You are on page 1of 18

Intellectual Property Law Submitted by: Kristine P. Pastores 2008-0315 Digest_Shangri-La International Hotel Management Ltd.

, v The Court of Appeals GR No. 111580 June 21, 2001 Facts: On June 21, 1988, the Shangri-La International Hotel Management, Ltd., Shangri-La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok Philippine Properties, Inc., filed with the Bureau of Patents, Trademarks and 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 latters 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 by the Developers Group in 1982. Likewise, the Shangri-La Group filed with the BPTTT its own application for registration of the subject mark and logo. The Developers Group filed an opposition to the application. Almost three (3) years later, the Developers Group instituted with the RTC a complaint for infringement and damages with prayer for injunction. When the Shangri-La Group moved for the suspension of the proceedings, the trial court denied such in a Resolution. The Shangri-La Group filed a petition for certiorari before the CA but the CA dismissed the petition for certiorari. Hence, the instant petition. Issue: Whether or not the infringement case should be dismissed or at least suspended Held: There can be no denying that the infringement case is validly pass upon the right of registration. Section 161 of Republic Act No. 8293 provides to wit: SEC. 161. Authority to Determine Right to Registration In any action involving a registered mark the court may determine the right to registration, order the cancellation of the registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this. Judgement and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Bureau, and shall be controlled thereby. (Sec. 25, R.A. No. 166a). (Emphasis provided) To provide a judicious resolution of the issues at hand, the Court find it apropos to order the suspension of the proceedings before the Bureau pending final determination of the infringement case, where the issue of the validity of the registration of the subject trademark and logo in the name of Developers Group was passed upon.

Case Digest_Asia Brewery v Court of Appeals, 224 SCRA 437 Facts: SMC filed a case against petitioner for infringement of trademark. It alleged that the bottles used by Asia Brewery were confusingly similar to those used by SMC in the packaging of its beer. The trial court held in favor of Asia Brewery but was reversed in the appellate court. Issue: Whether or not there was infringement Held: Using the holistic test, wherein all circumstances were given consideration, there was no infringement committed by petitioner. There are two tests available for colorable imitation. One is the dominancy test. If the form, marks, contents, words of other special arrangement or general appearance of the two marks or devices are such as would likely mislead persons in the ordinary course of purchasing the genuine article, then the similarity is such as would entitle the oppose to equitable protection. Under the holistic test, on the other hand, the opposing trademarks are compared in their entirety to determine confusing similarity.

Case Digest of Fruit of the Loom v CA, 133 SCRA 405 Facts: Petitioner is a corporation duly organized and existing under the laws of the State of Rhode Island, USA. It is the registrant of the trademark Fruit of the Loom in the Philippine Patent Office and was issued two Certificates of Registration, one of which was in 1957 and the other in 1958. Private respondent, a domestic corporation, is the registrant of the trademark Fruit for Eve in the Philippine Patent Office. Both are involved in the merchandise of garments. Petitioner filed a complaint for infringement of trademark and unfair competition against private respondent, alleging that: The latters trademark is confusingly similar to the formers, both trademarks being used in womens panties and other textile products That the hang tags used by private respondent is a colorable imitation of those of the petitioner

Petitioner respondent alleged that there was no confusing similarity between the trademarks. At the pre-trial, the following admissions were made: That the registered trademark Fruit for Eve bears the notice Reg. Phil. Pat. Off. While that of Fruit of the Loom does not That at the time of its registration, the plaintiff filed no opposition thereto.

The lower court rendered a decision in favor of the petitioner, permanently enjoining private respondent from using the trademark Fruit for Eve. Both parties appealed to the Court of Appeals wherein the petitioner questioned the lower courts failure to award damages in its favor and private respondent sought the reversal of the lower courts decision. The Court of Appeals rendered a decision reversing the lower courts decision and dismissing the petitioners complaint. The petitioners motion for reconsideration was denied. Issue: Whether or not there was infringement of trademark Held: In cases involving infringement of trademark brought before this Court, it has been consistently held that there is infringement of trademark when the use of the mark involved would be likely to cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion where one is confusingly similar to the other. The similarities of the competing trademarks in this case are completely lost in the substantial differences in the design and general appearance of their respective hangs tags. We have examined the two trademarks as they appear in the hang tags submitted by the parties and we are impressed more by the dissimilarities than by the similarities appearing therein. We hold that the trademarks Fruit of the Loom and Fruit for Eve do not resemble each other as to confuse or deceive an ordinary purchaser. The ordinary purchaser must be thought of as having, and credited with, at least a modicum of intelligence to be able to see the obvious differences between the two trademarks in question.

Case Digest_Francisco Joaquin Jr vs Franklin Drilon GR No. 108946, January 28, 1999 Facts: Petitioner BJ Productions Inc is the holder/grantee of Certificate of Copyright No. M922 of Rhoda and Me, a dating game show aired from 1970 to 1977. On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright specifying the shows format and style of presentation. On July 14, 1991 while watching television, petitioner saw on RPN Channel 9 an episode of Its a Date, which was produced by IXL Productions Inc. On July 18, 1991, he wrote a letter to private respondent Gabriel M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright to Rhoda and Me and demanding that IXL discontinue airing Its a Date. Private respondent apologized to petitioner and requested a meeting to discuss a possible settlement. IXL, however, continued airing Its a Date, prompting petitioner Joaquin to send a second letter in which he reiterated his demand and warned that if IXL did not comply, he would endorse the matter to his attorneys for proper legal action. Meanwhile, private respondent sought to register IXLs copyright to the first episode of Its a Date for which it was issued by the National Library a certificate of copyright on August 14, 1991. Upon complaint of petitioners, an information for violation of PD No. 49 was filed against private respondent Zosa together with certain officers of RPN Channel 9. However, private respondent Zosa sought a review of the resolution of the Assistant City Prosecutor before the Department of Justice. On August 12, 1992, respondent Secretary of Justice Franklin Drilon reversed the Assistant City Prosecutors findings and directed him to move for the dismissal of the case against private respondents. Petitioner filed a motion for reconsideration but his motion was denied by respondent Secretary of Justice. Hence, this petition. Issue: Whether or not public respondent committed grave abuse of discretion when he invoked non-presentation of the master tape as being fatal to the existence of probable cause to prove infringement, despite the fact that private respondents never raised the same as controverted issue; and whether or not public respondent committed grave abuse of discretion when he arrogated unto himself the determination of what is copyrightable. Held: The petition is denied. In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of probable cause in copyright infringement cases where there is doubt as to the true nexus between the master tape and the pirated copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases. Copyright in the strict sense of the term is purely a statutory right. It is a new or independent right granted by the statute and not simply a pre-existing right regulated by the statute. Since copyright in published work is purely a statutory creation, a copyright may be obtained only for a work falling within the statutory enumeration or description. P.D. No. 49, section 2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle or discovery regardless of the form in which it is described, explained, illustrated, or embodied in such work.

Case Digest_La Chemise Lacoste SA vs Hon. Oscar Fernandez GR No. L-63796 Facts: The petitioner is a foreign corporation, organized and existing under the laws of France and not doing business in the Philippines, It is undeniable from the records that it is the actual owner of the trademarks used on clothings and other goods specifically sporting apparels sold in many parts of the world and which have been marketed in the Philippines since 1964. The main basis of the private respondents case is its claim of alleged prior registration. Petitioner filed its application for registration of the trademark Crocodile Device and Lacoste. The former was approved for publication while the latter was opposed by Games and Garments in Inter Partes Case No. 1658. Petitioner filed a petition for the Cancellation of registration. On March 21, 1983, the petitioner filed with the National Bureau of Investigation (NBI) a letter-complaint alleging the acts of unfair competition being committed by Hemandas and requesting their assistance in his apprehension and prosecution. The NBI conducted an investigation and subsequently filed with the respondent court two applications for the issuance of search warrants which would authorize the search of the premises used and occupied by the Lacoste Sports Center and Games and Garments both owned and operated by Hemandas. The respondent court issued search warrant for violation of Article 189 of the Revised Penal Code. The NBI agents executed the two search warrants and as a result of the search found and seized various goods and articles described in the warrants. Hemandas filed a motion to quash the search warrants alleging that the trademark used by him was different from petitioners trademark and that pending resolution before the Patent Office, any criminal or civil action on the same subject matter and between the same parties would be premature. The petitioner filed its opposition to the motion arguing that the motion to quash was fatally defective as it cited no valid ground for the quashal of the search warrants and that the grounds alleged in the motion were absolutely without merit. The State Prosecutor likewise filed his opposition on the grounds that the goods seized were instrument of a crime and necessary for the resolution of the case on preliminary investigation and that the release of the said goods would be fatal to the case of the People should prosecution follow in court. The respondent court was, however, convinced that there was no probable cause to justify the issuance of the search warrants. Thus, in its order, the search warrants were recalled and set aside and the NBI agents or officers in custody of the seized items were ordered to return the same to Hemandas. Issue: Whether or not the judge committed grave abuse of discretion amounting to lack of jurisdiction in finding that the issuance of the search warrants is premature in the face of the fact that Lacostes registration of the subject trademark is still pending with the Patent Office with opposition from Hemandas and the subject trademarks had been earlier registered by Hemandas in his name in the Supplemental Register of the Philippine Patent Office. Held: In complying with the order to decide without delay the cases specified in the memorandum, the Director of Patents shall limit himself to the ascertainment of facts in issues not resolved by this decision and apply the law as expounded by this Court to those facts.

One final point, it is essential that we stress our concern at the seeming inability of law enforcement officials to stem the tide of fake and counterfeit consumer items flooding the Philippine market or exported abroad from our country. The greater victim is not so much the manufacturer whose product is being faked but the Filipino consuming public and in the case of exportations, our image abroad. No less than the President, in issuing Executive Order No. 913 dated October 7, 1983 to strengthen the powers of the Minister of Trade and Industry for the protection of consumers, stated that, among other acts, the dumping of substandard, imitated, hazardous, and cheap goods, the infringement of internationally known tradenames and trademarks, and the unfair trade practices of business firms has reached such proportions as to constitute economic sabotage. We buy a kitchen appliance, a household tool, perfume, face powder, other toilet articles, watches, brandy or whisky, and items of clothing like jeans, T-shirts, neck, ties, etc. the list is quite length and pay good money relying on the brand name as guarantee of its quality and genuine nature only to explode in bitter frustration and genuine nature on helpless anger because the purchased item turns out to be a shoddy imitation, albeit a clever looking counterfeit, of the quality product. Judges all over the country are well advised to remember that court processes should not be used as instruments to, unwittingly or otherwise, aid counterfeiters and intellectual pirates, tie the hands of the law as it seeks to protect the Filipino consuming public and frustrate executive and administrative implementation of solemn commitments pursuant to international conventions and treaties.

Case Digest_Del Monte Corporation vs CA 181 SCRA 410 Facts: Petitioner filed a case for trademark infringement and unfair competition against Sunshine Sauce. The latter for a time used the bottles of Del Monte in packaging their own catsup sauce. It also used bottles which were similar to those of petitioner. Issue: Whether or not trademark infringement and unfair competition are present Held: There is a distinction between infringement of trademark and unfair competition:

1. Infringement is the unauthorized use of a trademark while unfair competition is the passing off of ones goods as that of another 2. In infringement, fraudulent intent is unnecessary while it is otherwise for unfair competition 3. In infringement, prior registration of the trademark is needed whereas in unfair competition, registration is not necessary. In assessing the two trademarks, side-by-side comparison is not the final test of similarity because average buyers dont make minute scrutiny of label details. Also, in testing if there has been prior registration, registration in the supplemental register isnt what the law contemplates.

Case Digest_Corporation, doing business under the name and style of ROLEX MUSIC LOUNGE vs Hon. Reynaldo B. Daway Facts: On January 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil. Limited, owners/proprietors of Rolex and Crown Device filed against petitioner 246 Corporation the instant suit for trademark infringement and damages with prayer for the issuance of a restraining order or writ of preliminary injunction before RTC of Quezon City. Respondents alleged that sometime in July 1996, petitioner 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 and Party Club. Petitioner argued that respondents have no cause of action because no trademark infringement exist, that 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. It also contended that the complaint was not properly verified and certified against forum shopping considering that Atty. Alonzo Ancheta, the counsel of record of respondents who signed the verification and certification, was not authorized to represent respondents. Petitioner filed a motion for preliminary hearing on its affirmative defenses. Subsequently, on motion of petitioner, the trial court issued a subpoena ad testificandum requiring Atty. Alonzo Ancheta to appear at the preliminary hearing. Respondents, in the meantime, filed a Comment and Opposition to the motion for preliminary hearing and a motion to quash the subpoena ad testificandum. With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a petition for certiorari with the Court of Appeals contending that the trial court gravely abused its discretion in issuing the orders. On November 28, 2002, the CA dismissed the petition. The motion for reconsideration filed by petitioner was denied. Hence, this instant petition. Issue: Whether or not: a. the trial court denied not only petitioners motion for preliminary hearing on its affirmative defenses but its motion to dismiss as well; b. if the answer is in the affirmative, whether or not the trial court gravely abused its discretion in denying said motions; c. whether the trial court gravely abused its discretion in quashing the subpoena ad testificandum issued against Atty. Ancheta. Held: the petition filed by petitioner is denied.

In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion could be ascribed to the trial courts denial of petitioners motion for preliminary hearing on its affirmative defenses with motion to dismiss. The issue of whether or not a trademark infringement exists, is a question of fact that could best be determined by the trial court. Under the old Trademark Law where the goods for which the identical marks are used are unrelated, there can be no likelihood of confusion and there is therefore no infringement in the use by the junior user of the registered mark on the entirely different goods. This ruling, however, has been to some extent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293), which took effect on January 1, 1998.

A junior user of a well-known mark on goods or services which are not similar to the goods or services, and are therefore unrelated, to those specified in the certificate of registration of the well-known mark is precluded from using the same on the entirely unrelated goods or services, subject to the following requisites, to wit: 1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers,17 in determining whether a mark is well known, the following criteria or any combination thereof may be taken into account: (a) the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies; (b) the market share in the Philippines and in other countries, of the goods and/or services to which the mark applies; (c) the degree of the inherent or acquired distinction of the mark; (d) the quality-image or reputation acquired by the mark; (e) the extent to which the mark has been registered in the world; (f) the exclusivity of the registration attained by the mark in the world; (g) the extent to which the mark has been used in the world; (h) the exclusivity of use attained by the mark in the world; (i) the commercial value attributed to the mark in the world; (j) the record of successful protection of the rights in the mark; (k) the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and (l) the presence of absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark. (b) the market share in the Philippines and in other countries, of the goods and/or services to which the mark applies; (c) the degree of the inherent or acquired distinction of the mark; (d) the quality-image or reputation acquired by the mark; (e) the extent to which the mark has been registered in the world; (f) the exclusivity of the registration attained by the mark in the world;

(g) the extent to which the mark has been used in the world; (h) the exclusivity of use attained by the mark in the world; (i) the commercial value attributed to the mark in the world; (j) the record of successful protection of the rights in the mark; (k) the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and (l) the presence of absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark. 2. The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods or services and those goods or services specified in the certificate of registration in the well known mark. This requirement refers to the likelihood of confusion of origin or business or some business connection or relationship between the registrant and the user of the mark. 3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if the registrant will be precluded from expanding its business to those unrelated good or services, or if the interests of the registrant of the well-known mark will be damaged because of the inferior quality of the good or services of the user.

Case Digest_Emerald Garment Manufacturing Corporation vs Hon. Court of Appeals Facts: On September 18, 198, private respondent H.D. Lee Co., Inc, a foreign corporation organized under the laws of Delaware, USA filed with the Bureau of Patents, Trademarks & Technology a Petition for Cancellation of Registraion 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 October 27 1980 in the name of petitioner Emerald Garment Manufacturing Corporation, a domestic corporation organized and existing under Philippine laws. Private respondent invoking Sec 37 of RA No. 166 (Trademark Law) and Art VIII of the Paris Convention for the Protection of Industrial Property, averred that petitioners trademark so closely resembled its own trademark, LEE as previously registered and used in the Philippines, and not abandoned, as to be likely, when applied to or used in connection with petitioners goods, to cause confusion, mistake and deception on the part of the purchasing public as to the origin of the goods. Petitioner contended that its trademark was entirely and unmistakably different from that of private respondent and that its certificate of registration was legally and validly granted. Petitioner caused the publication of its application for registration of the trademark STYLISTIC MR. LEE in the Principal Register. Private respondent filed a notice of opposition to petitioners application for registration also on grounds that petitioners trademark was confusingly similar to its LEE trademark. The Director of Patents rendered a decision granting private respondents petitioner for cancellation and opposition to registration. Moreover, the Director of Patents, using the test of dominancy, declared that petitioners trademark was confusingly similar to private respondents 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. Petitioner appealed to the CA and on August 8, 1988, it filed with the BPTTT a Motion to Stay Execution of the 19 July 1988 decision of the Director of Patents on grounds that the same would cause it great and irreparable damage and injury. Private respondent submitted its opposition on August 22, 1988. The CA promulgated its decision affirming the decision of the Director of Patents. Petitioner filed a motion for reconsideration. The CA issued a resolution rejecting petitioners motion for reconsideration. Issue: Whether or not the CA erred in ruling that the defense of estoppels by laches must be raised in the proceedings before the Bureau of Patents, trademarks and technology transfer.

Held: Premises considered, the questioned decision and resolution are reversed and set aside.

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 the case at bench, however, we reverse the findings of the Director of Patents and the Court of Appeals. After a meticulous study of the records, we observe that the Director of Patents and the Court of Appeals relied mainly on the registration certificates as proof of use by private respondent of the trademark "LEE" which, as we have previously discussed are not sufficient. We cannot give credence to private respondent's claim that its "LEE" mark first reached the Philippines in the 1960's through local sales by the Post Exchanges of the U.S. Military Bases in the Philippines based as it was solely on the self-serving statements of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private respondent. The determination as to who is the prior user of the trademark is a question of fact and it is this Court's working principle not to disturb the findings of the Director of Patents on this issue in the absence of any showing of grave abuse of discretion. The findings of facts of the Director of Patents are conclusive upon the Supreme Court provided they are supported by substantial evidence.

Case Digest_Pacita Habana v Felicidad Robles, GR No. 131522, July 19, 1999 Facts: Petitioner are authors and copyright owners of duly issued certificates of copyright registration covering their published works, produced through their combined resources and efforts, entitled College English for Today, Books 1 and 2, and Workbook for College Freshman English, Series 1. Respondent Robles and Goodwill Trading Co., Inc are the author/publisher and distributor/seller of another published work entitled Developing English proficiency, books 1 and 2 (1985 edition) which book was covered by copyrights issued to them. In the course of revising their published works, petitioners scouted and looked around various bookstores to check on other textbooks dealing with the same subject matter. By chance they came upon the book of respondent Robles and upon perusal of said book they were surprised to see that the book was strikingly similar to the contents, scheme of presentation, illustrations and illustrative examples in their own book, CET. After an itemized examination and comparison of the two books, petitioners found that several pages of the respondents book are similar, if not all together a copy of petitioners book, which is a case of plagiarism and copyright infringement. Petitioners then made demands for damages against respondents and also demanded that they cease and desist from further selling and distributing to the general public the infringed copies of respondent Robles works. However, respondents ignored the demands, hence, petitioners filed with the RTC a complaint for Infringement and/or unfair competition with damages against private respondents. Respondent Robles was impleaded in the suit because she authored and directly committed the acts of infringement complained of, while respondent Goodwill was impleaded as the publisher and joint c-owner of the copyright certificates of registration covering the two books authored and caused to be published by respondent Robles with obvious connivance with one another. Robles filed a motion for a bill of particulars which the trial court approved. Petitioners complied with the desired particularization, and furnished respondent Robles the specific portions inclusive of pages and lines of the published and copyrighted books of the petitioners which were transposed, lifted, copied, and plagiarized and/or otherwise found their way into respondents book. After the trial on the merits, the trial court rendered its judgment in favor of the respondent. The petitioners filed their notice of appeal with the trial court. The CA rendered its decision in favor of respondents Robles and Goodwill. Hence, this petition. Issue: Whether or not there was copyright infringement Held: The petition is granted. In cases of infringement, copying alone is not what is prohibited. The copying must produce an injurious effect. Here, the injury consists in that respondent Robles lifted from petitioners book materials what were the result of the latters research work and compilation and misrepresented them as her own. She circulated the book DEP for commercial use and did not acknowledge petitioners as her source. Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles committed. Petitioners work as authors is the product of their long and assiduous research and for another to represent it as her own is injury enough. In

copyrighting books the purpose is to give protection to the intellectual product of an author. This is precisely what the law on copyright protected, under Section 184.1 (b). Quotations from a published work if they are compatible with fair use and only to the extent justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries are allowed provided that the source and the name of the author, if appearing on the work, are mentioned. In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners Habana et. al. as the source of the portions of DEP. The final product of an authors toil is her book. To allow another to copy the book without appropriate acknowledgment is injury enough.

Case Digest_Pearl & Dean (Phil.), Incorporated v Shoemart Incorporated GR No. 148222 August 15, 2003

Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with backlights. It was able to secure registration over these illuminated display units. The advertising light boxes were marketed under the trademark Poster Ads. In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to non-performance. Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located in SMIs different branches. Petitioner sent letters to respondents asking them to cease using the light boxes and the discontinued use of the trademark Poster Ads. Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringement of trademark and copy right, unfair competition and damages. SMI maintained that it independently developed its poster panels using commonly known techniques and available technology without notice of or reference to P&Ds copyright. In addition, it said that registration of Poster Ads obtained by petitioner was only for stationeries such as letterheads, envelopes and the like. Poster Ads is a generic term which cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright notice as provided for by law. RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as copyrightable class O work. In addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in its certificate of registration. The registration of the trademark Poster Ads covers only stationeries such as letterheads, envelopes and calling cards and newsletter.

Issue: (1) If the engineering or technical drawings of an advertising display unit are granted copyright protection is the light box depicted in such drawings ipso facto also protected by such copyright? (2) Should the light box be registered separately? (3) Can the owner of the registered trademark legally prevent others from using such mark if it is mere abbreviation of a term descriptive of his goods, services or business? Held: 1. No. Copyright is purely statutory. As such, the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the persons, and on the terms and conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or description. Petitioner

secured copyright under classification class O work. Thus, copyright protection extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of prints, pictorial illustrations, advertising copies, labels, tags and box wraps. What the law does not include, it excludes, and for the good reason: the light box was not a literary or artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the copyright certificate issued by the National Library as Advertising Display Units. It must be noted that copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. 2. Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which could have protected its invention, if in fact it really was. And because it had no patent, petitioner could not legally prevent anyone from manufacturing or commercially using the contraption. To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new designs and technologies into the public through disclosure. Ideas, once, disclosed to the public without protection of a valid patent, are subject to appropriation without significant restraint. The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public. It is only after an exhaustive examination by the patent office that patent is issued. Therefore, not having gone through the arduous examination for patents, petitioner cannot exclude other s from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate over the technical drawings. 3. Court agrees with CA that the certificate of registration issued by the Director of Patents can confer the exclusive right to use its own symbol only to those goods specified in the certificate, subject to any conditions and limitations specified in the certificate. One who has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others for products which are of a different description. Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of petitioner to secure a trademark registration for specific use on the light boxes meant that there could not have been any trademark infringement since registration was an essential element thereof. There is no evidence that petitioners use of poster Ads was distinctive or well-known. As noted by CA, petitioners expert witness himself had testified that Poster Ads was not too generic a name. SO it was difficult to identify it with any company. This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was generic and incapable of being used as a trademark because it was used in the field of poster advertising the very business engaged in by petitioner. Secondary meaning means that a word or phrase originally incapable of exclusive appropriation with reference to an article in the market might nevertheless have been used for so long and so exclusively by one producer with reference to his article that , in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his property. PETITION WAS DENIED

Case Digest_McDonalds Corporation v Macjoy Fastfood Corporation, GR No. 166115 February 2, 2007 Facts: On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic corporation engaged in the sale of fast food products in Cebu City, filed with the then Bureau of Patents, Trademarks and Technology Transfer (BPTT), now the Intellectual Property Office (IPO), an application for the registration of the trademark "MACJOY & DEVICE" for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks under classes 29 and 30 of the International Classification of Goods. Petitioner McDonalds Corporation, filed a verified Notice of Opposition against the respondents application claiming that the trademark "MACJOY & DEVICE" so resembles its corporate logo, otherwise known as the Golden Arches or "M" design, and its marks "McDonalds," McChicken," "MacFries," etc. (hereinafter MCDONALDS marks) such that when used on identical or related goods, the trademark applied for would confuse or deceive purchasers into believing that the goods originate from the same source or origin. Also, petitioner alleged that the respondents use and adoption in bad faith of the "MACJOY & DEVICE" mark would falsely tend to suggest a connection or affiliation with petitioners restaurant 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. IPO ruled that the predominance of the letter "M," and the prefixes "Mac/Mc" in both the "MACJOY" and the "MCDONALDS" marks lead to the conclusion that there is confusing similarity between them especially since both are used on almost the same products falling under classes 29 and 30 of the International Classification of Goods, i.e., food and ingredients of food, sustained the petitioners opposition and rejected the respondents application. (IPO used the dominancy test). IPO denied MR. CA reversed the IPO decision, ruling that there was no confusing similarity between the marks "MACJOY" and "MCDONALDS," for the ff. reasons: 1. The word "MacJoy" is written in round script while the word "McDonalds" is written in single stroke gothic; 2. The word "MacJoy" comes with the picture of a chicken head with cap and bowtie and wings sprouting on both sides, while the word "McDonalds" comes with an arches "M" in gold colors, and absolutely without any picture of a chicken; 3. The word "MacJoy" is set in deep pink and white color scheme while "McDonalds" is written in red, yellow and black color combination; 4. The faade of the respective stores of the parties are entirely different. Respondents restaurant is set also in the same bold, brilliant and noticeable color scheme as that of its wrappers, containers, cups, etc., while Petitioners restaurant is in yellow and red colors, and with the mascot of "Ronald McDonald" being prominently displayed therein." Issue: 1. Whether or not the dominancy test should be applied, instead of the holistic test. 2. Whether or not there is a confusing similarity between MACJOY and MCDONALDS trademarks as to justify the IPOs rejection of Macjoys trademark application.

Held: 1. YES. In determining similarity and likelihood of confusion, jurisprudence has developed two tests, the dominancy test and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. In contrast, the holistic test requires the court to consider the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. In recent cases with a similar factual milieu as here, the Court has consistently used and applied the dominancy test in determining confusing similarity or likelihood of confusion between competing trademarks. Under the dominancy test, courts give greater weight to the similarity of the appearance of the product arising from the adoption of the dominant features of the registered mark, disregarding minor differences. Courts will consider more the aural and visual impressions created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets and market segments. Applying the dominancy test to the instant case, the Court finds that herein petitioners "MCDONALDS" and respondents "MACJOY" marks are confusingly similar with each other such that an ordinary purchaser can conclude an association or relation between the marks. 2. YES. Both marks use the corporate "M" design logo and the prefixes "Mc" and/or "Mac" as dominant features. The first letter "M" in both marks puts emphasis on the prefixes "Mc" and/or "Mac" by the similar way in which they are depicted i.e. in an arch like, capitalized and stylized manner. It is the prefix "Mc," an abbreviation of "Mac," which visually and aurally catches the attention of the consuming public. Both trademarks are used in the sale of fastfood products. Indisputably, the respondents trademark application for the "MACJOY & DEVICE" trademark covers goods under Classes 29 and 30 of the International Classification of Goods, namely, fried chicken, chicken barbeque, burgers, fries, spaghetti, etc. McDonalds registered trademark covers goods similar if not identical to those covered by the respondents application. Predominant features such as the "M," "Mc," and "Mac" appearing in both McDonalds marks and the MACJOY & DEVICE" easily attract the attention of would-be customers. Even non-regular customers of their fastfood restaurants would readily notice the predominance of the "M" design, "Mc/Mac" prefixes shown in both marks. Such that the common awareness or perception of customers that the trademarks McDonalds mark and MACJOY & DEVICE are one and the same, or an affiliate, or under the sponsorship of the other is not far-fetched. By reason of the respondents implausible and insufficient explanation as to how and why out of the many choices of words it could have used for its tradename and/or trademark, it chose the word "MACJOY," the only logical conclusion deducible therefrom is that the respondent would want to ride high on the established reputation and goodwill of the MCDONALDs marks, which, as applied to petitioners restaurant business and food products, is undoubtedly beyond question. When one applies for the registration of a trademark or label which is almost the same or very closely resembles one already used and registered by another, the application should be rejected and dismissed outright, even without any opposition on the part of the owner and user of a previously registered label or trademark, this not only to avoid confusion on the part of the public, but also to protect an already used and registered trademark and an established goodwill. WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP NO. 57247, are REVERSED and SET ASIDE and the Decision of the Intellectual Property Office in Inter Partes Case No. 3861 is REINSTATED.