with the Bureau of
Patents and the SEC. However, Standard Philips refused to amend
its Articles of Incorporation so PEBV filed with the SEC a petition for
the issuance of a Writ of Preliminary Injunction, however this was
denied ruling that it can only be done when the corporate names
are identical and they have at least 2 words different. This was
affirmed by the SEC en banc and the Court of Appeals thus the case
at bar.
With regard to the 1st requisite, PEBV adopted the name Philips
part of its name 26 years before Standard Philips. As regards the
2nd, the test for the existence of confusing similarity is whether the
similarity is such as to mislead a person using ordinary care and
discrimination. Standard Philips only contains one word,
Standard, different from that of PEBV. The 2 companies products
are also the same, or cover the same line of products. Although
PEBV primarily deals with electrical products, it has also shipped to
its subsidiaries machines and parts which fall under the
classification of chains, rollers, belts, bearings and cutting saw,
the goods which Standard Philips also produce. Also, among
Standard Philips primary purposes are to buy, sell trade x x x
electrical wiring devices, electrical component, electrical supplies.
Given these, there is nothing to prevent Standard Philips from
dealing in the same line of business of electrical devices. The use of
Philips by Standard Philips tends to show its intention to ride on
the popularity and established goodwill of PEBV.
ISSUE:
Whether or not Standard Philips can be enjoined from using Philips
in its corporate name
RULING: YES
A corporations right to use its corporate and trade name is a
property right, a right in rem, which it may assert and protect
against the whole world. According to Sec. 18 of the Corporation
Code, no corporate name may be allowed if the proposed name is
identical or deceptively confusingly similar to that of any existing
corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing law.
PROSOURCE vs. HORPHAG

FACTS:
Respondent is a corporation and owner of trademark PYCNOGENOL, a food.
Respondent later discovered that petitioner was also distributing a similar
food supplement using the mark PCO-GENOLS since 1996. This prompted
respondent to demand that petitioner cease and desist from using the
aforesaid mark.
Respondent filed a Complaint for Infringement of Trademark with Prayer for
Preliminary Injunction against petitioner, in using the name PCO-GENOLS
for being confusingly similar. Petitioner appealed otherwise.
The RTC decided in favor of respondent. It observed that PYCNOGENOL and
PCO-GENOLS have the same suffix "GENOL" which appears to be merely
descriptive and thus open for trademark registration by combining it with
other words and concluded that the marks, when read, sound similar, and
thus confusingly similar especially since they both refer to food
supplements.
SC applied the Dominancy Test.Both the words have the same suffix
"GENOL" which on evidence, appears to be merely descriptive and furnish
no indication of the origin of the article and hence, open for trademark
registration by the plaintiff through combination with another word or
phrase. When the two words are pronounced, the sound effects are
confusingly similar not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as such by their
public consumers. And although there were dissimilarities in the trademark
due to the type of letters used as well as the size, color and design
employed on their individual packages/bottles, still the close relationship
of the competing products name in sounds as they were pronounced,
clearly indicates that purchasers could be misled into believing that they
are the same and/or originates from a common source and manufacturer.
On appeal to the CA, petitioner failed to obtain a favorable decision. The

appellate court explained that under the Dominancy or the Holistic Test,
PCO-GENOLS is deceptively similar to PYCNOGENOL.
ISSUE: Whether the names are confusingly similar.
RULING:
Yes. There is confusing similarity and the petition is denied. Jurisprudence
developed two test to prove such.
The Dominancy Test focuses on the similarity of the prevalent features of
the competing trademarks that might cause confusion and deception, thus
constituting infringement. If the competing trademark contains the main,
essential and dominant features of another, and confusion or deception is
likely to result, infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should suggest an
effort to imitate. The question is whether the use of the marks involved is
likely to cause confusion or mistake in the mind of the public or to deceive
purchasers. 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.
The Holistic Test entails a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining
confusing similarity. Not only on the predominant words should be the focus
but also on the other features appearing on both labels in order that the
observer may draw his conclusion whether one is confusingly similar to the
other.
COFFEE PARTNERS vs. SAN FRANSCISCO COFFEE

Facts:
The petitioner holds a business in maintaining coffee shops in the
Philippines. It is registered with the Securities and Exchange Commission in
January 2001. In its franchise agreement with Coffee Partners Ltd, it carries
the trademark San Francisco Coffee. Respondent is engaged in the
wholesale and retail sale of coffee that was registered in SEC in May 1995
under a registered business name of San Francisco Coffee &Roastery, Inc.
It entered into a joint venture with Boyd Coffee USA to study coffee carts in
malls.
When respondent learned that petitioner will open a coffee shop in Libis,
Q.C. they sent a letter to the petitioner demanding them to stop using the
name San Francisco Coffee as it causes confusion to the minds of the
public. A complaint was also filed by respondents before the Bureau of Legal
Affairs of the Intellectual Property Office for infringement and unfair
competition with claims for damages. Petitioners contend that there are
distinct differences in the appearance of their trademark and that respondent
abandoned the use of their trademark when it joined venture with Boyd
Coffee USA. The Bureau of Legal Affairs of the IPO held that petitioners
trademark infringed on the respondents trade name as it registered its
business name first with the DTI in 1995 while petitioner only registered its
trademark in 2001.
Furthermore, it ruled that the respondent did not abandon the use of its
trade name upon its joint venture with Boyd Coffee USA since in order for
abandonment to exist it must be permanent, intentional and voluntary. It
also held that petitioners use of the trademark "SAN FRANCISCO COFFEE"
will likely cause confusion because of the exact similarity in sound, spelling,
pronunciation, and commercial impression of the words "SAN FRANCISCO"
which is the dominant portion of respondents trade name and petitioners
trademark. Upon appeal before the office of the Director General of the IPO,
the decision of its legal affairs was reversed declaring there was no
infringement. The Court of Appeals however set aside its decision and
reinstated the IPO legal affairs decision. Petitioner contends that the
respondents trade name is not registered therefore a suit for infringement is
not available.
Issue:
Whether or not the petitioners use of the trademark "SAN FRANCISCO
COFFEE" constitutes infringement of respondents trade name "SAN
FRANCISCO COFFEE & ROASTERY, INC.," even if the trade name is not
registered with the Intellectual Property Office (IPO).
Ruling:
Registration of a trademark before the IPO is no longer a requirement to file
an action for infringement as provided in Section 165.2 of RA 8293. All that is
required is that the trade name is previously used in trade or commerce in
the Philippines. There is no showing that respondent abandoned the use of
its trade name as it continues to embark to conduct research on retailing
coffee, import and sell coffee machines as among the services for which the
use of the business name has been registered.
The court also laid down two tests to determine similarity and likelihood of
confusion. The dominancy test focuses on similarity of the prevalent features
of the trademarks that could cause deception and confusion that constitutes
infringement. Exact duplication or imitation is not required. The question is
whether the use of the marks involved is likely to cause confusion or mistake
in the mind of the public or to deceive consumers. the holistic test entails a
consideration of the entirety of the marks as applied to the products,
including the labels and packaging, in determining confusing
similarity.15 The discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing on both marks
in order that the observer may draw his conclusion whether one is
confusingly similar to the other. Applying either the dominancy test or the
holistic test, petitioners "SAN FRANCISCO COFFEE" trademark is a clear
infringement of respondents "SAN FRANCISCO COFFEE & ROASTERY,
INC." trade name. The descriptive words "SAN FRANCISCO COFFEE" are
precisely the dominant features of respondents trade name. And because
both are involved in coffee business there is always the high chance that the
public will get confused of the source of the coffee sold by the petitioner.
Respondent has acquired an exclusive right to the use of the trade name
"SAN FRANCISCO COFFEE & ROASTERY, INC." since the registration of
the business name with the DTI in 1995.
FABERGE vs. IAC

FactsoftheCase:
CoBengKayappliedfortheregistrationofthetrademark'BRUTE'tobeuseditits
underwear(briefs)products.Thepetitioneropposedonthegroundthatthereis
similaritywiththeirownsymbol(BRUT,Brut33&Device)usedonitsaftershave,
deodorant,creamshave,hairsprayandhairshampoo/soapsandthatitwouldcause
injurytotheirbusinessreputation.Itmustbenotedthatthepetitionerneverapplied
forregistrationofsaidtrademarkforitsbriefproducts.ThePatentOfficeallowedCo
BengKaytheregistrationandthiswasfurtheraffirmedbytheCourtofAppeals.
Issue:Isthereconfusingsimilaritybetweenthechallengedmarksandthatitsuse
wouldlikelycauseconfusiononthepartofthepurchasers?
HELD:NONE.CoBengKaymayrightlyappropriatethemark.InthiscaseSec.20
(PhilippineIntellectualPropertyLaw)iscontrolling.Thecertificateofregistration
issuedconferstheexclusiverighttouseitsownsymbolonlytothosegoods
specifiedbythefirstuserinthecertificate,subjecttoanyconditionsorlimitations
statedtherein.Moreover,thetwoproductsaresodissimilarthatapurchaserofone(a
brief)wouldnotbemisledormistakenintobuyingtheother(suchasanaftershave).
DERMALINEvs.MYRAPHARMACEUTICALS
Facts: Dermaline filed with the IPO an

application to register the trademark
Dermaline. Myra opposed this alleging
that the trademark resembles its
trademark Dermalin and will cause
confusion, mistake and deception to the
purchasing
public.
Dermalin
was
registered way back 1986 and was
commercially used since 1977. Myra
claims that despite attempts of Dermaline
to differentiate its mark, the dominant
feature is the term Dermaline to which
the first 8 letters were identical to that of
Dermalin. The pronunciation for both is
also identical. Further, both have 3
syllables each with identical sound and
appearance.
Issue: W/N the IPO should allow the
registration of the trademark Dermaline.
NO
Held: As Myra correctly posits, it has the
right under Section 147 of R.A. No. 8293
to prevent third parties from using a
trademark, or similar signs or containers

for goods or services, without its consent,
identical or similar to its registered
trademark, where such use would result in
a likelihood of confusion. In determining
confusion, case law has developed two (2)
tests, the Dominancy Test and the Holistic
or Totality Test.
The Dominancy Test focuses on the
similarity of the prevalent features of the
competing trademarks that might cause
confusion or deception. 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. Relative to the question on
confusion of marks and trade names,
jurisprudence 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.
trademark over the radio, chances are he

will associate it with Myras. 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.
Using this test, the IPO declared that both

confusion of goods and service and
confusion of business or of origin were
apparent in both trademarks. While it is
true that the two marks are presented
differently, they are almost spelled in the
same way, except for Dermalines mark
which ends with the letter "E," and they are
pronounced practically in the same
manner in three (3) syllables, with the
ending letter "E" in Dermalines mark
pronounced silently. Thus, when an
ordinary purchaser, for example, hears an
advertisement of Dermalines applied
Further, Dermalines stance that its

product belongs to a separate and
different classification from Myras
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.
BERRISAGRICORPvs.ABYADANG
FACTS:
Abyadang filed a trademark application with the IPO for the mark "NS D-10
PLUS" for use in connection with Fungicide. Berris Agricultural Co., Inc.
filed an opposition against the trademark citing that it is confusingly
similar with their trademark, "D-10 80 WP" which is also used for Fungicide
also with the same active ingredient.
The IPO ruled in favor of Berries but on appeal with the CA, the CA ruled in
favor of Abyadang.
ISSUE: Whether there is confusing similarity between the trademarks.
RULING:
Yes. The SC found that both products have the component D-10 as their
ingredient and that it is the dominant feature in both their marks. Applying
the Dominancy Test, Abyadang's product is similar to Berris' and that
confusion may likely to occur especially that both in the same type of
goods. Also using the Holistic Test, it was more obvious that there is
likelihood of confusion in their packaging and color schemes of the marks.
The SC states that buyers would think that Abyadang's product is an
upgrade of Berris'.
Fredco v. Harvard University, G.R. No. 185917, June 1, 2011

Facts:
In 2005, Fredco Manufacturing Corporation filed a petition for cancellation

before the Bureau of Legal Affairs of the Philippine Intellectual Property
Office against the President and Fellows of Harvard College for the
registration of its mark Harvard Veritas Shield Symbol under the Classes
16, 18, 21, 25 and 28 of the Nice International Classification of Goods an
Services alleging that its predecessor-in-interest, New York Garments
Manufacturing & Export Co., Inc., has been already using the mark Harvard
since 1985 when it registered the same mark under Class 25 of the Nice
Classification. Thus, Harvard University is not a prior user of the mark in the
Philippines and, therefore, has no right to register the mark.
On the other hand, Harvard University claimed that the mark Harvard has
been adopted by Harvard University in Cambridge, Massachusetts, USA
since 1639. Furthermore, it alleges that the name and mark Harvard and
Harvard Veritas Shield Symbol is registered in more than 50 countries,
including the Philippines, and has been used in commerce since 1872. In
fact, the name and mark is rated as one of the top brands of the world, being
worth between $750M and $1B.
Decision of BLA-IPO
The Bureau of Legal Affairs, IPO ruled in favour of Fredco ordering the
cancellation of Harvard Universitys mark under Class 25 only because the
other classes were not confusingly similar with respect to the goods and
services of Fredco.
Decision of ODG-IPO
Harvard University appealed before the Office of the Director General of IPO
wherein ODG-IPO reversed the decision of BLA-IPO. The Director General
ruled that the applicant must also be the owner of the mark sought to be
registered aside from the use of it. Thus, Fredco is not the owner of the mark
because it failed to explain how its predecessor got the mark Harvard.
There was also no evidence of the permission of Harvard University for
Fredco to use the mark.
Decision of the Court of Appeals
Fredco appealed the decision of the Director General before the Court of
Appeals, which then affirmed the decision of ODG-IPO considering the facts
found by the Director General. CA ruled that Harvard University had been
using the marks way before Fredco and the petitioners failed to explain its
use of the marks bearing the words Harvard, USA, Established 1936 and
Cambridge, Massachusetts within an oblong device.
Issue:
W/N CA erred in affirming the decision of ODG-IPO
Held:
The Petition has no merit.
Although R.A. 166 Section 2 states that before a mark can be registered, it
must have been actually used in commerce for not less than two months in
the Philippines prior to filing an application for its registration, a trademark
registered in a foreign country which is a member of the Paris Convention is
allowed to register without the requirement of use in the commerce in the

Philippines. Under Section 37 of R.A. 166, registration based on home
certificate is allowed and does not require the use of the mark in the
Philippines. Furthermore, R.A. 8293 Section 239.2 provides that marks which
have been registered under R.A. 166 shall remain in force but shall be
subject to the provisions of R.A. 8293, which does not require the prior use of
the mark in the Philippines.
Why the petition must fail?
1. The inclusion of the origin Cambridge, Massachusetts in Fredcos
mark connotes that Fredco is associated with Harvard University,
which is really not true. The registration of Fredcos mark should
have been rejected.
2. The Philippines is a signatory of the Paris Convention, which
provides for the protection against violation of intellectual property
rights to all the member countries regardless of whether the
trademarks is registered or not in a particular country.
1980, Luis Villafuerte issued a memo to the Director of Patents ordering the
latter to reject all pending applications of marks which involves a well-known
brand around the world by applicants other than the owner of the mark.
1983, Roberto Ongpin affirmed the memo of Villafuerte by commanding the
Director of Patents to implement measures which will comply with the
provisions of the Paris Convention. He provided criteria that should be
considered to any marks that are well-known in the Philippines or marks that
belong to persons subject to the protection of the Convention.
Currently, well-known marks are protected under Section 123.1(e) of R.A.
8293. Additionally, Rule 102 of the Rules and Regulations on Trademarks,
Service Marks, Trade Names and Marked or Stamped Containers provides
for the criteria in determining a well-known mark. The use of the mark in
commerce is not anymore required because it is enough that any
combination of the criteria be met in order for a mark to be well-known.
The ODG-IPO traced the origin of the mark Harvard. It ruled that Harvard
University had been using the mark centuries before Fredco although the
latter may have used the mark first in the Philippines before the former.
Likewise, CA ruled that the name and mark Harvard and Harvard Veritas
Shield Symbol were first used in the United States since 1953 under Class
25.
Finally, the Supreme Court declared the mark Harvard to be well-known
internationally, including the Philippines.
CRISANTAY.GABRIELvs.DR.JOSER.PEREZ
G.R.No.L24075.January31,1974
Facts:
Dr. Jose R. Perez filed with the Patents Office on

February 23, 1961 an application for registration of the
trademark "WONDER"
in the Supplemental Register. On October 19, 1962,
petitioner Crisanta Y.Gabriel claiming that he had been
using the subject mark since 1959 filed with the Patent
Office a petition for cancellation of the trademark
"WONDER from the supplemental register alleging that
the registrant was not entitled to register the
said trademark at the time of his application for
registration
In support of her petition, she further alleged the written
contract between her and the registrant (respondent)
wherein,
according to her, the latter has recognized her right of
use and ownership of said trademark; and that the
labels submitted by
the registrant are the very containers bearing the
trademark "WONDER" which are owned by her and
which she has been
exclusively and continuously using in commerce after
Dr. Perz had perfected his research and obtained a
certificate of label, he made
an agreement (January, 1959) with a certain company
named 'Manserco' for the distribution of his soap. It was
then being managed by Mariano S. Yangga who happens

to be the brother of the Petitioner Crisanta Y. Gabriel
"Because the corporation was allegedly going bankrupt
and the members were deserting, the Respondent
terminated the
agreement in July, 1959, and thereafter he asked the
Petitioner to become the distributor of his products.
Director of Patents rendered his decision denying the
petition of Gabriel to cancel the certificate of
registration
Issue/Answer:
WON Gabriel, as a mere distributor have the right to
register the subject mark in her own name/ negative
Ratio Decidendi:
"Because the corporation was allegedly going bankrupt
and the members were deserting, the Respondent
terminated the
agreement in July, 1959, and thereafter he asked the
Petitioner to become the distributor of his products
Crisanta Y. Gabriel appears to be a mere distributor of
the product by contract with the manufacturer,
respondent Dr. Jose R.
Perez and the same was only for a term.
Under Sections 2 and 2-A of the Trademark Law,
Republic Act No. 166, as amended, the right to register
trademark is based on
ownership and a mere distributor of a product bearing a
trademark, even if permitted to use said trademark,
has no
right to and cannot register the said trademark
Petitioner urges that the agreement of exclusive

distributorship executed by andbetween her and
respondent vested in her
the exclusive ownership of the trademark
"WONDER". But a scrutiny of the provisionsof said
contract does not yield any right in favor of petitioner
other than that expressly
granted to her to be the sole and exclusive distributor
of respondent Dr.Perez' product.
The agreement never mentioned transfer of ownership
of the trademark. It merely empowers the petitioner as
exclusive
distributor to own the package and to create a design at
her pleasure, but not the right to appropriate unto
herself the sole ownership of the trademark so as to
entitle her to registration in the Patent Office.
The exclusive distributor does not acquire any
proprietary interest in the principal's trademark. the
trademark "WONDER" has long been identified and
associated with the product
manufactured and produced by the Dr. Jose R. Perez
Cosmetic Laboratory. Petitioner's act in defraying
substantial
expenses in the promotion of the Respondent's goods
and the printing of the packages are the necessary or
essential
consequences of Paragraph 6 of the agreement
because, anyway, those activities are normal in the field
of sale and distribution, as it would redound to her own
benefit as distributor, and those acts are incumbent
upon her to do.
to register Pro Kennex as a trademark to SUPERIOR, on condition

that SUPERIOR acknowledged that KUNNAN was still the real owner
of the mark and agreed to return it to KUNNAN on request.
On December 3, 1991, upon the termination of its distributorship
agreement with SUPERIOR, KUNNAN appointed SPORTS CONCEPT
as its new distributor. Subsequently, KUNNAN also caused the
publication of a Notice and Warning in the Manila Bulletins January
29, 1993 issue, stating that (1) it is the owner of the disputed
SUPERIOR COMMERCIAL ENTERPRISES INC. vs. KUNNAN
trademarks;
(2)
it
terminated
its
Distributorship
Agreement
ENTERPRISES LTD. AND SPORTS CONCEPT & DISTRIBUTOR,
with SUPERIOR; and (3) it appointed SPORTS CONCEPT as its
INC., G.R. No. 169974, April 20, 2010
exclusive distributor. This notice prompted SUPERIOR to file its

Complaint for Infringement of Trademark and Unfair Competition
FACTS:
with Preliminary Injunction against KUNNAN.
On October 1, 1982, KUNNAN appointed SUPERIOR as its exclusive
Prior to and during the pendency of the infringement and unfair
distributor in the Philippines under a Distributorship Agreement
competition case before the RTC, KUNNAN filed with the Bureau of
which states that:
Patents, Trademarks and Technology Transfer separate Petitions for
Kunnan intends to acquire ownership of the Kennex

trademark
Philippines.
registered
Superior
by
Superior
Commercial
Commercial
is
desirous
in
of
the
being
appointed as the sole distributor of Kunnan products in the

Philippines.
SUPERIORs President and General Manager, misled KUNNANs
officers into believing that KUNNAN could not acquire trademark
rights in the Philippines. KUNNAN decided to assign its applications
the Cancellation of Registration Trademarks well as Opposition to

Applications (Consolidated Petitions for Cancellation) involving the
KENNEX and PRO KENNEX trademarks. In essence, KUNNAN filed
the Petition for Cancellation and Opposition on the ground that
SUPERIOR fraudulently registered and appropriated the disputed
trademarks; as mere distributor and not as lawful owner, it obtained
the registrations and assignments of the disputed trademarks in
violation of the terms of the Distributorship Agreement and Sections
2-A and 17 of Republic Act No. 166, as amended. These cases were
resolved in favour of Kunnan by the BPTTT and the Court of Appeals.
could not have been the owner, and was thus an invalid registrant of
This decision became final.
the disputed trademarks.
Issue: WON Superior, as a distributor, is the true and rightful owner
The right to register a trademark is based on ownership, and
of the trademarks.
therefore only the owner can register it. In finding that Kunnan
owned the marks, the court considered the distributorship agreement
Held:
No. An exclusive distributor does not acquire any proprietary interest
in the principals trademark and cannot register it, unless the owner
has assigned the right.
Trademark infringement
To establish trademark infringement, the following elements must be
proven: (1) the validity of plaintiffs mark; (2) the plaintiffs ownership
of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in likelihood of confusion.
Based on these elements, we find it immediately obvious that the
second element the plaintiffs ownership of the mark was what the
Registration Cancellation Case decided with finality. On this element
depended the validity of the registrations that, on their own, only
gave rise to the presumption of, but was not conclusive on, the issue
of ownership.
In no uncertain terms, the appellate court in the Registration
Cancellation Case ruled that SUPERIOR was a mere distributor and
and the so-called assignment agreement in their entirety; it

confirmed that Superior had sought to be Kunnans exclusive
distributor.
As enunciated in the case of Gabriel vs. Perez, 50 SCRA 406, a mere
distributor of a product bearing a trademark, even if permitted to use
said trademark has no right to and cannot register the said
trademark.
Unfair competition
Unfair competition has been defined as the passing off (or palming
off) or attempting to pass off upon the public of the goods or business
of one person as the goods or business of another with the end and
probable effect of deceiving the public. The essential elements
of unfair competition are (1) confusing similarity in the general
appearance of the goods; and (2) intent to deceive the public and
defraud a competitor.
Jurisprudence also formulated the following true test of unfair
competition: whether the acts of the defendant have the intent of
deceiving or are calculated to deceive the ordinary buyer making his

purchases under the ordinary conditions of the particular trade to
which the controversy relates. One of the essential requisites in an
action to restrain unfair competition is proof of fraud; the intent to
deceive, actual or probable must be shown before the right to recover
can exist.
In the present case, no evidence exists showing that KUNNAN ever
attempted to pass off the goods it sold (i.e. sportswear, sporting goods
and equipment) as those ofSUPERIOR. In addition, there is no
evidence of bad faith or fraud imputable to KUNNAN in using the
disputed trademarks. Specifically, SUPERIOR failed to adduce any
evidence to show that KUNNAN by the above-cited acts intended to
deceive the public as to the identity of the goods sold or of the
manufacturer of the goods sold.
Technology Transfer (BPTTT) a petition praying for the

cancellation of the registration of the "Shangri-La" mark and "S"
device/logo issued to the Developers Group of Companies, Inc.,
on the ground that the same was illegally and fraudulently
obtained and appropriated for the latter's restaurant business.
The Shangri-La Group alleged that it is the legal and beneficial
owners of the subject mark and logo; that it has been using the
said mark and logo for its corporate affairs and business since
March 1962 and caused the same to be specially designed for
their international hotels in 1975, much earlier than the alleged
first use thereof by the Developers Group in 1982. It also filed
with the BPTTT its own application for registration of the subject
mark and logo. The Developers Group filed an opposition to the
application, which was docketed as Inter Partes Case No. 3529.
Almost 3 years later, or on April 15, 1991, the Developers Group
instituted with the RTC of Quezon City a complaint for
infringement and damages with prayer for injunction.
On January 8, 1992, the Shangri-La Group moved for the
suspension of the proceedings in the infringement case on
account of the pendency of the administrative proceedings
before the BPTTT. This was denied by the trial court in a
Resolution issued on January 16, 1992.
Issue: Whether, despite the institution of an Inter Partes case
for cancellation of a mark with the BPTTT (now the Bureau of
Legal Affairs, Intellectual Property Office) by one party, the
adverse party can file a subsequent action for infringement with
the regular courts of justice in connection with the same
registered mark.
Shangri-La International Hotel Management v. CA

G.R. No. 111580, June 21, 2001
Facts: On June 21, 1988, the Shangri-La International Hotel
Management filed with the Bureau of Patents, Trademarks and
Held: Section 151.2 of Republic Act No. 8293, otherwise known

as the Intellectual Property Code, provides, as follows
Section 151.2. Notwithstanding the foregoing
provisions, the court or the administrative agency
vested with jurisdiction to hear and adjudicate any
action to enforce the rights to a registered mark

shall likewise exercise jurisdiction to determine
whether the registration of said mark may be
cancelled in accordance with this Act. The filing of a
suit to enforce the registered mark with the proper
court or agency shall exclude any other court or
agency from assuming jurisdiction over a
subsequently filed petition to cancel the same mark.
On the other hand, the earlier filing of petition to
cancel the mark with the Bureau of Legal Affairs
shall not constitute a prejudicial question that
must be resolved before an action to enforce the
rights to same registered mark may be decided.
(Emphasis provided)
The rationale is plain: Certificate of Registration No. 31904,

upon which the infringement case is based, remains valid and
subsisting for as long as it has not been cancelled by the
Bureau or by an infringement court. As such, Developers
Group's Certificate of Registration in the principal register
continues as "prima facie evidence of the validity of the
registration, the registrant's ownership of the mark or tradename, and of the registrant's exclusive right to use the same in
connection with the goods, business or services specified in the
certificate." Since the certificate still subsists, Developers Group
may thus file a corresponding infringement suit and recover
damages from any person who infringes upon the former's
rights.
Similarly, Rule 8, Section 7, of the Regulations on Inter Partes

Proceedings, provides to wit
Section 7. Effect of filing of a suit before the Bureau
or with the proper court. - The filing of a suit to
enforce the registered mark with the proper court or
Bureau shall exclude any other court or agency from
assuming jurisdiction over a subsequently filed
petition to cancel the same mark. On the other
hand, the earlier filing of petition to cancel the
mark with the Bureau shall not constitute a
prejudicial question that must be resolved
before an action to enforce the rights to same
registered mark may be decided. (Emphasis
provided)
Hence, as applied in the case at bar, the earlier institution of an
Inter Partes case by the Shangri-La Group for the cancellation
of the "Shangri-La" mark and "S" device/logo with the BPTTT
cannot effectively bar the subsequent filing of an infringement
case by registrant Developers Group. The law and the rules are
explicit.
DEL MONTE CORPORATION and PHILIPPINE

PACKING CORPORATION vs. COURT OF
APPEALS and SUNSHINE SAUCE
MANUFACTURING INDUSTRIES
G.R. No. L-78325 January 25, 1990
FACTS: Petitioner Del Monte Corporation (Del
Monte), through its local distributor and
manufacturer, PhilPack filed an infringement of

copyright complaint against respondent Sunshine
Sauce Manufacturing Industries (SSMI), also a
maker of catsup and other kitchen sauces. In its
complaint, Del Monte alleged that SSMI are using
bottles and logos identical to the petitioner, to
which is deceiving and misleading to the public.
observer must focus not only on the precognizant

words but also on the other features appearing on
both labels. It has been correctly held that side-byside comparison is not the final test of similarity. In
determining whether a trademark has been
infringed, we must consider the mark as a whole
and not as dissected.
In its answer, Sunshine alleged that it had ceased

to use the Del Monte bottle and that its logo was
substantially different from the Del Monte logo and
would not confuse the buying public to the
detriment of the petitioners.
The Court is agreed that are indeed distinctions,

but similarities holds a greater weight in this case.
The Sunshine label is a colorable imitation of the
Del Monte trademark. What is undeniable is the
fact that when a manufacturer prepares to package
his product, he has before him a boundless choice
of words, phrases, colors and symbols sufficient to
distinguish his product from the others. Sunshine
chose, without a reasonable explanation, to use the
same colors and letters as those used by Del
Monte though the field of its selection was so
broad, the inevitable conclusion is that it was done
deliberately to deceive.
The Regional Trial Court of Makati dismissed the

complaint. It held that there were substantial
differences between the logos or trademarks of the
parties nor on the continued use of Del Monte
bottles. The decision was affirmed in toto by the
Court of Appeals.
ISSUE: Whether
or
not
SSMI
committed
infringement against Del Monte in the use of its
logos and bottles.
HELD: Yes. In determining whether two trademarks
are confusingly similar, the two marks in their
entirety as they appear in the respective labels
must be considered in relation to the goods to
which they are attached; the discerning eye of the
With regard to the bottle use, Sunshine despite the

many choices available to it and notwithstanding
that the caution "Del Monte Corporation, Not to be
Refilled" was embossed on the bottle, still opted to
use the petitioners' bottle to market a product
which Philpack also produces. This clearly shows
the private respondent's bad faith and its intention
to capitalize on the latter's reputation and goodwill

and pass off its own product as that of Del Monte.
infringes SMCs trademark

and as such constitutes
unfair competition
HELD: NO
ASIA BREWERY vs. CA
FACTS:
San Miguel Corp. (SMC) filed a complaint
against Asia Brewery Inc. (ABI) for infringement
of trademark and unfair competition. RTC
dismissed the complaint finding that ABI has not
committed trademark infringement or unfair
competition. The CA reversed the decision
finding that ABI is guilty of trademark
infringement and unfair competition thus the
case at bar.
ISSUE: Whether or not ABI
Infringement is determined by a test of

dominancy. 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. A closer look at
the trademark of both companies will show that
the dominant features of each absolutely bear
no similarity to each other. SMCs dominant
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 while ABIs is the name Beer Pale
Pilsen with the word Beer written in large
amber letters, larger than any of the letter
found in SMC label.
The word pale pilsen on ABIs trademark does

not constitute trademark infringement for it is a
generic word descriptive of the color of a type of
beer. No one may appropriate generic or

descriptive words for they belong to the public
domain.
ABI is likewise not guilty of unfair competition
for 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 for those of another who
has already established goodwill for his similar
goods. The universal test for this is whether the
public is likely to be deceived. Actual or
probable deception and confusion on the part of
the customers by reason of defendants
practices must appear. However, this is unlikely
to happen in the case at bar for consumers
generally order beer by brand. Also, the fact
that ABI also uses amber-colored steinie bottles
cannot constitute unfair competition for ABI did
not copy SMCs bottle. SMC did not invent but
merely borrowed the steinie bottle from abroad.
Likewise, amber is the most effective color in
preventing transmission of light thus providing
maximum protection to beer. 320 ml is likewise
the standard prescribed under Metrication
Circular No. 778. The fact that it is the first to
use the steinie bottle does not give SMC a
vested right to use it to the exclusion of
everyone else. Nobody can acquire any
exclusive right to market articles supplying the
simple human needs in containers or wrappers
of the general form, size and character
commonly and immediately used in marketing

such articles.
There is no confusing similarity between the
competing beers therefore ABI neither infringed
SMCs trademark nor did it commit unfair
competition.
Dissenting Opinion of J. Cruz:Side-by-side
comparison is not the final test of similarity
because average buyers do not make minute
scrutiny of label details. The average shopper is
usually in a hurry and does not inspect every
product on the shelf is if he were browsing in a
library.
EMERALD GARMENT MANUFACTURING

CORPORATION vs. HON. COURT OF APPEALS,
BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER and H.D. LEE
COMPANY, INC.
G.R. No. 100098, December 29, 1995
FACTS:
On 18 September 1981, private respondent

H.D. Lee Co., Inc. filed with the Bureau of Patents,
Trademarks & Technology Transfer (BPTTT) a
Petition for Cancellation of Registration No. SR
5054 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.
Private respondent averred that petitioner's
trademark "so closely resembled its own
trademark, 'LEE' as previously registered and used
in the Philippines cause confusion, mistake and
deception on the part of the purchasing public as to
the origin of the goods.
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, 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.
ISSUE:
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.
HELD:
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. The alleged
difference is too insubstantial to be noticeable. The
likelihood of confusion is further made more
probable by the fact that both parties are engaged
in the same line of business.
Although the Court decided in favor of the
respondent, 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. The dissenting opinion of Justice Padilla
is more acceptable.
RULING:
MCDONALDS vs. MACJOY FASTFOOD

FACTS:
MacJoy Fastfood Corp. is a corporation in the sale of
fastfood based in Cebu filed with IPO for the registration
of their name.
McDonald's Corporation filed an opposition to the
application. McDonald's claims that their logo and use of
their name would falsely tend to suggest a connection
with MacJoy's services and food products, thus,
constituting a fraud upon the general public and further
cause the dilution of the distinctiveness of petitioners
registered and internationally recognized MCDONALDS
marks to its prejudice and irreparable damage.
Respondent averred that MACJOY has been used for the
past many years in good faith and has spent considerable
sums of money for said mark.
The IPO held that there is confusing similarity The CA
held otherwise stating there are
predominant difference like the spelling, the font and
color of the trademark and the picture of the logo.
No. Jurisprudence developed two tests, the dominancy

and holistic test. The dominancy test focuses on the
similarity of the prevalent features of the competing
trademarks that might cause confusion or deception while
the holistic test requires the court to consider the
entirety of the marks as applied to the products,
including the labels and packaging, in determining
confusing similarity. Under the latter test, a comparison
of the words is not the only determinant factor.
The IPO, though they correctly used the dominancy, they
should have taken more considerations. In recent cases,
the SC has consistently used and applied the dominancy
test in determining confusing similarity or likelihood of
confusion between competing trademarks. The CA, while
seemingly applying the dominancy test, in fact actually
applied the holistic test.
Applying the dominancy test to the instant case, the
Court both marks are confusingly similar with each other
such that an ordinary purchaser can conclude an
association or relation between the marks. The
predominant features such as the "M," "Mc," and "Mac"
appearing in both easily attract the attention of would-be
customers. Most importantly, both trademarks are used in
the sale of fastfood products.
Petitioner has the right of ownership in the said marks.
Petitioner's mark was registered in 1977 while respondent
only in 1991.
ISSUE: Whether the ruling of the CA is correct.

unwary customers to be manufactured by

Converse Rubber. The Director of Patents did
not grant the opposition by Converse
Rubber.
ISSUE: Whether or not the decision of the
Director of Patents is correct.
CONVERSE RUBBER vs. UNIVERSAL RUBBER
147 SCRA 154 Mercantile Law Intellectual

Property Law Law on Trademarks, Service
Marks and Trade Names Trade Name
Infringement
Converse Rubber Corporation is an American
corporation while Universal Rubber Products,
Inc. is a corporation licensed to do business
in the country. Converse has been operating
since 1946. Universal Rubber has been
operating since 1963. Later, Universal
Rubber filed an application for the trademark
Universal Converse and Device before the
Philippine Patent Office. Converse Rubber
opposed as it averred that the word
Converse which is part of its corporate
name cannot be granted as part of Universal
Rubbers trademark or trade name because
it will likely deceive purchasers of Universal
Rubbers products as it may be mistaken by
HELD: No. From a cursory appreciation of

the Converse Rubbers corporate name
CONVERSE RUBBER CORPORATION it is
evident that the word CONVERSE is the
dominant word which identifies Converse
Rubber from other corporations engaged in
similar business. Universal Rubber, in the
stipulation of facts, admitted Converse
Rubbers existence since 1946 as a duly
organized foreign corporation engaged in the
manufacture of rubber shoes. This admission
necessarily betrays its knowledge of the
reputation and business of petitioner even
before it applied for registration of the
trademark in question. Knowing, therefore,
that the word CONVERSE belongs to and is
being used by Converse Rubber, and is in
fact the dominant word in its corporate
name, Universal Rubber has no right to
appropriate the same for use on its products
which are similar to those being produced by
Converse Rubber.
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 Apparelles 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 petitioners 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 respondents
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 owners consent of a portion of a trademark
registered in its entirety constitutes material or
substantial invasion of the owners 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 trademarkthe 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 persons 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.
PHILIP S. YU, Petitioner

vs.
THE HONORABLE COURT OF APPEALS, THE HONORABLE
PRESIDING JUDGE, RTC
OF MANILA, BRANCH XXXIV (34) and UNISIA MERCHANDISING
CO., INC.,
Respondent
G.R. No. 86683 January 21, 1993
FACTS:
Unfair competition in commercial enterprises is the reason that
Mr. Yu filed a case in RTC stating that he was practically
bypassed and that private respondent acted in concert with FNF
Trading in misleading Mayfair into believing that the goods
ordered by the trading firm were intended for shipment to

Nigeria although they were actually shipped to and sold in the
Philippines. Resolving plaintiff's motion embodied in the
complaint for the issuance of a writ of preliminary injunction
after hearing, but without prejudging the merits of the case, and
finding from the evidences adduced by the plaintiff, that the
terms and conditions of the agency agreement between the
plaintiff and The House of Mayfair of England for the exclusive
distributorship by the plaintiff of the latter's goods, apertain to
them; that there is no privity of contract between the plaintiff
and the defendant; that the controversy in this case arose from
a breach of contract by the FNF Trading of Germany, for having
shipped goods it had purchased from The House of Mayfair to
the Philippines: that the House of Mayfair was demanding
payment of 4,500.00 from the FNF Trading for restitution of
plaintiff's alleged loss on account of the shipment of the goods
in question here in the Philippines and now in the possession of
the defendant; it appears to the Court that to restrain the
defendant from selling the goods it has ordered from the FNF
Trading of Germany, would be without legal justification. Having
the issuance of writ of injunction denied, petitioners plea was
brought to the filing of a petition for review on certiorari with the
Court of Appeals. But according to the appellate court,
petitioner was not able to demonstrate the unequivocal right
which he sought to protect and that private respondent is a
complete stranger vis-a-vis the covenant between petitioner and
Mayfair. Apart from these considerations, the reviewing
authority noted that petitioner could be fully compensated for
the prejudice he suffered. But the petitioner anchors his plea
for redress on his view that private respondent has distributed
and continues to sell Mayfair covering products in contravention
of petitioner's exclusive right granted by the covenant with the
House of Mayfair. Temporary restraining order was issued to last
until further notice from this Court directed against private
respondent. Notwithstanding such, private respondent persisted
in the distribution which triggered petitioner's motion to cite
private respondent's manager in contempt of court.
ISSUE:
Whether the appellate court correctly agree with the lower court
in disallowing the writ solicited by herein petitioner due to
reason that petitioner was not able to demonstrate the

unequivocal right which he sought to protect and that private
respondent is a complete stranger (or is it unfair competition
that gave rise to such which should be stressed upon so as to
issue writ of injunction).
HELD:
The circumstance which respondent court overlooked was
petitioner's suggestion, which was not disputed by herein
private respondent in its comment, that the House of Mayfair in
England was duped into believing that the goods ordered
through the FNF Trading were to be shipped to Nigeria only, but
the goods were actually sent to and sold in the Philippines. A
ploy of this character is akin to the scenario of a third person
who induces a party to renege on or violate his undertaking
under a contract, thereby entitling the other contracting party to
relief therefrom. The breach caused by private respondent was
even aggravated by the consequent diversion of trade from the
business of petitioner to that of private respondent caused by
the latter's species of unfair competition as demonstrated no
less by the sales effected inspite of this Court's restraining
order. This brought the irreparable mischief which respondent
court overlooked when it refused to grant the relief simply
because of the observation that petitioner can be fully
compensated for the damage. With this, SC issued the writ of
preliminary injunction.
ROMA DRUG vs. RTC
FACTS:
Roma Drug was raided by the NBI and BFAD and seized
several important medicines. It appears that Roma Drug is
one of six drug stores which were raided on or around the
same time upon the request of SmithKline which was the
duly registered corporation to distribute such medicines.
The medicines of Roma Drug was purchased directly from
abroad and not through SmithKline.
During preliminary investigation, Rodriguez challenged
the constitutionality of the law on Special Law on
Counterfeit Drugs (SLCD) regarding the distribution of
their medicine that were considered counterfeit although
they only bought it directly and not from SmithKline.
ISSUE: Whether the contention of Roma Drug is correct.
RULING:
Yes. Section 7 of Rep. Act No. 9502 unequivocally grants
third persons the right to import drugs or medicines
whose patent were registered in the Philippines by the
owner of the product. The unqualified right of private
third parties such as petitioner to import or possess
unregistered imported drugs in the Philippines is
further confirmed by the Implementing Rules to Republic
Act No. 9502 promulgated on November 4, 2008.
It may be that Rep. Act No. 9502 did not expressly repeal
any provision of the SLCD. However, it is clear that the
SLCOs classification of unregistered imported drugs as
counterfeit drugs, and of corresponding criminal
penalties therefore are irreconcilably in the imposition
conflict with Rep. Act No. 9502 since the latter
indubitably grants private third persons the unqualified
right to import or otherwise use such drugs. Where a

statute of later date, such as Rep. Act No. 9502, clearly
reveals an intention on the part of the legislature to
abrogate a prior act on the subject that intention must be
given effect.
The prosecution of petitioner is no longer warranted.
respondent is not guilty of unfair competition. Upon appeal by petitioner, the new
IPO Director General declared that respondents were guilty of unfair competition on
December 23, 2005. On 18 July 2006, the Court of Appeals promulgated a Decision
reversing the Decision dated 23 December 2005 of the IPO Director General. The
appellate court declared that Section 163 of the Intellectual Property Code
specifically confers upon the regular courts, and not the BLA-IPO, sole jurisdiction to
hear and decide cases involving provisions of the Intellectual Property Code,
particularly trademarks. Hence, the present petition.
Issue: (1) Whether the IPO (administrative bodies) have jurisdiction to cases
involving unfair competition
(2) Whether respondent Sehwani is liable of unfair competition
Held: (1) Yes. Sec. 160 and 170, which are found under Part III of the IP Code,
recognize the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases. Therefore, the IPO Director of Legal Affairs have jurisdiction to
decide the petitioner's administrative case against respondents and the IPO Director
General have exclusive jurisdiction over the appeal of the judgment of the IPO
Director of Legal Affairs.
In-N-Out Burger, Inc vs Sehwani, Inc

G.R. No. 179127 : December 24, 2008
Facts: Petitioner IN-N-OUT BURGER, INC., a business entity incorporated under the
laws of US, which is a signatory to the Convention of Paris on Protection of Industrial
Property and the Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS). Petitioner is engaged mainly in the restaurant business, but it has never
engaged in business in the Philippines. Respondents Sehwani, Incorporated and
Benita Frites, Inc. are corporations organized in the Philippines.
(2) Yes. The evidence on record shows that the respondents were not using their
registered trademark but that of the petitioner. Further, respondents are giving their
products the general appearance that would likely influence purchasers to believe
that these products are those of the petitioner. The intention to deceive may be
inferred from the similarity of the goods as packed and offered for sale, and, thus,
action will lie to restrain such unfair competition. Also, respondents use of IN-N-OUT
BURGER in busineses signages reveals fraudulent intent to deceive purchasers.
N.B.
The essential elements of an action for unfair competition are 1) confusing similarity
in the general appearance of the goods and (2) intent to deceive the public and
defraud a competitor.
On 2 June 1997, petitioner filed trademark and service mark applications with the
Bureau of Trademarks (BOT) of the IPO for "IN-N-OUT" and "IN-N-OUT Burger & Arrow
Design." Petitioner later found out, through the Official Action Papers issued by the
IPO on 31 May 2000, that respondent Sehwani, Incorporated had already obtained
Trademark Registration for the mark "IN N OUT (the inside of the letter "O" formed
like a star)." Petitioner eventually filed on 4 June 2001 before the Bureau of Legal
Affairs (BLA) of the IPO an administrative complaint against respondents for unfair
competition and cancellation of trademark registration. Respondents asserted
therein that they had been using the mark "IN N OUT" in the Philippines since 15
October 1982. Respondent then filed with the BPTTT an application for the
registration of the mark. BPTTT approved its application and issued the
corresponding certificate of registration in favor of the respondent.
On Dec 22, 2003, IPO Director of Legal Affairs rendered a decision in favor of
petitioner stating petitioner had the right to use its tradename and mark in the
Philippines to the exclusion of others. However, the decision also includes that
SAMSON vs. DAWAY

Facts:
The petitioner, owner/proprietor of ITTI Shoes/Mano Shoes
Manufactuirng Corporation, allegedly sold or offers the sale of
garment product using the trademark Caterpillar to the prejudice of
Caterpillar, Inc., private respondent in this case. The respondent filed
the case with the RTC. The petitioner questioned the jurisdiction of the
trial court over the offense charged contending that the case should be
filed with the MTC because violation of unfair competition is
penalized with imprisonment not exceeding 6 years under RA 7691.
Issue:
Which court has jurisdiction over criminal and civil cases for violation
of intellectual property rights?
Ruling of the Court:
The SC held that under Section 163 of the IPC, actions for unfair
competition shall be brought before the proper courts with appropriate
jurisdiction under existing laws. The law contemplated in Section 163
of IPC is RA 166 otherwise known as the Trademark Law. Section 27
of the Trademark Law provides that jurisdiction over cases for
infringement of registered marks, unfair competition, false designation
of origin and false description or representation, is lodged with the
Court of First Instance (now Regional Trial Court). Since RA 7691 is a
general law and IPC in relation to Trademark Law is a special law, the
latter shall prevail. Actions for unfair competition therefore should be
filed with the RTC.
SONY COMPUTER ENTERTAINMENT, INC., vs

Super Green
G.R. No. 161823 March 22, 2007

Facts: The case stemmed from the complaint filed
with the National Bureau of Investigation (NBI) by
petitioner Sony Computer Entertainment, Inc.,
against respondent Supergreen, Incorporated. The
NBI found that respondent engaged in the
reproduction
and
distribution
of
counterfeit
PlayStation
game
software,
consoles
and
accessories in violation of Sony Computers
intellectual property rights.
Ruling:
Nonetheless, we agree with petitioner that this case
involves a transitory or continuing offense of unfair
competition under Section 168 of Republic Act No.
8293, which provides,
SEC. 168. Unfair Competition, Rights, Regulation
and Remedies.
168.2. Any person who shall employ deception or

any other means contrary to good faith by which he
shall pass off the goods manufactured by him or in
which he deals, or his business, or services for
those of the one having established such goodwill,
or who shall commit any acts calculated to produce
said result, shall be guilty of unfair competition,
and shall be subject to an action therefor.
such services in the mind of the public; or

168.3. In particular, and without in any way
limiting the scope of protection against unfair
competition, the following shall be deemed guilty of
unfair competition:
(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.
(a) Any person, who is selling his goods

and gives 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;
Pertinent too is Article 189 (1) of the Revised Penal

Code that enumerates the elements of unfair
competition, to wit:
(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
(d) That there is actual intent to deceivethe public

or defraud a competitor.
(a) That the offender gives his goods the general

appearanceof the goods of another manufacturer or
dealer;
(b) That the general appearance is shown in the
(1) goods themselves, or in the (2) wrappingof
their packages, or in the (3) device or
wordstherein, or in (4) any other featureof their
appearance;
(c) That the offender offersto sell or sells those
goods or gives other persons a chance or
opportunity to do the same with a like purpose; and
Respondents imitation of the general appearance of

petitioners goods was done allegedly in Cavite. It

sold the goods allegedly in Mandaluyong City, Metro
Manila. The alleged acts would constitute a
transitory or continuing offense. Thus, clearly,
under Section 2 (b) of Rule 126, Section 168 of
Rep. Act No. 8293 and Article 189 (1) of the
Revised Penal Code, petitioner may apply for a
search warrant in any court where any element of
the alleged offense was committed, including any of
the courts within the National Capital Region (Metro
Manila).
In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the
trademark Chemise Lacoste and Q Crocodile Device "both in the supplemental and
Principal Registry. In 1980, La Chemise Lacoste SA filed for the registration of the
Crocodile device and Lacoste.
Games and Garments (Gobindram Hemandas, assignee of Hemandas Q.Co.)
opposed the registration of Lacoste.
In 1983, La Chemise Lacoste filed with the NBI a letter-complaint
alleging acts of unfair competition committed by Hemandas and requesting
the agencys assistance for investigation and prosection.
A search warrant was issued by the trial court. Various goods and articles were seized
upon the execution of the warrants.
Hemandas filed motion to quash the warrants, which the court granted. The search
warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste
filed a petition for certiorari.
The defendant argued that the petitioner has no capacity to sue being a
foreign corporation not doing business in the Philippines
Issue/s:
Ruling: Whether or not La Chemise Lacoste has capacity to sue
-Yes.
La Chemise Lacoste Vs. Fernandez

Nature: Petition for review on certiorari the decision of the Court of
Appeals
Facts:
La chemise Lacoste is a French corporation and the actual owner of the
trademarks Lacoste,Chemise Lacoste, Crocodile Device and a
composite mark consisting of the word Lacoste and a re presentation of a
crocodile/alligator, used on clothing's and other goods sold in many parts of the
world and which has been marketed in the Philippines (notably by Rustans) since
1964.
As early as 1927, this Court was, and it still is, of the view that a
foreign corporation not doing business in the Philippines needs no
license to sue before Philippine courts for infringement of trademark
and unfair competition. Thus, in Western Equipment and Supply Co. v.
Reyes(51 Phil. 115), this Court held that a foreign corporation which
has never done any business in the Philippines and which is unlicensed
and unregistered to do business here, but is widely and favorably
known in the Philippines through the use therein of its products
bearing its corporate and tradename, has a legal right to maintain an
action in the Philippines to restrain the residents and inhabitants
thereof from organizing a corporation therein bearing the same name
as the foreign corporation, when it appears that they have personal

knowledge of the existence of such a foreign corporation, and it is
apparent that the purpose of the proposed domestic corporation is to
deal and trade in the same goods as those of the foreign corporation.
party although there is a private right violated. Petitioner's capacity to

sue would become, therefore, of not much significance in the main
case
We further held:
xxx xxx xxx
... That company is not here seeking to enforce any legal or control
rights arising from, or growing out of, any business which it has
transacted in the Philippine Islands. The sole purpose of the action:
Is to protect its reputation, its corporate name, its goodwill,
whenever that reputation, corporate name or goodwill have,
through the natural development of its trade, established
themselves.' And it contends that its rights to the use of its
corporate and trade name:
Is a property right, a right in rem, which it may assert and protect
against all the world, in any of the courts of the world-even in
jurisdictions where it does not transact business-just the same as it
may protect its tangible property, real or personal, against trespass,
or conversion. .xx
Since it is the trade and not the mark that is to be protected, a
trade-mark acknowledges no territorial boundaries of
municipalities or states or nations, but extends to every market
where the trader's goods have become known and Identified by the
use of the mark.
More important is the nature of the case which led to this petition.
What preceded this petition forcertiorari was a letter complaint filed
before the NBI charging Hemandas with a criminal offense, i.e.,
violation of Article 189 of the Revised Penal Code. If prosecution
follows after the completion of the preliminary investigation being
conducted by the Special Prosecutor the information shall be in the
name of the People of the Philippines and no longer the petitioner
which is only an aggrieved party since a criminal offense is essentially
an act against the State. It is the latter which is principally the injured
PHILIP MORRIS, INC. VS. FORTUNE TOBACCO

CORPORATION (Equal Standing of International Law and
Municipal Law)
Penned by: GARCIA, J.:
Petition for review under Rule 45 of the Rules of Court,
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: PETITION
DENIED
1. Decision dated January 21, 20031 affirming an earlier
decision of the Regional Trial Court of Pasig City,
Branch 166, in its Civil Case No. 47374
Dismissed the complaint for trademark
infringement and damages thereat commenced
by the petitioners against respondent Fortune
Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners
motion for reconsideration.
Countries in which they are domiciled grant to corporate or juristic

persons of the Philippines the privilege to bring action for
infringement, 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
o
registered the trademarks in their respective countries of origin
by virtue of the long and extensive usage of the same,

these trademarks have already gained international fame
and acceptance
[respondent], without any previous consent from any of

the [petitioners], manufactured and sold cigarettes
bearing the identical and/or confusingly similar trademark
MARK
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.
Invoked provisions of the Paris Convention for the Protection of
Industrial and Intellectual Property (Paris Convention)
o
Philippines is a signatory, [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. In accordance with Section 21A in relation to Section 23 of Republic Act 166, as amended, they
are entitled to relief in the form of damages [and] the issuance of
a writ of preliminary injunction which should be made permanent.
[Respondent] filed its Answer denying [petitioners] material
allegations and averred [among other things] that MARK is a common
word, which cannot particularly identify a product to be the product of the
[petitioners]
After the termination of the trial on the merits trial court rendered its
Decision dated November 3, 1999 dismissing the complaint and
counterclaim after making a finding that the [respondent] did not commit
trademark infringement against the [petitioners].
The issue of whether or not there was infringement of the
[petitioners] trademarks by the [respondent] was likewise answered 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.
o
FACTS OF THE CASE:

Petitioner Philip Morris, Inc., a corporation (State
of Virginia, U.S.A), is the registered owner of the
trademark MARK VII for cigarettes. (per
Certificate of Registration No. 18723 issued on
April 26, 1973 by the Philippine Patents Office
(PPO)
Similarly, petitioner Benson & Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., is the
registered owner of the trademark MARK TEN
for cigarettes (PPO Certificate of Registration No.
11147)
Fabriques de Tabac Reunies, S.A. (Swiss
company), another subsidiary of Philip Morris, Inc.,
is the assignee of the trademark LARK,
(Trademark Certificate of Registration No. 19053)
(originally registered in 1964 by Ligget and Myers
Tobacco Company)
Respondent Fortune Tobacco Corporation, a
company organized in the Philippines,
manufactures and sells cigarettes using the
trademark MARK.
Petitioners, on the claim that an infringement of

their respective trademarks had been committed,
filed, on August 18, 1982, a Complaint for
Infringement of Trademark and Damages against
respondent Fortune Tobacco Corporation,
docketed as Civil Case No. 47374 of the Regional
Trial Court of Pasig, Branch 166.
The decision under review summarized what happened
next, as follows:
o
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.
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. (Appellate recourse docket CAG.R. CV No. 66619)

o CA decision on January 21, 2003 (while
ruling for petitioners on the matter of their
legal capacity to sue in this country for
trademark infringement) affirmed the trial
courts decision on the underlying issue of
respondents liability for infringement.
Motion for reconsideration denied by the CA
(Resolution of May 30, 2003)
ISSUES
Petitioners seek petition for review (Court of
Appeals):
o (1) whether or not petitioners, as Philippine
registrants of trademarks, are entitled to
enforce trademark rights in this country;
o (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.
Respondent: issue the propriety of the petition as it allegedly raises

questions of fact.
The petition is bereft of merit.
Petition raises both questions of fact and law
o question of law exists when the doubt or difference arises
as to what the law is on a certain state of facts
o question of fact when the doubt or difference arises as to
the truth or falsity of alleged facts
Court is not the proper venue to consider factual

issues as it is not a trier of facts
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, we will
not disturb them
Petitioners: contentions should be treated as purely legal since
they are assailing erroneous conclusions deduced from a set of
undisputed facts
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.
o A trademark deserves protection.
PETITIONER:
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.
o Right and mechanism are accorded by
Section 21-A of Republic Act (R.A.) No.
166 or the Trademark Law, as
amended
Article 2 of the Paris Convention for
the Protection of Industrial Property,
aka Paris Convention.
Not doing business in the Philippines does not
mean that cigarettes bearing their trademarks are
not available and sold locally. Citing Converse
Rubber Corporation v. Universal Rubber Products,
Inc., such availability and sale may be effected
through the acts of importers and distributors.
Entitlement to protection even in the absence of
actual use of trademarks in the country
o Philippines adherence to the Trade Related
Aspects of Intellectual Property Rights or the
TRIPS Agreement
o enactment of R.A. No. 8293, or the

Intellectual Property Code (IP Code)
o 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
o 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.
HELD/RATIO:
As we ruled in G.R. No. 91332,18 :
1. RECIPROCITY REQUIREMENT
Registration of a trademark gives the
registrant (petitioners) advantages denied nonregistrants or ordinary users (respondent)
o validity of the registration
o 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.
o Petitioners: still foreign corporations
o condition to availment of the rights and

privileges & their trademarks in this country:
On top of Philippine registration, their
country grants substantially similar
rights and privileges to Filipino citizens
pursuant to Section 21-A20 of R.A. No.
166.
In Leviton Industries v. Salvador
o Court: reciprocity requirement is a condition
sine qua non to filing a suit by a foreign
corporation
Unless alleged in the complaint, would
justify dismissal
o 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
being considered part of Philippine
municipal laws, can be taken judicial
notice of in infringement suits.
2. REGISTRATION VERSUS ACUAL USE!!
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.
Philippines adherence to the Paris Convention

effectively obligates the country to honor and
enforce its provisions( as regards the protection of
industrial property of foreign nationals in this

country)
o However, any protection accorded has to
be made subject to the limitations of
Philippine laws.
o 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 national
(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
foreign nationals must still observe
and comply with the conditions
imposed by Philippine law on its
nationals.
R.A. No. 166 (as amended, specifically Sections

228 and 2-A29), mandates actual use of the
marks and/or emblems in local commerce and
trade before they may be registered and
ownership thereof acquired
o the petitioners cannot, therefore, dispense
with the element of actual use.
o 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, the Court reiterated its rulings in
Sterling Products International, Inc. v.
Farbenfabriken Bayer Aktiengesellschaft, Kabushi
Kaisha Isetan v. Intermediate Appellate Court, and
Philip Morris v. Court of Appeals and Fortune
Tobacco Corporation on the importance of ACTUAL
COMMERCIAL USE OF A TRADEMARK in the
Philippines notwithstanding the Paris Convention:
o 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:
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.
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.
A foreign corporation) may have the

capacity to sue for infringement but
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.
Registration of trademark cannot be deemed

conclusive as to the actual use of such trademark
in local commerce.
o registration does not confer upon the
registrant an absolute right to the registered
mark.
o merely constitutes prima facie evidence that
the registrant is the owner of the registered
mark.
o Evidence of non-usage of the mark rebuts
the presumption of trademark ownership
We stress that registration in the Philippines of

trademarks does not ipso facto convey an
absolute right or exclusive ownership thereof.
o Shangri-La International Hotel Management,
Ltd. v. Development Group of Companies,
Inc.
Trademark is a creation of use
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
does not perfect such right;
actual use thereof is the
perfecting ingredient.
Petitioners reliance on Converse Rubber Corporation is

quite misplaced
o different factual milieu
o
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.
o 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
o the infringement complaint filed in August
1982 and tried under the aegis of R.A. No.
166, as amended.
o The IP Code (January 1, 1998) no provision
on retroactivity; TRIPS Agreement
(December 16, 1994)
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.
G.R. No. 154491
November 14, 2008
COCA-COLA BOTTLERS, PHILS., INC. (CCBPI), Naga Plant,

petitioner,
vs.
QUINTIN J. GOMEZ, a.k.a. "KIT" GOMEZ and DANILO E.
GALICIA, a.k.a. "DANNY GALICIA", respondents.
FACTS:
Coca-Cola applied for a search warrant against Pepsi for
hoarding Coke empty bottles in Pepsi's yard in Concepcion
Grande, Naga City, an act allegedly penalized as unfair
competition under the IP Code. Coca-Cola claimed that the
bottles must be confiscated to preclude their illegal use,
destruction or concealment by the respondents. In support of
the application, Coca-Cola submitted the sworn statements of
three witnesses: Naga plant representative Arnel John Ponce
said he was informed that one of their plant security guards had
gained access into the Pepsi compound and had seen empty
Coke bottles; acting plant security officer Ylano A. Regaspi said
he investigated reports that Pepsi was hoarding large quantities
of Coke bottles by requesting their security guard to enter the
Pepsi plant and he was informed by the security guard that

Pepsi hoarded several Coke bottles; security guard Edwin Lirio
stated that he entered Pepsi's yard on July 2, 2001 at 4 p.m.
and saw empty Coke bottles inside Pepsi shells or cases.
Municipal Trial Court (MTC) Executive Judge Julian C. Ocampo
of Naga City, after taking the joint deposition of the witnesses,
issued Search Warrant No. 2001-01 to seize 2,500 Litro and
3,000 eight and 12 ounces empty Coke bottles at Pepsi's Naga
yard for violation of Section 168.3 (c) of the IP Code.
In their counter-affidavits, Galicia and Gomez claimed that the bottles came
from various Pepsi retailers and wholesalers who included them in their
return to make up for shortages of empty Pepsi bottles; they had no way of
ascertaining beforehand the return of empty Coke bottles as they simply
received what had been delivered; the presence of the bottles in their yard
was not intentional nor deliberate.
The respondents also filed motions for the return of their shells and to quash
the search warrant. Coca-Cola opposed the motions as the shells were part of
the evidence of the crime, arguing that Pepsi used the shells in hoarding the
bottles. It insisted that the issuance of warrant was based on probable cause
for unfair competition under the IP Code, and that the respondents violated
R.A. 623, the law regulating the use of stamped or marked bottles, boxes,
and other similar containers.
The MTC issued the first assailed order denying the twin motions. It
explained there was an exhaustive examination of the applicant and its
witnesses through searching questions and that the Pepsi shells are prima
facie evidence that the bottles were placed there by the respondents.
The MTC denied the motion for reconsideration in the second assailed order,
explaining that the issue of whether there was unfair competition can only be
resolved during trial.
The respondents responded by filing a petition for certiorari under Rule 65 of
the Revised Rules of Court before the Regional Trial Court (RTC) of Naga
City on the ground that the subject search warrant was issued without
probable cause and that the empty shells were neither mentioned in the
warrant nor the objects of the perceived crime.
The RTC voided the warrant for lack of probable cause and the noncommission of the crime of unfair competition, even as it implied that other
laws may have been violated by the respondents. The RTC, though, found no
grave abuse of discretion on the part of the issuing MTC judge.
ISSUE:
Whether the Naga MTC was correct in issuing Search Warrant No. 2001-01
for the seizure of the empty Coke bottles from Pepsi's yard for probable
violation of Section 168.3 (c) of the IP Code.
HELD:
NO.
We clarify at the outset that while we agree with the RTC decision, our
agreement is more in the result than in the reasons that supported it. The
decision is correct in nullifying the search warrant because it was issued on
an invalid substantive basis - the acts imputed on the respondents do not
violate Section 168.3 (c) of the IP Code. For this reason, we deny the present
petition.
In the context of the present case, the question is whether the act charged alleged to be hoarding of empty Coke bottles - constitutes an offense under
Section 168.3 (c) of the IP Code. Section 168 in its entirety states:
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.
168.2. Any person who shall employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or
who shall commit any acts calculated to produce said result, shall be
guilty of unfair competition, and shall be subject to an action
therefor.
168.3. In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be deemed
guilty of unfair competition:
(a) Any person, who is selling his goods and gives 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.
168.4. The remedies provided by Sections 156, 157 and 161 shall
apply mutatis mutandis. (Sec. 29, R.A. No. 166a)
From jurisprudence, unfair competition has been defined as the passing off
(or palming off) or attempting to pass off upon the public the goods or
business of one person as the goods or business of another with the end and
probable effect of deceiving the public. It formulated the "true test" of unfair
competition: whether the acts of defendant are such as are calculated to
deceive the ordinary buyer making his purchases under the ordinary
conditions which prevail in the particular trade to which the controversy
relates. One of the essential requisites in an action to restrain unfair
competition is proof of fraud; the intent to deceive must be shown before the
right to recover can exist. The advent of the IP Code has not significantly
changed these rulings as they are fully in accord with what Section 168 of the
Code in its entirety provides. Deception, passing off and fraud upon the
public are still the key elements that must be present for unfair competition to
exist.
inflicts unfairness by seeking to limit the opposition's sales by depriving it of

the bottles it can use for these sales.
Based on the foregoing, we conclude that the RTC correctly ruled that the
petitioner's search warrant should properly be quashed for the petitioner's
failure to show that the acts imputed to the respondents do not violate the
cited offense. There could not have been any probable cause to support the
issuance of a search warrant because no crime in the first place was
effectively charged. This conclusion renders unnecessary any further
discussion on whether the search warrant application properly alleged that
the imputed act of holding Coke empties was in fact a "hoarding" in bad faith
aimed to prejudice the petitioner's operations, or whether the MTC duly
complied with the procedural requirements for the issuance of a search
warrant under Rule 126 of the Rules of Court.
The act alleged to violate the petitioner's rights under Section 168.3 (c) is
hoarding which we gather to be the collection of the petitioner's empty
bottles so that they can be withdrawn from circulation and thus impede the
circulation of the petitioner's bottled products. This, according to the
petitioner, is an act contrary to good faith - a conclusion that, if true, is
indeed an unfair act on the part of the respondents. The critical question,
however, is not the intrinsic unfairness of the act of hoarding; what is critical
for purposes of Section 168.3 (c) is to determine if the hoarding, as charged,
"is of a nature calculated to discredit the goods, business or services" of the
petitioner.
We hold that it is not. Hoarding as defined by the petitioner is not even an act
within the contemplation of the IP Code.
Under all the above approaches, we conclude that the "hoarding" - as defined
and charged by the petitioner - does not fall within the coverage of the IP
Code and of Section 168 in particular. It does not relate to any patent,
trademark, trade name or service mark that the respondents have invaded,
intruded into or used without proper authority from the petitioner. Nor are the
respondents alleged to be fraudulently "passing off" their products or services
as those of the petitioner. The respondents are not also alleged to be
undertaking any representation or misrepresentation that would confuse or
tend to confuse the goods of the petitioner with those of the respondents, or
vice versa. What in fact the petitioner alleges is an act foreign to the Code, to
the concepts it embodies and to the acts it regulates; as alleged, hoarding
TWIN ACE HOLDINGS CORPORATION VS. RUFINA AND COMPANY

G.R. NO. 160191
JUNE 08, 2006
Facts:
On 3 December 1991, Twin Ace Holdings Corporation (Twin Ace) filed a

Complaint for recovery of possession of personal property, permanent
injunction and damages with prayer for the issuance of a writ of replevin,
temporary restraining order and a writ of preliminary injunction against

Rufina and Company (Rufina).
As alleged in the complaint, Twin Ace is a private domestic corporation
engaged in the manufacture of rhum, wines and liquor under the name and
style "Tanduay Distillers."
On the other hand, Rufina is engaged in the production, extraction, fermentation and
manufacture of patis and other food seasonings and is engaged in the buying and
selling of all kinds of foods, merchandise and products for domestic use or for export
to other countries.
In its Answer with counter-application for a Writ of Preliminary Injunction, Rufina
claimed that the marked bottles it used as containers for its products were
purchased from junk dealers; hence, it became the owner thereof.
It is worth noting that Lorenzana Food Corporation which prevailed in the case filed
by Twin Ace against it is certainly not a small scale industry. Just like Rufina,
Lorenzana Food Corporation also manufactures and exports processed foods and
other related products, e.g., patis, toyo, bagoong, vinegar and other food
seasonings.
It is a basic rule in statutory construction that when the law is clear and free from
any doubt or ambiguity, there is no room for construction or interpretation. As has
been our consistent ruling, where the law speaks in clear and categorical language,
there is no occasion for interpretation; there is only room for application. 17
Notably, attempts to amend the protection afforded by Section 6 of Republic Act No.
623, by giving protection only to small scale manufacturers or those with a
capitalization of five hundred thousand pesos or less (P500,000.00), through then
House Bill No. 20585,18 and subsequently through House Bill No. 30400, 19 proved
unsuccessful as the amendment proposed in both Bills was never passed.
In view of these considerations, we find and so hold that the exemption contained in
Section 6 of Rep. Act No. 623 applies to all manufacturers of sisi, bagoong, patis and
similar native products without distinction or qualification as to whether they are
small, medium or large scale.
In this case, Twin Ace has not shown that it is entitled to the possession of the
bottles in question and consequently there is thus no basis for the demand by it of
due compensation.
Petitioner cannot seek refuge in Sec. 5 of RA No. 623 to support its claim of
continuing ownership over the subject bottles. In United States v. Manuel [7 Phil. 221
(1906)] we held that since the purchaser at his discretion could either retain or
return the bottles, the transaction must be regarded as a sale of the bottles when
the purchaser actually exercised that discretion and decided not to return them to
the vendor. We also take judicial notice of the standard practice today that the cost
of the container is included in the selling price of the product such that the buyer of
liquor or any such product from any store is not required to return the bottle nor is
the liquor placed in a plastic container that possession of the bottle is retained by
the store.

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G.R. No.

On February 5, 1974, Tobacco Industries applied for, but eventually

infringement). They claimed that petitioners adopted the GALLO

comrev2 mighty corporation vs e & j gallo winery Page 2 of 6

(3) In infringement of trademark the prior registration of the

of domestic legal disputes on any conflicting provisions between the

xxx xxx xxx

We also note that the GALLO trademark registration certificates in

Petitioners and respondents both use "GALLO" in the labels of their

merely as a trademark due to the fondness for fighting cocks of the

We find these premises patently insufficient and too arbitrary to

local sari-sari stores and grocery stores in Philippine rural areas,

purchasers to believe that the goods offered are those of a

ELIDAD KHO vs. CA

used it before anybody else did. Khos copyright and patent

PEARL & DEAN vs. SHOEMART

ANA ANG vs. TORIBIO TEODORO

ARCE SONS AND COMPANY vs. SELECTA BISCUIT COMPANY,INC., ET AL.,

Is the word Selecta registrable?

A 'trade-mark' is a distinctive mark of authenticity through

MCDONALDS CORP vs. LC BIG MAK

operates a global chain of fast-food restaurants, with Petitioner McGeorge

connection with such goods, business or services, shall be liable to a civil

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which

1ST ISSUE:W/N respondent corporation is liable for trademark infringement

In 1984, CFC Corporation filed with the Bureau of Patents,

product FLAVOR MASTER is likely to cause confusion or mistake or

246 CORP vs. DAWAY

registered diamond design is not an index of

Victorias Milling Company, Inc. vs. Ong Su and the

Whether or not the respondent director of

3. Whether or not the respondent director of patents

Whether or not the respondent director of

Whether or not the respondent director of

Whether or not the respondent director of

No, as correctly stated by the Director of Patents,

4. No, The word Victorias is what identifies the sugar

6. No, it is clear that the words Valentine and

No, The proposed testimony of Ernesto Duran

8. No, there is no evidence that the respondent Ong

comrev2 mighty corporation vs e & j gallo winery Page 16 of 6

other name already protected by law or is patently deceptive,

The corporate names of private respondents are not identical or

For the prohibition to apply, 2 requisites must be present:(1) the

PHILIPS EXPORT BV vs. CA

PROSOURCE vs. HORPHAG

On appeal to the CA, petitioner failed to obtain a favorable decision. The

COFFEE PARTNERS vs. SAN FRANSCISCO COFFEE

FABERGE vs. IAC

Facts: Dermaline filed with the IPO an

trademark, or similar signs or containers

confusion), where, although the goods of

trademark over the radio, chances are he

Using this test, the IPO declared that both

Further, Dermalines stance that its

comrev2 mighty corporation vs e & j gallo winery Page 22 of 6

Fredco v. Harvard University, G.R. No. 185917, June 1, 2011

In 2005, Fredco Manufacturing Corporation filed a petition for cancellation