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G.R. No.

143993 August 18, 2004

MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners,


vs.
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY,
JESUS AYCARDO, ARACELI AYCARDO, and GRACE HUERTO, respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the Decision dated 26 November 1999 of the Court of Appeals2 finding
respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement and unfair competition
and ordering petitioners to pay respondents P1,900,000 in damages, and of its Resolution dated 11
July 2000 denying reconsideration. The Court of Appeals' Decision reversed the 5 September 1994
Decision3 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak Burger,
Inc. liable for trademark infringement and unfair competition.

The Facts

Petitioner McDonald's Corporation ("McDonald's") is a corporation organized under the laws of


Delaware, United States. McDonald's operates, by itself or through its franchisees, a global chain of
fast-food restaurants. McDonald's4 owns a family of marks5 including the "Big Mac" mark for its
"double-decker hamburger sandwich."6McDonald's registered this trademark with the United States
Trademark Registry on 16 October 1979.7 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 the Intellectual Property Office
("IPO"). Pending approval of its application, McDonald's introduced its "Big Mac" hamburger
sandwiches in the Philippine market in September 1981. On 18 July 1985, the PBPTT allowed
registration of the "Big Mac" mark in the Principal Register based on its Home Registration in the
United States.

Like its other marks, McDonald's displays the "Big Mac" mark in items8 and paraphernalia9 in its
restaurants, and in its outdoor and indoor signages. From 1982 to 1990, McDonald's spent P10.5
million in advertisement for "Big Mac" hamburger sandwiches alone.10

Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic corporation, is McDonald's


Philippine franchisee.11

Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is a domestic corporation which
operates fast-food outlets and snack vans in Metro Manila and nearby provinces.12 Respondent
corporation's menu includes hamburger sandwiches and other food items.13 Respondents Francis B.
Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huerto
("private respondents") are the incorporators, stockholders and directors of respondent corporation.14

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the "Big
Mak" mark for its hamburger sandwiches. McDonald's opposed respondent corporation's application
on the ground that "Big Mak" was a colorable imitation of its registered "Big Mac" mark for the same
food products. McDonald's also informed respondent Francis Dy ("respondent Dy"), the chairman of
the Board of Directors of respondent corporation, 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 from respondent Dy, petitioners on 6 June 1990 sued respondents in the
Regional Trial Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair
competition. In its Order of 11 July 1990, the RTC issued a temporary restraining order ("TRO")
against respondents enjoining them from using the "Big Mak" mark in the operation of their business
in the National Capital Region.15 On 16 August 1990, the RTC issued a writ of preliminary injunction
replacing the TRO.16

In their Answer, respondents admitted that they have been using the name "Big Mak Burger" for their
fast-food business. Respondents claimed, however, that McDonald's does not have an exclusive
right to the "Big Mac" mark or to any other similar mark. Respondents point out that the Isaiyas
Group of Corporations ("Isaiyas Group") registered the same mark for hamburger sandwiches with
the PBPTT on 31 March 1979. One Rodolfo Topacio ("Topacio") similarly registered the same mark
on 24 June 1983, prior to McDonald's registration on 18 July 1985. Alternatively, respondents
claimed that they are not liable for trademark infringement or for unfair competition, as the "Big Mak"
mark they sought to register does not constitute a colorable imitation of the "Big Mac" mark.
Respondents asserted that they did not fraudulently pass off their hamburger sandwiches as those
of petitioners' Big Mac hamburgers.17 Respondents sought damages in their counterclaim.

In their Reply, petitioners denied respondents' claim that McDonald's is not the exclusive owner of
the "Big Mac" mark. Petitioners asserted that while the Isaiyas Group and Topacio did register the
"Big Mac" mark ahead of McDonald's, the Isaiyas Group did so only in the Supplemental Register of
the PBPTT and such registration does not provide any protection. McDonald's disclosed that it
had acquired Topacio's rights to his registration in a Deed of Assignment dated 18 May 1981.18

The Trial Court's Ruling

On 5 September 1994, the RTC rendered judgment ("RTC Decision") finding respondent corporation
liable for trademark infringement and unfair competition. However, the RTC dismissed the complaint
against private respondents and the counterclaim against petitioners for lack of merit and
insufficiency of evidence. The RTC held:

Undeniably, the mark "B[ig] M[ac]" is a registered trademark for plaintiff McDonald's, and as
such, it is entitled [to] protection against infringement.

xxxx

There exist some distinctions between the names "B[ig] M[ac]" and "B[ig] M[ak]" as
appearing in the respective signages, wrappers and containers of the food products of the
parties. But infringement goes beyond the physical features of the questioned name and the
original name. There are still other factors to be considered.

xxxx
Significantly, the contending parties are both in the business of fast-food chains and
restaurants. An average person who is hungry and wants to eat a hamburger sandwich may
not be discriminating enough to look for a McDonald's restaurant and buy a "B[ig] M[ac]"
hamburger. Once he sees a stall selling hamburger sandwich, in all likelihood, he will dip into
his pocket and order a "B[ig] M[ak]" hamburger sandwich. Plaintiff McDonald's fast-food
chain has attained wide popularity and acceptance by the consuming public so much so that
its air-conditioned food outlets and restaurants will perhaps not be mistaken by many to be
the same as defendant corporation's mobile snack vans located along busy streets or
highways. But the thing is that what is being sold by both contending parties is a food item
a hamburger sandwich which is for immediate consumption, so that a buyer may easily be
confused or deceived into thinking that the "B[ig] M[ak]" hamburger sandwich he bought is a
food-product of plaintiff McDonald's, or a subsidiary or allied outlet thereof. Surely, defendant
corporation has its own secret ingredients to make its hamburger sandwiches as palatable
and as tasty as the other brands in the market, considering the keen competition among
mushrooming hamburger stands and multinational fast-food chains and restaurants. Hence,
the trademark "B[ig] M[ac]" has been infringed by defendant corporation when it used the
name "B[ig] M[ak]" in its signages, wrappers, and containers in connection with its food
business. xxxx

Did the same acts of defendants in using the name "B[ig] M[ak]" as a trademark or
tradename in their signages, or in causing the name "B[ig] M[ak]" to be printed on the
wrappers and containers of their food products also constitute an act of unfair competition
under Section 29 of the Trademark Law?

The answer is in the affirmative. xxxx

The xxx provision of the law concerning unfair competition is broader and more inclusive
than the law concerning the infringement of trademark, which is of more limited range, but
within its narrower range recognizes a more exclusive right derived by the adoption and
registration of the trademark by the person whose goods or services are first
associated therewith. xxx Notwithstanding the distinction between an action for trademark
infringement and an action for unfair competition, however, the law extends substantially the
same relief to the injured party for both cases. (See Sections 23 and 29 of Republic Act No.
166)

Any conduct may be said to constitute unfair competition if the effect is to pass off on the
public the goods of one man as the goods of another. The choice of "B[ig] M[ak]" as
tradename by defendant corporation is not merely for sentimental reasons but was clearly
made to take advantage of the reputation, popularity and the established goodwill of plaintiff
McDonald's. For, as stated in Section 29, a person is guilty of unfair competition 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 likely influence purchasers to believe that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer. Thus, plaintiffs have
established their valid cause of action against the defendants for trademark infringement and
unfair competition and for damages.19

The dispositive portion of the RTC Decision provides:

WHEREFORE, judgment is rendered in favor of plaintiffs McDonald's Corporation and


McGeorge Food Industries, Inc. and against defendant L.C. Big Mak Burger, Inc., as follows:
1. The writ of preliminary injunction issued in this case on [16 August 1990] is made
permanent;

2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual damages in
the amount ofP400,000.00, exemplary damages in the amount of P100,000.00, and
attorney's fees and expenses of litigation in the amount of P100,000.00;

3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy, Wiliam B. Dy,
Jesus Aycardo, Araceli Aycardo and Grace Huerto, as well as all counter-claims, are
dismissed for lack of merit as well as for insufficiency of evidence.20

Respondents appealed to the Court of Appeals.

The Ruling of the Court of Appeals

On 26 November 1999, the Court of Appeals rendered judgment ("Court of Appeals' Decision")
reversing the RTC Decision and ordering McDonald's to pay respondents P1,600,000 as actual and
compensatory damages and P300,000 as moral damages. The Court of Appeals held:

Plaintiffs-appellees in the instant case would like to impress on this Court that the use
of defendants-appellants of its corporate name the whole "L.C. B[ig] M[ak] B[urger], I[nc]."
which appears on their food packages, signages and advertisements is an infringement of
their trademark "B[ig] M[ac]" which they use to identify [their] double decker sandwich, sold in
a Styrofoam box packaging material with the McDonald's logo of umbrella "M" stamped
thereon, together with the printed mark in red bl[o]ck capital letters, the words being
separated by a single space. Specifically, plaintiffs-appellees argue that defendants-
appellants' use of their corporate name is a colorable imitation of their trademark "Big Mac".

xxxx

To Our mind, however, this Court is fully convinced that no colorable imitation exists. As the
definition dictates, it is not sufficient that a similarity exists in both names, but that more
importantly, the over-all presentation, or in their essential, substantive and distinctive parts is
such as would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing
the genuine article. A careful comparison of the way the trademark "B[ig] M[ac]" is being
used by plaintiffs-appellees and corporate name L.C. Big Mak Burger, Inc. by defendants-
appellants, would readily reveal that no confusion could take place, or that the ordinary
purchasers would be misled by it. As pointed out by defendants-appellants, the plaintiffs-
appellees' trademark is used to designate only one product, a double decker sandwich sold
in a Styrofoam box with the "McDonalds" logo. On the other hand, what the defendants-
appellants corporation is using is not a trademark for its food product but a business or
corporate name. They use the business name "L.C. Big Mak Burger, Inc." in their restaurant
business which serves diversified food items such as siopao, noodles, pizza, and
sandwiches such as hotdog, ham, fish burger and hamburger. Secondly, defendants-
appellants' corporate or business name appearing in the food packages and signages are
written in silhouette red-orange letters with the "b" and "m" in upper case letters. Above the
words "Big Mak" are the upper case letter "L.C.". Below the words "Big Mak" are the words
"Burger, Inc." spelled out in upper case letters. Furthermore, said corporate or business
name appearing in such food packages and signages is always accompanied by the
company mascot, a young chubby boy named Maky who wears a red T-shirt with the upper
case "m" appearing thereinand a blue lower garment. Finally, the defendants-appellants'
food packages are made of plastic material.
xxxx

xxx [I]t is readily apparent to the naked eye that there appears a vast difference in the
appearance of the product and the manner that the tradename "Big Mak" is being used and
presented to the public. As earlier noted, there are glaring dissimilarities between plaintiffs-
appellees' trademark and defendants-appellants' corporate name. Plaintiffs-appellees'
product carrying the trademark "B[ig] M[ac]" is a double decker sandwich (depicted in the
tray mat containing photographs of the various food products xxx sold in a Styrofoam box
with the "McDonald's" logo and trademark in red, bl[o]ck capital letters printed thereon xxx at
a price which is more expensive than the defendants-appellants' comparable food
products. In order to buy a "Big Mac", a customer needs to visit an air-conditioned
"McDonald's" restaurant usually located in a nearby commercial center, advertised and
identified by its logo - the umbrella "M", and its mascot "Ronald McDonald". A typical
McDonald's restaurant boasts of a playground for kids, a second floor to
accommodate additional customers, a drive-thru to allow customers with cars to make orders
without alighting from their vehicles, the interiors of the building are well-lighted, distinctly
decorated and painted with pastel colors xxx. In buying a "B[ig] M[ac]", it is necessary to
specify it by its trademark. Thus, a customer needs to look for a "McDonald's" and enter it
first before he can find a hamburger sandwich which carry the mark "Big Mac". On the other
hand,defendants-appellants sell their goods through snack vans xxxx

Anent the allegation that defendants-appellants are guilty of unfair competition,


We likewise find the same untenable.

Unfair competition is defined as "the employment of deception or any other means contrary
to good faith by which a person shall pass off the goods manufactured by him or in which he
deals, or his business, or service, for those of another who has already established good will
for his similar good, business or services, or any acts calculated to produce the same result"
(Sec. 29, Rep. Act No. 166, as amended).

To constitute unfair competition therefore it must necessarily follow that there was malice
and that the entity concerned was in bad faith.

In the case at bar, We find no sufficient evidence adduced by plaintiffs-appellees that


defendants-appellants deliberately tried to pass off the goods manufactured by them for
those of plaintiffs-appellees. The mere suspected similarity in the sound of the defendants-
appellants' corporate name with the plaintiffs-appellees' trademark is not sufficient evidence
to conclude unfair competition. Defendants-appellants explained that the name "M[ak]" in
their corporate name was derived from both the first names of the mother and father of
defendant Francis Dy, whose names are Maxima and Kimsoy. With this explanation, it is up
to the plaintiffs-appellees to prove bad faith on the part of defendants-appellants. It is a
settled rule that the law always presumes good faith such that any person who seeks to be
awarded damages due to acts of another has the burden of proving that the latter acted in
bad faith or with ill motive. 21

Petitioners sought reconsideration of the Court of Appeals' Decision but the appellate court denied
their motion in its Resolution of 11 July 2000.

Hence, this petition for review.

Petitioners raise the following grounds for their petition:


I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS' CORPORATE
NAME "L.C. BIG MAK BURGER, INC." IS NOT A COLORABLE IMITATION OF THE
MCDONALD'S TRADEMARK "BIG MAC", SUCH COLORABLE IMITATION BEING
AN ELEMENT OF TRADEMARK INFRINGEMENT.

A. Respondents use the words "Big Mak" as trademark for their products and not
merely as their business or corporate name.

B. As a trademark, respondents' "Big Mak" is undeniably and unquestionably similar


to petitioners' "Big Mac" trademark based on the dominancy test and the idem
sonans test resulting inexorably in confusion on the part of the consuming public.

II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE INHERENT


SIMILARITY BETWEEN THE MARK "BIG MAK" AND THE WORD MARK "BIG MAC" AS
AN INDICATION OF RESPONDENTS' INTENT TO DECEIVE OR DEFRAUD
FOR PURPOSES OF ESTABLISHING UNFAIR COMPETITION.22

Petitioners pray that we set aside the Court of Appeals' Decision and reinstate the RTC Decision.

In their Comment to the petition, respondents question the propriety of this petition as it allegedly
raises only questions of fact. On the merits, respondents contend that the Court of Appeals
committed no reversible error in finding them not liable for trademark infringement and unfair
competition and in ordering petitioners to pay damages.

The Issues

The issues are:

1. Procedurally, whether the questions raised in this petition are proper for a petition for review under
Rule 45.

2. On the merits, (a) whether respondents used the words "Big Mak" not only as part of the corporate
name "L.C. Big Mak Burger, Inc." but also as a trademark for their hamburger products, and (b)
whether respondent corporation is liable for trademark infringement and unfair competition.23

The Court's Ruling

The petition has merit.

On Whether the Questions Raised in the Petition are Proper for a Petition for Review

A party intending to appeal from a judgment of the Court of Appeals may file with this Court a
petition for review under Section 1 of Rule 45 ("Section 1")24 raising only questions of law. A question
of law exists when the doubt or difference arises on what the law is on a certain state of facts. There
is a question of fact when the doubt or difference arises on the truth or falsity of the alleged facts. 25

Here, petitioners raise questions of fact and law in assailing the Court of Appeals' findings on
respondent corporation's non-liability for trademark infringement and unfair competition. Ordinarily,
the Court can deny due course to such a petition. In view, however, of the contradictory findings of
fact of the RTC and Court of Appeals, the Court opts to accept the petition, this being one of the
recognized exceptions to Section 1.26 We took a similar course of action in Asia Brewery, Inc. v.
Court of Appeals27 which also involved a suit for trademark infringement and unfair competition in
which the trial court and the Court of Appeals arrived at conflicting findings.

On the Manner Respondents Used


"Big Mak" in their Business

Petitioners contend that the Court of Appeals erred in ruling that the corporate name "L.C. Big Mak
Burger, Inc." appears in the packaging for respondents' hamburger products and not the words "Big
Mak" only.

The contention has merit.

The evidence presented during the hearings on petitioners' motion for the issuance of a writ of
preliminary injunction shows that the plastic wrappings and plastic bags used by respondents for
their hamburger sandwiches bore the words "Big Mak." The other descriptive words "burger" and
"100% pure beef" were set in smaller type, along with the locations of branches.28 Respondents' cash
invoices simply refer to their hamburger sandwiches as "Big Mak."29It is respondents' snack vans that
carry the words "L.C. Big Mak Burger, Inc."30

It was only during the trial that respondents presented in evidence the plastic wrappers and bags for
their hamburger sandwiches relied on by the Court of Appeals.31 Respondents' plastic wrappers and
bags were identical with those petitioners presented during the hearings for the injunctive writ except
that the letters "L.C." and the words "Burger, Inc." in respondents' evidence were added above and
below the words "Big Mak," respectively. Since petitioners' complaint was based on facts existing
before and during the hearings on the injunctive writ, the facts established during those hearings are
the proper factual bases for the disposition of the issues raised in this petition.

On the Issue of Trademark Infringement

Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA 166"), the law applicable to this
case,32 defines trademark infringement as follows:

Infringement, what constitutes. Any person who [1] shall use, without the consent of the
registrant, anyreproduction, counterfeit, copy or colorable imitation of any registered mark or
trade-name in connection withthe 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 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.33

Petitioners base their cause of action under the first part of Section 22, i.e. respondents allegedly
used, without petitioners' consent, a colorable imitation of the "Big Mac" mark in advertising and
selling respondents' hamburger sandwiches. This likely caused confusion in the mind of the
purchasing public on the source of the hamburgers or the identity of the business.

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."34 Of these, it is the element
of likelihood of confusion that is the gravamen of trademark infringement.35

On the Validity of the "Big Mac"Mark


and McDonald's Ownership of such Mark

A mark is valid if it is "distinctive" and thus not barred from registration under Section 436 of RA 166
("Section 4"). However, once registered, not only the mark's validity but also the registrant's
ownership of the mark is prima facie presumed.37

Respondents contend that of the two words in the "Big Mac" mark, it is only the word "Mac" that is
valid because the word "Big" is generic and descriptive (proscribed under Section 4[e]), and thus
"incapable of exclusive appropriation."38

The contention has no merit. The "Big Mac" mark, which should be treated in its entirety and not
dissected word for word,39 is neither generic nor descriptive. Generic marks are commonly used as
the name or description of a kind ofgoods,40 such as "Lite" for beer41 or "Chocolate Fudge" for
chocolate soda drink.42 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,43 such as
"Arthriticare" for arthritis medication.44 On the contrary, "Big Mac" falls under theclass of fanciful or
arbitrary marks as it bears no logical relation to the actual characteristics of the product it
represents.45 As such, it is highly distinctive and thus valid. Significantly, the trademark "Little Debbie"
for snack cakes was found arbitrary or fanciful.46

The Court also finds that petitioners have duly established McDonald's exclusive ownership of the
"Big Mac" mark. Although Topacio and the Isaiyas Group registered the "Big Mac" mark ahead of
McDonald's, Topacio, as petitioners disclosed, had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark only in the Supplemental Register. A
mark which is not registered in the Principal Register, and thus not distinctive, has no real
protection.47 Indeed, we have held that registration in the Supplemental Register is not even a prima
facie evidence of the validity of the registrant's exclusive right to use the mark on the goods specified
in the certificate.48

On Types of Confusion

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (product confusion) and confusion of business (source or origin
confusion). In Sterling Products International, Incorporated v. Farbenfabriken Bayer
Aktiengesellschaft, et al.,49 the Court distinguished these two types of confusion, thus:

[Rudolf] Callman notes two types of confusion. The first is the confusion of goods "in which
event the ordinarily prudent purchaser would be induced to purchase one product in the
belief that he was purchasing the other." xxx The other is the confusion of business: "Here
though the goods of the parties are different, the defendant's product is such as might
reasonably be assumed to originate with the plaintiff, and the public would then be deceived
either into that belief or into the belief that there is some connection between the plaintiff and
defendant which, in fact, does not exist."

Under Act No. 666,50 the first trademark law, infringement was limited to confusion of goods only,
when the infringing mark is used on "goods of a similar kind."51 Thus, no relief was afforded to the
party whose registered mark or its colorable imitation is used on different although related goods. To
remedy this situation, Congress enacted RA 166 on 20 June 1947. In defining trademark
infringement, Section 22 of RA 166 deleted the requirement in question and expanded its scope to
include such use of the mark or its colorable imitation that is likely to result in confusion on "the
source or origin of such goods or services, or identity of such business."52 Thus, while there is
confusion of goods when the products are competing, confusion of business exists when the
products are non-competing but related enough to produce confusion of affiliation.53

On Whether Confusion of Goods and


Confusion of Business are Applicable

Petitioners claim that respondents' use of the "Big Mak" mark on respondents' hamburgers results in
confusion of goods, particularly with respect to petitioners' hamburgers labeled "Big Mac." Thus,
petitioners alleged in their complaint:

1.15. Defendants have unduly prejudiced and clearly infringed upon the property rights of
plaintiffs in the McDonald's Marks, particularly the mark "B[ig] M[ac]". Defendants'
unauthorized acts are likely, and calculated, to confuse, mislead or deceive the public into
believing that the products and services offered by defendant Big Mak Burger, and the
business it is engaged in, are approved and sponsored by, or affiliated with,
plaintiffs.54 (Emphasis supplied)

Since respondents used the "Big Mak" mark on the same goods, i.e. hamburger sandwiches, that
petitioners' "Big Mac" mark is used, trademark infringement through confusion of goods is a proper
issue in this case.

Petitioners also claim that respondents' use of the "Big Mak" mark in the sale of hamburgers, the
same business that petitioners are engaged in, results in confusion of
business. Petitioners alleged in their complaint:

1.10. For some period of time, and without the consent of plaintiff McDonald's nor its
licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs' exclusive right to
use and/or appropriate the McDonald's marks, defendant Big Mak Burger acting through
individual defendants, has been operating "Big Mak Burger", a fast food restaurant business
dealing in the sale of hamburger and cheeseburger sandwiches, french fries and other food
products, and has caused to be printed on the wrapper of defendant's food products and
incorporated in its signages the name "Big Mak Burger", which is confusingly similar
to and/or is a colorable imitation of the plaintiff McDonald's mark "B[ig] M[ac]",
xxx. Defendant Big Mak Burger has thus unjustly created the impression that its
business is approved and sponsored by, or affiliated with, plaintiffs.xxxx

2.2 As a consequence of the acts committed by defendants, which unduly prejudice and
infringe upon the property rights of plaintiffs McDonald's and McGeorge as the real owner
and rightful proprietor, and the licensee/franchisee, respectively, of the McDonald's
marks, and which are likely to have caused confusion or deceived the public as to the
true source, sponsorship or affiliation of defendants' food products and restaurant
business, plaintiffs have suffered and continue to suffer actual damages in the form of injury
to their business reputation and goodwill, and of the dilution of the distinctive quality of the
McDonald's marks, in particular, the mark "B[ig] M[ac]".55 (Emphasis supplied)

Respondents admit that their business includes selling hamburger sandwiches, the same food
product that petitioners sell using the "Big Mac" mark. Thus, trademark infringement through
confusion of business is also a proper issue in this case.
Respondents assert that their "Big Mak" hamburgers cater mainly to the low-income group while
petitioners' "Big Mac" hamburgers cater to the middle and upper income groups. Even if this is true,
the likelihood of confusion of business remains, since the low-income group might be led to believe
that the "Big Mak" hamburgers are the low-end hamburgers marketed by petitioners. After all,
petitioners have the exclusive right to use the "Big Mac" mark. On the other hand, respondents
would benefit by associating their low-end hamburgers, through the use of the "Big Mak" mark, with
petitioners' high-end "Big Mac" hamburgers, leading to likelihood of confusion in the identity of
business.

Respondents further claim that petitioners use the "Big Mac" mark only on petitioners' double-decker
hamburgers, while respondents use the "Big Mak" mark on hamburgers and other products like
siopao, noodles and pizza. Respondents also point out that petitioners sell their Big Mac double-
deckers in a styrofoam box with the "McDonald's" logo and trademark in red, block letters at a price
more expensive than the hamburgers of respondents. In contrast, respondents sell their Big Mak
hamburgers in plastic wrappers and plastic bags. Respondents further point out that petitioners'
restaurants are air-conditioned buildings with drive-thru service, compared to respondents' mobile
vans.

These and other factors respondents cite cannot negate the undisputed fact that respondents use
their "Big Mak" mark on hamburgers, the same food product that petitioners' sell with the use of their
registered mark "Big Mac." Whether a hamburger is single, double or triple-decker, and whether
wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents'
use of the "Big Mak" mark on non-hamburger food products cannot excuse their infringement of
petitioners' registered mark, otherwise registered marks will lose their protection under the law.

The registered trademark owner may use his mark on the same or similar products, in different
segments of the market, and at different price levels depending on variations of the products for
specific segments of the market. The Court has recognized that the registered trademark owner
enjoys protection in product and market areas that are the normal potential expansion of his
business. Thus, the Court has declared:

Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as
where prospective purchasers would be misled into thinking that the complaining party has
extended his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is
in any way connected with the activities of the infringer; or when it forestalls the normal
potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).56 (Emphasis
supplied)

On Whether Respondents' Use of the "Big Mak"


Mark Results in Likelihood of Confusion

In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test
and the holistic test.57 The dominancy test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion. 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.

The Court of Appeals, in finding that there is no likelihood of confusion that could arise in the use
of respondents' "Big Mak" mark on hamburgers, relied on the holistic test. Thus, the Court of
Appeals ruled that "it is not sufficientthat a similarity exists in both name(s), but that more
importantly, the overall presentation, or in their essential, substantive and distinctive parts is such as
would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing the genuine
article." The holistic test considers the two marks in their entirety, as they appear on the goods with
their labels and packaging. It is not enough to consider their words and compare the spelling and
pronunciation of the words.58

Respondents now vigorously argue that the Court of Appeals' application of the holistic test to this
case is correct and in accord with prevailing jurisprudence.

This Court, however, has relied on the dominancy test rather than the holistic test. The dominancy
test considers the dominant features in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater weight to the similarity of the
appearance of the product arising from the adoption of the dominant features of the registered mark,
disregarding minor differences.59 Courts will consider more the aural and visual impressions created
by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets and
market segments.

Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60 the Court ruled:

xxx It has been consistently held that the question of infringement of a trademark is to
be determined by the test of dominancy. Similarity in size, form and color, while relevant, is
not conclusive. If the competing trademark contains the main or essential or dominant
features of another, and confusion and deception is likely to result, infringement takes
place. Duplication or imitation is not necessary; nor is it necessary that the infringing label
should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co.,
191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The question
at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; xxx)
(Emphasis supplied.)

The Court reiterated the dominancy test in Lim Hoa v. Director of Patents,61 Phil. Nut Industry,
Inc. v. Standard Brands Inc.,62 Converse Rubber Corporation v. Universal Rubber Products,
Inc.,63 and Asia Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des Produits
Nestl, S.A. v. Court of Appeals,65 the Court explicitly rejected the holistic test in this wise:

[T]he totality or holistic test is contrary to the elementary postulate of the law on
trademarks and unfair competition that confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons and overall impressions engendered by the
marks in controversy as they are encountered in the realities of the marketplace.
(Emphasis supplied)

The test of dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual
Property Code which defines infringement as the "colorable imitation of a registered mark xxx or
a dominant feature thereof."

Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark results in
likelihood of confusion. First, "Big Mak" sounds exactly the same as "Big Mac." Second, the first
word in "Big Mak" is exactly the same as the first word in "Big Mac." Third, the first two letters in
"Mak" are the same as the first two letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds
the same as "c" when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in
spelling, thus "Caloocan" is spelled "Kalookan."

In short, 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. In spelling, considering the Filipino language, even
the last letters of both marks are the same.

Clearly, respondents have adopted in "Big Mak" not only the dominant but also almost all the
features of "Big Mac." Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind.

The Court has taken into account the aural effects of the words and letters contained in the marks
in determining the issue of confusing similarity. Thus, in Marvex Commercial Co., Inc. v. Petra
Hawpia & Co., et al.,66 the Court held:

The following random list of confusingly similar sounds in the matter of trademarks, culled
from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop";
"Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe"
and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon Amdur, in his book "Trade-
Mark Law and Practice", pp. 419-421, cities, as coming within the purview of the idem
sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and "Seven-
Up" and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally said that
"Celdura" and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement of the trademark
"Sapolin", as the sound of the two names is almost the same. (Emphasis supplied)

Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater confusion, not only aurally
but also visually.

Indeed, a person cannot distinguish "Big Mac" from "Big Mak" by their sound. When one hears a
"Big Mac" or "Big Mak" hamburger advertisement over the radio, one would not know whether the
"Mac" or "Mak" ends with a "c" or a "k."

Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their advertisement expenses,
has built goodwill and reputation for such mark making it one of the easily recognizable marks in the
market today. This increases the likelihood that consumers will mistakenly associate petitioners'
hamburgers and business with those of respondents'.

Respondents' inability to explain sufficiently how and why they came to choose "Big Mak" for their
hamburger sandwiches indicates their intent to imitate petitioners' "Big Mac" mark. Contrary to the
Court of Appeals' finding, respondents' claim that their "Big Mak" mark was inspired by the first
names of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As petitioners well
noted:

[R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at a more
creative choice for a corporate name by using the names of his parents, especially since he
was allegedly driven by sentimental reasons. For one, he could have put his father's name
ahead of his mother's, as is usually done in this patriarchal society, and derived letters from
said names in that order. Or, he could have taken an equal number of letters (i.e., two) from
each name, as is the more usual thing done. Surely, the more plausible reason behind
Respondents' choice of the word "M[ak]", especially when taken in conjunction with the word
"B[ig]", was their intent to take advantage of Petitioners' xxx "B[ig] M[ac]" trademark, with
their allegedsentiment-focused "explanation" merely thought of as a
convenient, albeit unavailing, excuse or defense for such an unfair choice of name.67

Absent proof that respondents' adoption of the "Big Mak" mark was due to honest mistake or was
fortuitous,68 the inescapable conclusion is that respondents adopted the "Big Mak" mark to "ride on
the coattails" of the more established "Big Mac" mark.69 This saves respondents much of the expense
in advertising to create market recognition of their mark and hamburgers.70

Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners' claim of
trademark infringement.

On the Lack of Proof of


Actual Confusion

Petitioners' failure to present proof of actual confusion does not negate their claim of trademark
infringement. As noted in American Wire & Cable Co. v. Director of Patents,71 Section
22 requires the less stringent standard of "likelihood of confusion" only. While proof
of actual confusion is the best evidence of infringement, its absence is inconsequential.72

On the Issue of Unfair Competition

Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:

xxxx

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.

In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words thereon, or
in any 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 shalldeceive 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. (Emphasis supplied)

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.74 The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. The intent to deceive and defraud
may be inferred from the similarity of the appearance of the goods as offered for sale to the
public.75 Actual fraudulent intent need not be shown.76

Unfair competition is broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair competition.77 Trademark
infringement constitutes unfair competition when there is not merely likelihood of confusion, but
also actual or probable deception on the public because of the general appearance of the goods.
There can be trademark infringement without unfair competition as when the infringer discloses on
the labels containing the mark that he manufactures the goods, thus preventing the public from
being deceived that the goods originate from the trademark owner.78

To support their claim of unfair competition, petitioners allege that respondents fraudulently passed
off their hamburgers as "Big Mac" hamburgers. Petitioners add that respondents' fraudulent intent
can be inferred from the similarity of the marks in question.79

Passing off (or palming off) takes place where the defendant, by imitative devices on the general
appearance of the goods, misleads prospective purchasers into buying his merchandise under the
impression that they are buying that of his competitors.80 Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of deceiving the public that the
goods are those of his competitor.

The RTC described the respective marks and the goods of petitioners and respondents in this wise:

The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
sandwich. The packaging material is a styrofoam box with the McDonald's logo and
trademark in red with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are
also in red and block capital letters. On the other hand,defendants' "B[ig] M[ak]" script print is
in orange with only the letter "B" and "M" being capitalized and the packaging material
is plastic wrapper. xxxx Further, plaintiffs' logo and mascot are the umbrella "M" and "Ronald
McDonald's", respectively, compared to the mascot of defendant Corporation which is a
chubby boy called "Macky" displayed or printed between the words "Big" and
"Mak."81 (Emphasis supplied)

Respondents point to these dissimilarities as proof that they did not give their hamburgers the
general appearance of petitioners' "Big Mac" hamburgers.

The dissimilarities in the packaging are minor compared to the stark similarities in the words that
give respondents' "Big Mak" hamburgers the general appearance of petitioners' "Big Mac"
hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the
goods may be in the "devices or words" used on the wrappings. Respondents have applied on their
plastic wrappers and bags almost the same words that petitioners use on their styrofoam box. What
attracts the attention of the buying public are the words "Big Mak" which are almost the same, aurally
and visually, as the words "Big Mac." The dissimilarities in the material and other devices are
insignificant compared to the glaring similarity in the words used in the wrappings.
Section 29(a) also provides that the defendant gives "his goods the general appearance of goods of
another manufacturer." Respondents' goods are hamburgers which are also the goods of petitioners.
If respondents sold egg sandwiches only instead of hamburger sandwiches, their use of the "Big
Mak" mark would not give their goods the general appearance of petitioners' "Big Mac" hamburgers.
In such case, there is only trademark infringement but no unfair competition. However, since
respondents chose to apply the "Big Mak" mark on hamburgers, just like petitioner's use of the "Big
Mac" mark on hamburgers, respondents have obviously clothed their goods with the general
appearance of petitioners' goods.

Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big
Mak Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with the words
"L.C. Big Mak Burger, Inc." to inform the public of the name of the seller of the
hamburgers. However, petitioners introduced during the injunctive hearings plastic wrappers and
bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc." Respondents' belated
presentation of plastic wrappers and bags bearing the name of "L.C. Big Mak Burger, Inc." as the
seller of the hamburgers is an after-thought designed to exculpate them from their unfair business
conduct. As earlier stated, we cannot consider respondents' evidence since petitioners' complaint
was based on facts existing before and during the injunctive hearings.

Thus, there is actually no notice to the public that the "Big Mak" hamburgers are products of "L.C.
Big Mak Burger, Inc." and not those of petitioners who have the exclusive right to the "Big Mac"
mark. This clearly shows respondents' intent to deceive the public. Had respondents' placed a notice
on their plastic wrappers and bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.", then
they could validly claim that they did not intend to deceive the public. In such case, there is only
trademark infringement but no unfair competition.82 Respondents, however, did not give such notice.
We hold that as found by the RTC, respondent corporation is liable for unfair competition.

The Remedies Available to Petitioners

Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a plaintiff who successfully
maintains trademark infringement and unfair competition claims is entitled to injunctive and monetary
reliefs. Here, the RTC did not err in issuing the injunctive writ of 16 August 1990 (made permanent in
its Decision of 5 September 1994) and in ordering the payment of P400,000 actual damages in favor
of petitioners. The injunctive writ is indispensable to prevent further acts of infringement by
respondent corporation. Also, the amount of actual damages is a reasonable percentage (11.9%) of
respondent corporation's gross sales for three (1988-1989 and 1991) of the six years (1984-1990)
respondents have used the "Big Mak" mark.84

The RTC also did not err in awarding exemplary damages by way of correction for the public
good85 in view of the finding of unfair competition where intent to deceive the public is essential. The
award of attorney's fees and expenses of litigation is also in order.86

WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision dated 26 November
1999 of the Court of Appeals and its Resolution dated 11 July 2000 and REINSTATE the Decision
dated 5 September 1994 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C.
Big Mak Burger, Inc. liable for trademark infringement and unfair competition.

SO ORDERED.
McDONALDS CORPORATION,
G.R. No. 166115
Petitioner,
Present:

PUNO, C.J., Chairperson,


SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA,
- versus -
GARCIA, JJ.
Promulgated:

February 2, 2007
MACJOY FASTFOOD CORPORATION,
Respondent.
x----------------------------------------------------------------------------------------x
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, herein
petitioner McDonalds Corporation seeks the reversal and setting aside of the
following issuances of the Court of Appeals (CA) in CA-G.R. SP No. 57247, to
wit:

1. Decision dated 29 July 2004[1] reversing an earlier decision of the


Intellectual Property Office (IPO) which rejected herein
respondent MacJoy FastFood Corporations application for
registration of the trademark MACJOY & DEVICE; and

2. Resolution dated 12 November 2004[2] denying the petitioners


motion for reconsideration.

As culled from the record, the facts are as follows:

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, thereat identified as
Application Serial No. 75274, 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, a corporation duly organized and existing


under the laws of the State of Delaware, USA, filed a verified Notice of
Opposition[3] 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,
BigMac, McDo, McSpaghetti, McSnack, and Mc, (hereinafter collectively known
as the 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. Likewise, the 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. The application and the opposition
thereto was docketed as Inter Partes Case No. 3861.

Respondent denied the aforementioned allegations of the petitioner and averred


that it has used the mark MACJOY for the past many years in good faith and has
spent considerable sums of money for said marks extensive promotion in tri-media,
especially in Cebu City where it has been doing business long before the petitioner
opened its outletthereat sometime in 1992; and that its use of said mark would not
confuse affiliation with the petitioners restaurant services and food products
because of the differences in the design and detail of the two (2) marks.

In a decision[4] dated December 28, 1998, the IPO, ratiocinating 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, viz:
WHEREFORE, the Opposition to the registration of the mark MACJOY
& DEVICE for use in fried chicken and chicken barbecue, burgers, fries,
spaghetti, palabok, tacos, sandwiches, halo-halo, and steaks is, as it is
hereby, SUSTAINED. Accordingly, Application Serial No. 75274 of the herein
Respondent-Applicant is REJECTED.

Let the filewrapper of MACJOY subject matter of this case be sent to the
Administrative, Financial and Human Resources Development Bureau for
appropriate action in accordance with this Decision, with a copy to be furnished
the Bureau of Trademarks for information and to update its record.

SO ORDERED.

In time, the respondent moved for a reconsideration but the IPO denied the motion
in its Order[5] of January 14, 2000.

Therefrom, the respondent went to the CA via a Petition for Review with
prayer for Preliminary Injunction[6] under Rule 43 of the Rules of Court, whereat
its appellate recourse was docketed as CA-G.R. SP No. 57247.

Finding no confusing similarity between the marks MACJOY and


MCDONALDS, the CA, in its herein assailed Decision[7] dated July 29, 2004,
reversed and set aside the appealed IPO decision and order, thus:
WHEREFORE, in view of the foregoing, judgment is hereby rendered by us
REVERSING and SETTING ASIDE the Decision of the IPO dated 28 December
1998 and its Order dated 14 January 2000 and ORDERING the IPO to give due
course to petitioners Application Serial No. 75274.

SO ORDERED.

Explains the CA in its decision:

xxx, it is clear that the IPO brushed aside and rendered useless the glaring and
drastic differences and variations in style of the two trademarks and even decreed
that these pronounced differences are miniscule and considered them to have been
overshadowed by the appearance of the predominant features such as M, Mc, and
Mac appearing in both MCDONALDS and MACJOY marks. Instead of taking
into account these differences, the IPO unreasonably shrugged off these
differences in the device, letters and marks in the trademark sought to be
registered.The IPO brushed aside and ignored the following irrefutable facts and
circumstances showing differences between the marks of MACJOY and
MCDONALDS. They are, as averred by the petitioner [now respondent]:

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. Exhibits 1 and 1-A, show that [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. (Words in brackets
supplied.)
Petitioner promptly filed a motion for reconsideration. However, in its
similarly challenged Resolution[8] of November 12, 2004, the CA denied the
motion, as it further held:

Whether a mark or label of a competitor resembles another is to be


determined by an inspection of the points of difference and resemblance as a
whole, and not merely the points of resemblance. The articles and trademarks
employed and used by the [respondent] Macjoy Fastfood Corporation
are so different and distinct as to preclude any probability or likelihood of
confusion or deception on the part of the public to the injury of the trade or
business of the [petitioner] McDonalds Corporation. The Macjoy & Device mark
is dissimilar in color, design, spelling, size, concept and appearance to the
McDonalds marks. (Words in brackets supplied.)

Hence, the petitioners present recourse on the following grounds:


I.

THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS


MACJOY & DEVICE MARK IS NOT CONFUSINGLY SIMILAR TO
PETITIONERS McDONALDS MARKS.IT FAILED TO CORRECTLY APPLY
THE DOMINANCY TEST WHICH HAS BEEN CONSISTENTLY APPLIED
BY THIS HONORABLE COURT IN DETERMINING THE EXISTENCE OF
CONFUSING SIMILARITY BETWEEN COMPETING MARKS.

A. The McDonalds Marks belong to a well-known and established


family of marks distinguished by the use of the prefix Mc
and/or Mac and the corporate M logo design.

B. The prefix Mc and/or Mac is the dominant portion of both


Petitioners McDonalds Marks and the Respondents Macjoy
& Device mark. As such, the marks are confusingly similar
under the Dominancy Test.

C. Petitioners McDonalds Marks are well-known and world-


famous marks which must be protected under the Paris
Convention.

II.
THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF
THE IPO DATED 28 DECEMBER 1998 AND ITS ORDER DATED 14
JANUARY 2000 WERE NOT BASED ON SUBSTANTIAL EVIDENCE.

In its Comment,[9] the respondent asserts that the petition should be


dismissed outright for being procedurally defective: first, because the person who
signed the certification against forum shopping in behalf of the petitioner was not
specifically authorized to do so, and second, because the petition does not present a
reviewable issue as what it challenges are the factual findings of the CA. In any
event, the respondent insists that the CA committed no reversible error in finding
no confusing similarity between the trademarks in question.

The petition is impressed with merit.

Contrary to respondents claim, the petitioners Managing Counsel, Sheila


Lehr, was specifically authorized to sign on behalf of the petitioner the Verification
and Certification[10] attached to the petition. As can be gleaned from the petitioners
Board of Directors Resolution dated December 5, 2002, as embodied in the
Certificate of the Assistant Secretary dated December 21, 2004,[11] Sheila Lehr was
one of those authorized and empowered to execute and deliver for and on behalf of
[the petitioner] all documents as may be required in connection with x x x the
protection and maintenance of any foreign patents, trademarks, trade-names, and
copyrights owned now or hereafter by [the petitioner], including, but not limited
to, x x x documents required to institute opposition or cancellation proceedings
against conflicting trademarks, and to do such other acts and things and to execute
such other documents as may be necessary and appropriate to effect and carry out
the intent of this resolution. Indeed, the afore-stated authority given to Lehr
necessarily includes the authority to execute and sign the mandatorily required
certification of non-forum shopping to support the instant petition for review which
stemmed from the opposition proceedings lodged by the petitioner before the
IPO. Considering that the person who executed and signed the certification against
forum shopping has the authority to do so, the petition, therefore, is not
procedurally defective.
As regards the respondents argument that the petition raises only questions
of fact which are not proper in a petition for review, suffice it to say that the
contradictory findings of the IPO and the CA constrain us to give due course to the
petition, this being one of the recognized exceptions to Section 1, Rule 45 of the
Rules of Court. True, this Court is not the proper venue to consider factual issues
as it is not a trier of facts.[12] Nevertheless, when the factual findings of the
appellate court are mistaken, absurd, speculative, conjectural, conflicting, tainted
with grave abuse of discretion, or contrary to the findings culled by the court of
origin,[13] as here, this Court will review them.

The old Trademark Law, Republic Act (R.A.) No. 166, as amended, defines
a trademark as any distinctive word, name, symbol, emblem, sign, or device, or
any combination thereof adopted and used by a manufacturer or merchant on his
goods to identify and distinguish them from those manufactured, sold, or dealt in
by others.[14]

Under the same law, the registration of a trademark is subject to the


provisions of Section 4 thereof, paragraph (d) of which is pertinent to this
case. The provision reads:

Section 4. Registration of trademarks, trade-names and service-


marks on the principal register. There is hereby established a register of
trademarks, tradenames and service-marks which shall be known as the
principal register. The owner of the trade-mark, trade-name or service-
mark used to distinguish his goods, business or services of others shall
have the right to register the same on the principal register, unless it:

xxx xxx xxx

(d) Consists of or comprises a mark or trade-name


which so resembles a mark or trade-name registered in the
Philippines or a mark or trade-name previously used in the
Philippines by another and not abandoned, as to be likely,
when applied to or used in connection with the goods,
business or services of the applicant, to cause confusion or
mistake or to deceive purchasers;

xxx xxx xxx


Essentially, the issue here is whether there is a confusing similarity between
the MCDONALDS marks of the petitioner and the respondents MACJOY &
DEVICE trademark when applied to Classes 29 and 30 of the International
Classification of Goods, i.e., food and ingredients of food.

In determining similarity and likelihood of confusion, jurisprudence has


developed two tests, the dominancy test and the holistic test.[15] The dominancy test
focuses on the similarity of the prevalent features of the competing trademarks that
might cause confusion or deception.[16] 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.[17] Under the latter test,
a comparison of the words is not the only determinant factor.[18]

Here, the IPO used the dominancy test in concluding that there was
confusing similarity between the two (2) trademarks in question as it took note of
the appearance of the predominant features M, Mc and/or Mac in both the
marks. In reversing the conclusion reached by the IPO, the CA, while seemingly
applying the dominancy test, in fact actually applied the holistic test. The appellate
court ruled in this wise:

Applying the Dominancy test to the present case, the IPO should have taken into
consideration the entirety of the two marks instead of simply fixing its gaze on the
single letter M or on the combinations Mc or Mac. A mere cursory look of the
subject marks will reveal that, save for the letters M and c, no other similarity
exists in the subject marks.

We agree with the [respondent] that it is entirely unwarranted for the IPO to
consider the prefix Mac as the predominant feature and the rest of the designs in
[respondents] mark as details.Taking into account such paramount factors as
color, designs, spelling, sound, concept, sizes and audio and visual effects, the
prefix Mc will appear to be the only similarity in the two completely different
marks; and it is the prefix Mc that would thus appear as the miniscule
detail. When pitted against each other, the two marks reflect a distinct and
disparate visual impression that negates any possible confusing similarity in the
mind of the buying public. (Words in brackets supplied.)
Petitioner now vigorously points out that the dominancy test should be the
one applied in this case.

We agree.

In trademark cases, particularly in ascertaining whether one trademark is


confusingly similar to another, no set rules can be deduced because each case must
be decided on its merits.[19] In such cases, even more than in any other litigation,
precedent must be studied in the light of the facts of the particular case.[20] That is
the reason why in trademark cases, jurisprudential precedents should be applied
only to a case if they are specifically in point.[21]

While we agree with the CAs detailed enumeration of differences between


the two (2) competing trademarks herein involved, we believe that the holistic test
is not the one applicable in this case, the dominancy test being the one more
suitable. In recent cases with a similar factual milieu as here, the Court has
consistently used and applied the dominancy test in determining confusing
similarity or likelihood of confusion between competing trademarks.[22]

Notably, in McDonalds Corp. v. LC Big Mak Burger, Inc.,[23] a case where


the trademark Big Mak was found to be confusingly similar with the Big Mac
mark of the herein the petitioner, the Court explicitly held:

This Court, xxx, has relied on the dominancy test rather than the holistic
test. The dominancy test considers the dominant features in the competing marks
in determining whether they are confusingly similar. Under the dominancy test,
courts give greater weight to the similarity of the appearance of the product
arising from the adoption of the dominant features of the registered mark,
disregarding minor differences. Courts will consider more the aural and visual
impressions created by the marks in the public mind, giving little weight to factors
like prices, quality, sales outlets and market segments.
Moreover, in Societe Des Produits Nestle, S.A. v. CA[24] the Court, applying
the dominancy test, concluded that the use by the respondent therein of the word
MASTER for its coffee product FLAVOR MASTER was likely to cause confusion
with therein petitioners coffee products MASTER ROAST and MASTER BLEND
and further ruled:

xxx, the totality or holistic test is contrary to the elementary postulate of


the law on trademarks and unfair competition that confusing similarity is to be
determined on the basis of visual, aural, connotative comparisons and
overall impressions engendered by the marks in controversy as they are
encountered in the marketplace. The totality or holistic test only relies on visual
comparisons between two trademarks whereas the dominancy test relies not only
on the visual but also on the aural and connotative comparisons and overall
impressions between the two trademarks.

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.
To begin with, 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.[25]

For sure, it is the prefix Mc, an abbreviation of Mac, which visually and
aurally catches the attention of the consuming public. Verily, the word MACJOY
attracts attention the same way as did McDonalds, MacFries, McSpaghetti, McDo,
Big Mac and the rest of the MCDONALDS marks which all use the prefixes Mc
and/or Mac.

Besides and most importantly, both trademarks are used in the sale of
fastfood products. Indisputably, the 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. Likewise, the petitioners trademark registration for the
MCDONALDS marks in the Philippines covers goods which are similar if not
identical to those covered by the respondents application.
Thus, we concur with the IPOs findings that:

In the case at bar, the 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.

The differences and variations in styles as the device depicting a head of chicken
with cap and bowtie and wings sprouting on both sides of the chicken head, the
heart-shaped M, and the stylistic letters in MACJOY & DEVICE; in contrast to
the arch-like M and the one-styled gothic letters in McDonalds marks are of no
moment. These minuscule variations are overshadowed by the appearance of the
predominant features mentioned hereinabove.

Thus, with the predominance of the letter M, and prefixes Mac/Mc found in both
marks, the inevitable conclusion is there is confusing similarity between the
trademarks Mc Donalds marks and MACJOY AND DEVICE especially
considering the fact that both marks are being 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.

With the existence of confusing similarity between the subject trademarks, the
resulting issue to be resolved is who, as between the parties, has the rightful claim
of ownership over the said marks.

We rule for the petitioner.

A mark is valid if it is distinctive and hence not barred from registration


under the Trademark Law. However, once registered, not only the marks validity
but also the registrants ownership thereof is prima facie presumed.[26]
Pursuant to Section 37[27] of R.A. No. 166, as amended, as well as the
provision regarding the protection of industrial property of foreign nationals in this
country as embodied in the Paris Convention[28] under which the Philippines and
the petitioners domicile, the United States, are adherent-members, the petitioner
was able to register its MCDONALDS marks successively, i.e., McDonalds in 04
October, 1971[29]; the corporate logo which is the M or the golden arches design
and the McDonalds with the M or golden arches design both in 30 June
1977[30]; and so on and so forth.[31]

On the other hand, it is not disputed that the respondents application for
registration of its trademark MACJOY & DEVICE was filed only on March 14,
1991 albeit the date of first use in the Philippines was December 7, 1987.[32]

Hence, from the evidence on record, it is clear that the petitioner has duly
established its ownership of the mark/s.
Respondents contention that it was the first user of the mark in
the Philippines having used MACJOY & DEVICE on its restaurant business and
food products since December, 1987 at Cebu City while the first McDonalds outlet
of the petitioner thereat was opened only in 1992, is downright
unmeritorious. For the requirement of actual use in commerce x x x in the
Philippines before one may register a trademark, trade-name and service mark
under the Trademark Law[33] pertains to the territorial jurisdiction of the
Philippines and is not only confined to a certain region, province, city or barangay.

Likewise wanting in merit is the respondents claim that the petitioner cannot
acquire ownership of the word Mac because it is a personal name which may not
be monopolized as a trademark as against others of the same name or surname. As
stated earlier, once a trademark has been registered, the validity of the mark
is prima faciepresumed. In this case, the respondent failed to overcome such
presumption. We agree with the observations of the petitioner regarding the
respondents explanation that the word MACJOY is based on the name of its
presidents niece, Scarlett Yu Carcell. In the words of the petitioner:

First of all, Respondent failed to present evidence to support the foregoing


claim which, at best, is a mere self-serving assertion. Secondly, it cannot be
denied that there is absolutely no connection between the name Scarlett Yu Carcel
and MacJoy to merit the coinage of the latter word. Even assuming that the word
MacJoy was chosen as a term of endearment, fondness and affection for a certain
Scarlett Yu Carcel, allegedly the niece of Respondents president, as well as to
supposedly bring good luck to Respondents business, one cannot help but wonder
why out of all the possible letters or combinations of letters available to
Respondent, its president had to choose and adopt a mark with the prefix Mac as
the dominant feature thereof. A more plausible explanation perhaps is that the
niece of Respondents president was fond of the food products and services of the
Respondent, but that is beside the point. [34]

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 trade-
name 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.
Thus, the IPO was correct in rejecting and denying the respondents
application for registration of the trademark MACJOY & DEVICE. As this Court
ruled in Faberge Inc. v. IAC,[35] citing Chuanchow Soy & Canning Co. v. Dir. of
Patents and Villapanta:[36]

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.
No pronouncement as to costs.

SO ORDERED.
SKECHERS, U.S.A., INC., Petitioner, G.R. No. 164321

- versus - Present:

INTER PACIFIC INDUSTRIAL


TRADING CORP., and/or INTER CARPIO, J., Chairperson,
PACIFIC TRADING CORP. and/or
STRONG SPORTS GEAR CO., NACHURA,
LTD., and/or STRONGSHOES
PERALTA,
WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or ABAD, and
TAN TUAN HONG
MENDOZA, JJ.
and/or VIOLETA T. MAGAYAGA
and/or JEFFREY R. MORALES
and/or any of its other proprietor/s,
directors, officers, employees and/or
occupants of its premises located at S-
7, Ed & Joes Commercial Arcade, No.
153 Quirino Avenue, Paraaque City,

Respondents.

x----------------------------------------------x

TRENDWORKS INTERNATIONAL
CORPORATION,

Petitioner-Intervenor,
- versus

INTER PACIFIC INDUSTRIAL


TRADING CORP. and/or INTER
PACIFIC TRADING CORP. and/or
STRONG SPORTS GEAR CO.,
LTD., and/or STRONGSHOES
WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or
TAN TUAN HONG and/or

VIOLETA T. MAGAYAGA and/or


JEFFREY R. MORALES and/or any
of its other proprietor/s,
directors, officers, employees and/or
occupants of its premises located at S-
7, Ed & Joes Commercial Arcade, No.
153 Quirino Avenue, Paraaque City,
Promulgated:
Respondents.
March 23, 2011

x--------------------------------------------------x

RESOLUTION

PERALTA, J.:
For resolution are the twin Motions for Reconsideration[1] filed by petitioner and
petitioner-intervenor from the Decision rendered in favor of respondents,
dated November 30, 2006.

At the outset, a brief narration of the factual and procedural antecedents that
transpired and led to the filing of the motions is in order.

The present controversy arose when petitioner filed with Branch 24 of the
Regional Trial Court (RTC) of Manila an application for the issuance of search
warrants against an outlet and warehouse operated by respondents for infringement
of trademark under Section 155, in relation to Section 170 of Republic Act No.
8293, otherwise known as the Intellectual Property Code of the Philippines.[2] In
the course of its business, petitioner has registered the trademark
SKECHERS[3] and the trademark S (within an oval design)[4] with the Intellectual
Property Office (IPO).
Two search warrants[5] were issued by the RTC and were served on the premises of
respondents. As a result of the raid, more than 6,000 pairs of shoes bearing the S
logo were seized.

Later, respondents moved to quash the search warrants, arguing that there was no
confusing similarity between petitioners Skechers rubber shoes and its Strong
rubber shoes.

On November 7, 2002, the RTC issued an Order[6] quashing the search warrants
and directing the NBI to return the seized goods. The RTC agreed with
respondents view that Skechers rubber shoes and Strong rubber shoes have glaring
differences such that an ordinary prudent purchaser would not likely be misled or
confused in purchasing the wrong article.
Aggrieved, petitioner filed a petition for certiorari[7] with the Court of Appeals
(CA) assailing the RTC Order. On November 17, 2003, the CA issued a
Decision[8] affirming the ruling of the RTC.
Subsequently, petitioner filed the present petition[9] before this Court which puts
forth the following assignment of errors:

A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE


ABUSE OF DISCRETION IN CONSIDERING MATTERS OF
DEFENSE IN A CRIMINAL TRIAL FOR TRADEMARK
INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE
SEARCH WARRANT WHEN IT SHOULD HAVE LIMITED
ITSELF TO A DETERMINATION OF WHETHER THE TRIAL
COURT COMMITTED GRAVE ABUSE OF DISCRETION IN
QUASHING THE SEARCH WARRANTS.

B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE


ABUSE OF DISCRETION IN FINDING THAT RESPONDENTS
ARE NOT GUILTY OF TRADEMARK INFRINGEMENT IN THE
CASE WHERE THE SOLE TRIABLE ISSUE IS THE EXISTENCE
OF PROBABLE CAUSE TO ISSUE A SEARCH WARRANT.[10]

In the meantime, petitioner-intervenor filed a Petition-in-Intervention[11] with


this Court claiming to be the sole licensed distributor of Skechers products here in
the Philippines.

On November 30, 2006, this Court rendered a Decision[12] dismissing the


petition.
Both petitioner and petitioner-intervenor filed separate motions for
reconsideration.

In petitioners motion for reconsideration, petitioner moved for a


reconsideration of the earlier decision on the following grounds:

(a) THIS HONORABLE COURT MUST RE-EXAMINE THE


FACTS OF THIS CASE DUE TO THE SIGNIFICANCE AND
REPERCUSSIONS OF ITS DECISION.

(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH


THE UNAUTHORIZED REPRODUCTIONS OF THE S
TRADEMARK OWNED BY PETITIONER WERE INTENDED
FOR DISTRIBUTION IN THE PHILIPPINE MARKET TO THE
DETRIMENT OF PETITIONER RETURNING THE GOODS TO
RESPONDENTS WILL ADVERSELY AFFECT THE
GOODWILL AND REPUTATION OF PETITIONER.

(c) THE SEARCH WARRANT COURT AND THE COURT OF


APPEALS BOTH ACTED WITH GRAVE ABUSE OF
DISCRETION.

(d) THE SEARCH WARRANT COURT DID NOT PROPERLY RE-


EVALUATE THE EVIDENCE PRESENTED DURING THE
SEARCH WARRANT APPLICATION PROCEEDINGS.

(e) THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS


CASE, AS IT IS BASED ON A DIFFERENT FACTUAL MILIEU.
PRELIMINARY FINDING OF GUILT (OR ABSENCE
THEREOF) MADE BY THE SEARCH WARRANT COURT AND
THE COURT OF APPEALS WAS IMPROPER.
(f) THE SEARCH WARRANT COURT OVERSTEPPED ITS
DISCRETION. THE LAW IS CLEAR. THE DOMINANCY TEST
SHOULD BE USED.

(g) THE COURT OF APPEALS COMMITTED ERRORS OF


JURISDICTION.[13]

On the other hand, petitioner-intervenors motion for reconsideration raises


the following errors for this Courts consideration, to wit:

(a) THE COURT OF APPEALS AND THE SEARCH WARRANT


COURT ACTED CONTRARY TO LAW AND
JURISPRUDENCE IN ADOPTING THE ALREADY-
REJECTED HOLISTIC TEST IN DETERMINING THE ISSUE
OF CONFUSING SIMILARITY;

(b) THE COURT OF APPEALS AND THE SEARCH WARRANT


COURT ACTED CONTRARY TO LAW IN HOLDING THAT
THERE IS NO PROBABLE CAUSE FOR TRADEMARK
INFRINGEMENT; AND

(c) THE COURT OF APPEALS SANCTIONED THE TRIAL


COURTS DEPARTURE FROM THE USUAL AND
ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHEN
IT UPHELD THE QUASHAL OF THE SEARCH WARRANT
ON THE BASIS SOLELY OF A FINDING THAT THERE IS
NO CONFUSING SIMILARITY.[14]

A perusal of the motions submitted by petitioner and petitioner-intervenor


would show that the primary issue posed by them dwells on the issue of whether or
not respondent is guilty of trademark infringement.
After a thorough review of the arguments raised herein, this Court
reconsiders its earlier decision.

The basic law on trademark, infringement, and unfair competition is


Republic Act (R.A.) No. 8293. Specifically, Section 155 of R.A. No. 8293 states:

Remedies; Infringement. Any person who shall, without the


consent of the owner of the registered mark:

155.1. Use in commerce any reproduction,


counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of
any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or
to deceive; or

155.2. Reproduce, counterfeit, copy or colorably


imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used
in commerce upon or in connection with the sale, offering
for sale, distribution, or advertising of goods or services on
or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the registrant for
the remedies hereinafter set forth: Provided, That the
infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or
services using the infringing material.[15]

The essential element of infringement under R.A. No. 8293 is that the infringing
mark is likely to cause confusion. In determining similarity and likelihood of
confusion, jurisprudence has developed tests the Dominancy Test and the
Holistic or Totality Test. The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing trademarks that might cause
confusion, mistake, and deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it required that the mark sought
to be registered suggests an effort to imitate. Given more consideration are the
aural and visual impressions created by the marks on the buyers of goods, giving
little weight to factors like prices, quality, sales outlets, and market segments.[16]

In contrast, the Holistic or Totality Test necessitates a consideration of the


entirety of the marks as applied to the products, including the labels and packaging,
in determining confusing similarity. The discerning eye of the observer must focus
not only on the predominant words, but also on the other features appearing on
both labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.[17]

Relative to the question on confusion of marks and trade names,


jurisprudence has noted two (2) types of confusion, viz.: (1) confusion of goods
(product confusion), where the ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was purchasing the other; and (2)
confusion of business (source or origin confusion), where, although the goods of
the parties are different, the product, the mark of which registration is applied for
by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into
that belief or into the belief that there is some connection between the two parties,
though inexistent.[18]

Applying the Dominancy Test to the case at bar, this Court finds that the use
of the stylized S by respondent in its Strong rubber shoes infringes on the mark
already registered by petitioner with the IPO. While it is undisputed that
petitioners stylized S is within an oval design, to this Courts mind, the dominant
feature of the trademark is the stylized S, as it is precisely the stylized S which
catches the eye of the purchaser. Thus, even if respondent did not use an oval
design, the mere fact that it used the same stylized S, the same being the dominant
feature of petitioners trademark, already constitutes infringement under the
Dominancy Test.

This Court cannot agree with the observation of the CA that the use of the
letter S could hardly be considered as highly identifiable to the products of
petitioner alone. The CA even supported its conclusion by stating that the letter S
has been used in so many existing trademarks, the most popular of which is the
trademark S enclosed by an inverted triangle, which the CA says is identifiable to
Superman. Such reasoning, however, misses the entire point, which is that
respondent had used a stylized S, which is the same stylized S which petitioner has
a registered trademark for. The letter S used in the Superman logo, on the other
hand, has a block-like tip on the upper portion and a round elongated tip on the
lower portion. Accordingly, the comparison made by the CA of the letter S used in
the Superman trademark with petitioners stylized S is not appropriate to the case at
bar.

Furthermore, respondent did not simply use the letter S, but it appears to this
Court that based on the font and the size of the lettering, the stylized S utilized by
respondent is the very same stylized S used by petitioner; a stylized S which is
unique and distinguishes petitioners trademark. Indubitably, the likelihood of
confusion is present as purchasers will associate the respondents use of the stylized
S as having been authorized by petitioner or that respondents product is connected
with petitioners business.

Both the RTC and the CA applied the Holistic Test in ruling that respondent
had not infringed petitioners trademark. For its part, the RTC noted the following
supposed dissimilarities between the shoes, to wit:

1. The mark S found in Strong Shoes is not enclosed in an oval design.

2. The word Strong is conspicuously placed at the backside and insoles.

3. The hang tags and labels attached to the shoes bears the word Strong
for respondent and Skechers U.S.A. for private complainant;

4. Strong shoes are modestly priced compared to the costs of Skechers


Shoes.[19]

While there may be dissimilarities between the appearances of the shoes,


to this Courts mind such dissimilarities do not outweigh the stark and blatant
similarities in their general features. As can be readily observed by simply
comparing petitioners Energy[20] model and respondents Strong[21] rubber shoes,
respondent also used the color scheme of blue, white and gray utilized by
petitioner. Even the design and wavelike pattern of the midsole and outer sole of
respondents shoes are very similar to petitioners shoes, if not exact patterns
thereof. At the side of the midsole near the heel of both shoes are two elongated
designs in practically the same location. Even the outer soles of both shoes have
the same number of ridges, five at the back and six in front. On the side of
respondents shoes, near the upper part, appears the stylized S, placed in the exact
location as that of the stylized S on petitioners shoes. On top of the "tongue" of
both shoes appears the stylized S in practically the same location and size.
Moreover, at the back of petitioners shoes, near the heel counter, appears Skechers
Sport Trail written in white lettering. However, on respondents shoes appears
Strong Sport Trail noticeably written in the same white lettering, font size,
direction and orientation as that of petitioners shoes. On top of the heel collar of
petitioners shoes are two grayish-white semi-transparent circles. Not surprisingly,
respondents shoes also have two grayish-white semi-transparent circles in the exact
same location.

Based on the foregoing, this Court is at a loss as to how the RTC and the
CA, in applying the holistic test, ruled that there was no colorable imitation, when
it cannot be any more clear and apparent to this Court that there is colorable
imitation. The dissimilarities between the shoes are too trifling and frivolous that
it is indubitable that respondents products will cause confusion and mistake in the
eyes of the public. Respondents shoes may not be an exact replica of petitioners
shoes, but the features and overall design are so similar and alike that confusion is
highly likely.

In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co.,


Inc.,[22] this Court, in a case for unfair competition, had opined that even if not all
the details are identical, as long as the general appearance of the two products are
such that any ordinary purchaser would be deceived, the imitator should be liable,
to wit:

From said examination, We find the shoes manufactured by


defendants to contain, as found by the trial court, practically all the
features of those of the plaintiff Converse Rubber Corporation and
manufactured, sold or marketed by plaintiff Edwardson Manufacturing
Corporation, except for their respective brands, of course. We fully agree
with the trial court that "the respective designs, shapes, the colors of the
ankle patches, the bands, the toe patch and the soles of the two products
are exactly the same ... (such that) at a distance of a few meters, it is
impossible to distinguish "Custombuilt" from "Chuck Taylor." These
elements are more than sufficient to serve as basis for a charge of unfair
competition. Even if not all the details just mentioned were identical,
with the general appearances alone of the two products, any ordinary, or
even perhaps even a not too perceptive and discriminating customer
could be deceived, and, therefore, Custombuilt could easily be passed off
for Chuck Taylor. Jurisprudence supports the view that under such
circumstances, the imitator must be held liable. x x x[23]

Neither can the difference in price be a complete defense in trademark


infringement. In McDonalds Corporation v. L.C. Big Mak Burger. Inc.,[24] this
Court held:

Modern law recognizes that the protection to which the owner of


a trademark is entitled is not limited to guarding his goods or business
from actual market competition with identical or similar products of the
parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a
confusion of source, as where prospective purchasers would be misled
into thinking that the complaining party has extended his business into
the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the
normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am.
Jur. 576, 577). x x x[25]

Indeed, the registered trademark owner may use its mark on the same or
similar products, in different segments of the market, and at different price levels
depending on variations of the products for specific segments of the market. [26] The
purchasing public might be mistaken in thinking that petitioner had ventured into a
lower market segment such that it is not inconceivable for the public to think that
Strong or Strong Sport Trail might be associated or connected with petitioners
brand, which scenario is plausible especially since both petitioner and respondent
manufacture rubber shoes.
Withal, the protection of trademarks as intellectual property is intended not
only to preserve the goodwill and reputation of the business established on the
goods bearing the mark through actual use over a period of time, but also to
safeguard the public as consumers against confusion on these goods.[27] While
respondents shoes contain some dissimilarities with petitioners shoes, this Court
cannot close its eye to the fact that for all intents and purpose, respondent had
deliberately attempted to copy petitioners mark and overall design and features of
the shoes. Let it be remembered, that defendants in cases of infringement do not
normally copy but only make colorable changes.[28] The most successful form of
copying is to employ enough points of similarity to confuse the public, with
enough points of difference to confuse the courts.[29]

WHEREFORE, premises considered, the Motion for Reconsideration


is GRANTED. The Decision dated November 30,
2006 is RECONSIDERED and SET ASIDE.

SO ORDERED.
G.R. No. 103543 July 5, 1993

ASIA BREWERY, INC., petitioner,


vs.
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.

Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for petitioner.

Roco, Bunag, Kapunan Law Office for private respondent.

GRIO-AQUINO, J.:

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition on account of the latter's BEER PALE
PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL PALE
PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ.
Case. No. 56390, RTC Branch 166, Pasig, Metro Manila.).

On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O.
Bersamira, dismissing SMC's complaint because ABI "has not committed trademark infringement or
unfair competition against" SMC (p. 189, Rollo).

SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the
Court of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and ponente,
and Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial
court. The dispositive part of the decision reads as follows:

In the light of the foregoing analysis and under the plain language of the applicable
rule and principle on the matter, We find the defendant Asia Brewery Incorporated
GUILTY of infringement of trademark and unfair competition. The decision of the trial
court is hereby REVERSED, and a new judgment entered in favor of the plaintiff and
against the defendant as follows:

(1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are
hereby permanently enjoined and restrained from manufacturing, putting up, selling,
advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any
similar preparation, manufacture or beer in bottles and under labels substantially
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
employed for that purpose, or substantially identical with or like the bottles and labels
now employed by the defendant for that purpose, or in bottles or under labels which
are calculated to deceive purchasers and consumers into the belief that the beer is
the product of the plaintiff or which will enable others to substitute, sell or palm off the
said beer of the defendant as and for the beer of the plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and
pay the San Miguel Corporation double any and all the payments derived by
defendant from operations of its business and the sale of goods bearing the mark
"Beer Pale Pilsen" estimated at approximately Five Million Pesos (P5,000,000.00); to
recall all its products bearing the mark "Beer Pale Pilsen" from its retailers and
deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and
advertisements bearing the infringing mark and all plates, molds, materials and other
means of making the same to the Court authorized to execute this judgment for
destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
(P2,000,000.00) as moral damages and Half a Million Pesos (P5,000,000.00) by way
of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
of P250,000.00 plus costs to this suit. (p. 90, Rollo.)

Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was
modified by the separate opinions of the Special Sixth Division 1 so that it should read thus:

In the light of the foregoing analysis and under the plain language of the applicable
rule and principle on the matter, We find the defendant Asia Brewery
Incorporated GUILTY of infringement of trademark and unfair competition. The
decision of the trial court is hereby REVERSED, and a new judgment entered in
favor of the plaintiff and against the defendant as follows:

(1) The defendant Asia Brewery Inc., its officers, agents, servants and employees
are hereby permanently enjoined and restrained from manufacturing, putting up,
selling, advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or
any similar preparation, manufacture or beer in bottles and under labels substantially
identical with or like the said bottles and labels of plaintiff San Miguel Corporation
employed for that purpose, or substantially identical with or like the bottles and labels
now employed by the defendant for that purpose, or in bottles or under labels which
are calculated to deceive purchasers and consumers into the belief that the beer if
the product of the plaintiff or which will enable others to substitute, sell or palm off the
said beer of the defendant as and for the beer of the plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products
bearing the mark Beer Pale Pilsen from its retailers and deliver these as well as all
labels, signs, prints, packages, wrappers, receptacles and advertisements bearing
the infringing mark and all plates, molds, materials and other means of making the
same to the Court authorized to execute this judgment for destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos
(P2,000,000.00) as moral damages and Half a Million Pesos (P500,000.00) by way
of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount
of P250,000.00 plus costs of this suit.

In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of
Court. The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel Pale
Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition against the
latter. It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a
general rule, the findings of the Court of Appeals upon factual questions are conclusive and ought
not to be disturbed by us. However, there are exceptions to this general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and
conjectures;

(2) When the inference of the Court of Appeals from its findings of fact is manifestly
mistaken, absurd and impossible;

(3) Where there is grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the appellate court, in making its findings, went beyond the issues of the
case, and the same are contrary to the admissions of both the appellant and the
appellee;

(6) When the findings of said court are contrary to those of the trial court;

(7) When the findings are without citation of specific evidence on which they are
based;

(8) When the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondents; and

(9) When the findings of facts of the Court of Appeals are premised on the absence
of evidence and are contradicted on record. (Reynolds Philippine Corporation vs.
Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156
SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay vs.
Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs.
Court of Appeals, 198 SCRA 333, 336; also Apex Investment and Financing Corp.
vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina
Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102
SCRA 817; and Moran, Jr. vs. CA, 133 SCRA 88].)

Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct
findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.)
Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court
may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)

The present case is one of the exceptions because there is no concurrence between the trial court
and the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its
BEER PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted
rectangular label has committed trademark infringement and unfair competition against SMC.

Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what
constitutes infringement:

Sec. 22. Infringement, what constitutes. Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers or others as to
the source or origin of such goods or services, or identity of such business; or
reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and
apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services, shall be liable to a civil action
by the registrant for any or all of the remedies herein provided. (Emphasis supplied.)

This definition implies that only registered trade marks, trade names and service marks are
protected against infringement or unauthorized use by another or others. The use of someone else's
registered trademark, trade name or service mark is unauthorized, hence, actionable, if it is done
"without the consent of the registrant." (Ibid.)

The registered trademark of SMC for its pale pilsen beer is:

San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau
of Patents, Trademarks and Technology Transfer Trademark Certificate of
Registration No. 36103, dated 23 Oct. 1986,
(p. 174, Rollo.)

As described by the trial court in its decision (Page 177, Rollo):

. . . . a rectangular design [is] bordered by what appears to be minute grains


arranged in rows of three in which there appear in each corner hop designs. At the
top is a phrase written in small print "Reg. Phil. Pat. Off." and at the bottom "Net
Contents: 320 Ml." The dominant feature is the phrase "San Miguel" written
horizontally at the upper portion. Below are the words "Pale Pilsen" written diagonally
across the middle of the rectangular design. In between is a coat of arms and the
phrase "Expertly Brewed." The "S" in "San" and the "M" of "Miguel," "P" of "Pale" and
"Pilsen" are written in Gothic letters with fine strokes of serifs, the kind that first
appeared in the 1780s in England and used for printing German as distinguished
from Roman and Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first
line, "San Miguel Brewery" (second line), and "Philippines" (third line). (p. 177, Rollo;
Emphasis supplied.)

On the other hand, ABI's trademark, as described by the trial court, consists of:

. . . a rectangular design bordered by what appear to be buds of flowers with leaves.


The dominant feature is "Beer" written across the upper portion of the rectangular
design. The phrase "Pale Pilsen" appears immediately below in smaller block letters.
To the left is a hop design and to the right, written in small prints, is the phrase "Net
Contents 320 ml." Immediately below "Pale Pilsen" is the statement written in three
lines "Especially brewed and bottled by" (first line), "Asia Brewery Incorporated"
(second line), and "Philippines" (third line), (p. 177, Rollo; Emphasis supplied.)

Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE PILSEN
WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is "No."

Infringement is determined by the "test of dominancy" rather than by differences or variations in the
details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of
Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217
(1956), thus:
It has been consistently held that the question of infringement of a trademark is to be
determined by the test of dominancy. Similarity in size, form and color, while
relevant, is not conclusive. If the competing trademark contains the main or essential
or dominant features of another, and confusion and deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor it is necessary
that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co.
vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs.
Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of
trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis
supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or
"resemblance between the two (trademarks) such as would be likely to cause the one mark to be
mistaken for the other. . . . [But] this is not such similitude as amounts to identity."

In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the
test is "similarity in the dominant features of the trademarks."

What are the dominant features of the competing trademarks before us?

There is hardly any dispute that the dominant feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the
beginning and end of the letters "S" and "M" on an amber background across the upper portion of
the rectangular design.

On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with
the word "Beer" written in large amber letters, larger than any of the letters found in the SMC label.

The trial court perceptively observed that the word "BEER" does not appear in SMC's trademark, just
as the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there is absolutely no
similarity in the dominant features of both trademarks.

Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar
to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be
deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC
proving otherwise.

Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or
appearance of the competing products abound:

(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.

The BEER PALE PILSEN bottle has a fat, bulging neck.

(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along
a diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and printed in
slender block letters on a straight horizontal band. (See Exhibit "8-a".).

(3) The names of the manufacturers are prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas BEER
PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated, Philippines."

(4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and leaves,
its copyrighted slogan:

"BEER NA BEER!"

Whereas SMC's bottle carries no slogan.

(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.

(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words "San
Miguel Brewery Philippines" encircling the same.

The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center, surrounded by
the words "Asia Brewery Incorporated Philippines."

(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25
per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only
P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the storekeeper or
bartender.

The fact that the words pale pilsen are part of ABI's trademark does not constitute an infringement of
SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive of
the color ("pale"), of a type of beer ("pilsen"), which is a light bohemian beer with a strong hops flavor
that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle Ages.
(Webster's Third New International Dictionary of the English Language, Unabridged. Edited by Philip
Babcock Gove. Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily
geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of
R.A. No. 638) hence, non-registerable and not appropriable by any beer manufacturer. The
Trademark Law provides:

Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to distinguish


his goods, business or services from the goods, business or services of others shall
have the right to register the same [on the principal register], unless it:

xxx xxx xxx

(e) Consists of a mark or trade-name which, when applied to or used in connection


with the goods, business or services of the applicant is merely descriptive or
deceptively misdescriptive of them, or when applied to or used in connection with the
goods, business or services of the applicant is primarily geographically descriptive or
deceptively misdescriptive of them, or is primarily merely a surname." (Emphasis
supplied.)

The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part
of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as
"evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be
appropriated by any single manufacturer of these food products, for no other reason than that he
was the first to use them in his registered trademark. In Masso Hermanos, S.A. vs. Director of
Patents, 94 Phil. 136, 139 (1953), it was held that a dealer in shoes cannot register "Leather Shoes"
as his trademark because that would be merely descriptive and it would be unjust to deprive other
dealers in leather shoes of the right to use the same words with reference to their merchandise. No
one may appropriate generic or descriptive words. They belong to the public domain (Ong Ai Gui vs.
Director of Patents, 96 Phil. 673, 676 [1955]):

A word or a combination of words which is merely descriptive of an article of trade, or


of its composition, characteristics, or qualities, cannot be appropriated and protected
as a trademark to the exclusion of its use by others. . . . inasmuch as all persons
have an equal right to produce and vend similar articles, they also have the right to
describe them properly and to use any appropriate language or words for that
purpose, and no person can appropriate to himself exclusively any word or
expression, properly descriptive of the article, its qualities, ingredients or
characteristics, and thus limit other persons in the use of language appropriate to the
description of their manufactures, the right to the use of such language being
common to all. This rule excluding descriptive terms has also been held to apply to
trade-names. As to whether words employed fall within this prohibition, it is said that
the true test is not whether they are exhaustively descriptive of the article designated,
but whether in themselves, and as they are commonly used by those who
understand their meaning, they are reasonably indicative and descriptive of the thing
intended. If they are thus descriptive, and not arbitrary, they cannot be appropriated
from general use and become the exclusive property of anyone. (52 Am. Jur. 542-
543.)

. . . . Others may use the same or similar descriptive word in connection with their
own wares, provided they take proper steps to prevent the public being deceived.
(Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d] 598.)

. . . . A descriptive word may be admittedly distinctive, especially if the user is the first
creator of the article. It will, however, be denied protection, not because it lacks
distinctiveness, but rather because others are equally entitled to its use. (2 Callman.
Unfair Competition and Trademarks, pp. 869-870.)" (Emphasis supplied.)

The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has
printed its name all over the bottle of its beer product: on the label, on the back of the bottle, as well
as on the bottle cap, disproves SMC's charge that ABI dishonestly and fraudulently intends to palm
off its BEER PALE PILSEN as SMC's product. In view of the visible differences between the two
products, the Court believes it is quite unlikely that a customer of average intelligence would mistake
a bottle of BEER PALE PILSEN for SAN MIGUEL PALE PILSEN.

The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in amber-colored
steinie bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media,
does not necessarily constitute unfair competition.

Unfair competition is the employment of deception or any other means contrary to good faith by
which a person shall pass off the goods manufactured by him or in which he deals, or his business,
or services, for those of another who has already established goodwill for his similar goods, business
or services, or any acts calculated to produce the same result. (Sec. 29, Republic Act No. 166, as
amended.) The law further enumerates the more common ways of committing unfair competition,
thus:
Sec. 29. . . .

In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would be likely to
influence purchasers to believe that the goods offered are those of a manufacturer or
dealer other than the actual manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose.

(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who
shall commit any other act contrary to good faith of a nature calculated to discredit
the goods, business or services of another.

In this case, the question to be determined is whether ABI is using a name or mark for its beer that
has previously come to designate SMC's beer, or whether ABI is passing off its BEER PALE PILSEN
as SMC's SAN MIGUEL PALE PILSEN.

. . ..The universal test question is whether the public is likely to be deceived. Nothing
less than conduct tending to pass off one man's goods or business as that of another
will constitute unfair competition. Actual or probable deception and confusion on the
part of the customers by reason of defendant's practices must always appear. (Shell
Co., of the Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil.
434, 439.)

The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN
bottle, is not unlawful. As pointed out by ABI's counsel, SMC did not invent but merely borrowed the
steinie bottle from abroad and it claims neither patent nor trademark protection for that bottle shape
and design. (See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen use the "steinie"
bottle. (See Exhibits 57-D, 57-E.) The trial court found no infringement of SMC's bottle

The court agrees with defendant that there is no infringement of plaintiff's bottle,
firstly, because according to plaintiff's witness Deogracias Villadolid, it is a standard
type of bottle called steinie, and to witness Jose Antonio Garcia, it is not a San
Miguel Corporation design but a design originally developed in the United States by
the Glass Container Manufacturer's Institute and therefore lacks exclusivity.
Secondly, the shape was never registered as a trademark. Exhibit "C" is not a
registration of a beer bottle design required under Rep. Act 165 but the registration of
the name and other marks of ownership stamped on containers as required by Rep.
Act 623. Thirdly, the neck of defendant's bottle is much larger and has a distinct
bulge in its uppermost part. (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the exclusive property of any
one beer manufacturer is well taken. SMC's being the first to use the steinie bottle does not give
SMC a vested right to use it to the exclusion of everyone else. Being of functional or common use,
and not the exclusive invention of any one, it is available to all who might need to use it within the
industry. Nobody can acquire any exclusive right to market articles supplying simple human needs in
containers or wrappers of the general form, size and character commonly and immediately used in
marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

. . . protection against imitation should be properly confined to nonfunctional features.


Even if purely functional elements are slavishly copied, the resemblance will not
support an action for unfair competition, and the first user cannot claim secondary
meaning protection. Nor can the first user predicate his claim to protection on the
argument that his business was established in reliance on any such unpatented
nonfunctional feature, even "at large expenditure of money." (Callman Unfair
Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for
Review, p. 28.)

ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle
which has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a functional
feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is
contained and sold in amber-colored bottles because amber is the most effective color in preventing
transmission of light and provides the maximum protection to beer. As was ruled in California
Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38 F2d 885, a merchant cannot be enjoined
from using a type or color of bottle where the same has the useful purpose of protecting the contents
from the deleterious effects of light rays. Moreover, no one may have a monopoly of any color. Not
only beer, but most medicines, whether in liquid or tablet form, are sold in amber-colored bottles.

That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle because that
bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December
1979, of the Department of Trade, Metric System Board.

With regard to the white label of both beer bottles, ABI explained that it used the color white for its
label because white presents the strongest contrast to the amber color of ABI's bottle; it is also the
most economical to use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of September
20, 1988). No one can have a monopoly of the color amber for bottles, nor of white for labels, nor of
the rectangular shape which is the usual configuration of labels. Needless to say, the shape of the
bottle and of the label is unimportant. What is all important is the name of the product written on the
label of the bottle for that is how one beer may be distinguished form the others.

In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both
labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of
conventional color, both with labels containing designs drawn in green ink and Chinese characters
written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this
court found that the resemblances between the designs were not sufficient to mislead the ordinary
intelligent buyer, hence, there was no unfair competition. The Court held:

. . . . In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a public
accustomed to buy, and therefore to some extent familiar with, the goods in question.
The test of fraudulent simulation is to be found in the likelihood of the deception of
persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The test is
not found in the deception, or possibility of the deception, of the person who knows
nothing about the design which has been counterfeited, and who must be indifferent
as between that and the other. The simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinarily intelligent buyer who has a need to
supply and is familiar with the article that he seeks to purchase.

The main thrust of SMC's complaint if not infringement of its trademark, but unfair competition arising
form the allegedly "confusing similarity" in the general appearance or trade dress of ABI's BEER
PALE PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo)

SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN
MIGUEL PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles with
white rectangular labels.

However, when as in this case, the names of the competing products are clearly different and their
respective sources are prominently printed on the label and on other parts of the bottle, mere
similarity in the shape and size of the container and label, does not constitute unfair competition. The
steinie bottle is a standard bottle for beer and is universally used. SMC did not invent it nor patent it.
The fact that SMC's bottle is registered under R.A. No. 623 (as amended by RA 5700, An Act to
Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other
Similar Containers) simply prohibits manufacturers of other foodstuffs from the unauthorized use of
SMC's bottles by refilling these with their products. It was not uncommon then for products such
as patis (fish sauce) and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN
bottles. Registration of SMC's beer bottles did not give SMC a patent on the steinie or on bottles of
similar size, shape or color.

Most containers are standardized because they are usually made by the same manufacturer. Milk,
whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard
ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such as coffee,
mayonnaise, pickles and peanut butter are sold in standard glass jars. The manufacturers of these
foodstuffs have equal right to use these standards tins, bottles and jars for their products. Only their
respective labels distinguish them from each other. Just as no milk producer may sue the others for
unfair competition because they sell their milk in the same size and shape of milk can which he
uses, neither may SMC claim unfair competition arising from the fact that ABI's BEER PALE PILSEN
is sold, like SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed off as
SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally
order their beer by brand. As pointed out by ABI's counsel, in supermarkets and tiendas, beer is
ordered by brand, and the customer surrenders his empty replacement bottles or pays a deposit to
guarantee the return of the empties. If his empties are SAN MIGUEL PALE PILSEN, he will get SAN
MIGUEL PALE PILSEN as replacement. In sari-sari stores, beer is also ordered from the tindera by
brand. The same is true in restaurants, pubs and beer gardens beer is ordered from the waiters
by brand. (Op. cit. page 50.)

Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer
market for the past hundred years, those who have been drinking no other beer but SAN MIGUEL
PALE PILSEN these many years certainly know their beer too well to be deceived by a newcomer in
the market. If they gravitate to ABI's cheaper beer, it will not be because they are confused or
deceived, but because they find the competing product to their taste.
Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of Appeals
and Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that:

. . . to determine whether a trademark has been infringed, we must consider the mark
as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it.

That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases
of infringement and unfair competition, the courts should "take into consideration several factors
which would affect its conclusion, to wit: the age, training and education of the usual purchaser, the
nature and cost of the article, whether the article is bought for immediate consumption and also the
conditions under which it is usually purchased" (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household item which is bought off the store
shelves by housewives and house help who, if they are illiterate and cannot identify the product by
name or brand, would very likely identify it by mere recollection of its appearance. Since the
competitor, Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for its catsup
(despite the warning embossed on the bottles: "Del Monte Corporation. Not to be refilled.") but also
used labels which were "a colorable imitation" of Del Monte's label, we held that there was
infringement of Del Monte's trademark and unfair competition by Sunshine.

Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf but
ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by ABI's mark:
"BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a bulging neck to
differentiate it from SMC's bottle, and prints ABI's name in three (3) places on said bottle (front, back
and bottle cap) to prove that it has no intention to pass of its "BEER" as "SAN MIGUEL."

There is no confusing similarity between the competing beers for the name of one is "SAN MIGUEL"
while the competitor is plain "BEER" and the points of dissimilarity between the two outnumber their
points of similarity.

Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the
latter's SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes
with the latter in the open market, that competition is neither unfair nor fraudulent. Hence, we must
deny SMC's prayer to suppress it.

WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The decision
and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set aside and that of the
trial court is REINSTATED and AFFIRMED. Costs against the private respondent.

SO ORDERED.
PROSOURCE INTERNATIONAL, INC., G.R. No. 180073

Petitioner,
Present:

CORONA, J.,

Chairperson,

CHICO-NAZARIO,
- versus -
VELASCO, JR.,

NACHURA, and

PERALTA, JJ.

Promulgated:
HORPHAG RESEARCH
MANAGEMENT SA,

Respondent. November 25, 2009

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Court of Appeals (CA) Decision[1] dated July
27, 2007 and Resolution[2] dated October 15, 2007 in CA-G.R. CV No. 87556. The
assailed decision affirmed the Regional Trial Court (RTC)[3] Decision[4] dated
January 16, 2006 and Order[5] dated May 3, 2006 in Civil Case No. 68048; while
the assailed resolution denied petitioners motion for reconsideration.

The facts are as follows:

Respondent Horphag Research Management SA is a corporation duly organized


and existing under the laws of Switzerland and the owner[6] of trademark
PYCNOGENOL, a food supplement sold and distributed by Zuellig Pharma
Corporation. Respondent later discovered that petitioner Prosource International,
Inc. was also distributing a similar food supplement using the mark PCO-GENOLS
since 1996.[7] This prompted respondent to demand that petitioner cease and desist
from using the aforesaid mark.[8]

Without notifying respondent, petitioner discontinued the use of, and withdrew
from the market, the products under the name PCO-GENOLS as of June 19,
2000. It, likewise, changed its mark from PCO-GENOLS to PCO-PLUS.[9]

On August 22, 2000, respondent filed a Complaint[10] for Infringement of


Trademark with Prayer for Preliminary Injunction against petitioner, praying that
the latter cease and desist from using the brand PCO-GENOLS for being
confusingly similar with respondents trademark PYCNOGENOL. It, likewise,
prayed for actual and nominal damages, as well as attorneys fees.[11]
In its Answer,[12] petitioner contended that respondent could not file the
infringement case considering that the latter is not the registered owner of the
trademark PYCNOGENOL, but one Horphag Research Limited. It, likewise,
claimed that the two marks were not confusingly similar. Finally, it denied
liability, since it discontinued the use of the mark prior to the institution of the
infringement case. Petitioner thus prayed for the dismissal of the complaint. By
way of counterclaim, petitioner prayed that respondent be directed to pay
exemplary damages and attorneys fees.[13]

During the pre-trial, the parties admitted the following:

1. Defendant [petitioner] is a corporation duly organized and existing


under the laws of the Republic of the Philippines with business address
at No. 7 Annapolis Street, Greenhills, San Juan, Metro Manila;

2. The trademark PYCNOGENOL of the plaintiff is duly registered with


the Intellectual Property Office but not with the Bureau of Food and
Drug (BFAD).

3. The defendants product PCO-GENOLS is duly registered with the


BFAD but not with the Intellectual Property Office (IPO).

4. The defendant corporation discontinued the use of and had withdrawn


from the market the products under the name of PCO-GENOLS as
of June 19, 2000, with its trademark changed from PCO-GENOLS to
PCO-PLUS.

5. Plaintiff corporation sent a demand letter to the defendant dated 02


June 2000.[14]
On January 16, 2006, 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. The trial court, likewise, concluded that the marks, when read,
sound similar, and thus confusingly similar especially since they both refer to food
supplements. The court added that petitioners liability was not negated by its act of
pulling out of the market the products bearing the questioned mark since the fact
remains that from 1996 until June 2000, petitioner had infringed respondents
product by using the trademark PCO-GENOLS. As respondent manifested that it
was no longer interested in recovering actual damages, petitioner was made to
answer only for attorneys fees amounting to P50,000.00.[15] For lack of sufficient
factual and legal basis, the court dismissed petitioners counterclaim. Petitioners
motion for reconsideration was likewise denied.

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. It also found just and equitable the award
of attorneys fees especially since respondent was compelled to litigate.[16]

Hence, this petition, assigning the following errors:

I. THAT THE COURT OF APPEALS ERRED IN AFFRIMING


THE RULING OF THE LOWER [COURT] THAT
RESPONDENTS TRADEMARK P[YC]NOGENOLS (SIC)
WAS INFRINGED BY PETITIONERS PCO-GENOLS.

II. THAT THE COURT OF APPEALS ERRED IN AFFIRMING


THE AWARD OF ATTORNEYS FEES IN FAVOR OF
RESPONDENT HORPHAG RESEARCH MANAGEMENT S.A.
IN THE AMOUNT OF Php50,000.00.[17]
The petition is without merit.

It must be recalled that respondent filed a complaint for trademark


infringement against petitioner for the latters use of the mark PCO-GENOLS
which the former claimed to be confusingly similar to its trademark
PYCNOGENOL. Petitioners use of the questioned mark started in 1996 and ended
in June 2000. The instant case should thus be decided in light of the provisions of
Republic Act (R.A.) No. 166[18] for the acts committed until December 31, 1997,
and R.A. No. 8293[19] for those committed from January 1, 1998 until June 19,
2000.

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
by others. Inarguably, a trademark deserves protection.[20]

Section 22 of R.A. No. 166, as amended, and Section 155 of R.A. No. 8293
define what constitutes trademark infringement, as follows:

Sec. 22. Infringement, what constitutes. Any person who shall use,
without the consent of the registrant, any reproduction, counterfeit, copy
or colorable imitation of any registered mark or tradename in connection
with the sale, offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source
or origin of such goods or services, or identity of such business; or
reproduce, counterfeit, copy of colorably imitate any such mark or
tradename and apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such
goods, business, or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided.

Sec. 155. Remedies; Infringement. Any person who shall, without


the consent of the owner of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or


colorable imitation of a registered mark or the same container or a
dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services
on or in connection with which such use is likely to cause confusion, or
to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a


registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with the sale, offering for sale,
distribution, or advertising of goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake, or to
deceive, shall be liable in a civil action for infringement by the registrant
for the remedies hereinafter set forth: Provided, That infringement takes
place at the moment any of the acts stated in Subsection 155.1 or this
subsection are committed regardless of whether there is actual sale of
goods or services using the infringing material.
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A,
and 20 thereof, 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) [It] 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) [T]he trademark is used for identical or similar goods[;] and

(d) [S]uch act is done without the consent of the trademark registrant or
assignee.[21]

On the other hand, the elements of infringement under R.A. No. 8293 are as
follows:

(1) The trademark being infringed is registered in the Intellectual Property


Office; however, in infringement of trade name, the same need not be
registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or
colorably imitated by the infringer;

(3) The infringing mark or trade name is used in connection with the sale,
offering for sale, or advertising of any goods, business or services; or the
infringing mark or trade name 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;

(4) The use or application of the infringing mark or trade name is likely to
cause confusion or mistake or to deceive purchasers or others as to the
goods or services themselves or as to the source or origin of such goods or
services or the identity of such business; and

(5) It is without the consent of the trademark or trade name owner or the
assignee thereof.[22]

In the foregoing enumeration, it is the element of likelihood of confusion


that is the gravamen of trademark infringement. But likelihood of confusion is a
relative concept.The particular, and sometimes peculiar, circumstances of each
case are determinative of its existence. Thus, in trademark infringement cases,
precedents must be evaluated in the light of each particular case.[23]

In determining similarity and likelihood of confusion, jurisprudence has


developed two 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 and deception, thus constituting
infringement.[24] 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.[25] 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.[26]

In contrast, 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.[27] The discerning eye of the observer must focus
not only on the predominant words 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.[28]

The trial and appellate courts applied the Dominancy Test in determining
whether there was a confusing similarity between the marks PYCNOGENOL and
PCO-GENOL. Applying the test, the trial court found, and the CA affirmed, that:

Both the word[s] PYCNOGENOL and PCO-GENOLS 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 thru combination with another
word or phrase such as PYCNOGENOL, Exhibits A to A-3.
Furthermore, although the letters Y between P and C, N between O and
C and S after L are missing in the [petitioners] mark PCO-GENOLS,
nevertheless, 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.[29]

We find no cogent reason to depart from such conclusion.

This is not the first time that the Court takes into account the aural effects of
the words and letters contained in the marks in determining the issue of confusing
similarity. In Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et al.,[30] cited
in McDonalds Corporation v. L.C. Big Mak Burger, Inc.,[31] the Court held:

The following random list of confusingly similar sounds in the


matter of trademarks, culled from Nims, Unfair Competition and Trade
Marks, 1947, Vol. 1, will reinforce our view that SALONPAS and
LIONPAS are confusingly similar in sound: Gold Dust and Gold Drop;
Jantzen and Jass-Sea; Silver Flash and Supper Flash; Cascarete and
Celborite; Celluloid and Cellonite; Chartreuse and Charseurs; Cutex and
Cuticlean; Hebe and Meje; Kotex and Femetex; Zuso and Hoo Hoo.
Leon Amdur, in his book Trade-Mark Law and Practice, pp. 419-421,
cities, as coming within the purview of the idem sonans rule, Yusea and
U-C-A, Steinway Pianos and Steinberg Pianos, and Seven-Up and
Lemon-Up. In Co Tiong vs. Director of Patents, this Court
unequivocally said that Celdura and Cordura are confusingly similar in
sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that
the name Lusolin is an infringement of the trademark Sapolin, as the
sound of the two names is almost the same.[32]

Finally, we reiterate that the issue of trademark infringement is factual, with


both the trial and appellate courts finding the allegations of infringement to be
meritorious. As we have consistently held, factual determinations of the trial court,
concurred in by the CA, are final and binding on this Court.[33] Hence, petitioner is
liable for trademark infringement.
We, likewise, sustain the award of attorneys fees in favor
of respondent. Article 2208 of the Civil Code enumerates the instances when
attorneys fees are awarded, viz.:

Art. 2208. In the absence of stipulation, attorneys fees and


expenses of litigation, other than judicial costs, cannot be recovered,
except:

1. When exemplary damages are awarded;

2. When the defendants act or omission has compelled the


plaintiff to litigate with third persons or to incur expenses to
protect his interest;

3. In criminal cases of malicious prosecution against the


plaintiff;

4. In case of a clearly unfounded civil action or proceeding


against the plaintiff;

5. Where the defendant acted in gross and evident bad faith in


refusing to satisfy the plaintiffs plainly valid, just and
demandable claim;

6. In actions for legal support;


7. In actions for the recovery of wages of household helpers,
laborers and skilled workers;

8. In actions for indemnity under workmens compensation and


employers liability laws;

9. In a separate civil action to recover civil liability arising from


a crime;

10. When at least double judicial costs are awarded;

11. In any other case where the court deems it just and equitable
that attorneys fees and expenses of litigation should be
recovered.

In all cases, the attorneys fees and expenses of litigation must be


reasonable.

As a rule, an award of attorneys fees should be deleted where the award of


moral and exemplary damages is not granted.[34] Nonetheless, attorneys fees may
be awarded where the court deems it just and equitable even if moral and
exemplary damages are unavailing.[35] In the instant case, we find no reversible
error in the grant of attorneys fees by the CA.
WHEREFORE, premises considered, the petition is DENIED for lack of
merit. The Court of Appeals Decision dated July 27, 2007 and its Resolution dated
October 15, 2007 in CA-G.R. CV No. 87556 are AFFIRMED.
SO ORDERED.
G.R. No. L-78325 January 25, 1990

DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION, petitioners,


vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING INDUSTRIES, respondents.

Bito, Misa & Lozada for petitioners.


Reynaldo F. Singson for private respondent.

CRUZ, J.:

The petitioners are questioning the decision of the respondent court upholding the dismissal by the
trial court of their complaint against the private respondent for infringement of trademark and unfair
competition.

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines. Both the Philippines and the United States
are signatories to the Convention of Paris of September 27, 1965, which grants to the nationals of
the parties rights and advantages which their own nationals enjoy for the repression of acts of
infringement and unfair competition.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under
the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to manufacture,
distribute and sell in the Philippines various agricultural products, including catsup, under the Del
Monte trademark and logo.

On October 27,1965, Del Monte authorized Philpack to register with the Philippine Patent Office the
Del Monte catsup bottle configuration, for which it was granted Certificate of Trademark Registration
No. SR-913 by the Philippine Patent Office under the Supplemental Register. 1 On November 20,
1972, Del Monte also obtained two registration certificates for its trademark "DEL MONTE" and its
logo. 2

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by


the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture, packing, distribution
and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup.3

This logo was registered in the Supplemental Register on September 20, 1983. 4

The product itself was contained in various kinds of bottles, including the Del Monte bottle, which the
private respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively designed bottles and a
logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain of legal
action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte filed a
complaint against the private respondent for infringement of trademark and unfair competition, with a
prayer for damages and the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long 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. 6

After trial, the Regional Trial Court of Makati dismissed the complaint. It held that there were
substantial differences between the logos or trademarks of the parties; that the defendant had
ceased using the petitioners' bottles; and that in any case the defendant became the owner of the
said bottles upon its purchase thereof from the junk yards. Furthermore, the complainants had failed
to establish the defendant's malice or bad faith, which was an essential element of infringement of
trademark or unfair competition. 7

This decision was affirmed in toto by the respondent court, which is now faulted in this petition
for certiorari under Rule 45 of the Rules of Court.

Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in part as follows:

Sec. 22. Infringement, what constitutes. Any person who shall use, without the consent of
the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered
mark or trade-name in connection with the sale, offering for sale, or advertising of any goods,
business or services on or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin of such goods or
services or identity of such business; or reproduce, counterfeit copy or colorably imitate any
such mark or trade name and apply such reproduction, counterfeit copy or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.

Sec. 29 of the same law states as follows:

Sec. 29. Unfair competition, rights and remedies. 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 mark or tradename 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. Such a person shall have the remedies provided in section
twenty- three, Chapter V hereof.

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.

In particular, and without in any way limiting the scope of unfair competition, the following
shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would likely 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 ally 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.

To arrive at a proper resolution of this case, it is important to bear in mind the following
distinctions between infringement of trademark and 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. 8

In the challenged decision, the respondent court cited the following test laid down by this
Court in a number of cases:

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 observer must focus not
only on the predorninant words but also on the other features appearing on both
labels. 9

and applying the same, held that there was no colorable imitation of the petitioners'
trademark and logo by the private respondent. The respondent court agreed with the findings
of the trial court that:

In order to resolve the said issue, the Court now attempts to make a comparison of the two products,
to wit:

1. As to the shape of label or make:

Del Monte: Semi-rectangular with a crown or tomato shape design on top of the
rectangle.

Sunshine: Regular rectangle.

2. As to brand printed on label:

Del Monte: Tomato catsup mark.


Sunshine: Fruit catsup.

3. As to the words or lettering on label or mark:

Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.

Sunshine: Sunshine fruit catsup is clearly indicated "made in the Philippines by


Sunshine Sauce Manufacturing Industries" No. 1 Del Monte Avenue, Malabon, Metro
Manila.

4. As to color of logo:

Del Monte: Combination of yellow and dark red, with words "Del Monte Quality" in
white.

Sunshine: White, light green and light red, with words "Sunshine Brand" in yellow.

5. As to shape of logo:

Del Monte: In the shape of a tomato.

Sunshine: Entirely different in shape.

6. As to label below the cap:

Del Monte: Seal covering the cap down to the neck of the bottle, with picture of
tomatoes with words "made from real tomatoes."

Sunshine: There is a label below the cap which says "Sunshine Brand."

7. As to the color of the products:

Del Monte: Darker red.

Sunshine: Lighter than Del Monte.

While the Court does recognize these distinctions, it does not agree with the conclusion that there
was no infringement or unfair competition. It seems to us that the lower courts have been so pre-
occupied with the details that they have not seen the total picture.

It has been correctly held that side-by-side comparison is not the final test of similarity. 10 Such
comparison requires a careful scrutiny to determine in what points the labels of the products differ,
as was done by the trial judge. The ordinary buyer does not usually make such scrutiny nor does he
usually have the time to do so. The average shopper is usually in a hurry and does not inspect every
product on the shelf as if he were browsing in a library. Where the housewife has to return home as
soon as possible to her baby or the working woman has to make quick purchases during her off
hours, she is apt to be confused by similar labels even if they do have minute differences. The male
shopper is worse as he usually does not bother about such distinctions.
The question is not whether the two articles are distinguishable by their label when set side by side
but whether the general confusion made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his confounding it with the original. 11 As
observed in several cases, the general impression of the ordinary purchaser, buying under the
normally prevalent conditions in trade and giving the attention such purchasers usually give in
buying that class of goods is the touchstone. 12

It has been held that in making purchases, the consumer must depend upon his recollection of the
appearance of the product which he intends to purchase. 13 The buyer having in mind the mark/label
of the respondent must rely upon his memory of the petitioner's mark. 14 Unlike the judge who has
ample time to minutely examine the labels in question in the comfort of his sala, the ordinary
shopper does not enjoy the same opportunity.

A number of courts have held that to determine whether a trademark has been infringed, we must
consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it. 15 The court therefore should be guided by its first
impression, 16 for a buyer acts quickly and is governed by a casual glance, the value of which may be
dissipated as soon as the court assumes to analyze carefully the respective features of the mark. 17

It has also been held that it is not the function of the court in cases of infringement and unfair
competition to educate purchasers but rather to take their carelessness for granted, and to be ever
conscious of the fact that marks need not be identical. A confusing similarity will justify the
intervention of equity. 18 The judge must also be aware of the fact that usually a defendant in cases of
infringement does not normally copy but makes only colorable changes. 19Well has it been said that
the most successful form of copying is to employ enough points of similarity to confuse the public
with enough points of difference to confuse the courts. 20

We also note that the respondent court failed to take into consideration several factors which should
have affected its conclusion, to wit: age, training and education of the usual purchaser, the nature
and cost of the article, whether the article is bought for immediate consumption and also the
conditions under which it is usually purchased . 21Among these, what essentially determines the
attitude of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be
sure, a person who buys a box of candies will not exercise as much care as one who buys an
expensive watch. As a general rule, an ordinary buyer does not exercise as much prudence in
buying an article for which he pays a few centavos as he does in purchasing a more valuable
thing. 22 Expensive and valuable items are normally bought only after deliberate, comparative and
analytical investigation. But mass products, low priced articles in wide use, and matters of everyday
purchase requiring frequent replacement are bought by the casual consumer without great care. 23 In
this latter category is catsup.

At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label is a
colorable imitation of the Del Monte trademark. The predominant colors used in the Del Monte label
are green and red-orange, the same with Sunshine. The word "catsup" in both bottles is printed in
white and the style of the print/letter is the same. Although the logo of Sunshine is not a tomato, the
figure nevertheless approximates that of a tomato.

As previously stated, the person who infringes a trade mark does not normally copy out but only
makes colorable changes, employing enough points of similarity to confuse the public with enough
points of differences to confuse the courts. 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. When as in this case, 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 .24

It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as between
a newcomer who by the confusion has nothing to lose and everything to gain and one who by honest
dealing has already achieved favor with the public, any doubt should be resolved against the
newcomer inasmuch as the field from which he can select a desirable trademark to indicate the
origin of his product is obviously a large one. 25

Coming now to the second issue, we find that the private respondent is not guilty of infringement for
having used the Del Monte bottle. The reason is that the configuration of the said bottle was merely
registered in the Supplemental Register. In the case of Lorenzana v. Macagba, 26 we declared that:

(1) Registration in the Principal Register gives rise to a presumption of the validity of the
registration, the registrant's ownership of the mark and his right to the exclusive use thereof.
There is no such presumption in the registration in the Supplemental Register.

(2) Registration in the Principal Register is limited to the actual owner of the trademark and
proceedings therein on the issue of ownership which may be contested through opposition or
interference proceedings or, after registration, in a petition for cancellation.

Registration in the Principal Register is constructive notice of the registrant's claim of


ownership, while registration in the Supplemental Register is merely proof of actual use of
the trademark and notice that the registrant has used or appropriated it. It is not subject to
opposition although it may be cancelled after the issuance. Corollarily, registration in the
Principal Register is a basis for an action for infringement while registration in the
Supplemental Register is not.

(3) In applications for registration in the Principal Register, publication of the application is
necessary. This is not so in applications for registrations in the Supplemental Register.

It can be inferred from the foregoing that although Del Monte has actual use of the bottle's
configuration, the petitioners cannot claim exclusive use thereof because it has not been registered
in the Principal Register. However, we find that 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.

The Court observes that the reasons given by the respondent court in resolving the case in favor of
Sunshine are untenable. First, it declared that the registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's product. Second, it held that the Sunshine label
was not improper because the Bureau of Patent presumably considered other trademarks before
approving it. Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where this Court declared
that selling oil in containers of another with markings erased, without intent to deceive, was not
unfair competition.

Regarding the fact of registration, it is to be noted that the Sunshine label was registered not in the
Principal Register but only in the Supplemental Register where the presumption of the validity of the
trademark, the registrant's ownership of the mark and his right to its exclusive use are all absent.
Anent the assumption that the Bureau of Patent had considered other existing patents, it is reiterated
that since registration was only in the Supplemental Register, this did not vest the registrant with the
exclusive right to use the label nor did it give rise to the presumption of the validity of the registration.

On the argument that no unfair competition was committed, the Shell Case is not on all fours with
the case at bar because:

(1) In Shell, the absence of intent to deceive was supported by the fact that the respondent
therein, before marketing its product, totally obliterated and erased the brands/mark of the
different companies stenciled on the containers thereof, except for a single isolated
transaction. The respondent in the present case made no similar effort.

(2) In Shell, what was involved was a single isolated transaction. Of the many drums used,
there was only one container where the Shell label was not erased, while in the case at
hand, the respondent admitted that it made use of several Del Monte bottles and without
obliterating the embossed warning.

(3) In Shell, the product of respondent was sold to dealers, not to ultimate consumers. As a
general rule, dealers are well acquainted with the manufacturer from whom they make their
purchases and since they are more experienced, they cannot be so easily deceived like the
inexperienced public. There may well be similarities and imitations which deceive all, but
generally the interests of the dealers are not regarded with the same solicitude as are the
interests of the ordinary consumer. For it is the form in which the wares come to the final
buyer that is of significance. 28

As Sunshine's label is an infringement of the Del Monte's trademark, law and equity call for the
cancellation of the private respondent's registration and withdrawal of all its products bearing the
questioned label from the market. With regard to the use of Del Monte's bottle, the same constitutes
unfair competition; hence, the respondent should be permanently enjoined from the use of such
bottles.

The court must rule, however, that the damage prayed for cannot be granted because the petitioner
has not presented evidence to prove the amount thereof. Section 23 of R.A. No. 166 provides:

Sec. 23. Actions and damages and injunction for infringement. Any person entitled to the
exclusive use of a registered mark or trade name may recover damages in a civil action from
any person who infringes his rights, and the measure of the damages suffered shall be either
the reasonable profit which the complaining party would have made, had the defendant not
infringed his said rights or the profit which the defendant actually made out of the
infringement, or in the event such measure of damages cannot be readily ascertained with
reasonable certainty the court may award as damages reasonable percentage based upon
the amount of gross sales of the defendant or the value of the services in connection with
which the mark or trade name was used in the infringement of the rights of the complaining
party. In cases where actual intent to mislead the public or to defraud the complaining party
shall be shown, in the discretion of the court, the damages may be doubled.

The complaining party, upon proper showing may also be granted injunction. 1wphi 1

Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil Code,
which provides:
Art. 2222. The court may award nominal damages in every obligation arising from any
source enumerated in Art. 1157, or in every case where any property right has been invaded.

Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal damages
in the amount of Pl,000.00.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated December 24,
1986 and the Resolution dated April 27,1987, are REVERSED and SET ASIDE and a new judgment
is hereby rendered:

(1) Canceling the private respondent's Certificate of Register No. SR-6310 and permanently
enjoining the private respondent from using a label similar to that of the petitioners.

(2) Prohibiting the private respondent from using the empty bottles of the petitioners as
containers for its own products.

(3) Ordering the private respondent to pay the petitioners nominal damages in the amount of
Pl,000.00, and the costs of the suit.

SO ORDERED.
G.R. No. L-32747 November 29, 1984

FRUIT OF THE LOOM, INC., petitioner,


vs.
COURT OF APPEALS and GENERAL GARMENTS CORPORATION, respondents.

Lichauco, Picazo & Agcaoli Law Office for petitioner.

MAKASIAR, J.:

This is a petition for review on certiorari of the decision dated October 8, 1970 of the former Court of
Appeals reversing the decision of the defunct Court of First Instance of Manila, Branch XIV, ordering
the cancellation of private respondent's registration of the trademark FRUIT FOR EVE, enjoining it
permanently from using trademark and ordering it to pay herein petitioner P10,000.00 as attorney's
fees.

Petitioner, a corporation duly organized and existing under the laws of the State of Rhode Island,
United States of America, is the registrant of a trademark, FRUIT OF THE LOOM, in the Philippines
Patent Office and was issued two Certificates of Registration Nos. 6227 and 6680, on November 29,
1957 and July 26, 1958, respectively. The classes of merchandise covered by Registration
Certificate No. 6227 are, among others, men's, women's and children's underwear, which includes
women's panties and which fall under class 40 in the Philippine Patent Office's classification of
goods. Registration Certificate No. 6680 covers knitted, netted and textile fabrics.

Private respondent, a domestic corporation, is the registrant of a trademark FRUIT FOR EVE in the
Philippine Patent Office and was issued a Certificate of Registration No. 10160, on January 10, 1963
covering garments similar to petitioner's products like women's panties and pajamas.

On March 31, 1965 petitioner filed before the lower court, a complaint for infringement of trademark
and unfair competition against the herein private respondent. Petitioner principally alleged in the
complaint that private respondent's trademark FRUIT FOR EVE is confusingly similar to its
trademark FRUIT OF THE LOOM used also on women's panties and other textile products.
Furthermore, it was also alleged therein that the color get-up and general appearance of private
respondent's hang tag consisting of a big red apple is a colorable imitation to the hang tag of
petitioner.

On April 19, 1965, private respondent filed an answer invoking the special defense that its registered
trademark is not confusingly similar to that of petitioner as the latter alleged. Likewise, private
respondent stated that the trademark FRUIT FOR EVE is being used on ladies' panties and pajamas
only whereas petitioner's trademark is used even on men's underwear and pajamas.

At the pre-trial on May 5, 1965, the following admissions were made: (1) That the trademark FRUIT
OF THE LOOM has been registered with the Bureau of Patents and it does not bear the notice 'Reg.
Phil. Patent Off.', and (2) That the trademark FRUIT FOR EVE has been registered with the Bureau
of Patents and it bears the notice "Reg. Phil. Patent Off." and (3) That at the time of its registration,
plaintiff filed no opposition thereto.

After trial, judgment was rendered by the lower court in favor of herein petitioner, the dispositive
portion of which reads as follows:
Judgment is, therefore, rendered ordering the Bureau of Patents to cancel the
registration of the Trademark "Fruit for Eve", permanently enjoining Defendant from
using the trademark "Fruit for Eve", ordering Defendant to pay plaintiff the sum of
P10,000.00 as attorney's fees and to pay the costs.

Both parties appealed to the former Court of Appeals, herein petitioner's appeal being centered on
the failure of the trial court to award damages in its favor. Private respondent, on the other hand,
sought the reversal of the lower court's decision.

On October 8, 1970, the former Court of Appeals, as already stated, rendered its questioned
decision reversing the judgment of the lower court and dismissing herein petitioner's complaint.

Petitioner's motion for reconsideration having been denied, the present petition was filed before this
Court.

The first and second arguments advanced by petitioner are that the respondent court committed an
error in holding that the word FRUIT, being a generic word, is not capable of exclusive appropriation
by petitioner and that the registrant of a trademark is not entitled to the exclusive use of every word
of his mark. Otherwise stated, petitioner argues that the respondent court committed an error in
ruling that petitioner cannot appropriate exclusively the word FRUIT in its trademark FRUIT OF THE
LOOM.

The third and fourth arguments submitted by petitioner which We believe is the core of the present
controversy, are that the respondent court erred in holding that there is no confusing similarity in
sound and appearance between the two trademarks in question. According to petitioner, the
prominent and dominant features in both of petitioner's and private respondent's trademark are the
word FRUIT and the big red apple design; that ordinary or average purchasers upon seeing the word
FRUIT and the big red apple in private respondent's label or hang tag would be led to believe that
the latter's products are those of the petitioner, The resolution of these two assigned errors in the
negative will lay to rest the matter in litigation and there is no need to touch on the other issues
raised by petitioner. Should the said questions be resolved in favor of petitioner, then the other
matters may be considered.

Petitioner, on its fifth assigned error, blames the former Court of Appeals for not touching the
question of the fraudulent registration of private respondent's trademark FRUIT FOR EVE. As may
be gleaned from the questioned decision, respondent court did not pass upon the argument of
petitioner that private respondent obtained the registration of its trademark thru fraud or
misrepresentation because of the said court's findings that there is no confusing similarity between
the two trademarks in question. Hence, said court has allegedly nothing to determine as to who has
the right to registration because both parties have the right to have their respective trademarks
registered.

Lastly, petitioner asserts that respondent court should have awarded damages in its favor because
private respondent had clearly profited from the infringement of the former's trademark.

The main issue involved in this case is whether or not private respondent's trademark FRUIT FOR
EVE and its hang tag are confusingly similar to petitioner's trademark FRUIT OF THE LOOM and its
hang tag so as to constitute an infringement of the latter's trademark rights and justify the
cancellation of the former.

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 (Co Tiong Sa vs. Director of Patents, 95 Phil. 1; Alhambra Cigar & Cigarette Co. vs.
Mojica, 27 Phil. 266; Sapolin Co. vs. Balmaceda, 67 Phil. 705; La Insular vs. Jao Oge, 47 Phil. 75).

In cases of this nature, there can be no better evidence as to whether there is a confusing similarity
in the contesting trademarks than the labels or hang tags themselves. A visual presentation of the
labels or hang tags is the best argument for one or the other, hence, We are reproducing hereunder
pictures of the hang tags of the products of the parties to the case. The pictures below are part of the
documentary evidence appearing on page 124 of the original records.

Petitioner asseverates in the third and fourth assignment of errors, which, as We have said,
constitute the main argument, that the dominant features of both trademarks is the word FRUIT. In
determining whether the trademarks are confusingly similar, a comparison of the words is not the
only determinant factor. The trademarks in their entirety as they appear in their respective labels or
hang tags must also be considered in relation to the goods to which they are attached. The
discerning eye of the observer must focus not only on the predominant words but also on the other
features appearing in both labels in order that he may draw his conclusion whether one is
confusingly similar to the other (Bristol Myers Co. vs. Director of Patents, 17 SCRA 131).

In the trademarks FRUIT OF THE LOOM and FRUIT FOR EVE, the lone similar word is FRUIT. WE
agree with the respondent court that by mere pronouncing the two marks, it could hardly be said that
it will provoke a confusion, as to mistake one for the other. Standing by itself, FRUIT OF THE LOOM
is wholly different from FRUIT FOR EVE. WE do not agree with petitioner that the dominant feature
of both trademarks is the word FRUIT for even in the printing of the trademark in both hang tags, the
word FRUIT is not at all made dominant over the other words.

As to the design and coloring scheme of the hang tags, We believe that while there are similarities in
the two marks like the red apple at the center of each mark, We also find differences or
dissimilarities which are glaring and striking to the eye such as:

1. The shape of petitioner's hang tag is round with a base that looks like a paper
rolled a few inches in both ends; while that of private respondent is plain rectangle
without any base.

2. The designs differ. Petitioner's trademark is written in almost semi-circle while that
of private respondent is written in straight line in bigger letters than petitioner's.
Private respondent's tag has only an apple in its center but that of petitioner has also
clusters of grapes that surround the apple in the center.

3. The colors of the hang tag are also very distinct from each other. Petitioner's hang
tag is fight brown while that of respondent is pink with a white colored center piece.
The apples which are the only similarities in the hang tag are differently colored.
Petitioner's apple is colored dark red, while that of private respondent is light red.

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 hang 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 (Carnation Co. vs. California Growers Wineries, 97 F. 2d 80; Hyram
Walke and Sons vs. Penn-Maryland Corp., 79 F. 2d 836) to be able to see the obvious differences
between the two trademarks in question. Furthermore, We believe that a person who buys
petitioner's products and starts to have a liking for it, will not get confused and reach out for private
respondent's products when she goes to a garment store.

These findings in effect render immaterial the other errors assigned by petitioner which are premised
on the assumption that private respondent's trademark FRUIT FOR EVE had infringed petitioner's
trademark FRUIT OF THE LOOM.

WHEREFORE, THE DECISION APPEALED FROM IS AFFIRMED. COSTS AGAINST


PETITIONER.

SO ORDERED.
BERRIS AGRICULTURAL G.R. No. 183404

CO., INC.,
Present:
Petitioner,

VELASCO, JR., J.,*

NACHURA,**

Acting Chairperson,
- versus -
LEONARDO-DE CASTRO,***

BRION,**** and

MENDOZA, JJ.

Promulgated:
NORVY ABYADANG,

Respondent.
October 13, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:
This petition for review[1] on certiorari under Rule 45 of the Rules of Court seeks
the reversal of the Decision dated April 14, 2008[2] and the Resolution dated June
18, 2008[3]of the Court of Appeals (CA) in CA-G.R. SP No. 99928.

The antecedents

On January 16, 2004, respondent Norvy A. Abyadang (Abyadang), proprietor of


NS Northern Organic Fertilizer, with address at No. 43 Lower QM, Baguio City,
filed with the Intellectual Property Office (IPO) a trademark application for the
mark NS D-10 PLUS for use in connection with Fungicide (Class 5) with active
ingredient 80% Mancozeb. The application, under Application Serial No. 4-2004-
00450, was given due course and was published in the IPO e-Gazette for
opposition on July 28, 2005.

On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with business
address in Barangay Masiit, Calauan, Laguna, filed with the IPO Bureau of Legal
Affairs (IPO-BLA) a Verified Notice of Opposition[4] against the mark under
application allegedly because NS D-10 PLUS is similar and/or confusingly similar
to its registered trademark D-10 80 WP, also used for Fungicide (Class 5) with
active ingredient 80% Mancozeb. The opposition was docketed as IPC No. 14-
2005-00099.

After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-


Abelardo (Director Abelardo) of the IPO-BLA issued Decision No. 2006-
24[5] (BLA decision), the dispositive portion of which reads
WHEREFORE, viewed in the light of all the foregoing, this
Bureau finds and so holds that Respondent-Applicants mark NS D-10
PLUS is confusingly similar to the Opposers mark and as such, the
opposition is hereby SUSTAINED. Consequently, trademark application
bearing Serial No. 4-2004-00450 for the mark NS D-10 PLUS filed on
January 16, 2004 by Norvy A. Ab[yada]ng covering the goods fungicide
under Class 5 of the International Classification of goods is, as it is
hereby, REJECTED.

Let the filewrapper of the trademark NS D-10 PLUS subject


matter under consideration be forwarded to the Administrative, Financial
and Human Resources Development Services Bureau (AFHRDSB) for
appropriate action in accordance with this Order with a copy to be
furnished the Bureau of Trademark (BOT) for information and to update
its records.

SO ORDERED.[6]

Abyadang filed a motion for reconsideration, and Berris, in turn, filed its
opposition to the motion.

On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D)[7] (BLA


resolution), denying the motion for reconsideration and disposing as follows

IN VIEW OF THE FOREGOING, the Motion for


Reconsideration filed by the Respondent-Applicant is hereby DENIED
FOR LACK OF MERIT. Consequently, Decision No. 2006-24 dated
April 28, 2006 STANDS.
Let the filewrapper of the trademark NS D-10 PLUS subject
matter under consideration be forwarded to the Bureau of Trademarks
for appropriate action in accordance with this Resolution.

SO ORDERED.[8]

Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of the
Director General, Intellectual Property Philippines (IPPDG), docketed as Appeal
No. 14-06-13.

With the filing of the parties respective memoranda, Director General Adrian S.
Cristobal, Jr. of the IPPDG rendered a decision dated July 20, 2007,[9] ruling as
follows

Wherefore, premises considered[,] the appeal is hereby


DENIED. Accordingly, the appealed Decision of the Director is hereby
AFFIRMED.

Let a copy of this Decision as well as the trademark application


and records be furnished and returned to the Director of Bureau of Legal
Affairs for appropriate action. Further, let also the Directors of the
Bureau of Trademarks, the Administrative, Financial and Human
Resources Development Services Bureau, and the library of the
Documentation, Information and Technology Transfer Bureau be
furnished a copy of this Decision for information, guidance, and records
purposes.

SO ORDERED.[10]
Undeterred, Abyadang filed a petition for review[11] before the CA.
In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It held

In sum, the petition should be granted due to the following


reasons: 1) petitioners mark NS D-10 PLUS is not confusingly similar
with respondents trademark D-10 80 WP; 2) respondent failed to
establish its ownership of the mark D-10 80 WP and 3) respondents
trademark registration for D-10 80 WP may be cancelled in the present
case to avoid multiplicity of suits.

WHEREFORE, the petition is GRANTED. The decision dated


July 20, 2007 of the IPO Director General in Appeal No. 14-06-13 (IPC
No. 14-2005-00099) is REVERSED and SET ASIDE, and a new one is
entered giving due course to petitioners application for registration of the
mark NS D-10 PLUS, and canceling respondents trademark registration
for D-10 80 WP.

SO ORDERED.[12]

Berris filed a Motion for Reconsideration, but in its June 18, 2008 Resolution, the
CA denied the motion for lack of merit. Hence, this petition anchored on the
following arguments

I. The Honorable Court of Appeals finding that there exists no


confusing similarity between Petitioners and respondents marks is
based on misapprehension of facts, surmise and conjecture and
not in accord with the Intellectual Property Code and applicable
Decisions of this Honorable Court [Supreme Court].

II. The Honorable Court of Appeals Decision reversing and setting


aside the technical findings of the Intellectual Property Office
even without a finding or, at the very least, an allegation of grave
abuse of discretion on the part of said agency is not in accord with
law and earlier pronouncements of this Honorable Court
[Supreme Court].

III. The Honorable Court of Appeals Decision ordering the


cancellation of herein Petitioners duly registered and validly
existing trademark in the absence of a properly filed Petition for
Cancellation before the Intellectual Property Office is not in
accord with the Intellectual Property Code and applicable
Decisions of this Honorable Court [Supreme Court].[13]

The basic law on trademark, infringement, and unfair competition is


Republic Act (R.A.) No. 8293[14] (Intellectual Property Code of the Philippines),
specifically Sections 121 to 170 thereof. It took effect on January 1, 1998. Prior to
its effectivity, the applicable law was R.A. No. 166,[15] as amended.

Interestingly, R.A. No. 8293 did not expressly repeal in its entirety R.A. No.
166, but merely provided in Section 239.1[16] that Acts and parts of Acts
inconsistent with it were repealed. In other words, only in the instances where a
substantial and irreconcilable conflict is found between the provisions of R.A. No.
8293 and of R.A. No. 166 would the provisions of the latter be deemed repealed.
R.A. No. 8293 defines a mark as any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an enterprise and shall include
a stamped or marked container of goods.[17] It also defines a collective mark as any
visible sign designated as such in the application for registration and capable of
distinguishing the origin or any other common characteristic, including the quality
of goods or services of different enterprises which use the sign under the control of
the registered owner of the collective mark.[18]

On the other hand, R.A. No. 166 defines a trademark as any distinctive
word, name, symbol, emblem, sign, or device, or any combination thereof, adopted
and used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by another.[19] A trademark, being a
special property, is afforded protection by law. But for one to enjoy this legal
protection, legal protection ownership of the trademark should rightly be
established.

The ownership of a trademark is acquired by its registration and its actual


use by the manufacturer or distributor of the goods made available to the
purchasing public.Section 122[20] of R.A. No. 8293 provides that the rights in a
mark shall be acquired by means of its valid registration with the IPO. A certificate
of registration of a mark, once issued, constitutes prima facie evidence of the
validity of the registration, of the registrants ownership of the mark, and of the
registrants exclusive right to use the same in connection with the goods or services
and those that are related thereto specified in the certificate.[21] R.A. No. 8293,
however, requires the applicant for registration or the registrant to file a declaration
of actual use (DAU) of the mark, with evidence to that effect, within three (3)
years from the filing of the application for registration; otherwise, the application
shall be refused or the mark shall be removed from the register.[22] In other words,
the prima facie presumption brought about by the registration of a mark may be
challenged and overcome, in an appropriate action, by proof of the nullity of the
registration or of non-use of the mark, except when excused.[23] Moreover, the
presumption may likewise be defeated by evidence of prior use by another
person, i.e., it will controvert a claim of legal appropriation or of ownership based
on registration by a subsequent user.This is because a trademark is a creation of
use and belongs to one who first used it in trade or commerce.[24]

The determination of priority of use of a mark is a question of fact. Adoption


of the mark alone does not suffice. One may make advertisements, issue circulars,
distribute price lists on certain goods, but these alone will not inure to the claim of
ownership of the mark until the goods bearing the mark are sold to the public in the
market. Accordingly, receipts, sales invoices, and testimonies of witnesses as
customers, or orders of buyers, best prove the actual use of a mark in trade and
commerce during a certain period of time.[25]
In the instant case, both parties have submitted proof to support their claim
of ownership of their respective trademarks.

Culled from the records, Berris, as oppositor to Abyadangs application for


registration of his trademark, presented the following evidence: (1) its trademark
application dated November 29, 2002[26] with Application No. 4-2002-0010272;
(2) its IPO certificate of registration dated October 25, 2004,[27] with Registration
No. 4-2002-010272 and July 8, 2004 as the date of registration; (3) a photocopy of
its packaging[28] bearing the mark D-10 80 WP; (4) photocopies of its sales
invoices and official receipts;[29] and (5) its notarized DAU dated April 23,
2003,[30] stating that the mark was first used on June 20, 2002, and indicating that,
as proof of actual use, copies of official receipts or sales invoices of goods using
the mark were attached as Annex B.

On the other hand, Abyadangs proofs consisted of the following: (1) a


photocopy of the packaging[31] for his marketed fungicide bearing mark NS D-10
PLUS; (2) Abyadangs Affidavit dated February 14, 2006,[32] stating among others
that the mark NS D-10 PLUS was his own creation derived from: N for Norvy, his
name; S for Soledad, his wifes name; D the first letter for December, his birth
month; 10 for October, the 10th month of the year, the month of his business name
registration; and PLUS to connote superior quality; that when he applied for
registration, there was nobody applying for a mark similar to NS D-10 PLUS; that
he did not know of the existence of Berris or any of its products; that D-10 could
not have been associated with Berris because the latter never engaged in any
commercial activity to sell D-10 80 WP fungicide in the local market; and that he
could not have copied Berris mark because he registered his packaging with the
Fertilizer and Pesticide Authority (FPA) ahead of Berris; (3) Certification dated
December 19, 2005[33] issued by the FPA, stating that NS D-10 PLUS is owned
and distributed by NS Northern Organic Fertilizer, registered with the FPA since
May 26, 2003, and had been in the market since July 30, 2003; (4) Certification
dated October 11, 2005[34] issued by the FPA, stating that, per monitoring among
dealers in Region I and in the Cordillera Administrative Region registered with its
office, the Regional Officer neither encountered the fungicide with mark D-10 80
WP nor did the FPA provincial officers from the same area receive any report as to
the presence or sale of Berris product; (5) Certification dated March 14,
2006[35] issued by the FPA, certifying that all pesticides must be registered with the
said office pursuant to Section 9[36] of Presidential Decree (P.D.) No. 1144[37] and
Section 1, Article II of FPA Rules and Regulations No. 1, Series of 1977; (6)
Certification dated March 16, 2006[38] issued by the FPA, certifying that the
pesticide D-10 80 WP was registered by Berris on November 12, 2004; and (7)
receipts from Sunrise Farm Supply[39] in La Trinidad, Benguet of the sale of
Abyadangs goods referred to as D-10 and D-10+.

Based on their proffered pieces of evidence, both Berris and Abyadang


claim to be the prior user of their respective marks.

We rule in favor of Berris.

Berris was able to establish that it was using its mark D-10 80 WP since
June 20, 2002, even before it filed for its registration with the IPO on November
29, 2002, as shown by its DAU which was under oath and notarized, bearing the
stamp of the Bureau of Trademarks of the IPO on April 25, 2003,[40] and which
stated that it had an attachment as Annex B sales invoices and official receipts of
goods bearing the mark. Indeed, the DAU, being a notarized document, especially
when received in due course by the IPO, is evidence of the facts it stated and has
the presumption of regularity, entitled to full faith and credit upon its face. Thus,
the burden of proof to overcome the presumption of authenticity and due execution
lies on the party contesting it, and the rebutting evidence should be clear, strong,
and convincing as to preclude all controversy as to the falsity of the
certificate.[41] What is more, the DAU is buttressed by the Certification dated April
21, 2006[42] issued by the Bureau of Trademarks that Berris mark is still valid and
existing.

Hence, we cannot subscribe to the contention of Abyadang that Berris DAU


is fraudulent based only on his assumption that Berris could not have legally used
the mark in the sale of its goods way back in June 2002 because it registered the
product with the FPA only on November 12, 2004. As correctly held by the IPPDG
in its decision on Abyadangs appeal, the question of whether or not Berris violated
P.D. No. 1144, because it sold its product without prior registration with the FPA,
is a distinct and separate matter from the jurisdiction and concern of the IPO. Thus,
even a determination of violation by Berris of P.D. No. 1144 would not controvert
the fact that it did submit evidence that it had used the mark D-10 80 WP earlier
than its FPA registration in 2004.

Furthermore, even the FPA Certification dated October 11, 2005, stating that
the office had neither encountered nor received reports about the sale of the
fungicide D-10 80 WP within Region I and the Cordillera Administrative Region,
could not negate the fact that Berris was selling its product using that mark in
2002, especially considering that it first traded its goods in Calauan, Laguna, where
its business office is located, as stated in the DAU.

Therefore, Berris, as prior user and prior registrant, is the owner of the mark
D-10 80 WP. As such, Berris has in its favor the rights conferred by Section 147 of
R.A. No. 8293, which provides
Sec. 147. Rights Conferred.

147.1. The owner of a registered mark shall have the exclusive


right to prevent all third parties not having the owners consent from
using in the course of trade identical or similar signs or containers for
goods or services which are identical or similar to those in respect of
which the trademark is registered where such use would result in a
likelihood of confusion. In case of the use of an identical sign for
identical goods or services, a likelihood of confusion shall be presumed.

147.2. The exclusive right of the owner of a well-known mark


defined in Subsection 123.1(e) which is registered in the Philippines,
shall extend to goods and services which are not similar to those in
respect of which the mark is registered: Provided, That use of that mark
in relation to those goods or services would indicate a connection
between those goods or services and the owner of the registered
mark: Provided, further, That the interests of the owner of the registered
mark are likely to be damaged by such use.

Now, we confront the question, Is Abyadangs mark NS D-10 PLUS


confusingly similar to that of Berris D-10 80 WP such that the latter can rightfully
prevent the IPO registration of the former?

We answer in the affirmative.

According to Section 123.1(d) of R.A. No. 8293, a mark cannot be


registered if it is identical with a registered mark belonging to a different proprietor
with an earlier filing or priority date, with respect to: (1) the same goods or
services; (2) closely related goods or services; or (3) near resemblance of such
mark as to likely deceive or cause confusion.
In determining similarity and likelihood of confusion, jurisprudence has
developed teststhe Dominancy Test and the Holistic or Totality Test. The
Dominancy Test focuses on the similarity of the prevalent or dominant features of
the competing trademarks that might cause confusion, mistake, and deception in
the mind of the purchasing public.Duplication or imitation is not necessary; neither
is it required that the mark sought to be registered suggests an effort to
imitate. Given more consideration are the aural and visual impressions created by
the marks on the buyers of goods, giving little weight to factors like prices, quality,
sales outlets, and market segments.[43]

In contrast, the Holistic or Totality Test necessitates a consideration of the


entirety of the marks as applied to the products, including the labels and packaging,
in determining confusing similarity. The discerning eye of the observer must focus
not only on the predominant words but also on the other features appearing on both
labels so that the observer may draw conclusion on whether one is confusingly
similar to the other.[44]

Comparing Berris mark D-10 80 WP with Abyadangs mark NS D-10 PLUS,


as appearing on their respective packages, one cannot but notice that both have a
common component which is D-10. On Berris package, the D-10 is written with a
bigger font than the 80 WP. Admittedly, the D-10 is the dominant feature of the
mark. The D-10, being at the beginning of the mark, is what is most remembered
of it. Although, it appears in Berris certificate of registration in the same font size
as the 80 WP, its dominancy in the D-10 80 WP mark stands since the difference in
the form does not alter its distinctive character.[45]

Applying the Dominancy Test, it cannot be gainsaid that Abyadangs NS D-


10 PLUS is similar to Berris D-10 80 WP, that confusion or mistake is more likely
to occur.Undeniably, both marks pertain to the same type of goods fungicide with
80% Mancozeb as an active ingredient and used for the same group of fruits, crops,
vegetables, and ornamental plants, using the same dosage and manner of
application. They also belong to the same classification of goods under R.A. No.
8293. Both depictions of D-10, as found in both marks, are similar in size, such
that this portion is what catches the eye of the purchaser. Undeniably, the
likelihood of confusion is present.

This likelihood of confusion and mistake is made more manifest when the
Holistic Test is applied, taking into consideration the packaging, for both use the
same type of material (foil type) and have identical color schemes (red, green, and
white); and the marks are both predominantly red in color, with the same phrase
BROAD SPECTRUM FUNGICIDE written underneath.

Considering these striking similarities, predominantly the D-10, the buyers


of both products, mainly farmers, may be misled into thinking that NS D-10 PLUS
could be an upgraded formulation of the D-10 80 WP.

Moreover, notwithstanding the finding of the IPPDG that the D-10 is a


fanciful component of the trademark, created for the sole purpose of functioning as
a trademark, and does not give the name, quality, or description of the product for
which it is used, nor does it describe the place of origin, such that the degree of
exclusiveness given to the mark is closely restricted,[46] and considering its
challenge by Abyadang with respect to the meaning he has given to it, what
remains is the fact that Berris is the owner of the mark D-10 80 WP, inclusive of
its dominant feature D-10, as established by its prior use, and prior registration
with the IPO. Therefore, Berris properly opposed and the IPO correctly rejected
Abyadangs application for registration of the mark NS D-10 PLUS.

Verily, the protection of trademarks as intellectual property is intended not


only to preserve the goodwill and reputation of the business established on the
goods bearing the mark through actual use over a period of time, but also to
safeguard the public as consumers against confusion on these goods.[47] On this
matter of particular concern, administrative agencies, such as the IPO, by reason of
their special knowledge and expertise over matters falling under their jurisdiction,
are in a better position to pass judgment thereon. Thus, their findings of fact in that
regard are generally accorded great respect, if not finality by the courts, as long as
they are supported by substantial evidence, even if such evidence might not be
overwhelming or even preponderant. It is not the task of the appellate court to
weigh once more the evidence submitted before the administrative body and to
substitute its own judgment for that of the administrative agency in respect to
sufficiency of evidence.[48]

Inasmuch as the ownership of the mark D-10 80 WP fittingly belongs to


Berris, and because the same should not have been cancelled by the CA, we
consider it proper not to belabor anymore the issue of whether cancellation of a
registered mark may be done absent a petition for cancellation.

WHEREFORE, the petition is GRANTED. The assailed Decision dated


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

SO ORDERED.