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G.R. No. 167715 November 17, 2010 10.

ber 17, 2010 10. Complainants thus wrote the above hospitals and demanded that the latter immediately cease
and desist from accepting bids for the supply [of] Sulbactam Ampicillin or awarding the same to
PHIL PHARMAWEALTH, INC., Petitioner, entities other than complainants. Complainants, in the same letters sent through undersigned
counsel, also demanded that respondent immediately withdraw its bids to supply Sulbactam
vs.
PFIZER, INC. and PFIZER (PHIL.) INC., Respondents. Ampicillin.

11. In gross and evident bad faith, respondent and the hospitals named in paragraph 9 hereof,
DECISION
willfully ignored complainants' just, plain and valid demands, refused to comply therewith and
continued to infringe the Patent, all to the damage and prejudice of complainants. As registered
PERALTA, J.: owner of the Patent, Pfizer is entitled to protection under Section 76 of the IP Code.

Before the Court is a petition for review on certiorari seeking to annul and set aside the Resolutions x x x x4
dated January 18, 20051 and April 11, 20052 by the Court of Appeals (CA) in CA-G.R. SP No.
82734.
Respondents prayed for permanent injunction, damages and the forfeiture and impounding of the
alleged infringing products. They also asked for the issuance of a temporary restraining order and a
The instant case arose from a Complaint3 for patent infringement filed against petitioner Phil preliminary injunction that would prevent herein petitioner, its agents, representatives and assigns,
Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the Bureau from importing, distributing, selling or offering the subject product for sale to any entity in the
of Legal Affairs of the Intellectual Property Office (BLA-IPO). The Complaint alleged as follows: Philippines.

xxxx In an Order5 dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was effective
for ninety days from petitioner's receipt of the said Order.
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the "Patent") which was
issued by this Honorable Office on July 16, 1987. The patent is valid until July 16, 2004. The claims Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of Writ of
of this Patent are directed to "a method of increasing the effectiveness of a beta-lactam antibiotic in Preliminary Injunction6 which, however, was denied by the BLA-IPO in an Order7 dated October 15,
a mammalian subject, which comprises co-administering to said subject a beta-lactam antibiotic 2003.
effectiveness increasing amount of a compound of the formula IA." The scope of the claims of the
Patent extends to a combination of penicillin such as ampicillin sodium and beta-lactam antibiotic
Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO in a
like sulbactam sodium.
Resolution8dated January 23, 2004.

7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter "Sulbactam
Respondents then filed a special civil action for certiorari with the CA assailing the October 15,
Ampicillin"). Ampicillin sodium is a specific example of the broad beta-lactam antibiotic disclosed
2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the issuance
and claimed in the Patent. It is the compound which efficacy is being enhanced by co-administering
of a preliminary mandatory injunction for the reinstatement and extension of the writ of preliminary
the same with sulbactam sodium. Sulbactam sodium, on the other hand, is a specific compound of
injunction issued by the BLA-IPO.
the formula IA disclosed and claimed in the Patent.

While the case was pending before the CA, respondents filed a Complaint9 with the Regional Trial
8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn." Pfizer's "Unasyn"
Court (RTC) of Makati City for infringement and unfair competition with damages against herein
products, which come in oral and IV formulas, are covered by Certificates of Product Registration
petitioner. In said case, respondents prayed for the issuance of a temporary restraining order and
("CPR") issued by the Bureau of Food and Drugs ("BFAD") under the name of complainants. The
preliminary injunction to prevent herein petitioner from importing, distributing, selling or offering for
sole and exclusive distributor of "Unasyn" products in the Philippines is Zuellig Pharma Corporation,
sale sulbactam ampicillin products to any entity in the Philippines. Respondents asked the trial
pursuant to a Distribution Services Agreement it executed with Pfizer Phils. on January 23, 2001.
court that, after trial, judgment be rendered awarding damages in their favor and making the
injunction permanent.
9. Sometime in January and February 2003, complainants came to know that respondent [herein
petitioner] submitted bids for the supply of Sulbactam Ampicillin to several hospitals without the
On August 24, 2004, the RTC of Makati City issued an Order10 directing the issuance of a
consent of complainants and in violation of the complainants' intellectual property rights. x x x
temporary restraining order conditioned upon respondents' filing of a bond.

xxxx
In a subsequent Order11 dated April 6, 2005, the same RTC directed the issuance of a writ of
preliminary injunction "prohibiting and restraining [petitioner], its agents, representatives and
assigns from importing, distributing or selling Sulbactam Ampicillin products to any entity in the Section 37 of Republic Act No. (RA) 165,17 which was the governing law at the time of the issuance
Philippines." of respondents' patent, provides:

Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss 12 the petition filed with the Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use and sell
CA on the ground of forum shopping, contending that the case filed with the RTC has the same the patented machine, article or product, and to use the patented process for the purpose of
objective as the petition filed with the CA, which is to obtain an injunction prohibiting petitioner from industry or commerce, throughout the territory of the Philippines for the term of the patent; and
importing, distributing and selling Sulbactam Ampicillin products. such making, using, or selling by any person without the authorization of the patentee constitutes
infringement of the patent.18
On January 18, 2005, the CA issued its questioned Resolution13 approving the bond posted by
respondents pursuant to the Resolution issued by the appellate court on March 23, 2004 which It is clear from the above-quoted provision of law that the exclusive right of a patentee to make, use
directed the issuance of a temporary restraining order conditioned upon the filing of a bond. On and sell a patented product, article or process exists only during the term of the patent. In the
even date, the CA issued a temporary restraining order14 which prohibited petitioner "from instant case, Philippine Letters Patent No. 21116, which was the basis of respondents in filing their
importing, distributing, selling or offering for sale Sulbactam Ampicillin products to any hospital or to complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents
any other entity in the Philippines, or from infringing Pfizer Inc.'s Philippine Patent No. 21116 and themselves in their complaint. They also admitted that the validity of the said patent is until July 16,
impounding all the sales invoices and other documents evidencing sales by [petitioner] of 2004, which is in conformity with Section 21 of RA 165, providing that the term of a patent shall be
Sulbactam Ampicillin products." seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules of Court
provides that an admission, verbal or written, made by a party in the course of the proceedings in
the same case, does not require proof and that the admission may be contradicted only by showing
On February 7, 2005, petitioner again filed a Motion to Dismiss15 the case for being moot and
that it was made through palpable mistake or that no such admission was made. In the present
academic, contending that respondents' patent had already lapsed. In the same manner, petitioner
case, there is no dispute as to respondents' admission that the term of their patent expired on July
also moved for the reconsideration of the temporary restraining order issued by the CA on the
16, 2004. Neither is there evidence to show that their admission was made through palpable
same basis that the patent right sought to be protected has been extinguished due to the lapse of
mistake. Hence, contrary to the pronouncement of the CA, there is no longer any need to present
the patent license and on the ground that the CA has no jurisdiction to review the order of the
evidence on the issue of expiration of respondents' patent.
BLA-IPO as said jurisdiction is vested by law in the Office of the Director General of the IPO.

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004, respondents
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion to Dismiss,
no longer possess the exclusive right to make, use and sell the articles or products covered by
dated November 16, 2004, and the motion for reconsideration, as well as Motion to Dismiss, both
Philippine Letters Patent No. 21116.
dated February 7, 2005.

Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ of
Hence, the present petition raising the following issues:
preliminary injunction, viz:

a) Can an injunctive relief be issued based on an action of patent infringement when the patent
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists
allegedly infringed has already lapsed?
in restraining the commission or continuance of the acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?
(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
c) Is there forum shopping when a party files two actions with two seemingly different causes of
action and yet pray for the same relief?16
(c) That a party, court, or agency or a person is doing, threatening, or attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant
In the first issue raised, petitioner argues that respondents' exclusive right to monopolize the respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.
subject matter of the patent exists only within the term of the patent. Petitioner claims that since
respondents' patent expired on July 16, 2004, the latter no longer possess any right of monopoly
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if the
and, as such, there is no more basis for the issuance of a restraining order or injunction against
matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury, a
petitioner insofar as the disputed patent is concerned.
temporary restraining order may be issued ex parte.

The Court agrees.


From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of an
injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be protected;
and (2) an urgent and paramount necessity for the writ to prevent serious damage. 19
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving until after an administrative agency has determined some question or some aspect of some
the bond filed by respondents, the latter no longer had a right that must be protected, considering question arising in the proceeding before the court. It applies where the claim is originally
that Philippine Letters Patent No. 21116 which was issued to them already expired on July 16, cognizable in the courts and comes into play whenever enforcement of the claim requires the
2004. Hence, the issuance by the CA of a temporary restraining order in favor of the respondents is resolution of issues which, under a regulatory scheme, has been placed within the special
not proper. competence of an administrative body; in such case, the judicial process is suspended pending
referral of such issues to the administrative body for its view. 22
In fact, the CA should have granted petitioner's motion to dismiss the petition for certiorari filed
before it as the only issue raised therein is the propriety of extending the writ of preliminary Based on the foregoing, the Court finds that respondents' initial filing of their complaint with the
injunction issued by the BLA-IPO. Since the patent which was the basis for issuing the injunction, BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing
was no longer valid, any issue as to the propriety of extending the life of the injunction was already to the fact that the determination of the basic issue of whether petitioner violated respondents'
rendered moot and academic. patent rights requires the exercise by the IPO of sound administrative discretion which is based on
the agency's special competence, knowledge and experience.
As to the second issue raised, the Court, is not persuaded by petitioner's argument that, pursuant
to the doctrine of primary jurisdiction, the Director General of the IPO and not the CA has However, the propriety of extending the life of the writ of preliminary injunction issued by the
jurisdiction to review the questioned Orders of the Director of the BLA-IPO. BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the
jurisdiction of the said administrative agency, particularly that of its Director General. The resolution
It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code of of this issue which was raised before the CA does not demand the exercise by the IPO of sound
administrative discretion requiring special knowledge, experience and services in determining
the Philippines, which is the presently prevailing law, the Director General of the IPO exercises
technical and intricate matters of fact. It is settled that one of the exceptions to the doctrine of
exclusive appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO. However,
primary jurisdiction is where the question involved is purely legal and will ultimately have to be
what is being questioned before the CA is not a decision, but an interlocutory order of the BLA-IPO
decided by the courts of justice.23 This is the case with respect to the issue raised in the petition
denying respondents' motion to extend the life of the preliminary injunction issued in their favor.
filed with the CA.

RA 8293 is silent with respect to any remedy available to litigants who intend to question an
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not provide
interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and
for a procedural remedy to question interlocutory orders issued by the BLA-IPO. In this regard, it
Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property
bears to reiterate that the judicial power of the courts, as provided for under the Constitution,
Rights simply provides that interlocutory orders shall not be appealable. The said Rules and
includes the authority of the courts to determine in an appropriate action the validity of the acts of
Regulations do not prescribe a procedure within the administrative machinery to be followed in
the political departments.24 Judicial power also includes the duty of the courts of justice to settle
assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. Hence, in
actual controversies involving rights which are legally demandable and enforceable, and to
the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory
determine whether or not there has been a grave abuse of discretion amounting to lack or excess
manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the
of jurisdiction on the part of any branch or instrumentality of the Government. 25 Hence, the CA, and
present case, respondents correctly resorted to the filing of a special civil action for certiorari with
not the IPO Director General, has jurisdiction to determine whether the BLA-IPO committed grave
the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they
abuse of discretion in denying respondents' motion to extend the effectivity of the writ of preliminary
have no other plain, speedy and adequate remedy in the ordinary course of law. This is consistent
injunction which the said office earlier issued.
with Sections 120 and 4,21 Rule 65 of the Rules of Court, as amended.

Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate
In the first place, respondents' act of filing their complaint originally with the BLA-IPO is already in
actions before the IPO and the RTC praying for the same relief.
consonance with the doctrine of primary jurisdiction.

The Court agrees.


This Court has held that:

Forum shopping is defined as the act of a party against whom an adverse judgment has been
[i]n cases involving specialized disputes, the practice has been to refer the same to an
administrative agency of special competence in observance of the doctrine of primary jurisdiction. rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other
than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or
The Court has ratiocinated that it cannot or will not determine a controversy involving a question
proceedings grounded on the same cause on the supposition that one or the other court would
which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by
make a favorable disposition.26
the administrative tribunal, where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply The elements of forum shopping are: (a) identity of parties, or at least such parties that represent
with the premises of the regulatory statute administered. The objective of the doctrine of primary the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs
jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction being founded on the same facts; (c) identity of the two preceding particulars, such that any
judgment rendered in the other action will, regardless of which party is successful, amount to res it to comply with the paragraph 1 of the memorandum of agreement and damages. One can see
judicata in the action under consideration.27 that although the relief prayed for in the two (2) actions are ostensibly different, the ultimate
objective in both actions is the same, that is, the approval of the sale of vessel in favor of petitioner,
and to overturn the letter directive of the COA of October 10, 1988 disapproving the sale. 31
There is no question as to the identity of parties in the complaints filed with the IPO and the RTC.

In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows:
Respondents argue that they cannot be held guilty of forum shopping because their complaints are
based on different causes of action as shown by the fact that the said complaints are founded on
violations of different patents. A. Immediately upon the filing of this action, issue an ex parte order (a) temporarily restraining
respondent, its agents, representatives and assigns from importing, distributing, selling or offering
for sale Sulbactam Ampicillin products to the hospitals named in paragraph 9 of this Complaint or to
The Court is not persuaded.
any other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s Philippine Patent No.
21116; and (b) impounding all the sales invoices and other documents evidencing sales by
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by which a respondent of Sulbactam Ampicillin products.
party violates a right of another. In the instant case, respondents' cause of action in their complaint
filed with the IPO is the alleged act of petitioner in importing, distributing, selling or offering for sale
B. After hearing, issue a writ of preliminary injunction enjoining respondent, its agents,
Sulbactam Ampicillin products, acts that are supposedly violative of respondents' right to the
representatives and assigns from importing, distributing, selling or offering for sale Sulbactam
exclusive sale of the said products which are covered by the latter's patent. However, a careful
Ampicillin products to the hospitals named in paragraph 9 of the Complaint or to any other entity in
reading of the complaint filed with the RTC of Makati City would show that respondents have the
the Philippines, or from otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116; and
same cause of action as in their complaint filed with the IPO. They claim that they have the
exclusive right to make, use and sell Sulbactam Ampicillin products and that petitioner violated this
right. Thus, it does not matter that the patents upon which the complaints were based are different. C. After trial, render judgment:
The fact remains that in both complaints the rights violated and the acts violative of such rights are
identical.
(i) declaring that respondent has infringed Pfizer Inc.'s Philippine Patent No. 21116 and that
respondent has no right whatsoever over complainant's patent;
In fact, respondents seek substantially the same reliefs in their separate complaints with the IPO
and the RTC for the purpose of accomplishing the same objective.
(ii) ordering respondent to pay complainants the following amounts:

It is settled by this Court in several cases that the filing by a party of two apparently different actions
(a) at least ₱1,000,000.00 as actual damages;
but with the same objective constitutes forum shopping.28 The Court discussed this species of
forum shopping as follows:
(b) ₱700,000.00 as attorney's fees and litigation expenses;
Very simply stated, the original complaint in the court a quo which gave rise to the instant petition
was filed by the buyer (herein private respondent and his predecessors-in-interest) against the (d) ₱1,000,000.00 as exemplary damages; and
seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand,
the complaint in the Second Case seeks to declare such purported sale involving the same real (d) costs of this suit.
property "as unenforceable as against the Bank," which is the petitioner herein. In other words, in
the Second Case, the majority stockholders, in representation of the Bank, are seeking to
accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the (iii) ordering the condemnation, seizure or forfeiture of respondent's infringing goods or products,
objective or the relief being sought, though worded differently, is the same, namely, to enable the wherever they may be found, including the materials and implements used in the commission of
petitioner Bank to escape from the obligation to sell the property to respondent. 29 infringement, to be disposed of in such manner as may be deemed appropriate by this Honorable
Office; and

In Danville Maritime, Inc. v. Commission on Audit,30 the Court ruled as follows:


(iv) making the injunction permanent.32

In the attempt to make the two actions appear to be different, petitioner impleaded different
respondents therein – PNOC in the case before the lower court and the COA in the case before this In an almost identical manner, respondents prayed for the following in their complaint filed with the
Court and sought what seems to be different reliefs. Petitioner asks this Court to set aside the RTC:
questioned letter-directive of the COA dated October 10, 1988 and to direct said body to approve
the Memorandum of Agreement entered into by and between the PNOC and petitioner, while in the (a) Immediately upon the filing of this action, issue an ex parte order:
complaint before the lower court petitioner seeks to enjoin the PNOC from conducting a rebidding
and from selling to other parties the vessel "T/T Andres Bonifacio," and for an extension of time for
(1) temporarily restraining Pharmawealth, its agents, representatives and assigns from importing, prohibit petitioner from selling said products to any entity. Owing to the substantial identity of parties,
distributing, selling or offering for sale infringing sulbactam ampicillin products to various reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount to res
government and private hospitals or to any other entity in the Philippines, or from otherwise judicata in the other action.
infringing Pfizer Inc.'s Philippine Patent No. 26810.
It bears to reiterate that what is truly important to consider in determining whether forum shopping
(2) impounding all the sales invoices and other documents evidencing sales by pharmawealth of exists or not is the vexation caused the courts and parties-litigant by a party who asks different
sulbactam ampicillin products; and courts and/or administrative agencies to rule on the same or related causes and/or to grant the
same or substantially the same reliefs, in the process creating the possibility of conflicting decisions
being rendered by the different fora upon the same issue. 341avvphi1
(3) disposing of the infringing goods outside the channels of commerce.

Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.
(b) After hearing, issue a writ of preliminary injunction:

(1) enjoining Pharmawealth, its agents, representatives and assigns from importing, distributing, Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the
subsequent case shall be dismissed without prejudice, on the ground of either litis pendentia or res
selling or offering for sale infringing sulbactam ampicillin products to various government hospitals
judicata.35 However, if the forum shopping is willful and deliberate, both (or all, if there are more
or to any other entity in the Philippines, or from otherwise infringing Patent No. 26810;
than two) actions shall be dismissed with prejudice.36 In the present case, the Court finds that
respondents did not deliberately violate the rule on non-forum shopping. Respondents may not be
(2) impounding all the sales invoices and other documents evidencing sales by Pharmawealth of totally blamed for erroneously believing that they can file separate actions simply on the basis of
sulbactam ampicillin products; and different patents. Moreover, in the suit filed with the RTC of Makati City, respondents were candid
enough to inform the trial court of the pendency of the complaint filed with the BLA-IPO as well as
(3) disposing of the infringing goods outside the channels of commerce. the petition for certiorari filed with the CA. On these bases, only Civil Case No. 04-754 should be
dismissed on the ground of litis pendentia.

(c) After trial, render judgment:


WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court of
Appeals, dated January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734,
(1) finding Pharmawealth to have infringed Patent No. 26810 and declaring Pharmawealth to have are REVERSED and SET ASIDE. The petition for certiorari filed with the Court of Appeals
no right whatsoever over plaintiff's patent; is DISMISSED for being moot and academic.

(2) ordering Pharmawealth to pay plaintiffs the following amounts: Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
likewise DISMISSED on the ground of litis pendentia.
(i) at least ₱3,000,000.00 as actual damages;
SO ORDERED.
(ii) ₱500,000.00 as attorney's fees and ₱1,000,000.00 as litigation expenses;

(iii) ₱3,000,000.00 as exemplary damages; and

(iv) costs of this suit.

(3) ordering the condemnation, seizure or forfeiture of Pharmawealth's infringing goods or products,
wherever they may be found, including the materials and implements used in the commission of
infringement, to be disposed of in such manner as may be deemed appropriate by this Honorable
Court; and

(4) making the injunction permanent.33

It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their
separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation
of their right to exclusively sell Sulbactam Ampicillin products and to permanently prevent or
ROMA DRUG and ROMEO G.R. No. 149907
RODRIGUEZ, as Proprietor of pharmaceutical products manufactured by its parent London-based corporation. The local
of ROMA DRUG, Present:
Petitioners, SmithKline has since merged with Glaxo Wellcome Phil. Inc to form Glaxo SmithKline, private
QUISUMBING, J.,
Chairperson,
respondent in this case. The seized medicines, which were manufactured by SmithKline, were
CARPIO-MORALES,
TINGA,
imported directly from abroad and not purchased through the local SmithKline, the authorized
- versus - VELASCO, and
BRION, JJ.
Promulgated: Philippine distributor of these products.
THE REGIONAL TRIAL COURT
OF GUAGUA, PAMPANGA, THE
PROVINCIAL PROSECUTOR OF April 16, 2009
PAMPANGA, BUREAU OF FOOD The NBI subsequently filed a complaint against Rodriguez for violation of Section 4 (in relation to
& DRUGS (BFAD) and GLAXO
SMITHKLINE, Sections 3 and 5) of Republic Act No. 8203, also known as the Special Law on Counterfeit Drugs
Respondents.
(SLCD), with the Office of the Provincial Prosecutor in San Fernando, Pampanga. The section
x----------------------------------------------------------------------------x
prohibits the sale of counterfeit drugs, which under Section 3(b)(3), includes an unregistered

DECISION imported drug product. The term unregistered signifies the lack of registration with the Bureau of

TINGA, J.:
Patent, Trademark and Technology Transfer of a trademark, tradename or other identification mark

of a drug in the name of a natural or juridical person, the process of which is governed under Part III
On 14 August 2000, a team composed of the National Bureau of Investigation (NBI) operatives and
of the Intellectual Property Code.
inspectors of the Bureau of Food and Drugs (BFAD) conducted a raid on petitioner Roma Drug, a

In this case, there is no doubt that the subject seized drugs are identical in content with their

Philippine-registered counterparts. There is no claim that they were adulterated in any way or

duly registered sole proprietorship of petitioner Romeo Rodriguez (Rodriguez) operating a drug mislabeled at least. Their classification as counterfeit is based solely on the fact that they were

store located at San Matias, Guagua, Pampanga. The raid was conducted pursuant to a search imported from abroad and not purchased from the Philippine-registered owner of the patent or

warrant[1] issued by the Regional Trial Court (RTC), Branch 57, Angeles City. The raiding team trademark of the drugs.

seized several imported medicines, including Augmentin (375mg.) tablets, Orbenin (500mg.)

capsules, Amoxil (250mg.) capsules and Ampiclox (500mg.).[2] It appears that Roma Drug is one of During preliminary investigation, Rodriguez challenged the constitutionality of the SLCD.

six drug stores which were raided on or around the same time upon the request of SmithKline However, Assistant Provincial Prosecutor Celerina C. Pineda skirted the challenge and issued a

Beecham Research Limited (SmithKline), a duly registered corporation which is the local distributor Resolution dated 17 August 2001 recommending that Rodriguez be charged with violation of
Section 4(a) of the SLCD. The recommendation was approved by Provincial Prosecutor Jesus Y. does not in fact conflict with the aforementioned constitutional provisions and in fact are in accord

Manarang approved the recommendation.[3] with constitutional precepts in favor of the peoples right to health.

Hence, the present Petition for Prohibition questing the RTC-Guagua Pampanga and the Provincial The Office of the Solicitor General casts the question as one of policy wisdom of the law that is,

Prosecutor to desist from further prosecuting Rodriguez, and that Sections 3(b)(3), 4 and 5 of the beyond the interference of the judiciary.[5] Again, the presumption of constitutionality of statutes is

SLCD be declared unconstitutional. In gist, Rodriguez asserts that the challenged provisions invoked, and the assertion is made that there is no clear and unequivocal breach of the Constitution

contravene three provisions of the Constitution. The first is the equal protection clause of the Bill of presented by the SLCD.

Rights. The two other provisions are Section 11, Article XIII, which mandates that the State make

essential goods, health and other social services available to all the people at affordable cost; and II.

Section 15, Article II, which states that it is the policy of the State to protect and promote the right to

health of the people and instill health consciousness among them. The constitutional aspect of this petition raises obviously interesting questions. However, such

questions have in fact been mooted with the passage in 2008 of Republic Act No. 9502, also known

Through its Resolution dated 15 October 2001, the Court issued a temporary restraining as the Universally Accessible Cheaper and Quality Medicines Act of 2008. [6]

order enjoining the RTC from proceeding with the trial against Rodriguez, and the BFAD, the NBI

and Glaxo Smithkline from prosecuting the petitioners.[4] Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual Property Code in that the later

law unequivocally grants third persons the right to import drugs or medicines whose patent were

Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed the petition, the latter registered in the Philippines by the owner of the product:

in behalf of public respondents RTC, Provincial Prosecutor and Bureau of Food and Drugs (BFAD).
Sec. 7. Section 72 of Republic Act No. 8293, otherwise known as
On the constitutional issue, Glaxo Smithkline asserts the rule that the SLCD is presumed the Intellectual Property Code of the Philippines, is hereby amended to read as
follows:
constitutional, arguing that both Section 15, Article II and Section 11, Article XIII are not
Sec. 72. Limitations of Patent Rights. The owner of a patent has no
self-executing provisions, the disregard of which can give rise to a cause of action in the courts. It right to prevent third parties from performing, without his authorization, the acts
referred to in Section 71 hereof in the following circumstances:
adds that Section 11, Article XIII in particular cannot be work to the oppression and unlawful of the

property rights of the legitimate manufacturers, importers or distributors, who take pains in having

imported drug products registered before the BFAD. Glaxo Smithkline further claims that the SLCD
72.1. Using a patented product which has been put on the market in Rule 9. Limitations on Patent Rights. The owner of a patent has
the Philippines by the owner of the product, or with his express consent, no right to prevent third parties from performing, without his authorization, the
insofar as such use is performed after that product has been so put on the said acts referred to in Section 71 of the IP Code as enumerated hereunder:
market: Provided, That, with regard to drugs and medicines, the limitation
on patent rights shall apply after a drug or medicine has been introduced (i) Introduction in the Philippines or Anywhere Else in the World.
in the Philippines or anywhere else in the world by the patent owner,
or by any party authorized to use the invention: Provided, Using a patented product which has been put on the market in the
further, That the right to import the drugs and medicines contemplated in Philippines by the owner of the product, or with his express consent, insofar as
this section shall be available to any government agency or any private such use is performed after that product has been so put on the said
third party; market: Provided, That, with regard to drugs and medicines, the limitation on
patent rights shall apply after a drug or medicine has been introduced in the
72.2. Where the act is done privately and on a non-commercial scale or for a Philippines or anywhere else in the world by the patent owner, or by any party
non-commercial purpose: Provided, That it does not significantly prejudice the authorized to use the invention: Provided, further, That the right to import the
economic interests of the owner of the patent; drugs and medicines contemplated in this section shall be available to any
government agency or any private third party. (72.1)
72.3. Where the act consists of making or using exclusively for experimental
use of the invention for scientific purposes or educational purposes and such The drugs and medicines are deemed introduced when they have
other activities directly related to such scientific or educational experimental been sold or offered for sale anywhere else in the world. (n)
use;

72.4. In the case of drugs and medicines, where the act includes testing, using,
making or selling the invention including any data related thereto, solely for
purposes reasonably related to the development and submission of It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD.
information and issuance of approvals by government regulatory agencies
required under any law of the Philippines or of another country that regulates
However, it is clear that the SLCOs classification of unregistered imported drugs as counterfeit
the manufacture, construction, use or sale of any product: Provided, That, in
order to protect the data submitted by the original patent holder from unfair
drugs, and of corresponding criminal penalties therefore are irreconcilably in the imposition conflict
commercial use provided in Article 39.3 of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS Agreement), the Intellectual
Property Office, in consultation with the appropriate government agencies, with Rep. Act No. 9502 since the latter indubitably grants private third persons the unqualified right
shall issue the appropriate rules and regulations necessary therein not later
than one hundred twenty (120) days after the enactment of this law; to import or otherwise use such drugs. Where a statute of later date, such as Rep. Act No. 9502,

72.5. Where the act consists of the preparation for individual cases, in a clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject that
pharmacy or by a medical professional, of a medicine in accordance with a
medical shall apply after a drug or medicine has been introduced in the intention must be given effect.[9] When a subsequent enactment covering a field of operation
Philippines or anywhere else in the world by the patent owner, or by any party
authorized to use the invention: Provided, further, That the right to import the coterminus with a prior statute cannot by any reasonable construction be given effect while the
drugs and medicines contemplated in this section shall be available to any
government agency or any private third party; xxx[7] prior law remains in operative existence because of irreconcilable conflict between the two acts, the

latest legislative expression prevails and the prior law yields to the extent of the

The unqualified right of private third parties such as petitioner to import or possess unregistered conflict.[10] Irreconcilable inconsistency between two laws embracing the same subject may exist

imported drugs in the Philippines is further confirmed by the Implementing Rules to Republic Act No. when the later law nullifies the reason or purpose of the earlier act, so that the latter loses all

9502 promulgated on 4 November 2008.[8] The relevant provisions thereof read: meaning and function.[11] Legis posteriors priores contrarias abrogant.
For the reasons above-stated, the prosecution of petitioner is no longer warranted and

the quested writ of prohibition should accordingly be issued.

like-minded groups who necessarily bring their own pharmaceutical drugs when they embark on

their missions of mercy. After all, they are disabled from invoking the bare personal use exemption

III. afforded by the SLCD.

Had the Court proceeded to directly confront the constitutionality of the assailed Even worse is the fact that the law is not content with simply banning, at civil costs, the importation

provisions of the SLCD, it is apparent that it would have at least placed in doubt the validity of the of unregistered drugs. It equates the importers of such drugs, many of whom motivated to do so out

provisions. As written, the law makes a criminal of any person who imports an unregistered drug of altruism or basic human love, with the malevolents who would alter or counterfeit pharmaceutical

regardless of the purpose, even if the medicine can spell life or death for someone in drugs for reasons of profit at the expense of public safety. Note that the SLCD is a special law, and

the Philippines. It does not accommodate the situation where the drug is out of stock in the traditional treatment of penal provisions of special laws is that of malum prohibitumor

the Philippines, beyond the reach of a patient who urgently depends on it. It does not allow punishable regardless of motive or criminal intent. For a law that is intended to help save lives,

husbands, wives, children, siblings, parents to import the drug in behalf of their loved ones too the SLCD has revealed itself as a heartless, soulless legislative piece.

physically ill to travel and avail of the meager personal use exemption allotted by the law. It

discriminates, at the expense of health, against poor Filipinos without means to travel abroad to The challenged provisions of the SLCD apparently proscribe a range of constitutionally permissible

purchase less expensive medicines in favor of their wealthier brethren able to do so. Less urgently behavior. It is laudable that with the passage of Rep. Act No. 9502, the State has reversed course

perhaps, but still within the range of constitutionally protected behavior, it deprives Filipinos to and allowed for a sensible and compassionate approach with respect to the importation of

choose a less expensive regime for their health care by denying them a plausible and safe means pharmaceutical drugs urgently necessary for the peoples constitutionally-recognized right to health.

of purchasing medicines at a cheaper cost.

The absurd results from this far-reaching ban extends to implications that deny the basic decencies

of humanity. The law would make criminals of doctors from abroad on medical missions of such

humanitarian organizations such as the International Red Cross, WHEREFORE, the petition is GRANTED in part. A writ of prohibition is

the International Red Crescent, Medicin Sans Frontieres, and other hereby ISSUED commanding respondents from prosecuting petitioner Romeo Rodriguez for
violation of Section 4 or Rep. Act No. 8203. The Temporary Restraining Order dated 15 October

2001 is hereby made PERMANENT. No pronouncements as to costs.

SO ORDERED.
SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF Finding for private respondent, the trial court rendered a Decision dated July 23, 1991,[9] the
APPEALS and TRYCO PHARMA CORPORATION, respondents. dispositive portion of which reads:

DECISION WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby,
DISMISSED. The Writ of injunction issued in connection with the case is hereby ordered
CARPIO-MORALES, J.: DISSOLVED.

Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null
the state of Pennsylvania, United States of America (U.S.) and licensed to do business in the and void for being in violation of Sections 7, 9 and 15 of the Patents Law.
Philippines, filed on October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau
of Patents, Trademarks and Technology Transfer) an application for patent over an invention
entitled Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed
Propylthio-2-Benzimidazole Carbamate. The application bore Serial No. 18989. to cancel Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the
Official Gazette.
On September 24, 1981, Letters Patent No. 14561[1] for the aforesaid invention was issued to
petitioner for a term of seventeen (17) years. Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to
The letters patent provides in its claims[2] that the patented invention consisted of a new
defendant is subject to the lien on correct payment of filing fees.
compound named methyl 5 propylthio-2-benzimidazole carbamate and the methods or
compositions utilizing the compound as an active ingredient in fighting infections caused by
gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle, goats, horses, SO ORDERED. (Underscoring supplied)
and even pet animals.

Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, On appeal, the Court of Appeals, by Decision of April 21, 1995,[10] upheld the trial courts
distributes and sells veterinary products including Impregon, a drug that has Albendazole for its finding that private respondent was not liable for any infringement of the patent of petitioner in light
active ingredient and is claimed to be effective against gastro-intestinal roundworms, lungworms, of the latters failure to show that Albendazole is the same as the compound subject of Letters
tapeworms and fluke infestation in carabaos, cattle and goats. Patent No. 14561. Noting petitioners admission of the issuance by the U.S. of a patent for
Albendazole in the name of Smith Kline and French Laboratories which was petitioners former
Petitioner sued private respondent for infringement of patent and unfair competition before corporate name, the appellate court considered the U.S. patent as implying that Albendazole is
the Caloocan City Regional Trial Court (RTC).[3] It claimed that its patent covers or includes the different from methyl 5 propylthio-2-benzimidazole carbamate. It likewise found that private
substance Albendazole such that private respondent, by manufacturing, selling, using, and causing respondent was not guilty of deceiving the public by misrepresenting that Impregon is its product.
to be sold and used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9
of Letters Patent No. 14561[4] as well as committed unfair competition under Article 189, paragraph The appellate court, however, declared that Letters Patent No. 14561 was not void as it
1 of the Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law) for sustained petitioners explanation that Patent Application Serial No. 18989 which was filed on
advertising and selling as its own the drug Impregon although the same contained petitioners October 8, 1976 was a divisional application of Patent Application Serial No. 17280 filed on June 17,
patented Albendazole.[5] 1975 with the Philippine Patent Office, well within one year from petitioners filing on June 19, 1974
of its Foreign Application Priority Data No. 480,646 in the U.S. covering the same compound
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining subject of Patent Application Serial No. 17280.
order against private respondent enjoining it from committing acts of patent infringement and unfair
competition.[6] A writ of preliminary injunction was subsequently issued.[7] Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent
Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one year from the
Private respondent in its Answer[8] averred that Letters Patent No. 14561 does not cover the filing of a patent application abroad in compliance with the one-year rule under Section 15 of the
substance Albendazole for nowhere in it does that word appear; that even if the patent were to Patent Law. And it rejected the submission that the compound in Letters Patent No. 14561 was not
include Albendazole, such substance is unpatentable; that the Bureau of Food and Drugs allowed it patentable, citing the jurisprudentially established presumption that the Patent Offices
to manufacture and market Impregon with Albendazole as its known ingredient; that there is no determination of patentability is correct. Finally, it ruled that petitioner established itself to be the
proof that it passed off in any way its veterinary products as those of petitioner; that Letters Patent one and the same assignee of the patent notwithstanding changes in its corporate name. Thus the
No. 14561 is null and void, the application for the issuance thereof having been filed beyond the appellate court disposed:
one year period from the filing of an application abroad for the same invention covered thereby, in
violation of Section 15 of Republic Act No. 165 (The Patent Law); and that petitioner is not the WHEREFORE, the judgment appealed from is AFFIRMED with
registered patent holder. the MODIFICATION that the orders for the nullification of Letters
Patent No. 14561 and for its cancellation are deleted therefrom.
Private respondent lodged a Counterclaim against petitioner for such amount of actual
damages as may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary SO ORDERED.
damages; and P150,000.00 in attorneys fees.
Petitioners motion for reconsideration of the Court of Appeals decision having been speculative, conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the
denied[11] the present petition for review on certiorari[12] was filed, assigning as errors the following: findings culled by the court of origin,[15] this Court does not review them.

I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT From an examination of the evidence on record, this Court finds nothing infirm in the
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS IMPREGON DRUG, IS appellate courts conclusions with respect to the principal issue of whether private respondent
INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT committed patent infringement to the prejudice of petitioner.
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
The burden of proof to substantiate a charge for patent infringement rests on the
II. THE COURT OF APPEALS GRAVELY ERRED IN plaintiff.[16] In the case at bar, petitioners evidence consists primarily of its Letters Patent No. 14561,
AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA CORPORATION and the testimony of Dr. Orinion, its general manager in the Philippines for its Animal Health
P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEYS FEES. Products Division, by which it sought to show that its patent for the compound methyl 5
propylthio-2-benzimidazole carbamate also covers the substance Albendazole.
Petitioner argues that under the doctrine of equivalents for determining patent infringement,
Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions
Impregon, is substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by thereof, no mention is made of the compound Albendazole. All that the claims disclose are:the
its patent since both of them are meant to combat worm or parasite infestation in animals. It cites covered invention, that is, the compound methyl 5 propylthio-2-benzimidazole carbamate; the
the unrebutted testimony of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical compounds being anthelmintic but nontoxic for animals or its ability to destroy parasites without
formula in Letters Patent No. 14561 refers to the compound Albendazole.Petitioner adds that the harming the host animals; and the patented methods, compositions or preparations involving the
two substances substantially do the same function in substantially the same way to achieve the compound to maximize its efficacy against certain kinds of parasites infecting specified animals.
same results, thereby making them truly identical. Petitioner thus submits that the appellate court
should have gone beyond the literal wordings used in Letters Patent No. 14561, beyond merely When the language of its claims is clear and distinct, the patentee is bound thereby and may
applying the literal infringement test, for in spite of the fact that the word Albendazole does not not claim anything beyond them.[17] And so are the courts bound which may not add to or detract
appear in petitioners letters patent, it has ably shown by evidence its sameness with methyl 5 from the claims matters not expressed or necessarily implied, nor may they enlarge the patent
propylthio-2-benzimidazole carbamate. beyond the scope of that which the inventor claimed and the patent office allowed, even if the
patentee may have been entitled to something more than the words it had chosen would include.[18]
Petitioner likewise points out that its application with the Philippine Patent Office on account
of which it was granted Letters Patent No. 14561 was merely a divisional application of a prior It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561
application in the U. S. which granted a patent for Albendazole. Hence, petitioner concludes that is not determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is
both methyl 5 propylthio-2-benzimidazole carbamate and the U.S.-patented Albendazole are admittedly a chemical compound that exists by a name different from that covered in petitioners
dependent on each other and mutually contribute to produce a single result, thereby making letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding
Albendazole as much a part of Letters Patent No. 14561 as the other substance is. Albendazole. And no extrinsic evidence had been adduced to prove that Albendazole inheres in
petitioners patent in spite of its omission therefrom or that the meaning of the claims of the patent
Petitioner concedes in its Sur-Rejoinder[13] that although methyl 5 propylthio-2-benzimidazole embraces the same.
carbamate is not identical with Albendazole, the former is an improvement or improved version of
the latter thereby making both substances still substantially the same. While petitioner concedes that the mere literal wordings of its patent cannot establish private
respondents infringement, it urges this Court to apply the doctrine of equivalents.
With respect to the award of actual damages in favor of private respondent in the amount
of P330,000.00 representing lost profits, petitioner assails the same as highly speculative and The doctrine of equivalents provides that an infringement also takes place when a device
conjectural, hence, without basis. It assails too the award of P100,000.00 in attorneys fees as not appropriates a prior invention by incorporating its innovative concept and, although with some
falling under any of the instances enumerated by law where recovery of attorneys fees is allowed. modification and change, performs substantially the same function in substantially the same way to
achieve substantially the same result.[19] Yet again, a scrutiny of petitioners evidence fails to
In its Comment,[14] private respondent contends that application of the doctrine of convince this Court of the substantial sameness of petitioners patented compound and
equivalents would not alter the outcome of the case, Albendazole and methyl 5 Albendazole. While both compounds have the effect of neutralizing parasites in animals, identity of
propylthio-2-benzimidazole carbamate being two different compounds with different chemical and result does not amount to infringement of patent unless Albendazole operates in substantially the
physical properties. It stresses that the existence of a separate U.S. patent for Albendazole same way or by substantially the same means as the patented compound, even though it performs
indicates that the same and the compound in Letters Patent No. 14561 are different from each the same function and achieves the same result.[20] In other words, the principle or mode of
other; and that since it was on account of a divisional application that the patent for methyl 5 operation must be the same or substantially the same.[21]
propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional application,
such a compound is just one of several independent inventions alongside Albendazole under The doctrine of equivalents thus requires satisfaction of the function-means-and-result test,
petitioners original patent application. the patentee having the burden to show that all three components of such equivalency test are
met.[22]
As has repeatedly been held, only questions of law may be raised in a petition for review on
certiorari before this Court. Unless the factual findings of the appellate court are mistaken, absurd, As stated early on, petitioners evidence fails to explain how Albendazole is in every essential
detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that
Albendazole is an anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing
more is asserted and accordingly substantiated regarding the method or means by which
Albendazole weeds out parasites in animals, thus giving no information on whether that method is
substantially the same as the manner by which petitioners compound works. The testimony of Dr.
Orinion lends no support to petitioners cause, he not having been presented or qualified as an
expert witness who has the knowledge or expertise on the matter of chemical compounds.

As for the concept of divisional applications proffered by petitioner, it comes into play when
two or more inventions are claimed in a single application but are of such a nature that a single
patent may not be issued for them.[23] The applicant thus is required to divide, that is, to limit the
claims to whichever invention he may elect, whereas those inventions not elected may be made the
subject of separate applications which are called divisional applications. [24] What this only means is
that petitioners methyl 5 propylthio-2-benzimidazole carbamate is an invention distinct from the
other inventions claimed in the original application divided out, Albendazole being one of those
other inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been
the subject of a divisional application if a single patent could have been issued for it as well as
Albendazole.

The foregoing discussions notwithstanding, this Court does not sustain the award of actual
damages and attorneys fees in favor of private respondent. The claimed actual damages
of P330,000.00 representing lost profits or revenues incurred by private respondent as a result of
the issuance of the injunction against it, computed at the rate of 30% of its alleged P100,000.00
monthly gross sales for eleven months, were supported by the testimonies of private respondents
President[25] and Executive Vice-President that the average monthly sale of Impregon
was P100,000.00 and that sales plummeted to zero after the issuance of the injunction. [26] While
indemnification for actual or compensatory damages covers not only the loss suffered (damnum
emergens) but also profits which the obligee failed to obtain (lucrum cessans or ganacias
frustradas), it is necessary to prove the actual amount of damages with a reasonable degree of
certainty based on competent proof and on the best evidence obtainable by the injured
party.[27] The testimonies of private respondents officers are not the competent proof or best
evidence obtainable to establish its right to actual or compensatory damages for such damages
also require presentation of documentary evidence to substantiate a claim therefor. [28]

In the same vein, this Court does not sustain the grant by the appellate court of attorneys
fees to private respondent anchored on Article 2208 (2) of the Civil Code, private respondent
having been allegedly forced to litigate as a result of petitioners suit. Even if a claimant is compelled
to litigate with third persons or to incur expenses to protect its rights, still attorneys fees may not be
awarded where no sufficient showing of bad faith could be reflected in a partys persistence in a
case other than an erroneous conviction of the righteousness of his cause. [29]There exists no
evidence on record indicating that petitioner was moved by malice in suing private respondent.

This Court, however, grants private respondent temperate or moderate damages in the
amount of P20,000.00 which it finds reasonable under the circumstances, it having suffered some
pecuniary loss the amount of which cannot, from the nature of the case, be established with
certainty.[30]

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
MODIFICATION. The award of actual or compensatory damages and attorneys fees to private
respondent, Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded the amount
of P20,000.00 as temperate or moderate damages.

SO ORDERED.
G.R. No. 194307 November 20, 2013 by the subject applications are identical to the one covered by Registration No. 56334 and thus,
petitioner has no right to the registration of such marks; (c) on November 15, 1991, respondent’s
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK predecessor-in-interest likewise obtained a Certificate of Copyright Registration No. 0-11193 for the
ORTHOPAEDIE GMBH),Petitioner, word "BIRKENSTOCK" ; (d) while respondent and its predecessor-in-interest failed to file the 10th
Yea r DAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful commerce; and (e) to
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent. record its continued ownership and exclusive right to use the "BIRKENSTOCK" marks, it has filed
TASN 4-2006-010273 as a " re-application " of its old registration, Registration No. 56334.13 On
November 13, 2007, the Bureau of Legal Affairs (BLA) of the IPO issued Order No. 2007-2051
DECISION consolidating the aforesaid inter partes cases (Consolidated Opposition Cases). 14

PERLAS-BERNABE, J.: The Ruling of the BLA

Assailed in this Petition for Review on Certiorari1 are the Court of Appeals (CA) Decision2 dated In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondent’s opposition, thus,
June 25, 2010 and Resolution3 dated October 27, 2010 in CA-G.R. SP No. 112278 which reversed ordering the rejection of the subject applications. It ruled that the competing marks of the parties
and set aside the Intellectual Property Office (IPO) Director General’s Decision4 dated December are confusingly similar since they contained the word "BIRKENSTOCK" and are used on the same
22, 2009 that allowed the registration of various trademarks in favor of petitioner Birkenstock and related goods. It found respondent and its predecessor-in-interest as the prior user and
Orthopaedie GmbH & Co. KG. adopter of "BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed to present
evidence of actual use in the trade and business in this country. It opined that while Registration No.
The Facts 56334 was cancelled, it does not follow that prior right over the mark was lost, as proof of
continuous and uninterrupted use in trade and business in the Philippines was presented. The BLA
likewise opined that petitioner’s marks are not well -known in the Philippines and internationally and
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for that the various certificates of registration submitted by petitioners were all photocopies and,
various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark therefore, not admissible as evidence.16
Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the International
Classification of Goods and Services (Nice Classification) with filing date of March 11, 1994; (b)
"BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL Aggrieved, petitioner appealed to the IPO Director General.
AND REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN 4-1994-091509 for
goods falling under Class 25 of the Nice Classification with filing date of March 11, 1994; and (c) The Ruling of the IPO Director General
"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL
AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043 for
In his Decision17 dated December 22, 2009, the IPO Director General reversed and set aside the
goods falling under Class 10 of the Nice Classification with filing date of September 5, 1994
ruling of the BLA, thus allowing the registration of the subject applications. He held that with the
(subject applications).5
cancellation of Registration No. 56334 for respondent’s failure to file the 10th Year DAU, there is no
more reason to reject the subject applications on the ground of prior registration by another
However, registration proceedings of the subject applications were suspended in view of an proprietor.18 More importantly, he found that the evidence presented proved that petitioner is the
existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 true and lawful owner and prior user of "BIRKENSTOCK" marks and thus, entitled to the
dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and registration of the marks covered by the subject applications.19 The IPO Director General further
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing held that respondent’s copyright for the word "BIRKENSTOCK" is of no moment since copyright
Corporation.6 In this regard, on May 27, 1997 petitioner filed a petition for cancellation of and trademark are different forms of intellectual property that cannot be interchanged. 20
Registration No. 56334 on the ground that it is the lawful and rightful owner of the Birkenstock
marks (Cancellation Case).7 During its pendency, however, respondent and/or its
Finding the IPO Director General’s reversal of the BLA unacceptable, respondent filed a petition for
predecessor-in-interest failed to file the required 10th Year Declaration of Actual Use (10th Year
review with the CA.
DAU) for Registration No. 56334 on or before October 21, 2004,8 thereby resulting in the
cancellation of such mark.9 Accordingly, the cancellation case was dismissed for being moot and
academic.10 Ruling of the CA

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the In its Decision21 dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director
subject applications in the IPO e-Gazette on February 2, 2007.11 In response, respondent filed General and reinstated that of the BLA. It disallowed the registration of the subject applications on
three (3) separate verified notices of oppositions to the subject applications docketed as Inter the ground that the marks covered by such applications "are confusingly similar, if not outright
Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116,12 claiming, inter alia, that: identical" with respondent’s mark.22 It equally held that respondent’s failure to file the 10th Year
(a) it, together with its predecessor-in-interest, has been using Birkenstock marks in the Philippines DAU for Registration No. 56334 "did not deprive petitioner of its ownership of the ‘BIRKENSTOCK’
for more than 16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered mark since it has submitted substantial evidence showing its continued use, promotion and
advertisement thereof up to the present."23 It opined that when respondent’s speedy and inexpensive disposition of cases, and which will give the Bureau the greatest possibility
predecessor-in-interest adopted and started its actual use of "BIRKENSTOCK," there is neither an to focus on the contentious issues before it. (Emphasis and underscoring supplied)
existing registration nor a pending application for the same and thus, it cannot be said that it acted
in bad faith in adopting and starting the use of such mark.24 Finally, the CA agreed with respondent
In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the
that petitioner’s documentary evidence, being mere photocopies, were submitted in violation of
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the originals
Section 8.1 of Office Order No. 79, Series of 2005 (Rules on Inter Partes Proceedings).
of such documentary evidence in the related Cancellation Case earlier filed before it. Under this
circumstance and the merits of the instant case as will be subsequently discussed, the Court holds
Dissatisfied, petitioner filed a Motion for Reconsideration25 dated July 20, 2010, which was, that the IPO Director General’s relaxation of procedure was a valid exercise of his discretion in the
however, denied in a Resolution26 dated October 27, 2010. Hence, this petition.27 interest of substantial justice.33

Issues Before the Court Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantive
issues.
The primordial issue raised for the Court’s resolution is whether or not the subject marks should be
allowed registration in the name of petitioner. B. Registration and ownership of "BIRKENSTOCK."

The Court’s Ruling Republic Act No. (RA) 166,34 the governing law for Registration No. 56334, requires the filing of a
DAU on specified periods,35 to wit:
The petition is meritorious.
Section 12. Duration. – Each certificate of registration shall remain in force for twenty years:
A. Admissibility of Petitioner’s Documentary Evidence. Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the
certificate of registration, the registrant shall file in the Patent Office an affidavit showing that the
In its Comment28 dated April 29, 2011, respondent asserts that the documentary evidence mark or trade-name is still in use or showing that its non-use is due to special circumstance which
submitted by petitioner in the Consolidated Opposition Cases, which are mere photocopies, are excuse such non-use and is not due to any intention to abandon the same, and pay the required
violative of Section 8.1 of the Rules on Inter Partes Proceedings, which requires certified true fee.
copies of documents and evidence presented by parties in lieu of originals.29 As such, they should
be deemed inadmissible.
The Director shall notify the registrant who files the above- prescribed affidavits of his acceptance
or refusal thereof and, if a refusal, the reasons therefor. (Emphasis and underscoring supplied)
The Court is not convinced.
The aforementioned provision clearly reveals that failure to file the DAU within the requisite period
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the attainment of results in the automatic cancellation of registration of a trademark. In turn, such failure is
justice, rather than its frustration. A strict and rigid application of the rules must always be tantamount to the abandonment or withdrawal of any right or interest the registrant has over his
eschewed when it would subvert the primary objective of the rules, that is, to enhance fair trials and trademark.36
expedite justice. Technicalities should never be used to defeat the substantive rights of the other
party. Every party-litigant must be afforded the amplest opportunity for the proper and just
In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334
determination of his cause, free from the constraints of technicalities."30 "Indeed, the primordial
within the requisite period, or on or before October 21, 2004. As a consequence, it was deemed to
policy is a faithful observance of [procedural rules], and their relaxation or suspension should only
have abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK." Neither can it
be for persuasive reasons and only in meritorious cases, to relieve a litigant of an injustice not
invoke Section 23637 of the IP Code which pertains to intellectual property rights obtained under
commensurate with the degree of his thoughtlessness in not complying with the procedure
previous intellectual property laws, e.g., RA 166, precisely because it already lost any right or
prescribed."31 This is especially true with quasi-judicial and administrative bodies, such as the IPO,
interest over the said mark.
which are not bound by technical rules of procedure.32 On this score, Section 5 of the Rules on Inter
Partes Proceedings provides:
Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. – The
rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases.
The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technical Under Section 238 of RA 166, which is also the law governing the subject applications, in order to
rules of procedure and evidence but may adopt, in the absence of any applicable rule herein, such register a trademark, one must be the owner thereof and must have actually used the mark in
mode of proceedings which is consistent with the requirements of fair play and conducive to the just, commerce in the Philippines for two (2) months prior to the application for registration. Section
2-A39 of the same law sets out to define how one goes about acquiring ownership thereof. Under
the same section, it is clear that actual use in commerce is also the test of ownership but the In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful
provision went further by saying that the mark must not have been so appropriated by another. owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad
Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark must faith in having it registered in its name. In this regard, the Court quotes with approval the words of
be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use the IPO Director General, viz.:
but may not yet have the right to register such ownership here due to the owner’s failure to use the
same in the Philippines for two (2) months prior to registration.40
The facts and evidence fail to show that [respondent] was in good faith in using and in registering
the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and
It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring arbitrary mark. It is very remote that two persons did coin the same or identical marks. To come up
ownership.1âwphi1 If the applicant is not the owner of the trademark, he has no right to apply for its with a highly distinct and uncommon mark previously appropriated by another, for use in the same
registration. Registration merely creates a prima facie presumption of the validity of the registration, line of business, and without any plausible explanation, is incredible. The field from which a person
of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof. Such may select a trademark is practically unlimited. As in all other cases of colorable imitations, the
presumption, just like the presumptive regularity in the performance of official functions, is unanswered riddle is why, of the millions of terms and combinations of letters and designs available,
rebuttable and must give way to evidence to the contrary.41 [respondent] had to come up with a mark identical or so closely similar to the [petitioner’s] if there
was no intent to take advantage of the goodwill generated by the [petitioner’s] mark. Being on the
same line of business, it is highly probable that the [respondent] knew of the existence of
Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it is
BIRKENSTOCK and its use by the [petitioner], before [respondent] appropriated the same mark
the ownership of a trademark that confers the right to register the same. A trademark is an
and had it registered in its name.46
industrial property over which its owner is entitled to property rights which cannot be appropriated
by unscrupulous entities that, in one way or another, happen to register such trademark ahead of
its true and lawful owner. The presumption of ownership accorded to a registrant must then WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution dated
necessarily yield to superior evidence of actual and real ownership of a trademark. October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET
ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is hereby
REINSTATED.
The Court’s pronouncement in Berris Agricultural Co., Inc. v. Abyadang42 is instructive on this point:

SO ORDERED.
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. x x x A certificate of registration
of a mark, once issued, constitutes prima facie evidence of the validity of the registration, of the
registrant’s ownership of the mark, and of the registrant’s exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in the certificate.
x x x In other words, the prima facie presumption brought about by the registration of a mark may
be challenged and overcome in an appropriate action, x x x 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.43(Emphasis and underscoring supplied)

In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of "BIRKENSTOCK" and
its use in commerce long before respondent was able to register the same here in the Philippines. It
has sufficiently proven that "BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor,
Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter, numerous
generations of his kin continuously engaged in the manufacture and sale of shoes and sandals
bearing the mark "BIRKENSTOCK" until it became the entity now known as the petitioner.
Petitioner also submitted various certificates of registration of the mark "BIRKENSTOCK" in various
countries and that it has used such mark in different countries worldwide, including the
Philippines.44

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its
claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions made by
respondent involving the same.45
FREDCO MANUFACTURING G.R. No. 185917 The Case

CORPORATION,

Petitioner, Present: Before the Court is a petition for review1 assailing the 24 October 2008 Decision2 and 8 January
2009 Resolution3 of the Court of Appeals in CA-G.R. SP No. 103394.
C
ARPI
O, J.,
Chairp
erson,
N
ACHU
The Antecedent Facts
RA,

- versus - PERALTA,
A
On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation
BAD,
organized and existing under the laws of the Philippines, filed a Petition for Cancellation of
and
Registration No. 56561 before the Bureau of Legal Affairs of the Intellectual Property Office (IPO)
M against respondents President and Fellows of Harvard College (Harvard University), a corporation
ENDO organized and existing under the laws of Massachusetts, United States of America. The case was
ZA, JJ docketed as Inter Partes Case No. 14-2005-00094.
.

Fredco alleged that Registration No. 56561 was issued to Harvard University on 25 November
PRESIDENT AND FELLOWS 1993 for the mark Harvard Veritas Shield Symbol for decals, tote bags, serving trays, sweatshirts,
t-shirts, hats and flying discs under Classes 16, 18, 21, 25 and 28 of the Nice International
Classification of Goods and Services. Fredco alleged that the mark Harvard for t-shirts, polo
OF HARVARD COLLEGE Promulgated: shirts, sandos, briefs, jackets and slacks was first used in the Philippines on 2 January 1982 by
New York Garments Manufacturing & Export Co., Inc. (New York Garments), a domestic
(HARVARD UNIVERSITY), corporation and Fredcos predecessor-in-interest. On 24 January 1985, New York Garments filed
for trademark registration of the mark Harvard for goods under Class 25. The application matured
into a registration and a Certificate of Registration was issued on 12 December 1988, with a
Respondents. June 1, 2011 20-year term subject to renewal at the end of the term. The registration was later assigned to
Romeo Chuateco, a member of the family that owned New York Garments.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Fredco alleged that it was formed and registered with the Securities and Exchange Commission on
9 November 1995 and had since then handled the manufacture, promotion and marketing of
Harvard clothing articles. Fredco alleged that at the time of issuance of Registration No. 56561 to
Harvard University, New York Garments had already registered the mark Harvard for goods under
DECISION Class 25. Fredco alleged that the registration was cancelled on 30 July 1998 when New York
Garments inadvertently failed to file an affidavit of use/non-use on the fifth anniversary of the
registration but the right to the mark Harvard remained with its predecessor New York Garments
and now with Fredco.
CARPIO, J.:
Harvard University, on the other hand, alleged that it is the lawful owner of the name and mark
Harvard in numerous countries worldwide, including the Philippines. Among the countries where
Harvard University has registered its name and mark Harvard are:
Harvard University alleged that in March 2002, it discovered, through its international trademark
watch program, Fredcos website www.harvard-usa.com. The website advertises and promotes the
brand name Harvard Jeans USA without Harvard Universitys consent. The websites main page
shows an oblong logo bearing the mark Harvard Jeans USA, Established 1936, and Cambridge,
1. Argentina 26. South Korea
Massachusetts. On 20 April 2004, Harvard University filed an administrative complaint against
2. Benelux4 27. Malaysia Fredco before the IPO for trademark infringement and/or unfair competition with damages.
3. Brazil 28. Mexico
4. Canada 29. New Zealand
5. Chile 30. Norway Harvard University alleged that its valid and existing certificates of trademark registration in the
6. China P.R. 31. Peru Philippines are:

7. Colombia 32. Philippines


8. Costa Rica 33. Poland
1. Trademark Registration No. 56561 issued on 25 November 1993 for Harvard Veritas
9. Cyprus 34. Portugal Shield Design for goods and services in Classes 16, 18, 21, 25 and 28 (decals, tote bags,
10. Czech Republic 35. Russia serving trays, sweatshirts, t-shirts, hats and flying discs) of the Nice International
Classification of Goods and Services;
11. Denmark 36. South Africa
2. Trademark Registration No. 57526 issued on 24 March 1994 for Harvard Veritas Shield
12. Ecuador 37. Switzerland Symbol for services in Class 41; Trademark Registration No. 56539 issued on 25
13. Egypt 38. Singapore November 1998 for Harvard for services in Class 41; and

14. Finland 39. Slovak Republic 3. Trademark Registration No. 66677 issued on 8 December 1998 for Harvard Graphics for
goods in Class 9. Harvard University further alleged that it filed the requisite affidavits of
15. France 40. Spain use for the mark Harvard Veritas Shield Symbol with the IPO.
16. Great Britain 41. Sweden Further, on 7
May 2003
17. Germany 42. Taiwan
Harvard
18. Greece 43. Thailand University filed
Trademark
19. Hong Kong 44. Turkey Application No.
20. India 45. United Arab Emirates 4-2003-04090
for Harvard
21. Indonesia 46. Uruguay Medical
22. Ireland 47. United States of America International &
Shield Design for
23. Israel 48. Venezuela services in
24. Italy 49. Zimbabwe Classes 41 and
44. In 1989,
25. Japan 50. European Community5 Harvard
University
established the
Harvard
Trademark
The name and mark Harvard was adopted in 1639 as the name of Harvard College6 of Cambridge, Licensing
Massachusetts, U.S.A. The name and mark Harvard was allegedly used in commerce as early as Program,
1872. Harvard University is over 350 years old and is a highly regarded institution of higher learning operated by the
in the United States and throughout the world. Harvard University promotes, uses, and advertises Office for
its name Harvard through various publications, services, and products in foreign countries, Technology and
including the Philippines. Harvard University further alleged that the name and the mark have been Trademark
rated as one of the most famous brands in the world, valued between US $750,000,000 and US Licensing, to
$1,000,000,000. oversee and
manage the Harvard University filed an appeal before the Office of the Director General of the IPO. In a
worldwide Decision9 dated 21 April 2008, the Office of the Director General, IPO reversed the decision of the
licensing of the Bureau of Legal Affairs, IPO.
Harvard name
and trademarks
for various
goods and
services. The Director General ruled that more than the use of the trademark in the Philippines, the applicant
Harvard must be the owner of the mark sought to be registered. The Director General ruled that the right to
University stated register a trademark is based on ownership and when the applicant is not the owner, he has no
that it never right to register the mark. The Director General noted that the mark covered by Harvard Universitys
authorized or Registration No. 56561 is not only the word Harvard but also the logo, emblem or symbol of
licensed any Harvard University. The Director General ruled that Fredco failed to explain how its predecessor
person to use its New York Garments came up with the mark Harvard. In addition, there was no evidence that
name and mark Fredco or New York Garments was licensed or authorized by Harvard University to use its name in
Harvard in commerce or for any other use.
connection with
any goods or
services in the
Philippines.
The dispositive portion of the decision of the Office of the Director General, IPO reads:

In a Decision7 dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau of Legal WHEREFORE, premises considered, the instant appeal is GRANTED. The
Affairs, IPO cancelled Harvard Universitys registration of the mark Harvard under Class 25, as appealed decision is hereby REVERSED and SET ASIDE. Let a copy of this
follows: Decision as well as the trademark application and records be furnished and
returned to the Director of Bureau of Legal Affairs for appropriate action.
Further, let also the Directors of the Bureau of Trademarks and the
Administrative, Financial and Human Resources Development Services
WHEREFORE, premises considered, the Petition for Cancellation is hereby Bureau, and the library of the Documentation, Information and Technology
GRANTED. Consequently, Trademark Registration Number 56561 for the Transfer Bureau be furnished a copy of this Decision for information, guidance,
trademark HARVARD VE RI TAS SHIELD SYMBOL issued on November 25, and records purposes.
1993 to PRESIDENT AND FELLOWS OF HARVARD COLLEGE (HARVARD
UNIVERSITY) should be CANCELLED only with respect to goods falling under
Class 25. On the other hand, considering that the goods of SO ORDERED.10
Respondent-Registrant falling under Classes 16, 18, 21 and 28 are not
confusingly similar with the Petitioners goods, the Respondent-Registrant has
acquired vested right over the same and therefore, should not be cancelled.

Fredco filed a petition for review before the Court of Appeals assailing the decision of the Director
General.
Let the filewrapper of the Trademark Registration No. 56561 issued on
November 25, 1993 for the trademark HARVARD VE RI TAS SHIELD
SYMBOL, subject matter of this case together with a copy of this Decision be
forwarded to the Bureau of Trademarks (BOT) for appropriate action. The Decision of the Court of Appeals

SO ORDERED.8 In its assailed decision, the Court of Appeals affirmed the decision of the Office of the Director
General of the IPO.

The Court of Appeals adopted the findings of the Office of the Director General and ruled that the
latter correctly set aside the cancellation by the Director of the Bureau of Legal Affairs of Harvard
Universitys trademark registration under Class 25. The Court of Appeals ruled that Harvard
University was able to substantiate that it appropriated and used the marks Harvard and Harvard
Veritas Shield Symbol in Class 25 way ahead of Fredco and its predecessor New York Garments. mark Harvard in commerce since 1872. It is also established that Harvard University has been
The Court of Appeals also ruled that the records failed to disclose any explanation for Fredcos use using the marks Harvard and Harvard Veritas Shield Symbol for Class 25 goods in the United
of the name and mark Harvard and the words USA, Established 1936, and Cambridge, States since 1953. Further, there is no dispute that Harvard University has registered the name and
Massachusetts within an oblong device, US Legend and Europes No. 1 Brand. Citing Shangri-La mark Harvard in at least 50 countries.
International Hotel Management, Ltd. v. Developers Group of Companies, Inc.,11 the Court of
Appeals ruled:
On the other hand, Fredcos predecessor-in-interest, New York Garments, started using the mark
Harvard in the Philippines only in 1982. New York Garments filed an application with the Philippine
One who has imitated the trademark of another cannot bring an action for Patent Office in 1985 to register the mark Harvard, which application was approved in 1988.
infringement, particularly against the true owner of the mark, because he Fredco insists that the date of actual use in the Philippines should prevail on the issue of who has
would be coming to court with unclean hands. Priority is of no avail to the bad the better right to register the marks.
faith plaintiff. Good faith is required in order to ensure that a second user may
not merely take advantage of the goodwill established by the true owner. 12
Under Section 2 of Republic Act No. 166,14 as amended (R.A. No. 166), before a trademark can be
The dispositive portion of the decision of the Court of Appeals reads:
registered, it must have been actually used in commerce for not less than two months in the
Philippines prior to the filing of an application for its registration. While Harvard University had
actual prior use of its marks abroad for a long time, it did not have actual prior use in the Philippines
WHEREFORE, premises considered, the petition for review is DENIED. The
of the mark Harvard Veritas Shield Symbol before its application for registration of the mark
Decision dated April 21, 2008 of the Director General of the IPO in Appeal No.
Harvard with the then Philippine Patents Office. However, Harvard Universitys registration of the
14-07-09 Inter Partes Case No. 14-2005-00094 is hereby AFFIRMED.
name Harvard is based on home registration which is allowed under Section 37 of R.A. No.
166.15 As pointed out by Harvard University in its Comment:
SO ORDERED.13
Although Section 2 of the Trademark law (R.A. 166) requires for the
registration of trademark that the applicant thereof must prove that the same
Fredco filed a motion for reconsideration. has been actually in use in commerce or services for not less than two (2)
months in the Philippines before the application for registration is filed, where
the trademark sought to be registered has already been registered in a foreign
In its Resolution promulgated on 8 January 2009, the Court of Appeals denied the motion for lack country that is a member of the Paris Convention, the requirement of proof of
of merit. use in the commerce in the Philippines for the said period is not necessary. An
applicant for registration based on home certificate of registration need not
even have used the mark or trade name in this country.16

Hence, this petition before the Court.


Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco alleged that Harvard
Universitys registration is based on home registration for the mark Harvard Veritas Shield for Class
25.17
The Issue

In any event, under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293),18 [m]arks registered
The issue in this case is whether the Court of Appeals committed a reversible error in affirming the under Republic Act No. 166 shall remain in force but shall be deemed to have been granted
decision of the Office of the Director General of the IPO. under this Act x x x, which does not require actual prior use of the mark in the Philippines. Since
the mark Harvard Veritas Shield Symbol is now deemed granted under R.A. No. 8293, any alleged
defect arising from the absence of actual prior use in the Philippines has been cured by Section
239.2.19 In addition, Fredcos registration was already cancelled on 30 July 1998 when it failed to
file the required affidavit of use/non-use for the fifth anniversary of the marks registration. Hence, at
The Ruling of this Court the time of Fredcos filing of the Petition for Cancellation before the Bureau of Legal Affairs of the
IPO, Fredco was no longer the registrant or presumptive owner of the mark Harvard.

The petition has no merit.


There are two compelling reasons why Fredcos petition must fail.

There is no dispute that the mark Harvard used by Fredco is the same as the mark Harvard in the
Harvard Veritas Shield Symbol of Harvard University. It is also not disputed that Harvard University First, Fredcos registration of the mark Harvard and its identification of origin as Cambridge,
was named Harvard College in 1639 and that then, as now, Harvard University is located in Massachusetts falsely suggest that Fredco or its goods are connected with Harvard University,
Cambridge, Massachusetts, U.S.A. It is also unrefuted that Harvard University has been using the
which uses the same mark Harvard and is also located in Cambridge, Massachusetts. This can associate its products with Harvard University, riding on the prestige and popularity of Harvard
easily be gleaned from the following oblong logo of Fredco that it attaches to its clothing line: University, and thus appropriating part of Harvard Universitys goodwill without the latters consent.
Section 4(a) of R.A. No. 166 is identical to Section 2(a) of the Lanham Act, 20 the trademark law of
the United States. These provisions are intended to protect the right of publicity of famous
individuals and institutions from commercial exploitation of their goodwill by others. 21 What Fredco
has done in using the mark Harvard and the words Cambridge, Massachusetts, USA to evoke a
desirable aura to its products is precisely to exploit commercially the goodwill of Harvard University
without the latters consent. This is a clear violation of Section 4(a) of R.A. No. 166. Under Section
17(c)22 of R.A. No. 166, such violation is a ground for cancellation of Fredcos registration of the
mark Harvard because the registration was obtained in violation of Section 4 of R.A. No. 166.
Second, the Philippines and the United States of America are both signatories to the Paris
Convention for the Protection of Industrial Property (Paris Convention). The Philippines became a
signatory to the Paris Convention on 27 September 1965. Articles 6bis and 8 of the Paris
Convention state:

ARTICLE 6bis

(i) The countries of the Union undertake either administratively if their


legislation so permits, or at the request of an interested party, to refuse or to
cancel the registration and to prohibit the use of a trademark which constitutes
a reproduction, imitation or translation, liable to create confusion or a mark
Fredcos registration of the mark Harvard should not have been allowed because Section 4(a) of considered by the competent authority of the country as being already the
R.A. No. 166 prohibits the registration of a mark which may disparage or falsely suggest a mark of a person entitled to the benefits of the present Convention and
connection with persons, living or dead, institutions, beliefs x x x. Section 4(a) of R.A. No. 166 used for identical or similar goods. These provisions shall also apply
provides: when the essential part of the mark constitutes a reproduction of any
such well-known mark or an imitation liable to create confusion
therewith.
Section 4. Registration of trade-marks, trade-names and service- marks on the
principal register. ‒ There is hereby established a register of trade-mark,
trade-names and service-marks which shall be known as the principal register.
The owner of a trade-mark, a trade-name or service-mark used to distinguish
his goods, business or services from the goods, business or services of others ARTICLE 8
shall have the right to register the same on the principal register, unless it:

A trade name shall be protected in all the countries of the Union without the
(a) Consists of or comprises immoral, deceptive or scandalous manner, or obligation of filing or registration, whether or not it forms part of a trademark.
matter which may disparage or falsely suggest a connection with persons, (Emphasis supplied)
living or dead, institutions, beliefs, or national symbols, or bring them into
contempt or disrepute;

Thus, this Court has ruled that the Philippines is obligated to assure nationals of countries of the
(b) x x x (emphasis supplied)
Paris Convention that they are afforded an effective protection against violation of their intellectual
Fredcos use of the mark Harvard, coupled with its claimed origin in Cambridge, Massachusetts, property rights in the Philippines in the same way that their own countries are obligated to accord
obviously suggests a false connection with Harvard University. On this ground alone, Fredcos similar protection to Philippine nationals.23
registration of the mark Harvard should have been disallowed.
Indisputably, Fredco does not have any affiliation or connection with Harvard University, or even
Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166, as follows:
with Cambridge, Massachusetts. Fredco or its predecessor New York Garments was not
established in 1936, or in the U.S.A. as indicated by Fredco in its oblong logo. Fredco offered no
explanation to the Court of Appeals or to the IPO why it used the mark Harvard on its oblong logo
Section 37. Rights of foreign registrants. Persons who are nationals of,
with the words Cambridge, Massachusetts, Established in 1936, and USA. Fredco now claims
domiciled in, or have a bona fide or effective business or commercial
before this Court that it used these words to evoke a lifestyle or suggest a desirable aura of
establishment in any foreign country, which is a party to any international
petitioners clothing lines. Fredcos belated justification merely confirms that it sought to connect or
convention or treaty relating to marks or trade-names, or the repression of
unfair competition to which the Philippines may be a party, shall be entitled to You are also required to submit to the undersigned a progress report on the
the benefits and subject to the provisions of this Act to the extent and under the matter.
conditions essential to give effect to any such convention and treaties so long
as the Philippines shall continue to be a party thereto, except as provided in
the following paragraphs of this section. For immediate compliance.27
xxxx
In a Memorandum dated 25 October 1983, then Minister of Trade and Industry Roberto Ongpin
affirmed the earlier Memorandum of Minister Villafuerte. Minister Ongpin directed the Director of
Trade-names of persons described in the first paragraph of this section
Patents to implement measures necessary to comply with the Philippines obligations under the
shall be protected without the obligation of filing or registration whether
Paris Convention, thus:
or not they form parts of marks.24

1. Whether the trademark under consideration is well-known


x x x x (Emphasis supplied)
in the Philippines or is a mark already belonging to a
person entitled to the benefits of the CONVENTION, this
should be established, pursuant to Philippine Patent
Thus, under Philippine law, a trade name of a national of a State that is a party to the Paris
Office procedures in inter partes and ex parte cases,
Convention, whether or not the trade name forms part of a trademark, is protected without the
according to any of the following criteria or any
obligation of filing or registration.
combination thereof:
Harvard is the trade name of the world famous Harvard University, and it is also a trademark of
Harvard University. Under Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166,
Harvard University is entitled to protection in the Philippines of its trade name Harvard even without (a) a declaration by the Minister of Trade and Industry that the trademark being
registration of such trade name in the Philippines. This means that no educational entity in the considered is already well-known in the Philippines such that permission for its
Philippines can use the trade name Harvard without the consent of Harvard University. Likewise, use by other than its original owner will constitute a reproduction, imitation,
no entity in the Philippines can claim, expressly or impliedly through the use of the name and mark translation or other infringement;
Harvard, that its products or services are authorized, approved, or licensed by, or sourced from,
Harvard University without the latters consent.
(b) that the trademark is used in commerce internationally, supported by proof
that goods bearing the trademark are sold on an international scale,
Article 6bis of the Paris Convention has been administratively implemented in the Philippines advertisements, the establishment of factories, sales offices, distributorships,
through two directives of the then Ministry (now Department) of Trade, which directives were and the like, in different countries, including volume or other measure of
upheld by this Court in several cases.25 On 20 November 1980, then Minister of Trade Secretary international trade and commerce;
Luis Villafuerte issued a Memorandum directing the Director of Patents to reject, pursuant to the
Paris Convention, all pending applications for Philippine registration of signature and other
world-famous trademarks by applicants other than their original owners.26The Memorandum states: (c) that the trademark is duly registered in the industrial property office(s)
of another country or countries, taking into consideration the dates of
such registration;
Pursuant to the Paris Convention for the Protection of Industrial Property to
which the Philippines is a signatory, you are hereby directed to reject all
pending applications for Philippine registration of signature and other (d) that the trademark has been long established and obtained goodwill and
world-famous trademarks by applicants other than its original owners or users. general international consumer recognition as belonging to one owner or
source;

The conflicting claims over internationally known trademarks involve such


name brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, (e) that the trademark actually belongs to a party claiming ownership and has
Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, the right to registration under the provisions of the aforestated PARIS
Geoffrey Beene, Lanvin and Ted Lapidus. CONVENTION.

It is further directed that, in cases where warranted, Philippine registrants of 2. The word trademark, as used in this MEMORANDUM, shall include
such trademarks should be asked to surrender their certificates of registration, tradenames, service marks, logos, signs, emblems, insignia or other
if any, to avoid suits for damages and other legal action by the trademarks similar devices used for identification and recognition by consumers.
foreign or local owners or original users.
3. The Philippine Patent Office shall refuse all applications for, or cancel the
registration of, trademarks which constitute a reproduction, translation or
imitation of a trademark owned by a person, natural or corporate, who is a the Philippines but only that it be well-known in the Philippines. Moreover, Rule 102 of the Rules
citizen of a country signatory to the PARIS CONVENTION FOR THE and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped
PROTECTION OF INDUSTRIAL PROPERTY. Containers, which implement R.A. No. 8293, provides:

x x x x28 (Emphasis supplied) Rule 102. Criteria for determining whether a mark is well-known. In
determining whether a mark is well-known, the following criteria or any
combination thereof may be taken into account:
In Mirpuri, the Court ruled that the essential requirement under Article 6bis of the Paris Convention
is that the trademark to be protected must be well-known in the country where protection is
sought.29 The Court declared that the power to determine whether a trademark is well-known lies in (a) the duration, extent and geographical area of any use of the mark, in
the competent authority of the country of registration or use. 30 The Court then stated that the particular, the duration, extent and geographical area of any promotion of the
competent authority would either be the registering authority if it has the power to decide this, or the mark, including advertising or publicity and the presentation, at fairs or
courts of the country in question if the issue comes before the courts.31 exhibitions, of the goods and/or services to which the mark applies;

To be protected under the two directives of the Ministry of Trade, an internationally well-known (b) the market share, in the Philippines and in other countries, of the goods
mark need not be registered or used in the Philippines.32 All that is required is that the mark is and/or services to which the mark applies;
well-known internationally and in the Philippines for identical or similar goods, whether or not the
mark is registered or used in the Philippines. The Court ruled in Sehwani, Incorporated v. In-N-Out
Burger, Inc.:33 (c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
The fact that respondents marks are neither registered nor used in the
Philippines is of no moment. The scope of protection initially afforded by
Article 6bis of the Paris Convention has been expanded in the 1999 Joint (e) the extent to which the mark has been registered in the world;
Recommendation Concerning Provisions on the Protection of Well-Known
Marks, wherein the World Intellectual Property Organization (WIPO) General
Assembly and the Paris Union agreed to a nonbinding recommendation that a (f) the exclusivity of registration attained by the mark in the world;
well-known mark should be protected in a country even if the mark is
neither registered nor used in that country. Part I, Article 2(3) thereof
provides: (g) the extent to which the mark has been used in the world;

(3) [Factors Which Shall Not Be Required] (a) A Member State shall not (h) the exclusivity of use attained by the mark in the world;
require, as a condition for determining whether a mark is a well-known mark:

(i) the commercial value attributed to the mark in the world;


(i) that the mark has been used in, or that the mark has been registered or that
an application for registration of the mark has been filed in or in respect of, the
Member State: (j) the record of successful protection of the rights in the mark;

(ii) that the mark is well known in, or that the mark has been registered or that (k) the outcome of litigations dealing with the issue of whether the mark is a
an application for registration of the mark has been filed in or in respect of, any well-known mark; and
jurisdiction other than the Member State; or

(l) the presence or absence of identical or similar marks validly registered for or
(iii) that the mark is well known by the public at large in the Member used on identical or similar goods or services and owned by persons other
State.34 (Italics in the original decision; boldface supplied) than the person claiming that his mark is a well-known mark. (Emphasis
supplied)

Indeed, Section 123.1(e) of R.A. No. 8293 now categorically states that a mark which is considered
by the competent authority of the Philippines to be well-known internationally and in the
Philippines, whether or not it is registered here, cannot be registered by another in the
Philippines. Section 123.1(e) does not require that the well-known mark be used in commerce in
on December 31, 1953 for athletic uniforms, boxer shorts, briefs, caps, coats,
leather coats, sports coats, gym shorts, infant jackets, leather jackets, night
shirts, shirts, socks, sweat pants, sweatshirts, sweaters and underwear (Class
Since any combination of the foregoing criteria is sufficient to determine that a mark is well-known, 25). The applications for registration with the USPTO were filed on September
it is clearly not necessary that the mark be used in commerce in the Philippines. Thus, while under 9, 1996, the mark Harvard was registered on December 9, 1997 and the mark
the territoriality principle a mark must be used in commerce in the Philippines to be entitled to Harvard Ve ri tas Shield Symbol was registered on September 30, 1997. 36
protection, internationally well-known marks are the exceptions to this rule.

We also note that in a Decision37 dated 18 December 2008 involving a separate case between
In the assailed Decision of the Office of the Director General dated 21 April 2008, the Director Harvard University and Streetward International, Inc.,38 the Bureau of Legal Affairs of the IPO ruled
General found that: that the mark Harvard is a well-known mark. This Decision, which cites among others the
numerous trademark registrations of Harvard University in various countries, has become final and
executory.
Traced to its roots or origin, HARVARD is not an ordinary word. It refers to no
other than Harvard University, a recognized and respected institution of higher
learning located in Cambridge, Massachusetts, U.S.A. Initially referred to There is no question then, and this Court so declares, that Harvard is a well-known name and mark
simply as the new college, the institution was named Harvard College on 13 not only in the United States but also internationally, including the Philippines. The mark Harvard is
March 1639, after its first principal donor, a young clergyman named John rated as one of the most famous marks in the world. It has been registered in at least 50 countries.
Harvard. A graduate of Emmanuel College, Cambridge in England, John It has been used and promoted extensively in numerous publications worldwide. It has established
Harvard bequeathed about four hundred books in his will to form the basis of a considerable goodwill worldwide since the founding of Harvard University more than 350 years
the college library collection, along with half his personal wealth worth several ago. It is easily recognizable as the trade name and mark of Harvard University of Cambridge,
hundred pounds. The earliest known official reference to Harvard as a Massachusetts, U.S.A., internationally known as one of the leading educational institutions in the
university rather than college occurred in the new Massachusetts Constitution world. As such, even before Harvard University applied for registration of the mark Harvard in the
of 1780. Philippines, the mark was already protected under Article 6bis and Article 8 of the Paris Convention.
Again, even without applying the Paris Convention, Harvard University can invoke Section 4(a) of
R.A. No. 166 which prohibits the registration of a mark which may disparage or falsely suggest a
Records also show that the first use of the name HARVARD was in 1638 for connection withpersons, living or dead, institutions, beliefs x x x.
educational services, policy courses of instructions and training at the
university level. It has a Charter. Its first commercial use of the name or mark
HARVARD for Class 25 was on 31 December 1953 covered by UPTON Reg.
No. 2,119,339 and 2,101,295. Assuming in arguendo, that the Appellate may
have used the mark HARVARD in the Philippines ahead of the Appellant, it WHEREFORE, we DENY the petition. We AFFIRM the 24 October 2008 Decision and 8 January
still cannot be denied that the Appellants use thereof was decades, even 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 103394.
centuries, ahead of the Appellees. More importantly, the name HARVARD
was the name of a person whose deeds were considered to be a cornerstone SO ORDERED.
of the university. The Appellants logos, emblems or symbols are owned by
Harvard University. The name HARVARD and the logos, emblems or symbols
are endemic and cannot be separated from the institution. 35

Finally, in its assailed Decision, the Court of Appeals ruled:

Records show that Harvard University is the oldest and one of the foremost
educational institutions in the United States, it being established in 1636. It is
located primarily in Cambridge, Massachusetts and was named after John
Harvard, a puritan minister who left to the college his books and half of his
estate.

The mark Harvard College was first used in commerce in the United States in
1638 for educational services, specifically, providing courses of instruction and
training at the university level (Class 41). Its application for registration with the
United States Patent and Trademark Office was filed on September 20, 2000
and it was registered on October 16, 2001. The marks Harvard and Harvard
Ve ri tas Shield Symbol were first used in commerce in the the United States
G.R. No. L-48226 December 14, 1942 First. Counsel for the petitioner, in a well-written brief, makes a frontal sledge-hammer attack on the
validity of respondent's trade-mark "Ang Tibay." He contends that the phrase "Ang Tibay" as
ANA L. ANG, petitioner, employed by the respondent on the articles manufactured by him is a descriptive term because,
"freely translate in English," it means "strong, durable, lasting." He invokes section 2 of Act No. 666,
vs.
TORIBIO TEODORO, respondent. which provides that words or devices which related only to the name, quality, or description of the
merchandise cannot be the subject of a trade-mark. He cites among others the case of Baxter vs.
Zuazua (5 Phil., 16), which involved the trade-mark "Agua de Kananga" used on toilet water, and in
OZAETA, J.: which this Court held that the word "Kananga," which is the name of a well-known Philippine tree or
its flower, could not be appropriated as a trade-mark any more than could the words "sugar,"
Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of Appeals "tobacco," or "coffee." On the other hand, counsel for the respondent, in an equally well-prepared
reversing that of the Court of First Instance of Manila and directing the Director of Commerce to and exhaustive brief, contend that the words "Ang Tibay" are not descriptive but merely suggestive
cancel the registration of the trade-mark "Ang Tibay" in favor of said petitioner, and perpetually and may properly be regarded as fanciful or arbitrary in the legal sense. The cite several cases in
enjoining the latter from using said trade-mark on goods manufactured and sold by her. which similar words have been sustained as valid trade-marks, such as "Holeproof" for
hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for neckties and sweaters. 3

Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole proprietor,
has continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture We find it necessary to go into the etymology and meaning of the Tagalog words "Ang Tibay" to
and sale of slippers, shoes, and indoor baseballs since 1910. He formally registered it as determine whether they are a descriptive term, i.e., whether they relate to the quality or description
trade-mark on September 29, 1915, and as trade-name on January 3, 1933. The growth of his of the merchandise to which respondent has applied them as a trade-mark. The word "ang" is a
business is a thrilling epic of Filipino industry and business capacity. Starting in an obscure shop in definite article meaning "the" in English. It is also used as an adverb, a contraction of the word
1910 with a modest capital of P210 but with tireless industry and unlimited perseverance, Toribio "anong" (what or how). For instance, instead of saying, "Anong ganda!" ("How beautiful!"), we
Teodoro, then an unknown young man making slippers with his own hands but now a prominent ordinarily say, "Ang ganda!" Tibay is a root word from which are derived the verb magpatibay (to
business magnate and manufacturer with a large factory operated with modern machinery by a strenghten; the nouns pagkamatibay (strength, durability), katibayan (proof, support,
great number of employees, has steadily grown with his business to which he has dedicated the strength), katibay-tibayan (superior strength); and the adjectives matibay (strong, durable,
best years of his life and which he has expanded to such proportions that his gross sales from 1918 lasting), napakatibay (very strong), kasintibay or magkasintibay (as strong as, or of equal strength).
to 1938 aggregated P8,787,025.65. His sales in 1937 amounted to P1,299,343.10 and in 1938, The phrase "Ang Tibay" is an exclamation denoting administration of strength or durability. For
P1,133,165.77. His expenses for advertisement from 1919 to 1938 aggregated P210,641.56. instance, one who tries hard but fails to break an object exclaims, "Ang tibay!" (How strong!") It may
also be used in a sentence thus, "Ang tibay ng sapatos mo!" (How durable your shoes are!") The
phrase "ang tibay" is never used adjectively to define or describe an object. One does not say, "ang
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts on tibay sapatos" or "sapatos ang tibay" is never used adjectively to define or describe an object. One
April 11, 1932, and established a factory for the manufacture of said articles in the year 1937. In the does not say, "ang tibay sapatos" or "sapatos ang tibay" to mean "durable shoes," but "matibay na
following year (1938) her gross sales amounted to P422,682.09. Neither the decision of the trial sapatos" or "sapatos na matibay."
court nor that of the Court of Appeals shows how much petitioner has spent or advertisement. But
respondent in his brief says that petitioner "was unable to prove that she had spent a single
centavo advertising "Ang Tibay" shirts and pants prior to 1938. In that year she advertised the From all of this we deduce that "Ang Tibay" is not a descriptive term within the meaning of the
factory which she had just built and it was when this was brought to the attention of the appellee Trade-Mark Law but rather a fanciful or coined phrase which may properly and legally be
that he consulted his attorneys and eventually brought the present suit." appropriated as a trade-mark or trade-name. In this connection we do not fail to note that when the
petitioner herself took the trouble and expense of securing the registration of these same words as
a trademark of her products she or her attorney as well as the Director of Commerce was
The trial court (Judge Quirico Abeto) presiding absolved the defendant from the complaint, with undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence could be
costs against the plaintiff, on the grounds that the two trademarks are dissimilar and are used on legally used and validly registered as a trade-mark. It seems stultifying and puerile for her now to
different and non-competing goods; that there had been no exclusive use of the trade-mark by the contend otherwise, suggestive of the story of sour grapes. Counsel for the petitioner says that the
plaintiff; and that there had been no fraud in the use of the said trade-mark by the defendant function of a trade-mark is to point distinctively, either by its own meaning or by association, to the
because the goods on which it is used are essentially different from those of the plaintiff. The origin or ownership of the wares to which it is applied. That is correct, and we find that "Ang Tibay,"
second division of the Court of Appeals, composed of Justices Bengson, Padilla, Lopez Vito, as used by the respondent to designate his wares, had exactly performed that function for
Tuason, and Alex Reyes, with Justice Padilla as ponente, reversed that judgment, holding that by twenty-two years before the petitioner adopted it as a trade-mark in her own business. Ang Tibay
uninterrupted an exclusive use since 191 in the manufacture of slippers and shoes, respondent's shoes and slippers are, by association, known throughout the Philippines as products of the Ang
trade-mark has acquired a secondary meaning; that the goods or articles on which the two Tibay factory owned and operated by the respondent Toribio Teodoro.
trade-marks are used are similar or belong to the same class; and that the use by petitioner of said
trade-mark constitutes a violation of sections 3 and 7 of Act No. 666. The defendant Director of
Commerce did not appeal from the decision of the Court of Appeals. Second. In her second assignment of error petitioner contends that the Court of Appeals erred in
holding that the words "Ang Tibay" had acquired a secondary meaning. In view of the conclusion
we have reached upon the first assignment of error, it is unnecessary to apply here the doctrine of
"secondary meaning" in trade-mark parlance. This doctrine is to the effect that a word or phrase
originally incapable of exclusive appropriation with reference to an article of the market, because The burden of petitioner's argument is that under sections 11 and 20 the registration by respondent
geographically or otherwise descriptive, might nevertheless have been used so long and so of the trade-mark "Ang Tibay" for shoes and slippers is no safe-guard against its being used by
exclusively by one producer with reference to his article that, in that trade and to that branch of the petitioner for pants and shirts because the latter do not belong to the same class of merchandise or
purchasing public, the word or phrase has come to mean that the article was his product. (G. & C. articles as the former; that she cannot be held guilty of infringement of trade-mark under section 3
Merriam Co. vs. Salfield, 198 F., 369, 373.) We have said that the phrase "Ang Tibay," being because respondent's mark is not a valid trade-mark, nor has it acquired a secondary meaning;
neither geographic nor descriptive, was originally capable of exclusive appropriation as a that pants and shirts do not possess the same descriptive properties as shoes and slippers; that
trade-mark. But were it not so, the application of the doctrine of secondary meaning made by the neither can she be held guilty of unfair competition under section 7 because the use by her of the
Court of Appeals could nevertheless be fully sustained because, in any event, by respondent's long trade-mark "Ang Tibay" upon pants and shirts is not likely to mislead the general public as to their
and exclusive use of said phrase with reference to his products and his business, it has acquired a origin or ownership; and that there is now showing that she in unfairly or fraudulently using that
proprietary connotation. (Landers, Frary, and Clark vs. Universal Cooler Corporation, 85 F. [2d], mark "Ang Tibay" against the respondent. If we were interpreting the statute for the first time and in
46.) the first decade of the twentieth century, when it was enacted, and were to construe it strictly and
literally, we might uphold petitioner's contentions. But law and jurisprudence must keep abreast
with the progress of mankind, and the courts must breathe life into the statutes if they are to serve
Third. Petitioner's third assignment of error is, that the Court of Appeals erred in holding that pants
their purpose. Our Trade-mark Law, enacted nearly forty years ago, has grown in its implications
and shirts are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No.
and practical application, like a constitution, in virtue of the life continually breathed into it. It is not
666. She also contends under her fourth assignment of error (which we deem convenient to pass
of merely local application; it has its counterpart in other jurisdictions of the civilized world from
upon together with the third) that there can neither be infringement of trade-mark under section 3
whose jurisprudence it has also received vitalizing nourishment. We have to apply this law as it has
nor unfair competition under section 7 through her use of the words "Ang Tibay" in connection with
grown and not as it was born. Its growth or development abreast with that of sister statutes and
pants and shirts, because those articles do not belong to the same class of merchandise as shoes
jurisprudence in other jurisdictions is reflected in the following observation of a well-known author:
and slippers.

The question raised by petitioner involve the scope and application of sections 3,7, 11, 13, and 20 This fundamental change in attitude first manifested itself in the year 1915-1917. Until about then,
the courts had proceeded on the theory that the same trade-mark, used on un-like goods, could not
of the Trade-Mark Law (Act No. 666.) Section 3 provides that "any person entitled to the exclusive
cause confusion in trade and that, therefore, there could be no objection to the use and registration
use of a trade-mark to designate the origin or ownership of goods he has made or deals in, may
of a well-known mark by a third party for a different class of goods. Since 1916 however, a growing
recover damages in a civil actions from any person who has sold goods of a similar kind, bearing
sentiment began to arise that in the selection of a famous mark by a third party, there was generally
such trade-mark . . . The complaining party . . . may have a preliminary injunction, . . . and such
the hidden intention to "have a free ride" on the trade-mark owner's reputation and good will.
injunction upon final hearing, if the complainant's property in the trade-mark and the defendant's
(Derenberg, Trade-Mark Protection & Unfair Trading, 1936 edition, p. 409.)
violation thereof shall be fully established, shall be made perpetual, and this injunction shall be part
of the judgment for damages to be rendered in the same cause." Section 7 provides that any
person who, in selling his goods, shall give them the general appearance of the goods of another In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair
either in the wrapping of the packages, or in the devices or words thereon, or in any other feature of Trading, the test employed by the courts to determine whether noncompeting goods are or are not
their appearance, which would be likely to influence purchasers to believe that the goods offered of the same class is confusion as to the origin of the goods of the second user. Although two
are those of the complainant, shall be guilty of unfair competition, and shall be liable to an action for noncompeting articles may be classified under two different classes by the Patent Office because
damages and to an injunction, as in the cases of trade-mark infringement under section 3. Section they are deemed not to possess the same descriptive properties, they would, nevertheless, be held
11 requires the applicant for registration of a trade-mark to state, among others, "the general class by the courts to belong to the same class if the simultaneous use on them of identical or closely
of merchandise to which the trade-mark claimed has been appropriated." Section 13 provides that similar trade-marks would be likely to cause confusion as to the origin, or personal source, of the
no alleged trade-mark or trade name shall be registered which is identical with a registered or second user's goods. They would be considered as not falling under the same class only if they are
known trade-mark owned by another and appropriate to the same class of merchandise, or which so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the
to nearly resembles another person's lawful trade-mark or trade-name as to be likely to cause first user made the second user's goods.
confusion or mistake in the mind of the public, or to deceive purchasers. And section 2 authorizes
the Director of Commerce to establish classes of merchandise for the purpose of the registration of
Such construction of the law is induced by cogent reasons of equity and fair dealing. The courts
trade-marks and to determine the particular description of articles included in each class; it also
have come to realize that there can be unfair competition or unfair trading even if the goods are
provides that "an application for registration of a trade-mark shall be registered only for one class of
non-competing, and that such unfair trading can cause injury or damage to the first user of a given
articles and only for the particular description of articles mentioned in said application."
trade-mark, first, by prevention of the natural expansion of his business and, second, by having his
business reputation confused with and put at the mercy of the second user. Then noncompetitive
We have underlined the key words used in the statute: "goods of a similar kin," "general class of products are sold under the same mark, the gradual whittling away or dispersion of the identity and
merchandise," "same class of merchandise," "classes of merchandise," and "class of articles," hold upon the public mind of the mark created by its first user, inevitably results. The original owner
because it is upon their implications that the result of the case hinges. These phrases, which refer is entitled to the preservation of the valuable link between him and the public that has been created
to the same thing, have the same meaning as the phrase "merchandise of the same descriptive by his ingenuity and the merit of his wares or services. Experience has demonstrated that when a
properties" used in the statutes and jurisprudence of other jurisdictions. well-known trade-mark is adopted by another even for a totally different class of goods, it is done to
get the benefit of the reputation and advertisements of the originator of said mark, to convey to the
public a false impression of some supposed connection between the manufacturer of the article
sold under the original mark and the new articles being tendered to the public under the same or petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride
similar mark. As trade has developed and commercial changes have come about, the law of unfair on the reputation and selling power it has acquired at the hands of the respondent. As observed in
competition has expanded to keep pace with the times and the element of strict competition in itself another case, 12 the field from which a person may select a trade-mark is practically unlimited, and
has ceased to be the determining factor. The owner of a trade-mark or trade-name has a property hence there is no excuse for impinging upon or even closely approaching the mark of a business
right in which he is entitled to protection, since there is damage to him from confusion of reputation rival. In the unlimited field of choice, what could have been petitioner's purpose in selecting "Ang
or goodwill in the mind of the public as well as from confusion of goods. The modern trend is to give Tibay" if not for its fame?
emphasis to the unfairness of the acts and to classify and treat the issue as a fraud.
Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain the use of
A few of the numerous cases in which the foregoing doctrines have been laid down in one form or the mark "Ang Tibay." Her counsel suggests that instead of enjoining her from using it, she may be
another will now be cited: (1) In Teodoro Kalaw Ng Khe vs. Level Brothers Company (G.R. No. required to state in her labels affixed to her products the inscription: "Not manufactured by Toribio
46817), decided by this Court on April 18, 1941, the respondent company (plaintiff below) was Teodoro." We think such practice would be unethical and unworthy of a reputable businessman. To
granted injunctive relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy" for the suggestion of petitioner, respondent may say, not without justice though with a tinge of
hair pomade, they having been originally used by the respondent for soap; The Court held in effect bitterness: "Why offer a perpetual apology or explanation as to the origin of your products in order
that although said articles are noncompetitive, they are similar or belong to the same class. (2) to use my trade-mark instead of creating one of your own?" On our part may we add, without
In Lincoln Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of the meaning to be harsh, that a self-respecting person does not remain in the shelter of another but
well-known Lincoln automobile was granted injunctive relief against the use of the word "Lincoln" by builds one of his own.
another company as part of its firm name. (3) The case of Aunt Jemima Mills Co. vs. Rigney &
Co. (247 F., 407), involved the trade-mark "Aunt Jemima," originally used on flour, which the
The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the three
defendant attempted to use on syrup, and there the court held that the goods, though different, are
instances. So ordered.
so related as to fall within the mischief which equity should prevent. (4) In Tiffany & Co., vs. Tiffany
Productions, Inc. (264 N.Y.S., 459; 23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern,
was granted injunctive relief against the defendant, a manufacturer of motion pictures, from using
the name "Tiffany." Other famous cases cited on the margin, wherein the courts granted injunctive
relief, involved the following trade-marks or trade-names: "Kodak," for cameras and photographic
supplies, against its use for bicycles. 4 "Penslar," for medicines and toilet articles, against its use for
cigars; 5 "Rolls-Royce," for automobiles. against its use for radio tubes; 6 "Vogue," as the name of a
magazine, against its use for hats; 7 "Kotex," for sanitary napkins, against the use of "Rotex" for
vaginal syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks and keys,
against its use for electric flashlights; 10 and "Waterman," for fountain pens, against its use for razor
blades. 11lawphil.net

Against this array of famous cases, the industry of counsel for the petitioner has enabled him to cite
on this point only the following cases: (1) Mohawk Milk Products vs. General Distilleries
Corporation (95 F. [2d], 334), wherein the court held that gin and canned milk and cream do not
belong to the same class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d],
194), wherein the court held that the words "Popular Mechanics" used as the title of a magazine
and duly registered as a trade-mark were not infringed by defendant's use of the words "Modern
Mechanics and Inventions" on a competitive magazine, because the word "mechanics" is merely a
descriptive name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d], 688),
wherein the plaintiff unsuccessfully attempted to enjoin the defendant from using the word
"Visualized" in connection with history books, the court holding that said word is merely descriptive.
These cases cites and relied upon by petitioner are obviously of no decisive application to the case
at bar.

We think reasonable men may not disagree that shoes and shirts are not as unrelated as fountain
pens and razor blades, for instance. The mere relation or association of the articles is not
controlling. As may readily be noted from what we have heretofore said, the proprietary connotation
that a trade-mark or trade-name has acquired is of more paramount consideration. The Court of
Appeals found in this case that by uninterrupted and exclusive use since 1910 of respondent's
registered trade-mark on slippers and shoes manufactured by him, it has come to indicate the
origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by
G.R. No. 143993 August 18, 2004 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.
MCDONALDS CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners,
vs. 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
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY, and unfair competition. In its Order of 11 July 1990, the RTC issued a temporary restraining order
JESUS AYCARDO, ARACELI AYCARDO, and GRACE HUERTO, respondents. (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]

DECISION In their Answer, respondents admitted that they have been using the name Big Mak Burger for their
fast-food business. Respondents claimed, however, that McDonalds does not have an exclusive
CARPIO, J.: 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 Case the PBPTT on 31 March 1979. One Rodolfo Topacio (Topacio) similarly registered the same mark
on 24 June 1983, prior to McDonalds registration on 18 July 1985. Alternatively, respondents
This is a petition for review[1] of the Decision dated 26 November 1999 of the Court of claimed that they are not liable for trademark infringement or for unfair competition, as the Big Mak
Appeals[2] finding respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement and mark they sought to register does not constitute a colorable imitation of the Big Mac mark.
unfair competition and ordering petitioners to pay respondents P1,900,000 in damages, and of Respondents asserted that they did not fraudulently pass off their hamburger sandwiches as those
its Resolution dated 11 July 2000 denying reconsideration. The Court of Appeals Decision of petitioners Big Mac hamburgers.[17] Respondents sought damages in their counterclaim.
reversed the 5 September 1994 Decision[3] of the Regional Trial Court of Makati, Branch 137,
finding respondent L.C. Big Mak Burger, Inc. liable for trademark infringement and unfair In their Reply, petitioners denied respondents claim that McDonalds is not the exclusive owner of
competition. the Big Mac mark. Petitioners asserted that while the Isaiyas Group and Topacio did register the
Big Mac mark ahead of McDonalds, the Isaiyas Group did so only in the Supplemental Register of
The Facts the PBPTT and such registration does not provide anyprotection. McDonalds disclosed that it
had acquired Topacios rights to his registration in a Deed of Assignment dated 18 May 1981. [18]
Petitioner McDonalds Corporation (McDonalds) is a corporation organized under the
laws of Delaware, United States. McDonalds operates, by itself or through its franchisees, a global The Trial Courts Ruling
chain of fast-food restaurants. McDonalds[4] owns a family of marks[5] including the Big Mac mark
for its double-decker hamburger sandwich.[6]McDonalds registered this trademark with the United On 5 September 1994, the RTC rendered judgment (RTC Decision) finding respondent corporation
States Trademark Registry on 16 October 1979.[7] Based on this Home Registration, McDonalds liable for trademark infringement and unfair competition. However, the RTC dismissed the
applied for the registration of the same mark in the Principal Register of the then Philippine Bureau complaint against private respondents and the counterclaim against petitioners for lack of merit and
of Patents, Trademarks and Technology (PBPTT), now the Intellectual Property Office insufficiency of evidence. The RTC held:
(IPO). Pendingapproval of its application, McDonalds introduced its Big Mac hamburger
sandwiches in the Philippine market in September 1981. On 18 July 1985, the PBPTT allowed Undeniably, the mark B[ig] M[ac] is a registered trademark for
registration of the Big Mac mark in the Principal Register based on its Home Registration in the plaintiff McDonalds, and as such, it is entitled [to] protection against
United States. infringement.

Like its other marks, McDonalds displays the Big Mac mark in items[8] and xxxx
paraphernalia[9] in its restaurants, and in its outdoor and indoor signages. From 1982 to 1990, There exist some distinctions between the names B[ig] M[ac] and B[ig]
McDonalds spent P10.5 million in advertisement for Big Mac hamburger sandwiches alone.[10] M[ak] as appearing in the respective signages, wrappers and containers of the
food products of the parties. But infringement goes beyond the physical
Petitioner McGeorge Food Industries (petitioner McGeorge), a domestic corporation, is features of the questioned name and the original name. There are still other
McDonalds Philippine franchisee.[11] factors to be considered.

Respondent L.C. Big Mak Burger, Inc. (respondent corporation) is a domestic xxxx
corporation which operates fast-food outlets and snack vans in Metro Manila and nearby
provinces.[12] Respondent corporations menu includes hamburger sandwiches and other food Significantly, the contending parties are both in the business of fast-food
items.[13] Respondents Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, chains and restaurants. An average person who is hungry and wants to eat a
Araceli Aycardo, and Grace Huerto (private respondents) are the incorporators, stockholders and hamburger sandwich may not be discriminating enough to look for a
directors of respondent corporation.[14] McDonalds 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
On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the Big order a B[ig] M[ak] hamburger sandwich. Plaintiff McDonalds fast-food chain
Mak mark for its hamburger sandwiches. McDonalds opposed respondent corporations application has attained wide popularity and acceptance by the consuming public so much
on the ground that Big Mak was a colorable imitation of its registered Big Mac mark for the same so that its air-conditioned food outlets and restaurants will perhaps not be
food products. McDonalds also informed respondent Francis Dy (respondent Dy), the chairman of mistaken by many to be the same as defendant corporations mobile snack
vans located along busy streets or highways. But the thing is that what is being in the amount of P100,000.00, and attorneys fees and expenses of litigation
sold by both contending parties is a food item a hamburger sandwich which is in the amount of P100,000.00;
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 3. The complaint against defendants Francis B. Dy, Edna A. Dy,
a food-product of plaintiff McDonalds, or a subsidiary or allied Rene B. Dy, Wiliam B. Dy, Jesus Aycardo, Araceli Aycardo and Grace
outlet thereof. Surely, defendant corporation has its own secret ingredients to Huerto, as well as all counter-claims, are dismissed for lack of merit as well
make its hamburger sandwiches as palatable and as tasty as the other brands as for insufficiency of evidence.[20]
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 Respondents appealed to the Court of Appeals.
connection withits food business. xxxx

Did the same acts of defendants in using the name B[ig] M[ak] as a trademark The Ruling of the Court of Appeals
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 On 26 November 1999, the Court of Appeals rendered judgment (Court of Appeals Decision)
an act of unfair competition under Section 29 of the Trademark Law? reversing the RTC Decision and ordering McDonalds to pay respondents P1,600,000 as actual and
compensatory damages and P300,000 as moral damages. The Court of Appeals held:
The answer is in the affirmative. xxxx
Plaintiffs-appellees in the instant case would like to impress on this
The xxx provision of the law concerning unfair competition is broader and Court that the use of defendants-appellants of its corporate name the whole
more inclusive than the law concerning the infringement of trademark, which is L.C. B[ig] M[ak] B[urger], I[nc]. which appears on their food packages,
of more limited range, but within its narrower range recognizes a more signages and advertisements is an infringement of their trademark B[ig] M[ac]
exclusive right derived by the adoption and registration of the trademark by the which they use to identify [their] double decker sandwich, sold in a Styrofoam
person whose goods or services are first associated therewith. box packaging material with the McDonalds logo of umbrella M stamped
xxxNotwithstanding the distinction between an action for trademark thereon, together with the printed mark in red bl[o]ck capital letters, the words
infringement and an action for unfair competition, however, the law extends being separated by a single space.Specifically, plaintiffs-appellees argue that
substantially the same relief to the injured party for both cases. (See Sections defendants-appellants use of their corporate name is a colorable imitation of
23 and 29 of Republic Act No. 166) their trademark Big Mac.

Any conduct may be said to constitute unfair competition if the effect is to pass xxxx
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 To Our mind, however, this Court is fully convinced that no colorable imitation
sentimental reasons but was clearly made to take advantage of the reputation, exists. As the definition dictates, it is not sufficient that a similarity exists
popularity and the established goodwill of plaintiff McDonalds. For, as stated in in both names, but that more importantly, the over-all presentation, or in their
Section 29, a person is guilty of unfair competition who in selling his essential, substantive and distinctive parts is such as would likely MISLEAD or
goods shall give them the general appearance, of goods of another CONFUSE persons in the ordinary course of purchasing the genuine
manufacturer or dealer, either as to the goods themselves or in the wrapping article. A careful comparison of the way the trademark B[ig] M[ac] is being
of the packages in which they are contained, or the devices or words thereon, used by plaintiffs-appellees and corporate name L.C. Big Mak Burger, Inc. by
or in any other feature of their appearance, which would likely influence defendants-appellants, would readily reveal that no confusion could take place,
purchasers to believe that the goods offered are those of a manufacturer or or that the ordinary purchasers would be misled by it. As pointed out by
dealer other than the actual manufacturer or dealer. Thus, plaintiffs have defendants-appellants, the plaintiffs-appellees trademark is used to designate
established their valid cause of action against the defendants for trademark only one product, a double decker sandwich sold in a Styrofoam box with the
infringement and unfair competition and for damages.[19] 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
The dispositive portion of the RTC Decision provides: 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,
WHEREFORE, judgment is rendered in favor of plaintiffs noodles, pizza, and sandwiches such as hotdog, ham, fish burger and
McDonalds Corporation and McGeorge Food Industries, Inc. and against hamburger. Secondly, defendants-appellants corporate or business name
defendant L.C. Big Mak Burger, Inc., as follows: 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
1. The writ of preliminary injunction issued in this case on [16 Mak are the upper case letter L.C.. Below the words Big Mak are the words
August 1990] is made permanent; Burger, Inc. spelled out in upper case letters. Furthermore, said corporate or
business name appearing in such food packages and signages is always
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay accompanied by the company mascot, a young chubby boy named Maky who
plaintiffs actual damages in the amount of P400,000.00, exemplary damages wears a red T-shirt with the upper case m appearing therein and a blue lower
garment. Finally, the defendants-appellants food packages are made of plastic Petitioners sought reconsideration of the Court of Appeals Decision but the appellate court denied
material. their motion in its Resolution of 11 July 2000.

xxxx Hence, this petition for review.

xxx [I]t is readily apparent to the naked eye that there appears a vast Petitioners raise the following grounds for their petition:
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, I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS
there are glaring dissimilarities between plaintiffs-appellees trademark and CORPORATE NAME L.C. BIG MAK BURGER, INC. IS NOT A
defendants-appellants corporate name. Plaintiffs-appellees product carrying COLORABLE IMITATION OF THE MCDONALDS TRADEMARK BIG
the trademark B[ig] M[ac] is a double decker sandwich (depicted in the tray MAC, SUCH COLORABLE IMITATION BEING AN ELEMENT
mat containing photographs of the various food products xxx sold in a OF TRADEMARK INFRINGEMENT.
Styrofoam box with the McDonalds logo and trademark in red, bl[o]ck capital
letters printed thereon xxx at a price which is more expensive than the A. Respondents use the words Big Mak as trademark for their
defendants-appellants comparable food products. In order to buy a Big Mac, a products and not merely as their business or corporate name.
customer needs to visit an air-conditioned McDonalds restaurant
usually located in a nearby commercial center, advertised and identified by its B. As a trademark, respondents Big Mak is undeniably and
logo - the umbrella M, and its mascot Ronald McDonald. A typical unquestionably similar to petitioners Big Mac trademark based
McDonalds restaurant boasts of a playground for kids, a second floor to on the dominancy test and the idem sonans test resulting
accommodate additional customers, a drive-thru to allow customers with cars inexorably in confusion on the part of the consuming public.
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 II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE
buying a B[ig] M[ac], it is necessary to specify it by its trademark. Thus, a INHERENT SIMILARITY BETWEEN THE MARK BIG MAK AND THE
customer needs to look for a McDonalds and enter it first before he can find a WORD MARK BIG MAC AS AN INDICATION OF RESPONDENTS
hamburger sandwich which carry the mark Big Mac. On the other INTENT TO DECEIVE OR DEFRAUD FOR PURPOSES
hand, defendants-appellants sell their goods through snack vans xxxx OF ESTABLISHING UNFAIR COMPETITION.[22]

Anent the allegation that defendants-appellants are guilty of unfair competition, Petitioners pray that we set aside the Court of Appeals Decision and reinstate the RTC Decision.
We likewise find the same untenable.
In their Comment to the petition, respondents question the propriety of this petition as it
Unfair competition is defined as the employment of deception or any other allegedly raises only questions of fact. On the merits, respondents contend that the Court of
means contrary to good faith by which a person shall pass off the goods Appeals committed no reversible error in finding them not liable for trademark infringement and
manufactured by him or in which he deals, or his business, or service, for unfair competition and in ordering petitioners to pay damages.
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. The Issues
29, Rep. Act No. 166, as amended).
The issues are:
To constitute unfair competition therefore it must necessarily follow that there
was malice and that the entity concerned was in bad faith. 1. Procedurally, whether the questions raised in this petition are proper for a petition for
review under Rule 45.
In the case at bar, We find no sufficient evidence adduced by
plaintiffs-appellees that defendants-appellants deliberately tried to pass off the 2. On the merits, (a) whether respondents used the words Big Mak not only as part of the
goods manufactured by them for those of plaintiffs-appellees. The mere corporate name L.C. Big Mak Burger, Inc. but also as a trademark for their hamburger products,
suspected similarity in the sound of the defendants-appellants corporate name and (b) whether respondent corporation is liable for trademark infringement and unfair
with the plaintiffs-appellees trademark is not sufficient evidence to conclude competition.[23]
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 The Courts Ruling
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 The petition has merit.
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 On Whether the Questions Raised in the Petition are
to acts of another has the burden of proving that the latter acted in bad faith or Proper for a Petition for Review
with ill motive. [21]

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 selling respondents hamburger sandwiches. This likely caused confusion in the mind of the
facts. There is a question of fact when the doubt or difference arises on the truth or falsity of purchasing public on the source of the hamburgers or the identity of the business.
the alleged facts. [25]
To establish trademark infringement, the following elements must be shown: (1) the
Here, petitioners raise questions of fact and law in assailing the Court of Appeals findings on validity of plaintiffs mark; (2) the plaintiffs ownership of the mark; and (3) the use ofthe mark or its
respondent corporations non-liability for trademark infringement and unfair competition. Ordinarily, colorable imitation by the alleged infringer results in likelihood of confusion.[34] Of these, it is
the Court can deny due course to such a petition. In view, however, of the contradictory findings of the element of likelihood of confusion that is the gravamen of trademark infringement.[35]
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. On the Validity of the Big Mac Mark
Court of Appeals[27] which also involved a suit for trademark infringement and unfair competition in and McDonalds Ownership of such Mark
which the trial court and the Court of Appeals arrived at conflicting findings.

On the Manner Respondents Used A mark is valid if it is distinctive and thus not barred from
Big Mak in their Business registration under Section 4[36] of RA 166 (Section 4). However, once registered, not only the marks
validity but also the registrants ownership of the mark is prima facie presumed.[37]
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. 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
The contention has merit. thus incapable of exclusive appropriation.[38]

The evidence presented during the hearings on petitioners motion for the issuance of a writ of The contention has no merit. The Big Mac mark, which should be treated in its entirety and not
preliminary injunction shows that the plastic wrappings and plastic bags used by respondents for dissected word for word,[39] is neither generic nor descriptive. Generic marks are commonly used as
their hamburger sandwiches bore the words Big Mak. The other descriptive words burger and the name or description of a kind of goods,[40] such as Lite for beer[41] or Chocolate Fudge for
100% pure beef were set in smaller type, along with the locations of branches.[28] Respondents chocolate soda drink.[42] Descriptive marks, on the other hand, convey the characteristics, functions,
cash invoices simply refer to their hamburger sandwiches as Big Mak.[29] It is respondents snack qualities or ingredients of a product to one who has never seen it or does not know it exists,[43] such
vans that carry the words L.C. Big Mak Burger, Inc.[30] as Arthriticare for arthritis medication.[44] On the contrary, Big Mac falls under the class of fanciful or
It was only during the trial that respondents presented in evidence the plastic wrappers and bags arbitrary marks as it bears no logical relation to the actual characteristics of the product it
for their hamburger sandwiches relied on by the Court of Appeals.[31]Respondents plastic wrappers represents.[45] As such, it is highly distinctive and thus valid. Significantly, the trademark Little
and bags were identical with those petitioners presented during the hearings for the injunctive writ Debbie for snack cakes was found arbitrary or fanciful. [46]
except that the letters L.C. and the words Burger, Inc. in respondents evidence were added above The Court also finds that petitioners have duly established McDonalds exclusive
and below the words Big Mak, respectively. Since petitioners complaint was based on facts existing ownership of the Big Mac mark. Although Topacio and the Isaiyas Group registered the Big Mac
before and during the hearings on the injunctive writ, the facts established during those hearings mark ahead of McDonalds, Topacio, as petitioners disclosed, had already assigned his rights to
are the proper factual bases for the disposition of the issues raised in this petition. McDonalds. 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
On the Issue of Trademark Infringement 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 registrants exclusive right to use
Section 22 (Section 22) of Republic Act No. 166, as amended (RA 166), the law applicable to this the mark on the goods specified in the certificate.[48]
case,[32] defines trademark infringement as follows:
On Types of Confusion
Infringement, what constitutes. Any person who [1] shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable Section 22 covers two types of confusion arising from the use of similar or colorable imitation
imitation of any registered mark or trade-name in connection with the sale, marks, namely, confusion of goods (product confusion) and confusion of business (source or origin
offering for sale, or advertising of any goods, business or services on or in confusion). In Sterling Products International, Incorporated v. Farbenfabriken Bayer
connection with which such use is likely to cause confusion or mistake or to Aktiengesellschaft, et al.,[49] the Court distinguished these two types of confusion, thus:
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 [Rudolf] Callman notes two types of confusion. The first is the confusion of
colorably imitate any such mark or trade-name and apply such reproduction, goods in which event the ordinarily prudent purchaser would be induced to
counterfeit, copy, or colorable imitation to labels, signs, prints, packages, purchase one product in the belief that he was purchasing the other. xxx The
wrappers, receptacles or advertisements intended to be used upon or in other is the confusion of business: Here though the goods of the parties are
connection with such goods, business or services, shall be liable to a civil different, the defendants product is such as might reasonably be assumed to
action by the registrant for any or all of the remedies herein provided.[33] 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.
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
Under Act No. 666,[50] the first trademark law, infringement was limited to confusion of goods only, goodwill, and of the dilution of the distinctive quality of the McDonalds
when the infringing mark is used on goods of a similar kind.[51] Thus, no relief was afforded to the marks, in particular, the mark B[ig] M[ac].[55] (Emphasis supplied)
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 Respondents admit that their business includes selling hamburger sandwiches, the same food
infringement, Section 22 of RA 166 deleted the requirement in question and expanded its scope to product that petitioners sell using the Big Mac mark. Thus, trademark infringement through
include such use of the mark or its colorable imitation that is likely to result in confusion on the confusion of business is also a proper issue in this case.

source or origin of such goods or services, or identity of such business.[52] Thus, while there is Respondents assert that their Big Mak hamburgers cater mainly to the low-income group
confusion of goods when the products are competing, confusion of business exists when the while petitioners Big Mac hamburgers cater to the middle and upper income groups. Even if this is
products are non-competing but related enough to produce confusion of affiliation. [53] 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,
On Whether Confusion of Goods and petitioners have the exclusive right to use the Big Mac mark. On the other hand, respondents would
Confusion of Business are Applicable 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
Petitioners claim that respondents use of the Big Mak mark on respondents hamburgers results in business.
confusion of goods, particularly with respect to petitioners hamburgers labeled Big Mac. Thus, Respondents further claim that petitioners use the Big Mac mark only on petitioners
petitioners alleged in their complaint: 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
1.15. Defendants have unduly prejudiced and clearly Mac double-deckers in a styrofoam box with the McDonalds logo and trademark in red, block letters
infringed upon the property rights of plaintiffs in the McDonalds Marks, at a price more expensive than the hamburgers of respondents. In contrast, respondents sell their
particularly the mark B[ig] M[ac]. Defendants unauthorized acts are likely, and Big Mak hamburgers in plastic wrappers and plastic bags. Respondents further point out that
calculated, to confuse, mislead or deceive the public into believing that petitioners restaurants are air-conditioned buildings with drive-thru service, compared to
the products and services offered by defendant Big Mak Burger, and the respondents mobile vans.
business it is engaged in, are approved and sponsored by, or affiliated with,
plaintiffs.[54] (Emphasis supplied) 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
Since respondents used the Big Mak mark on the same goods, i.e. hamburger sandwiches, that triple-decker, and whether wrapped in plastic or styrofoam, it remains the same hamburger food
petitioners Big Mac mark is used, trademark infringement through confusion of goods is a proper product. Even respondents use of the Big Mak mark on non-hamburger food products cannot
issue in this case. excuse their infringement of petitioners registered mark, otherwise registered marks will lose their
protection under the law.
Petitioners also claim that respondents use of the Big Mak mark in the sale of hamburgers, the The registered trademark owner may use his mark on the same or similar products, in
same business that petitioners are engaged in, results in confusion of different segments of the market, and at different price levels depending on variations of the
business.Petitioners alleged in their complaint: 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
1.10. For some period of time, and without the consent of plaintiff expansion of his business. Thus, the Court has declared:
McDonalds nor its licensee/franchisee, plaintiff McGeorge, and in clear
violation of plaintiffs exclusive right to use and/or appropriate the McDonalds Modern law recognizes that the protection to which the owner of a
marks, defendant Big Mak Burger acting through individual defendants, has trademark is entitled is not limited to guarding his goods or business
been operating Big Mak Burger, a fast food restaurant business dealing in the from actual market competition with identical or similar products of the parties,
sale of hamburger and cheeseburger sandwiches, french fries and other food but extends to all cases in which the use by a junior appropriator of a
products, and has caused to be printed on the wrapper of defendants food trade-mark or trade-name is likely to lead to a confusion of source, as
products and incorporated in its signages the name Big Mak Burger, which is where prospective purchasers would be misled into thinking that the
confusingly similar to and/or is a colorable imitation of the plaintiff complaining party has extended his business into the field (see 148 ALR
McDonalds mark B[ig] M[ac], xxx. Defendant Big Mak Burger has thus 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the
unjustly created the impression that its business is approved and infringer; or when it forestalls the normal potential expansion of his
sponsored by, or affiliated with, plaintiffs. xxxx business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).[56] (Emphasis supplied)

2.2 As a consequence of the acts committed by defendants, which On Whether Respondents Use of the Big Mak
unduly prejudice and infringe upon the property rights of plaintiffs McDonalds Mark Results in Likelihood of Confusion
and McGeorge as the real owner and rightful proprietor, and the
licensee/franchisee, respectively, of the McDonalds marks, and which are
likely to have caused confusion or deceived the public as to the true In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test
source, sponsorship or affiliation of defendants food products and and the holistic test.[57] The dominancy test focuses on the similarity of the prevalent features of the
restaurant business, plaintiffs have suffered and continue to competing trademarks that might cause confusion. In contrast, the holistic test requires the court to
suffer actual damages in the form of injury to their business reputation and
consider the entirety of the marks as applied to the products, including the labels and packaging, The test of dominancy is now explicitly incorporated into law in Section 155.1 of the
in determining confusing similarity. Intellectual Property Code which defines infringement as the colorable imitation of a registered
mark xxx or a dominant feature thereof.
The Court of Appeals, in finding that there is no likelihood of confusion that could arise Applying the dominancy test, the Court finds that respondents use of the Big Mak mark
in the use of respondents Big Mak mark on hamburgers, relied on the holistic test. Thus, the Court results in likelihood of confusion. First, Big Mak sounds exactly the same as Big Mac. Second, the
of Appeals ruled that it is not sufficient that a similarity exists in both name(s), but that more first word in Big Mak is exactly the same as the first word in Big Mac. Third, the first two letters in
importantly, the overall presentation, or in their essential, substantive and distinctive parts is such Mak are the same as the first two letters in Mac. Fourth, the last letter in Mak while a k sounds the
as would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing the genuine same as c when the word Mak is pronounced. Fifth, in Filipino, the letter k replaces c in spelling,
article. The holistic test considers the two marks in their entirety, as they appear on the goods with thus Caloocan is spelled Kalookan.
their labels and packaging. It is not enough to consider their words and compare the spelling and
pronunciation of the words.[58] 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
Respondents now vigorously argue that the Court of Appeals application of the holistic two marks have both two words and six letters, with the first word of both marks having the same
test to this case is correct and in accord with prevailing jurisprudence. 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.
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 determiningwhether they are Clearly, respondents have adopted in Big Mak not only the dominant but also
confusingly similar. Under the dominancy test, courts give greater weight to the similarity of the almost all the features of Big Mac. Applied to the same food product of hamburgers, the two
appearance of the product arising from the adoption of the dominant features of the registered marks will likely result in confusion in the public mind.
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 The Court has taken into account the aural effects of the words and letters contained in the marks
outlets and market segments. in determining the issue of confusing similarity. Thus, in Marvex Commercial Co., Inc. v. Petra
Hawpia & Co., et al.,[66] the Court held:
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,[60] the Court ruled:
The following random list of confusingly similar sounds in the
xxx It has been consistently held that the question of infringement of matter of trademarks, culled from Nims, Unfair Competition and Trade Marks,
a trademark is to be determined by the test of dominancy. Similarity in size, 1947, Vol. 1, will reinforce our view that SALONPAS and LIONPAS are
form and color, while relevant, is not conclusive. If the competing trademark confusingly similar in sound: Gold Dust and Gold Drop; Jantzen and Jass-Sea;
contains the main or essential or dominant features of another, and Silver Flash and Supper Flash; Cascarete and Celborite; Celluloid and
confusion and deception is likely to result, infringement takes place. Cellonite; Chartreuse and Charseurs; Cutex and Cuticlean; Hebe and Meje;
Duplication or imitation is not necessary; nor is it necessary that the infringing Kotex and Femetex; Zuso and Hoo Hoo. Leon Amdur, in his book Trade-Mark
label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Law and Practice, pp. 419-421, cities, as coming within the purview of
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. the idem sonans rule, Yusea and U-C-A, Steinway Pianos and Steinberg
Pflugh (CC) 180 Fed. 579). The question at issue in cases of infringement of Pianos, and Seven-Up and Lemon-Up. In Co Tiong vs. Director of Patents, this
trademarks is whether the use of the marks involved would be likely to cause Court unequivocally said that Celdura and Cordura are confusingly similar in
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the
Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; xxx) (Emphasis name Lusolin is an infringement of the trademark Sapolin, as the sound of the
supplied.) two names is almost the same. (Emphasis supplied)

Certainly, Big Mac and Big Mak for hamburgers create even greater confusion, not only aurally but
The Court reiterated the dominancy test in Lim Hoa v. Director of Patents,[61] Phil. Nut also visually.
Industry, Inc. v. Standard Brands Inc.,[62] Converse Rubber Corporation v. Universal Rubber Indeed, a person cannot distinguish Big Mac from Big Mak by their sound. When one
Products, Inc.,[63] and Asia Brewery, Inc. v. Court of Appeals.[64] In the 2001 case of Societe hears a Big Mac or Big Mak hamburger advertisement over the radio, one would not know whether
Des Produits Nestl, S.A. v. Court of Appeals,[65] the Court explicitly rejected the holistic test in the Mac or Mak ends with a c or a k.
this wise:
Petitioners aggressive promotion of the Big Mac mark, as borne by their advertisement expenses,
[T]he totality or holistic test is contrary to the elementary postulate of the has built goodwill and reputation for such mark making it one of the easily recognizable marks in
law on trademarks and unfair competition that confusing similarity is to the market today. This increases the likelihood that consumers will mistakenly associate petitioners
be determined on the basis of visual, aural, connotative comparisons hamburgers and business with those of respondents.
and overall impressions engendered by the marks in controversy as they
are encountered in the realities of the marketplace. (Emphasis supplied) 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 Dys mother (Maxima) and father (Kimsoy) is not credible. As petitioners well noted:
[R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at (b) Any person who by any artifice, or device, or who employs any other
a more creative choice for a corporate name by using the names of his parents, means calculated to induce the false belief that such person is offering the
especially since he was allegedly driven by sentimental reasons. For one, he services of another who has identified such services in the mind of the public;
could have put his fathers name ahead of his mothers, as is usually done in or
this patriarchal society, and derived letters from said names in that order.Or, (c) Any person who shall make any false statement in the course of trade or
he could have taken an equal number of letters (i.e., two) from each name, as who shall commit any other act contrary to good faith of a nature calculated to
is the more usual thing done. Surely, the more plausible reason behind discredit the goods, business or services of another. (Emphasis supplied)
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 alleged sentiment-focused explanation merely The essential elements of an action for unfair competition are (1) confusing similarity in
thought of as a convenient, albeit unavailing, excuse or defense for such an the general appearance of the goods, and (2) intent to deceive the public and defraud a
unfair choice of name.[67] 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
Absent proof that respondents adoption of the Big Mak mark was due to honest mistake for sale to the public.[75] Actual fraudulent intent need not be shown.[76]
or was fortuitous,[68] the inescapable conclusion is that respondents adopted the Big Mak mark to Unfair competition is broader than trademark infringement and includes passing off
ride on the coattails of the more established Big Mac mark.[69] This saves respondents much of the goods with or without trademark infringement. Trademark infringement is a form of unfair
expense in advertising to create market recognition of their mark and hamburgers.[70] 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
Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners appearance of the goods. There can be trademark infringement without unfair competition as when
claim of trademark infringement. 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]
On the Lack of Proof of
Actual Confusion 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]
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 Passing off (or palming off) takes place where the defendant, by imitative devices on the
22 requires the less stringent standard of likelihood of confusion only. While proof general appearance of the goods, misleads prospective purchasers into buying his merchandise
of actual confusion is the best evidence of infringement, its absence is inconsequential.[72] 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.
On the Issue of Unfair Competition
The RTC described the respective marks and the goods of petitioners and respondents
Section 29 (Section 29)[73] of RA 166 defines unfair competition, thus: in this wise:
xxxx
The mark B[ig] M[ac] is used by plaintiff McDonalds to identify its
Any person who will employ deception or any other means contrary to good double decker hamburger sandwich. The packaging material is a styrofoam
faith by which he shall pass off the goods manufactured by him or in which he box with the McDonalds logo and trademark in red with block capital letters
deals, or his business, or services for those of the one having established such printed on it. All letters of the B[ig] M[ac] mark are also in red and block capital
goodwill, or who shall commit any acts calculated to produce said letters. On the other hand, defendants B[ig] M[ak] script print is in orange with
result, shall be guilty of unfair competition, and shall be subject to an only the letter B and M being capitalized and the packaging material is plastic
action therefor. wrapper. xxxx Further, plaintiffs logo and mascot are the umbrella M and
In particular, and without in any way limiting the scope of unfair Ronald McDonalds, respectively, compared to the mascot of defendant
competition, the following shall be deemed guilty of unfair competition: Corporation which is a chubby boy called Macky displayed or printed between
(a) Any person, who in selling his goods shall give them the general the words Big and Mak.[81] (Emphasis supplied)
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 Respondents point to these dissimilarities as proof that they did not give their hamburgers the
contained, or the devices or words thereon, or in any feature of their general appearance of petitioners Big Mac hamburgers.
appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer, other The dissimilarities in the packaging are minor compared to the stark similarities in the
than the actual manufacturer or dealer, or who otherwise clothes the goods words that give respondents Big Mak hamburgers the general appearance of petitioners Big Mac
with such appearance as shall deceive the public and defraud another of his hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the
legitimate trade, or any subsequent vendor of such goods or any agent goods may be in the devices or words used on the wrappings. Respondents have applied on their
of any vendor engaged in selling such goods with a like purpose; 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 petitioners 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 23[83] (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 corporations 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 good[85] in view of the finding of unfair competition where intent to deceive the public is
essential. The award of attorneys 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.
G.R. No. 166115 FEBRUARY 2, 2007 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
MCDONALD’S CORPORATION, petitioner, respondents application, viz:
vs. WHEREFORE, the Opposition to the registration of the
MACJOY FOOD CORPORATION, respondent. 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
DECISION herein Respondent-Applicant is REJECTED.

GARCIA, J.: Let the filewrapper of MACJOY subject matter of this case be sent to
the Administrative, Financial and Human Resources Development Bureau for
In this petition for review on certiorari under Rule 45 of the Rules of Court, herein petitioner appropriate action in accordance with this Decision, with a copy to be
McDonalds Corporation seeks the reversal and setting aside of the following issuances of the Court furnished the Bureau of Trademarks for information and to update its record.
of Appeals (CA) in CA-G.R. SP No. 57247, to wit:
SO ORDERED.
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 In time, the respondent moved for a reconsideration but the IPO denied the motion in its
trademark MACJOY & DEVICE; and Order[5] of January 14, 2000.

2. Resolution dated 12 November 2004[2] denying the petitioners Therefrom, the respondent went to the CA via a Petition for Review with prayer for
motion for reconsideration. Preliminary Injunction[6] under Rule 43 of the Rules of Court, whereat its appellate recourse was
docketed as CA-G.R. SP No. 57247.
As culled from the record, the facts are as follows:
Finding no confusing similarity between the marks MACJOY and MCDONALDS, the CA,
On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic corporation engaged in in its herein assailed Decision[7] dated July 29, 2004, reversed and set aside the appealed IPO
the sale of fast food products in Cebu City, filed with the then Bureau of Patents, Trademarks and decision and order, thus:
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 & WHEREFORE, in view of the foregoing, judgment is hereby rendered by us
DEVICE for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, REVERSING and SETTING ASIDE the Decision of the IPO dated 28
halo-halo and steaks under classes 29 and 30 of the International Classification of Goods. December 1998 and its Order dated 14 January 2000 and ORDERING the
IPO to give due course to petitioners Application Serial No. 75274.
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 SO ORDERED.
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, Explains the CA in its decision:
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 xxx, it is clear that the IPO brushed aside and rendered useless the glaring and
deceive purchasers into believing that the goods originate from the same source or origin. Likewise, drastic differences and variations in style of the two trademarks and even
the petitioner alleged that the respondents use and adoption in bad faith of the MACJOY & DEVICE decreed that these pronounced differences are miniscule and considered them
mark would falsely tend to suggest a connection or affiliation with petitioners restaurant services to have been overshadowed by the appearance of the predominant features
and food products, thus, constituting a fraud upon the general public and further cause the dilution such as M, Mc, and Mac appearing in both MCDONALDS and MACJOY
of the distinctiveness of petitioners registered and internationally recognized MCDONALDS marks marks. Instead of taking into account these differences, the IPO unreasonably
to its prejudice and irreparable damage. The application and the opposition shrugged off these differences in the device, letters and marks in the
thereto was docketed as Inter Partes Case No. 3861. trademark sought to be registered.The IPO brushed aside and ignored the
following irrefutable facts and circumstances showing differences between the
Respondent denied the aforementioned allegations of the petitioner and averred that it has used marks of MACJOY and MCDONALDS. They are, as averred by the petitioner
the mark MACJOY for the past many years in good faith and has spent considerable sums of [now respondent]:
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 1. The word MacJoy is written in round script while the
use of said mark would not confuse affiliation with the petitioners restaurant services and food word McDonalds is written in single stroke
products because of the differences in the design and detail of the two (2) marks. gothic;

In a decision[4] dated December 28, 1998, the IPO, ratiocinating that the predominance of the letter 2. The word MacJoy comes with the picture of a chicken
M, and the prefixes Mac/Mc in both the MACJOY and the MCDONALDS marks lead to the head with cap and bowtie and wings sprouting
conclusion that there is confusing similarity between them especially since both are used on almost on both sides, while the word McDonalds
comes with an arches M in gold colors, and C. Petitioners McDonalds Marks are well-known
absolutely without any picture of a chicken; and world-famous marks which must be
protected under the Paris Convention.
3. The word MacJoy is set in deep pink and white color
scheme while McDonalds is written in red,
yellow and black color combination; II.

4. The faade of the respective stores of the parties are THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF
entirely different. Exhibits 1 and 1-A, show that THE IPO DATED 28 DECEMBER 1998 AND ITS ORDER DATED 14
[respondents] restaurant is set also in the same JANUARY 2000 WERE NOT BASED ON SUBSTANTIAL EVIDENCE.
bold, brilliant and noticeable color scheme as
that of its wrappers, containers, cups, etc., while In its Comment,[9] the respondent asserts that the petition should be dismissed outright
[petitioners] restaurant is in yellow and red for being procedurally defective: first, because the person who signed the certification against
colors, and with the mascot of Ronald forum shopping in behalf of the petitioner was not specifically authorized to do so, and second,
McDonald being prominently displayed because the petition does not present a reviewable issue as what it challenges are the factual
therein. (Words in brackets supplied.) 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.
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: The petition is impressed with merit.

Whether a mark or label of a competitor resembles another is to be Contrary to respondents claim, the petitioners Managing Counsel, Sheila Lehr, was
determined by an inspection of the points of difference and resemblance as a specifically authorized to sign on behalf of the petitioner the Verification and
whole, and not merely the points of resemblance. The articles and trademarks Certification[10] attached to the petition. As can be gleaned from the petitioners Board of Directors
employed and used by the [respondent] Macjoy Fastfood Corporation Resolution dated December 5, 2002, as embodied in the Certificate of the Assistant Secretary
are so different and distinct as to preclude any probability or likelihood of dated December 21, 2004,[11] Sheila Lehr was one of those authorized and empowered to execute
confusion or deception on the part of the public to the injury of the trade or and deliver for and on behalf of [the petitioner] all documents as may be required in connection with
business of the [petitioner] McDonalds Corporation. The Macjoy & Device x x x the protection and maintenance of any foreign patents, trademarks, trade-names, and
mark is dissimilar in color, design, spelling, size, concept and appearance to copyrights owned now or hereafter by [the petitioner], including, but not limited to, x x x documents
the McDonalds marks. (Words in brackets supplied.) 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
Hence, the petitioners present recourse on the following grounds: 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
I. who executed and signed the certification against forum shopping has the authority to do so, the
petition, therefore, is not procedurally defective.
THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS As regards the respondents argument that the petition raises only questions of fact which
MACJOY & DEVICE MARK IS NOT CONFUSINGLY SIMILAR TO are not proper in a petition for review, suffice it to say that the contradictory findings of the IPO and
PETITIONERS McDONALDS MARKS.IT FAILED TO CORRECTLY APPLY the CA constrain us to give due course to the petition, this being one of the recognized exceptions
THE DOMINANCY TEST WHICH HAS BEEN CONSISTENTLY APPLIED BY to Section 1, Rule 45 of the Rules of Court. True, this Court is not the proper venue to consider
THIS HONORABLE COURT IN DETERMINING THE EXISTENCE OF factual issues as it is not a trier of facts.[12] Nevertheless, when the factual findings of the appellate
CONFUSING SIMILARITY BETWEEN COMPETING MARKS. 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
A. The McDonalds Marks belong to a well-known them.
and established family of marks distinguished
by the use of the prefix Mc and/or Mac and the The old Trademark Law, Republic Act (R.A.) No. 166, as amended, defines a trademark
corporate M logo design. 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
B. The prefix Mc and/or Mac is the dominant from those manufactured, sold, or dealt in by others. [14]
portion of both Petitioners McDonalds Marks
and the Respondents Macjoy & Device Under the same law, the registration of a trademark is subject to the provisions of Section
mark. As such, the marks are confusingly 4 thereof, paragraph (d) of which is pertinent to this case. The provision reads:
similar under the Dominancy Test.
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 In trademark cases, particularly in ascertaining whether one trademark is confusingly
right to register the same on the principal register, unless it: 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
xxx xxx xxx 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]
(d) Consists of or comprises a mark or
trade-name which so resembles a mark or trade-name While we agree with the CAs detailed enumeration of differences between the two (2)
registered in the Philippines or a mark or trade-name competing trademarks herein involved, we believe that the holistic test is not the one applicable in
previously used in the Philippines by another and not this case, the dominancy test being the one more suitable. In recent cases with a similar factual
abandoned, as to be likely, when applied to or used in milieu as here, the Court has consistently used and applied the dominancy test in determining
connection with the goods, business or services of the confusing similarity or likelihood of confusion between competing trademarks. [22]
applicant, to cause confusion or mistake or to deceive
purchasers; 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
xxx xxx xxx Court explicitly held:

Essentially, the issue here is whether there is a confusing similarity between the This Court, xxx, has relied on the dominancy test rather than the
MCDONALDS marks of the petitioner and the respondents MACJOY & DEVICE trademark when holistic test. The dominancy test considers the dominant features in the
applied to Classes 29 and 30 of the International Classification of Goods, i.e., food and ingredients competing marks in determining whether they are confusingly similar. Under
of food. the dominancy test, courts give greater weight to the similarity of the
appearance of the product arising from the adoption of the dominant features
In determining similarity and likelihood of confusion, jurisprudence has developed two of the registered mark, disregarding minor differences. Courts will consider
tests, the dominancy test and the holistic test.[15] The dominancy test focuses on the similarity of more the aural and visual impressions created by the marks in the public mind,
the prevalent features of the competing trademarks that might cause confusion or deception. [16] In giving little weight to factors like prices, quality, sales outlets and market
contrast, the holistic test requires the court to consider the entirety of the marks as applied to the segments.
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]
Moreover, in Societe Des Produits Nestle, S.A. v. CA[24] the Court, applying the
Here, the IPO used the dominancy test in concluding that there was confusing similarity dominancy test, concluded that the use by the respondent therein of the word MASTER for its
between the two (2) trademarks in question as it took note of the appearance of the predominant coffee product FLAVOR MASTER was likely to cause confusion with therein petitioners coffee
features M, Mc and/or Mac in both the marks. In reversing the conclusion reached by the IPO, the products MASTER ROAST and MASTER BLEND and further ruled:
CA, while seemingly applying the dominancy test, in fact actually applied the holistic test. The
appellate court ruled in this wise: 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
Applying the Dominancy test to the present case, the IPO should have taken be determined on the basis of visual, aural, connotative comparisons and
into consideration the entirety of the two marks instead of simply fixing its gaze overall impressions engendered by the marks in controversy as they are
on the single letter M or on the combinations Mc or Mac. A mere cursory look encountered in the marketplace. The totality or holistic test only relies on visual
of the subject marks will reveal that, save for the letters M and c, no other comparisons between two trademarks whereas the dominancy test relies not
similarity exists in the subject marks. only on the visual but also on the aural and connotative comparisons and
overall impressions between the two trademarks.
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 Applying the dominancy test to the instant case, the Court finds that herein petitioners
as color, designs, spelling, sound, concept, sizes and audio and visual effects, MCDONALDS and respondents MACJOY marks are confusingly similar with each other such that
the prefix Mc will appear to be the only similarity in the two completely different an ordinary purchaser can conclude an association or relation between the marks.
marks; and it is the prefix Mc that would thus appear as the miniscule To begin with, both marks use the corporate M design logo and the prefixes Mc and/or
detail. When pitted against each other, the two marks reflect a distinct and Mac as dominant features. The first letter M in both marks puts emphasis on the prefixes Mc and/or
disparate visual impression that negates any possible confusing similarity in Mac by the similar way in which they are depicted i.e. in an arch-like, capitalized and stylized
the mind of the buying public. (Words in brackets supplied.) manner.[25]

For sure, it is the prefix Mc, an abbreviation of Mac, which visually and aurally catches
Petitioner now vigorously points out that the dominancy test should be the one applied in the attention of the consuming public. Verily, the word MACJOY attracts attention the same way as
this case. did McDonalds, MacFries, McSpaghetti, McDo, Big Mac and the rest of the MCDONALDS marks
which all use the prefixes Mc and/or Mac.
We agree.
Besides and most importantly, both trademarks are used in the sale of fastfood Respondents contention that it was the first user of the mark in the Philippines having
products. Indisputably, the respondents trademark application for the MACJOY & DEVICE used MACJOY & DEVICE on its restaurant business and food products since December, 1987
trademark covers goods under Classes 29 and 30 of the International Classification of Goods, at Cebu City while the first McDonalds outlet of the petitioner thereat was opened only in 1992, is
namely, fried chicken, chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioners downright unmeritorious. For the requirement of actual use in commerce x x x in the Philippines
trademark registration for the MCDONALDS marks in the Philippines covers goods which are before one may register a trademark, trade-name and service mark under the Trademark
similar if not identical to those covered by the respondents application. Law[33] pertains to the territorial jurisdiction of the Philippines and is not only confined to a certain
Thus, we concur with the IPOs findings that: region, province, city or barangay.

In the case at bar, the predominant features such as the M, Mc, and Mac Likewise wanting in merit is the respondents claim that the petitioner cannot acquire
appearing in both McDonalds marks and the MACJOY & DEVICE easily attract ownership of the word Mac because it is a personal name which may not be monopolized as a
the attention of would-be customers.Even non-regular customers of their trademark as against others of the same name or surname. As stated earlier, once a trademark has
fastfood restaurants would readily notice the predominance of the M design, been registered, the validity of the mark is prima faciepresumed. In this case, the respondent failed
Mc/Mac prefixes shown in both marks. Such that the common awareness or to overcome such presumption. We agree with the observations of the petitioner regarding the
perception of customers that the trademarks McDonalds mark and MACJOY & respondents explanation that the word MACJOY is based on the name of its presidents niece,
DEVICE are one and the same, or an affiliate, or under the sponsorship of the Scarlett Yu Carcell. In the words of the petitioner:
other is not far-fetched.
First of all, Respondent failed to present evidence to support the
The differences and variations in styles as the device depicting a head of foregoing claim which, at best, is a mere self-serving assertion. Secondly, it
chicken with cap and bowtie and wings sprouting on both sides of the chicken cannot be denied that there is absolutely no connection between the name
head, the heart-shaped M, and the stylistic letters in MACJOY & DEVICE; in Scarlett Yu Carcel and MacJoy to merit the coinage of the latter word. Even
contrast to the arch-like M and the one-styled gothic letters in McDonalds assuming that the word MacJoy was chosen as a term of endearment,
marks are of no moment. These minuscule variations are overshadowed by fondness and affection for a certain Scarlett Yu Carcel, allegedly the niece of
the appearance of the predominant features mentioned hereinabove. Respondents president, as well as to supposedly bring good luck to
Respondents business, one cannot help but wonder why out of all the possible
Thus, with the predominance of the letter M, and prefixes Mac/Mc found in letters or combinations of letters available to Respondent, its president had to
both marks, the inevitable conclusion is there is confusing similarity between choose and adopt a mark with the prefix Mac as the dominant feature
the trademarks Mc Donalds marks and MACJOY AND DEVICE especially thereof. A more plausible explanation perhaps is that the niece of
considering the fact that both marks are being used on almost the same Respondents president was fond of the food products and services of the
products falling under Classes 29 and 30 of the International Classification of Respondent, but that is beside the point. [34]
Goods i.e. Food and ingredients of food.

By reason of the respondents implausible and insufficient explanation as to how and why
With the existence of confusing similarity between the subject trademarks, the resulting issue to be out of the many choices of words it could have used for its trade-name and/or trademark, it chose
resolved is who, as between the parties, has the rightful claim of ownership over the said marks. 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
We rule for the petitioner. 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
A mark is valid if it is distinctive and hence not barred from registration under the registration of the trademark MACJOY & DEVICE. As this Court ruled in Faberge Inc. v.
Trademark Law. However, once registered, not only the marks validity but also the registrants IAC,[35] citing Chuanchow Soy & Canning Co. v. Dir. of Patents and Villapanta:[36]
ownership thereof is prima facie presumed.[26]
When one applies for the registration of a trademark or label which
Pursuant to Section 37[27] of R.A. No. 166, as amended, as well as the provision is almost the same or very closely resembles one already used and registered
regarding the protection of industrial property of foreign nationals in this country as embodied in the by another, the application should be rejected and dismissed outright, even
Paris Convention[28] under which the Philippines and the petitioners domicile, the United States, are without any opposition on the part of the owner and user of a previously
adherent-members, the petitioner was able to register its MCDONALDS marks successively, i.e., registered label or trademark, this not only to avoid confusion on the part of the
McDonalds in 04 October, 1971[29]; the corporate logo which is the M or the golden arches design public, but also to protect an already used and registered trademark and an
and the McDonalds with the M or golden arches design both in 30 June 1977[30]; and so on and so established goodwill.
forth.[31] 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
On the other hand, it is not disputed that the respondents application for registration of its ASIDE and the Decision of the Intellectual Property Office in Inter Partes Case No.
trademark MACJOY & DEVICE was filed only on March 14, 1991 albeit the date of first use in 3861 is REINSTATED.
the Philippines was December 7, 1987.[32] No pronouncement as to costs.

Hence, from the evidence on record, it is clear that the petitioner has duly established its SO ORDERED.
ownership of the mark/s.
G.R. No. 164321 November 30, 2006 importation, distribution and sale of unauthorized products bearing counterfeit or unauthorized
trademarks owned by petitioner.
SKECHERS, U.S.A., INC., Petitioner,
vs. On 11 April 2002, Mr. Alvin Ambion, a Market Researcher for Zetetic, visited the business address
INTER PACIFIC INDUSTRIAL TRADING CORP. and/or INTER PACIFIC TRADING CORP. of Inter Pacific/Strongshoes Warehouse and/or Strong Fashion Shoes Trading at S-7 No. 153
and/or STRONG SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or Quirino Avenue, Parañaque City. Located at said business address was Warehouse No. 7 of Ed &
STRONG FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T. Joe’s Commercial Arcade. Upon entering said warehouse, Mr. Ambion saw different kinds and
MAGAYAGA and/or JEFFREY R. MORALES and/or any of its other proprietor/s, directors, models of rubber shoes including shoes bearing the "S" logo. During the visit, Mr. Ambion allegedly
officers, employees and/or occupants of its premises located at S-7, Ed & Joe’s Commercial talked with the caretakers of said warehouse who informed him that Inter Pacific directly imports the
Arcade, No. 153 Quirino Avenue, Parañaque City, Respondents. goods from China and that their company distributes them to wholesalers and retailers in the
Baclaran area. One of the caretakers allegedly claimed that the shoes bearing the "Strong" name
with the "S" logo have the same style as Skechers shoes. Another caretaker purportedly informed
x--------------------------------------------x
Mr. Ambion that they have an outlet located at Stall C-11, Baclaran Terminal, Plaza 2 Shopping
Center, Taft Avenue Ext., Pasay City, managed by Violeta T. Magayaga, which sells the same
TRENDWORKS INTERNATIONAL CORPORATION, Petitioner-Intervenor, footwear products.
vs.
INTER PACIFIC INDUSTRIAL TRADING CORP. and/or INTER PACIFIC TRADING CORP.
and/or STRONG SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or Together with his colleague, Ms. Amelita Angeles, Mr. Ambion again visited respondent’s
STRONG FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T. warehouse on 12 April 2002 and purchased four pairs of rubber shoes bearing the "Strong" mark
MAGAYAGA and/or JEFFREY R. MORALES and/or any of its other proprietor/s, directors, containing the "S" logo for ₱730.00, for which he was issued Sales Invoice No. 0715. On the same
officers, employees and/or occupants of its premises located at S-7, Ed & Joe’s Commercial day, Mr. Ambion and Ms. Angeles visited respondent’s outlet store in Baclaran.
Arcade, No. 153 Quirino Avenue, Parañaque City, Respondents.
On 17 May 2002, counsel for petitioner filed a letter complaint with the Office of the NBI Director
requesting their assistance in stopping the illegal importation, manufacture and sale of counterfeit
DECISION
products bearing the trademarks owned by petitioner, and in prosecuting the owners of the
establishments engaged therein. Thus, on 21 May 2002 Mr. Ambion and Ms. Angeles, together
CHICO-NAZARIO, J.: with NBI Special Investigator Carlos N. Borromeo III of the Intellectual Property Rights Division of
the NBI, visited respondent’s warehouse located at Ed & Joe’s Commercial Arcade and purchased
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, 24 pairs of rubber shoes bearing the "Strong" name and the "S" logo. Afterwards, they went to
assailing the Decision1 of the Court of Appeals in CA-G.R. SP No. 77269, dated 17 November 2003, respondent’s outlet store in Baclaran and therein purchased a pair of rubber shoes also bearing the
which denied petitioner’s Petition for Certiorari seeking to annul the Order2 of the Regional Trial "Strong" name and the "S" logo.
Court (RTC) of Manila, Branch 24 dated 7 November 2002, quashing Search Warrant No. 02-2827
and directing National Bureau of Investigation (NBI) Special Investigator Carlos N. Borromeo III to On 11 June 2002, Special Investigator Borromeo of the NBI, with Mr. Ambion as witness,
return the seized items to respondents and the Order dated 6 March 2003 denying petitioner’s proceeded to Branch 24, RTC, Manila, to apply for search warrants against the warehouse and
Motion for Reconsideration. outlet store being operated and managed by respondent for infringement of trademark under
Section 1553 in relation to Section 1704 of Republic Act No. 8293, otherwise known as The
Petitioner is a foreign corporation existing under the laws of the State of California, United States of Intellectual Property Code of the Philippines.
America and engaged in the manufacture of footwear. Petitioner is not doing business in the
Philippines and is suing before the trial court only to protect its intellectual property rights. In the After personally examining the search warrant applicant and his witness, the court a quo found
course of business, petitioner registered the trademark "SKECHERS" with the Intellectual Property probable cause to issue the search warrants applied for and thus issued on the same day Search
Office (IPO) under Registration No. 63364, Class 25 on 30 August 1996, and the trademark "S" Warrant Nos. 02-2827 and 02-2828 to be served on the warehouse and retail outlet of respondent.
(within an oval design) under Registration No. 4-1996-110182, Class 25 on 12 July 2000, both to That same afternoon, the search warrants were simultaneously served by the operatives of the
be used in men’s, women’s, and children’s footwear, namely, shoes, boots and slippers of all kinds, Intellectual Property Rights Division of the NBI and seized from the warehouse 71 boxes containing
and men’s, women’s and children’s clothing, namely, t-shirts, sweat shirts, sweat pants, socks, 36 pairs of rubber shoes each or 2,556 pairs of rubber shoes bearing the "S" logo, 147 boxes
shorts, and hats. Petitioner also has a pending application for the trademark "S" and design to be containing 24 pairs per box or 3,528 pairs of rubber shoes bearing the "S" logo and six pages of
used for the same kinds of goods. various documents evidencing the sale and distribution of similar merchandise; and from the outlet
store, 295 pairs of rubber shoes bearing the "S" logo and five pieces of rubber shoes bearing the
Sometime in March 2002, petitioner engaged the services of Zetetic Far East, Inc. (Zetetic), a "S" logo.
private investigative firm, to conduct an investigation on Inter Pacific Industrial Trading Corporation
(Inter Pacific) in coordination with the NBI to confirm if Inter Pacific is indeed engaged in the In compliance with the Order dated 9 July 2002 of the RTC directing respondents to file their
Comment on the issuance of the search warrant, respondents filed their Compliance and Comment
with Prayer to Quash the search warrants. On 28 August 2002, respondents filed their Amended Court of Appeals assailing the Orders of the court a quo on the ground that public respondent court
Comment with Motion to Quash Search Warrants on the ground that there is no confusing similarity committed grave abuse of discretion amounting to lack and/or excess of jurisdiction in ruling that
between the petitioner’s Skechers’ rubber shoes and respondent’s Strong rubber shoes. the act of private respondents in selling and distributing rubber shoes which contain the trademarks
and designs owned by petitioner does not constitute trademark infringement.
On 7 November 2002, the lower court issued the assailed Order quashing Search Warrant No.
02-2827 and directing the NBI to return to respondents the items seized by virtue of said search On 17 November 2003, the appellate court denied the petition in this wise:
warrant. According to the court a quo:
In the instant case, after examining and evaluating the foregoing factual milieu and the respective
The question to be posed in this case is this: Will the purchaser be deceived or likely to be deceived arguments of the parties, We are inclined to agree with the ruling of the public respondent that the
into purchasing respondent’s Strong Rubber Shoes because of the belief that they are Skechers holistic test is better suited to the present case and consequently, hold that the private respondents’
shoes in the ordinary course of purchase? We answer in the negative. appropriation and use of the letter "S" on their rubber shoes did not constitute an infringement of
the trademark of the petitioner. Hence, the instant petition must necessarily fail.
A careful perusal of the Strong Rubber Shoes and Skechers shoes presented by both respondents
and private complainants reveals glaring differences that an ordinary prudent purchaser would not A careful appreciation of the products in question readily reveals that these products are not the
likely be mislead or confused in purchasing the wrong article. Some of these are; ordinary household items like catsup, coffee or candy which are commonly inexpensive. As such,
the ordinary purchaser would be naturally inclined to closely examine specific details and would
prefer to mull over his purchase. The case of Del Monte Corp. vs. Court of Appeals (181 SCRA
1. The mark "S" found in Strong Shoes is not enclosed in an "oval design";
410), is clear on this point:

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


Among these, what essentially determines the attitudes of the purchaser, specifically his inclination
to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not
3. The hang tags and labels attached to the shoes bears the word "Strong" for respondent and exercise as much care as one who buys an expensive watch. As a general rule, an ordinary buyer
"Sketchers U.S.A." for private complainant; does not exercise as much prudence in buying an article for which he pays a few centavos as he
does in purchasing a more valuable thing. Expensive and valuable items are normally bought only
4. Strong Shoes are modestly priced compared to the costs of Sketchers Shoes. 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 care x x x.
xxxx

In his context, although one of the essential features of the private respondents’ shoes is the letter
Similarly as in this case, although the mark "S" is prominent on both products, the same should be "S", suffice it to state that this alone would not likely cause confusion, deception or mistake on the
considered as a whole and not piecemeal. Factoring the variables already cited make the part of the ordinary buying public. For it must be stressed that an ordinary purchaser of a product
dissimilarities between the two marks conspicuous, noticeable and substantial. like a pair of rubber shoes is an intelligent buyer, who "is accustomed to buy, and therefore to some
extent familiar with the goods" (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190). x x x.
Further, the products involved in the case at bar are not your ordinary household items. These are
shoes which vary in price. The casual buyer is predisposed to be more cautious and discriminating xxxx
and would prefer to mull over his purchase. Confusion and deception is less likely.

Going further, contrary to the contention of the petitioner, the case of Converse Rubber Corp. vs.
Finally, like beer and maong pants and jeans, the average consumer generally buys his rubber Universal Rubber Products, Inc. (147 SCRA 154) is in no way controlling in the instant case
shoes by brand. He does not ask the sales clerk for rubber shoes but for, say Adidas, Reebok, or considering that it involved a different factual milieu in contrast with that of the instant case. In said
Nike. He is, more or less, knowledgeable and familiar with his preference and will not easily be case, the respondent sought for the registration of the trademark "UNIVERSAL CONVERSE AND
distracted. (Emerald Garment Manufacturing Corp., v. Court of Appeals, 251 SCRA 600, supra) DEVICE" used on rubber shoes. Petitioner opposed on the ground that respondent’s trademark is
confusingly similar to petitioner’s corporate name which is CONVERSE RUBBER CORPORATION
ACCORDINGLY, respondent’s Inter Pacific Industrial Trading Corporation, Motion to Quash and that it would likely deceive purchasers of products on which it is to be used to an extent that
Search [Warrant] is hereby granted. Search Warrant No. 02-2827 is quashed. The applicant, said products may be mistaken by the unwary public to be manufactured by the petitioner, i.e.
Carlos N. Borromeo of the National Bureau of Investigation is hereby directed to return to "CONVERSE CHUCK TAYLOR," "CONVERSE ALL STAR," "ALL STAR CONVERSE CHUCK
respondents the seized items.5 TAYLOR," OR "ALL STAR DEVICE." The High Court denied the application for registration of
respondent’s trademark ratiocinating as follows:
Petitioner’s Motion for Reconsideration was subsequently denied in an Order dated 6 March 2003.
Aggrieved, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Court before the
The similarity in the general appearance of respondent’s trademark and that of petitioner would The special civil action for certiorari is not a remedy for errors of judgment, which are correctible by
evidently create a likelihood of confusion among the purchasing public. But even assuming appeal (Montecillo vs. Civil Service Commission, 360 SCRA 99).
arguendo, that the trademark sought to be registered by respondent is distinctively dissimilar from
those of the petitioner, the likelihood of confusion would still subsists, not on the purchaser’s
WHEREFORE, in consideration of the foregoing premises, the instant petition is perforce denied.[6]
perception of the goods but on the origins thereof. By appropriating the world "CONVERSE,"
respondent’s products are likely to be mistaken as having been produced by petitioner. The risk of
damage is not limited to a possible confusion of goods but also includes confusion of reputation if Petitioner’s Motion for Reconsideration having been denied in an Order dated 18 June 2004,
the public could reasonably assume that the goods of the parties originated from the same source. petitioner filed the instant case contending that 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 and in concluding that respondents are not guilty of
Verily, the foregoing ruling does not apply on all fours in the instant case. The word "CONVERSE"
trademark infringement in the case where the sole triable issue is the existence of probable cause
is highly identified not only to the products of Converse Rubber Corporation but to the corporate
to issue a search warrant.
entity most importantly such that the mere appropriation of the word "CONVERSE" on products like
rubber shoes, regardless of whether or not it was compounded with other letters, symbols or words;
would not only likely but actually cause one to be mistaken that such rubber shoes had been For its part, respondent maintains that it is logical for the Court of Appeals to touch on the issue of
produced by Converse Rubber Corporation. whether or not there was trademark infringement since it was the very issue raised in the Petition
for Certiorari. According to respondent, petitioner failed to qualify whether or not the determination
of the Court of Appeals should be limited to whether or not there was probable cause to issue the
On the other hand, the letter "S" used on private respondents’ rubber shoes in the instant case search warrants. Furthermore, respondent claims that the trial court may not be faulted for
could hardly be considered as highly identifiable to the products of petitioner alone. For it is not
quashing the search warrants it had issued after finding that there was no basis for its issuance in
amiss to state that the letter "S" has been used in many existing trademarks, the most popular of
the first place. According to respondent, after full appreciation of the trademarks and logos depicted
which is the trademark "S" enclosed by an inverted triangle, which is extremely and profoundly
in the rubber shoes presented before the court a quo for close comparison, it was only prudent for
identifiable to the well-known comics action hero, Superman. And perhaps it is due to the existence
the lower court to correct itself and quash the search warrant following a finding that probable
of these trademarks containing letter "S" that the petitioner was prompted to accessorize that letter
cause does not exist for the offense of trademark infringement.
"S" in its trademark with an outer oval design and accompany it with the word "SKECHERS" in
order to make it distinct from the rest and identifiable only to its products. As such, the dominancy
test as applied in the Converse case could not be applied in the instant case inasmuch as the letter At this juncture, it is paramount to stress that the power to issue search warrants is exclusively
"S," although a dominant feature in petitioner’s trademark; is neither extremely and profoundly vested with the trial judges in the exercise of their judicial function. 7 And inherent in the courts’
identifiable to the products of petitioner alone nor has it acquired a certain connotation to mean the power to issue search warrants is the power to quash warrants already issued. 8 After the judge has
rubber shoes produced by the petitioner. What is extremely and profoundly identifiable to the issued a warrant, he is not precluded to subsequently quash the same, if he finds upon
products of the petitioner is the whole trademark consisting of the letter "S" enclosed by a uniquely re-evaluation of the evidence that no probable cause exists.9 Though there is no fixed rule for the
designed oval. Further, confusion and deception are less likely in the instant case considering that determination of the existence of probable cause since the existence depends to a large degree
the private respondents’ rubber shoes were distinctly and conspicuously marked "STRONG" at upon the finding or opinion of the judge conducting the examination,10 however, the findings of the
their front side, back side and insoles. Furthermore their hang tags and labels attached to the judge should not disregard the facts before him nor run counter to the clear dictates of reason. 11
shoes bear the word "STRONG." In view of these, the dissimilarities between the private
respondents’ and petitioner’s shoes became more striking and noticeable to the ordinary purchaser In the determination of probable cause, the court must necessarily resolve whether or not an
who could not in any way be deceived or misled that the shoes he buys is produced by the offense exists to justify the issuance or quashal of the search warrant. 12 In the case at bar, the
petitioner. With this, the holistic test is squarely applicable. subject search warrant was issued allegedly in connection with trademark infringement, particularly
the unauthorized use of the "S" logo by respondent in their Strong rubber shoes. After conducting
xxxx the hearing on the application for a search warrant, the court a quo was initially convinced that
there was sufficient reason to justify the issuance of the search warrant. However, upon motion of
respondent to quash the search warrant, the lower court changed its position and declared that
As set out in the decision, the foregoing case involves a peculiar factual milieu in stark contrast with
there was no probable cause to issue the search warrant as there was no colorable imitation
the instant case. As such, it finds no application in the controversy in the instant case.
between respondent’s trademark and that of petitioner.

Taking off from the foregoing premises, the public respondent judge did not commit grave abuse of
Based on its appreciation of the respective parties’ arguments and the pieces of evidence,
discretion amounting to lack or excess of jurisdiction in ruling that the act of the private respondent
particularly the samples of the original Skechers rubber shoes vis-à-vis respondent’s Strong rubber
in selling and distributing rubber shoes which contain the trademarks and designs owned by the
shoes, the trial court concluded that respondent’s appropriation of the symbol "S" on their rubber
petitioners does not constitute trademark infringement. After all, the public respondent judge was
shoes does not constitute an infringement on the trademark of petitioner. This exercise of judgment
merely exercising his judgmental call conformably with the factual and legal issues proferred and
was further strengthened by the affirmation of the Court of Appeals that public respondent judge did
presented before him. Suffice it to state, it is a hornbook doctrine in our jurisdiction that certiorari
not commit grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that the
will not be issued to cure errors in proceedings or to correct erroneous conclusions of law and fact.
acts of respondent do not constitute trademark infringement in light of the factual and legal issues
presented before it for consideration.
In ruling that there was no colorable imitation of petitioner’s trademark in light of the factual milieu
prevalent in the instant case, the trial court may not be faulted for reversing its initial finding that
there was probable cause. Based on the courts’ inherent power to issue search warrants and to
quash the same, the courts must be provided with the opportunity to correct itself of an error
inadvertently committed. After reevaluating the evidence presented before it, the trial court may
reverse its initial finding of probable cause in order that its conclusion may be made to conform to
the facts prevailing in the instant case.

Furthermore, the court was acting reasonably when it went into a discussion of whether or not there
was trademark infringement, this is so because in the determination of the existence of probable
cause for the issuance or quashal of a warrant, it is inevitable that the court may touch on issues
properly threshed out in a regular proceeding.13 This finding that there was no colorable imitation of
petitioner’s trademark is merely preliminary and did not finally determine the merits of the possible
criminal proceedings that may be instituted by petitioner. As held in the case of Solid Triangle Sales
Corp. v. Sheriff, RTC, Q.C., Br. 93:141âwphi1

When the court, in determining probable cause for issuing or quashing a search warrant, finds that
no offense has been committed, it does not interfere with or encroach upon the proceedings in the
preliminary investigation. The court does not oblige the investigating officer not to file an
information for the court’s ruling that no crime exists is only for the purposes of issuing or quashing
the warrant.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of the
Court of Appeals in CA-G.R. SP No. 77269, dated 17 November 2003 is hereby AFFIRMED. Costs
against petitioner.

SO ORDERED.
G.R. No. 103543 July 5, 1993 (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.)
ASIA BREWERY, INC., petitioner,
vs. Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents. modified by the separate opinions of the Special Sixth Division 1 so that it should read thus:

GRIÑO-AQUINO, J.: 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
On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
new judgment entered in favor of the plaintiff and against the defendant as follows:
(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. (1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are hereby
Case. No. 56390, RTC Branch 166, Pasig, Metro Manila.). 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
On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O.
plaintiff San Miguel Corporation employed for that purpose, or substantially identical with or like the
Bersamira, dismissing SMC's complaint because ABI "has not committed trademark infringement
bottles and labels now employed by the defendant for that purpose, or in bottles or under labels
or unfair competition against" SMC (p. 189, Rollo).
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
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the defendant as and for the beer of the plaintiff-complainant.
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
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products bearing the mark
court. The dispositive part of the decision reads as follows:
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,
In the light of the foregoing analysis and under the plain language of the applicable rule and materials and other means of making the same to the Court authorized to execute this judgment for
principle on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement destruction.
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:
(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.
(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
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount of
or announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture or
P250,000.00 plus costs of this suit.
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 In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of
which are calculated to deceive purchasers and consumers into the belief that the beer is the Court. The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel Pale
product of the plaintiff or which will enable others to substitute, sell or palm off the said beer of the Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition against the
defendant as and for the beer of the plaintiff-complainant. 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:
(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 (1) When the conclusion is grounded entirely on speculation, surmises and conjectures;
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,
(2) When the inference of the Court of Appeals from its findings of fact is manifestly mistaken,
receptacles and advertisements bearing the infringing mark and all plates, molds, materials and
absurd and impossible;
other means of making the same to the Court authorized to execute this judgment for destruction.

(3) Where there is grave abuse of discretion;


(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) 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 The registered trademark of SMC for its pale pilsen beer is:
same are contrary to the admissions of both the appellant and the appellee;
San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau of Patents,
(6) When the findings of said court are contrary to those of the trial court; Trademarks and Technology Transfer Trademark Certificate of Registration No. 36103, dated 23
Oct. 1986,
(p. 174, Rollo.)
(7) When the findings are without citation of specific evidence on which they are based;

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


(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
. . . . 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
(9) When the findings of facts of the Court of Appeals are premised on the absence of evidence and
"Reg. Phil. Pat. Off." and at the bottom "Net Contents: 320 Ml." The dominant feature is the phrase
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 "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
SCRA 238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576;
"Expertly Brewed." The "S" in "San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in
Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex Investment and Financing Corp.
Gothic letters with fine strokes of serifs, the kind that first appeared in the 1780s in England and
vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs.
used for printing German as distinguished from Roman and Italic. Below "Pale Pilsen" is the
CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA,
statement "And Bottled by" (first line, "San Miguel Brewery" (second line), and "Philippines" (third
133 SCRA 88].)
line). (p. 177, Rollo; Emphasis supplied.)

Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct
On the other hand, ABI's trademark, as described by the trial court, consists of:
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.) . . . 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
The present case is one of the exceptions because there is no concurrence between the trial court
right, written in small prints, is the phrase "Net Contents 320 ml." Immediately below "Pale Pilsen" is
and the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its
the statement written in three lines "Especially brewed and bottled by" (first line), "Asia Brewery
BEER PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted
Incorporated" (second line), and "Philippines" (third line), (p. 177, Rollo; Emphasis supplied.)
rectangular label has committed trademark infringement and unfair competition against SMC.

Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE
Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100,
PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is "No."
106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what
constitutes infringement:
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
Sec. 22. Infringement, what constitutes. — Any person who shall use, without the consent of the
Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or
(1956), thus:
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 It has been consistently held that the question of infringement of a trademark is to be determined by
such business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the
and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, competing trademark contains the main or essential or dominant features of another, and confusion
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with and deception is likely to result, infringement takes place. Duplication or imitation is not necessary;
such goods, business or services, shall be liable to a civil action by the registrant for any or all of nor it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing
the remedies herein provided. (Emphasis supplied.) 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
This definition implies that only registered trade marks, trade names and service marks are
deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .)
protected against infringement or unauthorized use by another or others. The use of someone
(Emphasis supplied.)
else's registered trademark, trade name or service mark is unauthorized, hence, actionable, if it is
done "without the consent of the registrant." (Ibid.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or Whereas SMC's bottle carries no slogan.
"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."
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.
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."
(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.
What are the dominant features of the competing trademarks before us?
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center, surrounded
There is hardly any dispute that the dominant feature of SMC's trademark is the name of the by the words "Asia Brewery Incorporated Philippines."
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
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25
the rectangular design. 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
On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with bartender.
the word "Beer" written in large amber letters, larger than any of the letters found in the SMC label.
The fact that the words pale pilsen are part of ABI's trademark does not constitute an infringement
The trial court perceptively observed that the word "BEER" does not appear in SMC's trademark, of SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive
just as the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there is absolutely no of the color ("pale"), of a type of beer ("pilsen"), which is a light bohemian beer with a strong hops
similarity in the dominant features of both trademarks. 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
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar
"primarily geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted
to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be
by Sec. 2 of R.A. No. 638) hence, non-registerable and not appropriable by any beer manufacturer.
deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC
The Trademark Law provides:
proving otherwise.

Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to distinguish his goods,
Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or
business or services from the goods, business or services of others shall have the right to register
appearance of the competing products abound:
the same [on the principal register], unless it:

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

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


(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
(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along when applied to or used in connection with the goods, business or services of the applicant
a diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and printed in is primarily geographically descriptive or deceptively misdescriptive of them, or is primarily merely a
slender block letters on a straight horizontal band. (See Exhibit "8-a".). surname." (Emphasis supplied.)

(3) The names of the manufacturers are prominently printed on their respective bottles. 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
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas BEER "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be
PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated, Philippines." 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
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and leaves, Shoes" as his trademark because that would be merely descriptive and it would be unjust to
its copyrighted slogan: 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
"BEER NA BEER!" 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 packages in which they are contained, or the devices or words thereon, or in any other feature of
composition, characteristics, or qualities, cannot be appropriated and protected as a trademark to their appearance, which would be likely to influence purchasers to believe that the goods offered
the exclusion of its use by others. . . . inasmuch as all persons have an equal right to produce and are those of a manufacturer or dealer other than the actual manufacturer or dealer, or who
vend similar articles, they also have the right to describe them properly and to use any appropriate otherwise clothes the goods with such appearance as shall deceive the public and defraud another
language or words for that purpose, and no person can appropriate to himself exclusively any word of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
or expression, properly descriptive of the article, its qualities, ingredients or characteristics, and engaged in selling such goods with a like purpose.
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
(b) Any person who by any artifice, or device, or who employs any other means calculated to
descriptive terms has also been held to apply to trade-names. As to whether words employed fall
induce the false belief that such person is offering the services of another who has identified such
within this prohibition, it is said that the true test is not whether they are exhaustively descriptive of services in the mind of the public; or
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 (c) Any person who shall make any false statement in the course of trade or who shall commit any
become the exclusive property of anyone. (52 Am. Jur. 542-543.) other act contrary to good faith of a nature calculated to discredit the goods, business or services of
another.
. . . . 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. In this case, the question to be determined is whether ABI is using a name or mark for its beer that
Dr. Miles Medical Co., 16 E. [2d] 598.) 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.
. . . . 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 . . ..The universal test question is whether the public is likely to be deceived. Nothing less than
because others are equally entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. conduct tending to pass off one man's goods or business as that of another will constitute unfair
869-870.)" (Emphasis supplied.) 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 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 The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN
off its BEER PALE PILSEN as SMC's product. In view of the visible differences between the two bottle, is not unlawful. As pointed out by ABI's counsel, SMC did not invent but merely borrowed the
products, the Court believes it is quite unlikely that a customer of average intelligence would steinie bottle from abroad and it claims neither patent nor trademark protection for that bottle shape
mistake a bottle of BEER PALE PILSEN for SAN MIGUEL PALE PILSEN. 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 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, The court agrees with defendant that there is no infringement of plaintiff's bottle, firstly, because
does not necessarily constitute unfair competition. 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
Unfair competition is the employment of deception or any other means contrary to good faith by
therefore lacks exclusivity. Secondly, the shape was never registered as a trademark. Exhibit "C" is
which a person shall pass off the goods manufactured by him or in which he deals, or his business,
not a registration of a beer bottle design required under Rep. Act 165 but the registration of the
or services, for those of another who has already established goodwill for his similar goods,
name and other marks of ownership stamped on containers as required by Rep. Act 623. Thirdly,
business or services, or any acts calculated to produce the same result. (Sec. 29, Republic Act No.
the neck of defendant's bottle is much larger and has a distinct bulge in its uppermost part. (p.
166, as amended.) The law further enumerates the more common ways of committing unfair
186, Rollo.)
competition, thus:

The petitioner's contention that bottle size, shape and color may not be the exclusive property of
Sec. 29. . . .
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
In particular, and without in any way limiting the scope of unfair competition, the following shall be use, and not the exclusive invention of any one, it is available to all who might need to use it within
deemed guilty of unfair competition: 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.)
(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
. . . protection against imitation should be properly confined to nonfunctional features. Even if purely The main thrust of SMC's complaint if not infringement of its trademark, but unfair competition
functional elements are slavishly copied, the resemblance will not support an action for unfair arising form the allegedly "confusing similarity" in the general appearance or trade dress of ABI's
competition, and the first user cannot claim secondary meaning protection. Nor can the first user BEER PALE PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo)
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
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN
Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)
MIGUEL PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored bottles
with white rectangular labels.
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
However, when as in this case, the names of the competing products are clearly different and their
feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is
respective sources are prominently printed on the label and on other parts of the bottle, mere
contained and sold in amber-colored bottles because amber is the most effective color in
similarity in the shape and size of the container and label, does not constitute unfair competition.
preventing transmission of light and provides the maximum protection to beer. As was ruled
The steinie bottle is a standard bottle for beer and is universally used. SMC did not invent it nor
in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38 F2d 885, a merchant
patent it. The fact that SMC's bottle is registered under R.A. No. 623 (as amended by RA 5700, An
cannot be enjoined from using a type or color of bottle where the same has the useful purpose of
Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and
protecting the contents from the deleterious effects of light rays. Moreover, no one may have a
Other Similar Containers) simply prohibits manufacturers of other foodstuffs from the unauthorized
monopoly of any color. Not only beer, but most medicines, whether in liquid or tablet form, are sold
use of SMC's bottles by refilling these with their products. It was not uncommon then for products
in amber-colored bottles.
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
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle because similar size, shape or color.
that bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4
December 1979, of the Department of Trade, Metric System Board.
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
With regard to the white label of both beer bottles, ABI explained that it used the color white for its standard ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such
label because white presents the strongest contrast to the amber color of ABI's bottle; it is also the as coffee, mayonnaise, pickles and peanut butter are sold in standard glass jars. The
most economical to use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of manufacturers of these foodstuffs have equal right to use these standards tins, bottles and jars for
September 20, 1988). No one can have a monopoly of the color amber for bottles, nor of white for their products. Only their respective labels distinguish them from each other. Just as no milk
labels, nor of the rectangular shape which is the usual configuration of labels. Needless to say, the producer may sue the others for unfair competition because they sell their milk in the same size and
shape of the bottle and of the label is unimportant. What is all important is the name of the product shape of milk can which he uses, neither may SMC claim unfair competition arising from the fact
written on the label of the bottle for that is how one beer may be distinguished form the others. that ABI's BEER PALE PILSEN is sold, like SMC's SAN MIGUEL PALE PILSEN in amber steinie
bottles.
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 The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed off as
conventional color, both with labels containing designs drawn in green ink and Chinese characters SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally
written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this order their beer by brand. As pointed out by ABI's counsel, in supermarkets and tiendas, beer is
court found that the resemblances between the designs were not sufficient to mislead the ordinary ordered by brand, and the customer surrenders his empty replacement bottles or pays a deposit to
intelligent buyer, hence, there was no unfair competition. The Court held: 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
. . . . In order that there may be deception of the buying public in the sense necessary to constitute
from the waiters by brand. (Op. cit. page 50.)
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 Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer
desirous of purchasing the commodity with which that design has been associated. The test is not market for the past hundred years, those who have been drinking no other beer but SAN MIGUEL
found in the deception, or possibility of the deception, of the person who knows nothing about the PALE PILSEN these many years certainly know their beer too well to be deceived by a newcomer
design which has been counterfeited, and who must be indifferent as between that and the other. in the market. If they gravitate to ABI's cheaper beer, it will not be because they are confused or
The simulation, in order to be objectionable, must be such as appears likely to mislead the deceived, but because they find the competing product to their taste.
ordinarily intelligent buyer who has a need to supply and is familiar with the article that he seeks to
purchase.
Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of Appeals
and Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that:
. . . to determine whether a trademark has been infringed, we must consider the mark as a whole
and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually
to any part of it.

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

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

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

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

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

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

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

SO ORDERED.
G.R. No. 180073 November 25, 2009 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).
PROSOURCE INTERNATIONAL, INC., Petitioner,
vs. 3. The defendant’s product PCO-GENOLS is duly registered with the BFAD but not with the
HORPHAG RESEARCH MANAGEMENT SA, Respondent. Intellectual Property Office (IPO).

DECISION 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
NACHURA, J.: PCO-GENOLS to PCO-PLUS.

5. Plaintiff corporation sent a demand letter to the defendant dated 02 June 2000. 14
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) Decision1 dated July 27, 2007 and Resolution2 dated October
15, 2007 in CA-G.R. CV No. 87556. The assailed decision affirmed the Regional Trial Court On January 16, 2006, the RTC decided in favor of respondent. It observed that PYCNOGENOL
(RTC)3 Decision4 dated January 16, 2006 and Order5 dated May 3, 2006 in Civil Case No. 68048; and PCO-GENOLS have the same suffix "GENOL" which appears to be merely descriptive and
while the assailed resolution denied petitioner’s motion for reconsideration. 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 petitioner’s liability was not negated by
The facts are as follows:
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 respondent’s product by using the
Respondent Horphag Research Management SA is a corporation duly organized and existing trademark PCO-GENOLS. As respondent manifested that it was no longer interested in recovering
under the laws of Switzerland and the owner6 of trademark PYCNOGENOL, a food supplement actual damages, petitioner was made to answer only for attorney’s fees amounting to
sold and distributed by Zuellig Pharma Corporation. Respondent later discovered that petitioner ₱50,000.00.15 For lack of sufficient factual and legal basis, the court dismissed petitioner’s
Prosource International, Inc. was also distributing a similar food supplement using the mark counterclaim. Petitioner’s motion for reconsideration was likewise denied.
PCO-GENOLS since 1996.7 This prompted respondent to demand that petitioner cease and desist
from using the aforesaid mark.8
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
Without notifying respondent, petitioner discontinued the use of, and withdrew from the market, the PYCNOGENOL. It also found just and equitable the award of attorney’s fees especially since
products under the name PCO-GENOLS as of June 19, 2000. It, likewise, changed its mark from respondent was compelled to litigate.16
PCO-GENOLS to PCO-PLUS.9
Hence, this petition, assigning the following errors:
On August 22, 2000, respondent filed a Complaint10 for Infringement of Trademark with Prayer for
Preliminary Injunction against petitioner, praying that the latter cease and desist from using the
I. THAT THE COURT OF APPEALS ERRED IN AFFRIMING THE RULING OF THE LOWER
brand PCO-GENOLS for being confusingly similar with respondent’s trademark PYCNOGENOL. It,
[COURT] THAT RESPONDENT’S TRADEMARK P[YC]NOGENOLS (SIC) WAS INFRINGED BY
likewise, prayed for actual and nominal damages, as well as attorney’s fees.11
PETITIONER’S PCO-GENOLS.

In its Answer,12 petitioner contended that respondent could not file the infringement case
II. THAT THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ATTORNEY’S
considering that the latter is not the registered owner of the trademark PYCNOGENOL, but one
FEES IN FAVOR OF RESPONDENT HORPHAG RESEARCH MANAGEMENT S.A. IN THE
Horphag Research Limited. It, likewise, claimed that the two marks were not confusingly similar.
AMOUNT OF Php50,000.00.17
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 attorney’s fees.13 The petition is without merit.

During the pre-trial, the parties admitted the following: It must be recalled that respondent filed a complaint for trademark infringement against petitioner
for the latter’s use of the mark PCO-GENOLS which the former claimed to be confusingly similar to
its trademark PYCNOGENOL. Petitioner’s use of the questioned mark started in 1996 and ended in
1. Defendant [petitioner] is a corporation duly organized and existing under the laws of the Republic
June 2000. The instant case should thus be decided in light of the provisions of Republic Act (R.A.)
of the Philippines with business address at No. 7 Annapolis Street, Greenhills, San Juan, Metro
No. 16618 for the acts committed until December 31, 1997, and R.A. No. 829319 for those
Manila;
committed from January 1, 1998 until June 19, 2000.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used
thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish upon or in connection with such goods, business or services as to likely cause confusion or mistake
them from those manufactured, sold, or dealt by others. Inarguably, a trademark deserves or to deceive purchasers[;]
protection.20
(c) [T]he trademark is used for identical or similar goods[;] and
Section 22 of R.A. No. 166, as amended, and Section 155 of R.A. No. 8293 define what constitutes
trademark infringement, as follows:
(d) [S]uch act is done without the consent of the trademark registrant or assignee. 21

Sec. 22. Infringement, what constitutes. – Any person who shall use, without the consent of the
On the other hand, the elements of infringement under R.A. No. 8293 are as follows:
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 (1) The trademark being infringed is registered in the Intellectual Property Office; however, in
deceive purchasers or others as to the source or origin of such goods or services, or identity of infringement of trade name, the same need not be registered;
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, (2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with infringer;
such goods, business, or services, shall be liable to a civil action by the registrant for any or all of
the remedies herein provided.
(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
Sec. 155. Remedies; Infringement. – Any person who shall, without the consent of the owner of the labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon
registered mark: or in connection with such goods, business or services;

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered (4) The use or application of the infringing mark or trade name is likely to cause confusion or
mark or the same container or a dominant feature thereof in connection with the sale, offering for mistake or to deceive purchasers or others as to the goods or services themselves or as to the
sale, distribution, advertising of any goods or services including other preparatory steps necessary source or origin of such goods or services or the identity of such business; and
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
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.22

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, In the foregoing enumeration, it is the element of "likelihood of confusion" that is the gravamen of
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in trademark infringement. But "likelihood of confusion" is a relative concept. The particular, and
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in sometimes peculiar, circumstances of each case are determinative of its existence. Thus, in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, trademark infringement cases, precedents must be evaluated in the light of each particular case.23
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 In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the
or this subsection are committed regardless of whether there is actual sale of goods or services Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of
using the infringing material. 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
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20 thereof, the features of another, and confusion or deception is likely to result, infringement takes place.
following constitute the elements of trademark infringement: 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
(a) A trademark actually used in commerce in the Philippines and registered in the principal register the aural and visual impressions created by the marks in the public mind, giving little weight to
of the Philippine Patent Office[;] factors like prices, quality, sales outlets, and market segments. 26

(b) [It] is used by another person in connection with the sale, offering for sale, or advertising of any In contrast, the Holistic Test entails a consideration of the entirety of the marks as applied to the
goods, business or services or in connection with which such use is likely to cause confusion or products, including the labels and packaging, in determining confusing similarity. 27 The discerning
mistake or to deceive purchasers or others as to the source or origin of such goods or services, or eye of the observer must focus not only on the predominant words but also on the other features
identity of such business; or such trademark is reproduced, counterfeited, copied or colorably appearing on both labels in order that the observer may draw his conclusion whether one is
imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied confusingly similar to the other.28
The trial and appellate courts applied the Dominancy Test in determining whether there was a 2. When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or
confusing similarity between the marks PYCNOGENOL and PCO-GENOL. Applying the test, the to incur expenses to protect his interest;
trial court found, and the CA affirmed, that:
3. In criminal cases of malicious prosecution against the plaintiff;
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
4. In case of a clearly unfounded civil action or proceeding against the plaintiff;
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 [petitioner’s] mark PCO-GENOLS, 5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff"s
nevertheless, when the two words are pronounced, the sound effects are confusingly similar not to plainly valid, just and demandable claim;
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 6. In actions for legal support;
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 7. In actions for the recovery of wages of household helpers, laborers and skilled workers;
are the same and/or originates from a common source and manufacturer. 29
8. In actions for indemnity under workmen’s compensation and employer’s liability laws;
We find no cogent reason to depart from such conclusion.
9. In a separate civil action to recover civil liability arising from a crime;
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., 10. When at least double judicial costs are awarded;
Inc. v. Petra Hawpia & Co., et al.,30 cited in McDonald’s Corporation v. L.C. Big Mak Burger,
Inc.,31 the Court held:
11. In any other case where the court deems it just and equitable that attorney’s fees and expenses
of litigation should be recovered.
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"
In all cases, the attorney’s fees and expenses of litigation must be reasonable.
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 As a rule, an award of attorney’s fees should be deleted where the award of moral and exemplary
"Femetex"; "Zuso" and "Hoo Hoo." Leon Amdur, in his book "Trade-Mark Law and Practice," pp. damages is not granted.34 Nonetheless, attorney’s fees may be awarded where the court deems it
419-421, cities, as coming within the purview of the idem sonans rule, "Yusea" and "U-C-A," just and equitable even if moral and exemplary damages are unavailing.35 In the instant case, we
"Steinway Pianos" and "Steinberg Pianos," and "Seven-Up" and "Lemon-Up." In Co Tiong vs. find no reversible error in the grant of attorney’s fees by the CA.
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" WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals
is an infringement of the trademark "Sapolin," as the sound of the two names is almost the same. 32 Decision dated July 27, 2007 and its Resolution dated October 15, 2007 in CA-G.R. CV No. 87556
are AFFIRMED.
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 SO ORDERED.
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 attorney’s fees in favor of respondent. Article 2208 of the Civil
Code enumerates the instances when attorney’s fees are awarded, viz.:

Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:

1. When exemplary damages are awarded;


G.R. No. L-78325 January 25, 1990 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
DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION, petitioners, 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
vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING INDUSTRIES, respondents. failed to establish the defendant's malice or bad faith, which was an essential element of
infringement of trademark or unfair competition. 7

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

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United 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
States and not engaged in business in the Philippines. Both the Philippines and the United States
trade-name in connection with the sale, offering for sale, or advertising of any goods, business or
are signatories to the Convention of Paris of September 27, 1965, which grants to the nationals of
services on or in connection with which such use is likely to cause confusion or mistake or to
the parties rights and advantages which their own nationals enjoy for the repression of acts of
deceive purchasers or others as to the source or origin of such goods or services or identity of such
infringement and unfair competition.
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,
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized wrappers, receptacles or advertisements intended to be used upon or in connection with such
under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to goods, business or services, shall be liable to a civil action by the registrant for any or all of the
manufacture, distribute and sell in the Philippines various agricultural products, including catsup, remedies herein provided.
under the Del Monte trademark and logo.
Sec. 29 of the same law states as follows:
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
Sec. 29. Unfair competition, rights and remedies. — A person who has identified in the mind of the
Registration No. SR-913 by the Philippine Patent Office under the Supplemental Register. 1 On
public the goods he manufactures or deals in, his business or services from those of others,
November 20, 1972, Del Monte also obtained two registration certificates for its trademark "DEL
whether or not a mark or tradename is employed, has a property right in the goodwill of the said
MONTE" and its logo. 2
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
Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by hereof.
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
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
4
This logo was registered in the Supplemental Register on September 20, 1983. those of the one having established such goodwill, or who shall commit any acts calculated to
produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.
The 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. In particular, and without in any way limiting the scope of unfair competition, the following shall be
deemed guilty of unfair competition:
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 (a) Any person, who in selling his goods shall give them the general appearance of goods of
action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte filed a another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
complaint against the private respondent for infringement of trademark and unfair competition, with packages in which they are contained, or the devices or words thereon, or in any other feature of
a prayer for damages and the issuance of a writ of preliminary injunction. 5 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
In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle and that its logo clothes the goods with such appearance as shall deceive the public and defraud another of his
was substantially different from the Del Monte logo and would not confuse the buying public to the legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in
detriment of the petitioners. 6 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 3. As to the words or lettering on label or mark:
the false belief that such person is offering the services of another who has identified such services
in the mind of the public; or
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C., Philippines.

(c) Any person who shall make any false statement in the course of trade or who shall commit any
Sunshine: Sunshine fruit catsup is clearly indicated "made in the Philippines by Sunshine Sauce
other act contrary to good faith of a nature calculated to discredit the goods, business or services of
Manufacturing Industries" No. 1 Del Monte Avenue, Malabon, Metro Manila.
another.

4. As to color of logo:
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.
Del Monte: Combination of yellow and dark red, with words "Del Monte Quality" in white.
(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. Sunshine: White, light green and light red, with words "Sunshine Brand" in yellow.

(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition 5. As to shape of logo:
fraudulent intent is essential.
Del Monte: In the shape of a tomato.
(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 Sunshine: Entirely different in shape.

In the challenged decision, the respondent court cited the following test laid down by this Court in a 6. As to label below the cap:
number of cases:

Del Monte: Seal covering the cap down to the neck of the bottle, with picture of tomatoes with
In determining whether two trademarks are confusingly similar, the two marks in their entirety as words "made from real tomatoes."
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 Sunshine: There is a label below the cap which says "Sunshine Brand."

and applying the same, held that there was no colorable imitation of the petitioners' trademark and 7. As to the color of the products:
logo by the private respondent. The respondent court agreed with the findings of the trial court that:
Del Monte: Darker red.
In order to resolve the said issue, the Court now attempts to make a comparison of the two
products, to wit: Sunshine: Lighter than Del Monte.

1. As to the shape of label or make: 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
Del Monte: Semi-rectangular with a crown or tomato shape design on top of the rectangle. pre-occupied with the details that they have not seen the total picture.

Sunshine: Regular rectangle. 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
2. As to brand printed on label: 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
Del Monte: Tomato catsup mark. 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.
Sunshine: Fruit catsup.
The question is not whether the two articles are distinguishable by their label when set side by side prepares to package his product, he has before him a boundless choice of words, phrases, colors
but whether the general confusion made by the article upon the eye of the casual purchaser who is and symbols sufficient to distinguish his product from the others. When as in this case, Sunshine
unsuspicious and off his guard, is such as to likely result in his confounding it with the original. 11 As chose, without a reasonable explanation, to use the same colors and letters as those used by Del
observed in several cases, the general impression of the ordinary purchaser, buying under the Monte though the field of its selection was so broad, the inevitable conclusion is that it was done
normally prevalent conditions in trade and giving the attention such purchasers usually give in deliberately to deceive .24
buying that class of goods is the touchstone. 12
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as between
It has been held that in making purchases, the consumer must depend upon his recollection of the a newcomer who by the confusion has nothing to lose and everything to gain and one who by
appearance of the product which he intends to purchase. 13 The buyer having in mind the honest dealing has already achieved favor with the public, any doubt should be resolved against
mark/label of the respondent must rely upon his memory of the petitioner's mark. 14 Unlike the the newcomer inasmuch as the field from which he can select a desirable trademark to indicate the
judge who has ample time to minutely examine the labels in question in the comfort of his sala, the origin of his product is obviously a large one. 25
ordinary shopper does not enjoy the same opportunity.
Coming now to the second issue, we find that the private respondent is not guilty of infringement for
A number of courts have held that to determine whether a trademark has been infringed, we must having used the Del Monte bottle. The reason is that the configuration of the said bottle was merely
consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the registered in the Supplemental Register. In the case of Lorenzana v. Macagba, 26 we declared that:
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 (1) Registration in the Principal Register gives rise to a presumption of the validity of the registration,
be dissipated as soon as the court assumes to analyze carefully the respective features of the
the registrant's ownership of the mark and his right to the exclusive use thereof. There is no such
mark. 17
presumption in the registration in the Supplemental Register.

It has also been held that it is not the function of the court in cases of infringement and unfair
(2) Registration in the Principal Register is limited to the actual owner of the trademark and
competition to educate purchasers but rather to take their carelessness for granted, and to be ever
proceedings therein on the issue of ownership which may be contested through opposition or
conscious of the fact that marks need not be identical. A confusing similarity will justify the
interference proceedings or, after registration, in a petition for cancellation.
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 Registration in the Principal Register is constructive notice of the registrant's claim of ownership,
public with enough points of difference to confuse the courts. 20 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
We also note that the respondent court failed to take into consideration several factors which
action for infringement while registration in the Supplemental Register is not.
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 (3) In applications for registration in the Principal Register, publication of the application is
attitude of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be necessary. This is not so in applications for registrations in the Supplemental Register.
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 It can be inferred from the foregoing that although Del Monte has actual use of the bottle's
buying an article for which he pays a few centavos as he does in purchasing a more valuable configuration, the petitioners cannot claim exclusive use thereof because it has not been registered
thing. 22 Expensive and valuable items are normally bought only after deliberate, comparative and in the Principal Register. However, we find that Sunshine, despite the many choices available to it
analytical investigation. But mass products, low priced articles in wide use, and matters of everyday and notwithstanding that the caution "Del Monte Corporation, Not to be Refilled" was embossed on
purchase requiring frequent replacement are bought by the casual consumer without great the bottle, still opted to use the petitioners' bottle to market a product which Philpack also produces.
care. 23 In this latter category is catsup. 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.
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 The Court observes that the reasons given by the respondent court in resolving the case in favor of
are green and red-orange, the same with Sunshine. The word "catsup" in both bottles is printed in Sunshine are untenable. First, it declared that the registration of the Sunshine label belied the
white and the style of the print/letter is the same. Although the logo of Sunshine is not a tomato, the company's malicious intent to imitate petitioner's product. Second, it held that the Sunshine label
figure nevertheless approximates that of a tomato. 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
As previously stated, the person who infringes a trade mark does not normally copy out but only that selling oil in containers of another with markings erased, without intent to deceive, was not
makes colorable changes, employing enough points of similarity to confuse the public with enough unfair competition.
points of differences to confuse the courts. What is undeniable is the fact that when a manufacturer
Regarding the fact of registration, it is to be noted that the Sunshine label was registered not in the public or to defraud the complaining party shall be shown, in the discretion of the court, the
Principal Register but only in the Supplemental Register where the presumption of the validity of damages may be doubled.
the trademark, the registrant's ownership of the mark and his right to its exclusive use are all
absent.
The complaining party, upon proper showing may also be granted injunction.1âwphi1

Anent the assumption that the Bureau of Patent had considered other existing patents, it is
Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil Code,
reiterated that since registration was only in the Supplemental Register, this did not vest the
which provides:
registrant with the exclusive right to use the label nor did it give rise to the presumption of the
validity of the registration.
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.
On the argument that no unfair competition was committed, the Shell Case is not on all fours with
the case at bar because:
Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal
damages in the amount of Pl,000.00.
(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 WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated December 24,
respondent in the present case made no similar effort. 1986 and the Resolution dated April 27,1987, are REVERSED and SET ASIDE and a new
judgment is hereby rendered:
(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 (1) Canceling the private respondent's Certificate of Register No. SR-6310 and permanently
respondent admitted that it made use of several Del Monte bottles and without obliterating the enjoining the private respondent from using a label similar to that of the petitioners.
embossed warning.
(2) Prohibiting the private respondent from using the empty bottles of the petitioners as containers
(3) In Shell, the product of respondent was sold to dealers, not to ultimate consumers. As a general for its own products.
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. (3) Ordering the private respondent to pay the petitioners nominal damages in the amount of
There may well be similarities and imitations which deceive all, but generally the interests of the Pl,000.00, and the costs of the suit.
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
SO ORDERED.

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
G.R. No. L-32747 November 29, 1984 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
FRUIT OF THE LOOM, INC., petitioner, Eve", ordering Defendant to pay plaintiff the sum of P10,000.00 as attorney's fees and to pay the
costs.
vs.
COURT OF APPEALS and GENERAL GARMENTS CORPORATION, respondents.
Both parties appealed to the former Court of Appeals, herein petitioner's appeal being centered on
MAKASIAR, J.: 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.

This is a petition for review on certiorari of the decision dated October 8, 1970 of the former Court of
On October 8, 1970, the former Court of Appeals, as already stated, rendered its questioned
Appeals reversing the decision of the defunct Court of First Instance of Manila, Branch XIV,
decision reversing the judgment of the lower court and dismissing herein petitioner's complaint.
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's motion for reconsideration having been denied, the present petition was filed before this
Court.
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 The first and second arguments advanced by petitioner are that the respondent court committed an
Patent Office and was issued two Certificates of Registration Nos. 6227 and 6680, on November error in holding that the word FRUIT, being a generic word, is not capable of exclusive
29, 1957 and July 26, 1958, respectively. The classes of merchandise covered by Registration appropriation by petitioner and that the registrant of a trademark is not entitled to the exclusive use
Certificate No. 6227 are, among others, men's, women's and children's underwear, which includes of every word of his mark. Otherwise stated, petitioner argues that the respondent court committed
women's panties and which fall under class 40 in the Philippine Patent Office's classification of an error in ruling that petitioner cannot appropriate exclusively the word FRUIT in its trademark
goods. Registration Certificate No. 6680 covers knitted, netted and textile fabrics. FRUIT OF THE LOOM.

Private respondent, a domestic corporation, is the registrant of a trademark FRUIT FOR EVE in the The third and fourth arguments submitted by petitioner which We believe is the core of the present
Philippine Patent Office and was issued a Certificate of Registration No. 10160, on January 10, controversy, are that the respondent court erred in holding that there is no confusing similarity in
1963 covering garments similar to petitioner's products like women's panties and pajamas. 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
On March 31, 1965 petitioner filed before the lower court, a complaint for infringement of trademark
word FRUIT and the big red apple in private respondent's label or hang tag would be led to believe
and unfair competition against the herein private respondent. Petitioner principally alleged in the
that the latter's products are those of the petitioner, The resolution of these two assigned errors in
complaint that private respondent's trademark FRUIT FOR EVE is confusingly similar to its
the negative will lay to rest the matter in litigation and there is no need to touch on the other issues
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 raised by petitioner. Should the said questions be resolved in favor of petitioner, then the other
matters may be considered.
respondent's hang tag consisting of a big red apple is a colorable imitation to the hang tag of
petitioner.
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
On April 19, 1965, private respondent filed an answer invoking the special defense that its
be gleaned from the questioned decision, respondent court did not pass upon the argument of
registered trademark is not confusingly similar to that of petitioner as the latter alleged. Likewise,
petitioner that private respondent obtained the registration of its trademark thru fraud or
private respondent stated that the trademark FRUIT FOR EVE is being used on ladies' panties and
misrepresentation because of the said court's findings that there is no confusing similarity between
pajamas only whereas petitioner's trademark is used even on men's underwear and pajamas.
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
At the pre-trial on May 5, 1965, the following admissions were made: (1) That the trademark FRUIT registered.
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
Lastly, petitioner asserts that respondent court should have awarded damages in its favor because
of Patents and it bears the notice "Reg. Phil. Patent Off." and (3) That at the time of its registration,
private respondent had clearly profited from the infringement of the former's trademark.
plaintiff filed no opposition thereto.

The main issue involved in this case is whether or not private respondent's trademark FRUIT FOR
After trial, judgment was rendered by the lower court in favor of herein petitioner, the dispositive
EVE and its hang tag are confusingly similar to petitioner's trademark FRUIT OF THE LOOM and
portion of which reads as follows:
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 trademarks FRUIT OF THE LOOM and FRUIT FOR EVE do not resemble each other as to confuse
that there is infringement of trademark when the use of the mark involved would be likely to cause or deceive an ordinary purchaser. The ordinary purchaser must be thought of as having, and
confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of credited with, at least a modicum of intelligence (Carnation Co. vs. California Growers Wineries, 97
the commodity (Co Tiong Sa vs. Director of Patents, 95 Phil. 1; Alhambra Cigar & Cigarette Co. vs. F. 2d 80; Hyram Walke and Sons vs. Penn-Maryland Corp., 79 F. 2d 836) to be able to see the
Mojica, 27 Phil. 266; Sapolin Co. vs. Balmaceda, 67 Phil. 705; La Insular vs. Jao Oge, 47 Phil. 75). 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.
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 These findings in effect render immaterial the other errors assigned by petitioner which are
pictures of the hang tags of the products of the parties to the case. The pictures below are part of premised on the assumption that private respondent's trademark FRUIT FOR EVE had infringed
the documentary evidence appearing on page 124 of the original records. petitioner's trademark FRUIT OF THE LOOM.

Petitioner asseverates in the third and fourth assignment of errors, which, as We have said, WHEREFORE, THE DECISION APPEALED FROM IS AFFIRMED. COSTS AGAINST
constitute the main argument, that the dominant features of both trademarks is the word FRUIT. In PETITIONER.
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
SO ORDERED.
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
G.R. No. 183404 October 13, 2010 Abyadang filed a motion for reconsideration, and Berris, in turn, filed its opposition to the motion.

BERRIS AGRICULTURAL CO., INC., Petitioner, On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D)7 (BLA resolution), denying
vs. the motion for reconsideration and disposing as follows —
NORVY ABYADANG, Respondent.
IN VIEW OF THE FOREGOING, the Motion for Reconsideration filed by the Respondent-Applicant
DECISION is hereby DENIED FOR LACK OF MERIT. Consequently, Decision No. 2006-24 dated April 28,
2006 STANDS.
NACHURA, J.:
Let the filewrapper of the trademark "NS D-10 PLUS" subject matter under consideration be
1 forwarded to the Bureau of Trademarks for appropriate action in accordance with this Resolution.
This petition for review on certiorari under Rule 45 of the Rules of Court seeks the reversal of the
Decision dated April 14, 20082 and the Resolution dated June 18, 20083 of the Court of Appeals
(CA) in CA-G.R. SP No. 99928. SO ORDERED.8

The antecedents— 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.
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 With the filing of the parties’ respective memoranda, Director General Adrian S. Cristobal, Jr. of the
Office (IPO) a trademark application for the mark "NS D-10 PLUS" for use in connection with IPPDG rendered a decision dated July 20, 2007,9 ruling as follows—
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
Wherefore, premises considered[,] the appeal is hereby DENIED. Accordingly, the appealed
July 28, 2005.
Decision of the Director is hereby AFFIRMED.

On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with business address in
Let a copy of this Decision as well as the trademark application and records be furnished and
Barangay Masiit, Calauan, Laguna, filed with the IPO Bureau of Legal Affairs (IPO-BLA) a Verified
returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the
Notice of Opposition4 against the mark under application allegedly because "NS D-10 PLUS" is
Directors of the Bureau of Trademarks, the Administrative, Financial and Human Resources
similar and/or confusingly similar to its registered trademark "D-10 80 WP," also used for Fungicide Development Services Bureau, and the library of the Documentation, Information and Technology
(Class 5) with active ingredient 80% Mancozeb. The opposition was docketed as IPC No.
Transfer Bureau be furnished a copy of this Decision for information, guidance, and records
14-2005-00099.
purposes.

After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-Abelardo (Director
SO ORDERED.10
Abelardo) of the IPO-BLA issued Decision No. 2006-245 (BLA decision), the dispositive portion of
which reads—
Undeterred, Abyadang filed a petition for review11 before the CA.
WHEREFORE, viewed in the light of all the foregoing, this Bureau finds and so holds that
Respondent-Applicant’s mark "NS D-10 PLUS" is confusingly similar to the Opposer’s mark and as In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It held—
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 In sum, the petition should be granted due to the following reasons: 1) petitioner’s mark "NS D-10
covering the goods fungicide under Class 5 of the International Classification of goods is, as it is PLUS" is not confusingly similar with respondent’s trademark "D-10 80 WP"; 2) respondent failed to
hereby, REJECTED. establish its ownership of the mark "D-10 80 WP" and 3) respondent’s trademark registration for
"D-10 80 WP" may be cancelled in the present case to avoid multiplicity of suits.
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 WHEREFORE, the petition is GRANTED. The decision dated July 20, 2007 of the IPO Director
(AFHRDSB) for appropriate action in accordance with this Order with a copy to be furnished the General in Appeal No. 14-06-13 (IPC No. 14-2005-00099) is REVERSED and SET ASIDE, and a
Bureau of Trademark (BOT) for information and to update its records. new one is entered giving due course to petitioner’s application for registration of the mark "NS
D-10 PLUS," and canceling respondent’s trademark registration for "D-10 80 WP."
SO ORDERED.6
SO ORDERED.12
Berris filed a Motion for Reconsideration, but in its June 18, 2008 Resolution, the CA denied the to file a declaration of actual use (DAU) of the mark, with evidence to that effect, within three (3)
motion for lack of merit. Hence, this petition anchored on the following arguments— 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
I. The Honorable Court of Appeals’ finding that there exists no confusing similarity between
proof of the nullity of the registration or of non-use of the mark, except when excused.23 Moreover,
Petitioner’s and respondent’s marks is based on misapprehension of facts, surmise and conjecture
the presumption may likewise be defeated by evidence of prior use by another person, i.e., it will
and not in accord with the Intellectual Property Code and applicable Decisions of this Honorable
controvert a claim of legal appropriation or of ownership based on registration by a subsequent
Court [Supreme Court].
user. This is because a trademark is a creation of use and belongs to one who first used it in trade
or commerce.24
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
The determination of priority of use of a mark is a question of fact. Adoption of the mark alone does
abuse of discretion on the part of said agency is not in accord with law and earlier pronouncements
not suffice. One may make advertisements, issue circulars, distribute price lists on certain goods,
of this Honorable Court [Supreme Court].
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
III. The Honorable Court of Appeals’ Decision ordering the cancellation of herein Petitioner’s duly witnesses as customers, or orders of buyers, best prove the actual use of a mark in trade and
registered and validly existing trademark in the absence of a properly filed Petition for Cancellation commerce during a certain period of time.25
before the Intellectual Property Office is not in accord with the Intellectual Property Code and
applicable Decisions of this Honorable Court [Supreme Court]. 13
In the instant case, both parties have submitted proof to support their claim of ownership of their
respective trademarks.
The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No.
829314 (Intellectual Property Code of the Philippines), specifically Sections 121 to 170 thereof. It
Culled from the records, Berris, as oppositor to Abyadang’s application for registration of his
took effect on January 1, 1998. Prior to its effectivity, the applicable law was R.A. No. 166,15 as
trademark, presented the following evidence: (1) its trademark application dated November 29,
amended.
200226 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
Interestingly, R.A. No. 8293 did not expressly repeal in its entirety R.A. No. 166, but merely photocopy of its packaging28 bearing the mark "D-10 80 WP"; (4) photocopies of its sales invoices
provided in Section 239.116 that Acts and parts of Acts inconsistent with it were repealed. In other and official receipts;29 and (5) its notarized DAU dated April 23, 2003,30 stating that the mark was
words, only in the instances where a substantial and irreconcilable conflict is found between the first used on June 20, 2002, and indicating that, as proof of actual use, copies of official receipts or
provisions of R.A. No. 8293 and of R.A. No. 166 would the provisions of the latter be deemed sales invoices of goods using the mark were attached as Annex "B."
repealed.
On the other hand, Abyadang’s proofs consisted of the following: (1) a photocopy of the
R.A. No. 8293 defines a "mark" as any visible sign capable of distinguishing the goods (trademark) packaging31 for his marketed fungicide bearing mark "NS D-10 PLUS"; (2) Abyadang’s Affidavit
or services (service mark) of an enterprise and shall include a stamped or marked container of dated February 14, 2006,32 stating among others that the mark "NS D-10 PLUS" was his own
goods.17 It also defines a "collective mark" as any visible sign designated as such in the application creation derived from: N – for Norvy, his name; S – for Soledad, his wife’s name; D – the first letter
for registration and capable of distinguishing the origin or any other common characteristic, for December, his birth month; 10 – for October, the 10th month of the year, the month of his
including the quality of goods or services of different enterprises which use the sign under the business name registration; and PLUS – to connote superior quality; that when he applied for
control of the registered owner of the collective mark.18 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
On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol, Berris because the latter never engaged in any commercial activity to sell "D-10 80 WP" fungicide
emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or in the local market; and that he could not have copied Berris’ mark because he registered his
merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt by packaging with the Fertilizer and Pesticide Authority (FPA) ahead of Berris; (3) Certification dated
another.19 A trademark, being a special property, is afforded protection by law. But for one to enjoy December 19, 200533 issued by the FPA, stating that "NS D-10 PLUS" is owned and distributed by
this legal protection, legal protection ownership of the trademark should rightly be established. 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, 200534 issued by the FPA, stating
that, per monitoring among dealers in Region I and in the Cordillera Administrative Region
The ownership of a trademark is acquired by its registration and its actual use by the manufacturer registered with its office, the Regional Officer neither encountered the fungicide with mark "D-10 80
or distributor of the goods made available to the purchasing public. Section 12220 of R.A. No. 8293 WP" nor did the FPA provincial officers from the same area receive any report as to the presence or
provides that the rights in a mark shall be acquired by means of its valid registration with the IPO. A sale of Berris’ product; (5) Certification dated March 14, 200635 issued by the FPA, certifying that all
certificate of registration of a mark, once issued, constitutes prima facie evidence of the validity of pesticides must be registered with the said office pursuant to Section 936 of Presidential Decree
the registration, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to (P.D.) No. 114437 and Section 1, Article II of FPA Rules and Regulations No. 1, Series of 1977; (6)
use the same in connection with the goods or services and those that are related thereto specified Certification dated March 16, 200638 issued by the FPA, certifying that the pesticide "D-10 80 WP"
in the certificate.21 R.A. No. 8293, however, requires the applicant for registration or the registrant
was registered by Berris on November 12, 2004; and (7) receipts from Sunrise Farm Supply39 in La or services would indicate a connection between those goods or services and the owner of the
Trinidad, Benguet of the sale of Abyadang’s goods referred to as "D-10" and "D-10+." registered mark: Provided, further, That the interests of the owner of the registered mark are likely
to be damaged by such use.
Based on their proffered pieces of evidence, both Berris and Abyadang claim to be the prior user of
their respective marks. Now, we confront the question, "Is Abyadang’s 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 rule in favor of Berris.
We answer in the affirmative.
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 According to Section 123.1(d) of R.A. No. 8293, a mark cannot be registered if it is identical with a
was under oath and notarized, bearing the stamp of the Bureau of Trademarks of the IPO on April registered mark belonging to a different proprietor with an earlier filing or priority date, with respect
25, 2003,40 and which stated that it had an attachment as Annex "B" sales invoices and official to: (1) the same goods or services; (2) closely related goods or services; or (3) near resemblance of
receipts of goods bearing the mark. Indeed, the DAU, being a notarized document, especially when such mark as to likely deceive or cause confusion.
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
In determining similarity and likelihood of confusion, jurisprudence has developed tests—the
presumption of authenticity and due execution lies on the party contesting it, and the rebutting
Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of
evidence should be clear, strong, and convincing as to preclude all controversy as to the falsity of
the prevalent or dominant features of the competing trademarks that might cause confusion,
the certificate.41 What is more, the DAU is buttressed by the Certification dated April 21,
mistake, and deception in the mind of the purchasing public. Duplication or imitation is not
200642 issued by the Bureau of Trademarks that Berris’ mark is still valid and existing.
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
Hence, we cannot subscribe to the contention of Abyadang that Berris’ DAU is fraudulent based of goods, giving little weight to factors like prices, quality, sales outlets, and market segments.43
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
In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the marks as
correctly held by the IPPDG in its decision on Abyadang’s appeal, the question of whether or not applied to the products, including the labels and packaging, in determining confusing similarity. The
Berris violated P.D. No. 1144, because it sold its product without prior registration with the FPA, is a
discerning eye of the observer must focus not only on the predominant words but also on the other
distinct and separate matter from the jurisdiction and concern of the IPO. Thus, even a
features appearing on both labels so that the observer may draw conclusion on whether one is
determination of violation by Berris of P.D. No. 1144 would not controvert the fact that it did submit
confusingly similar to the other.44
evidence that it had used the mark "D-10 80 WP" earlier than its FPA registration in 2004.

Comparing Berris’ mark "D-10 80 WP" with Abyadang’s mark "NS D-10 PLUS," as appearing on
Furthermore, even the FPA Certification dated October 11, 2005, stating that the office had neither
their respective packages, one cannot but notice that both have a common component which is
encountered nor received reports about the sale of the fungicide "D-10 80 WP" within Region I and "D-10." On Berris’ package, the "D-10" is written with a bigger font than the "80 WP." Admittedly,
the Cordillera Administrative Region, could not negate the fact that Berris was selling its product
the "D-10" is the dominant feature of the mark. The "D-10," being at the beginning of the mark, is
using that mark in 2002, especially considering that it first traded its goods in Calauan, Laguna,
what is most remembered of it. Although, it appears in Berris’ certificate of registration in the same
where its business office is located, as stated in the DAU.
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
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—
Applying the Dominancy Test, it cannot be gainsaid that Abyadang’s "NS D-10 PLUS" is similar to
Berris’ "D-10 80 WP," that confusion or mistake is more likely to occur. Undeniably, both marks
Sec. 147. Rights Conferred.— 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.
147.1. The owner of a registered mark shall have the exclusive right to prevent all third parties not
Both depictions of "D-10," as found in both marks, are similar in size, such that this portion is what
having the owner’s consent from using in the course of trade identical or similar signs or containers
catches the eye of the purchaser. Undeniably, the likelihood of confusion is present.
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. 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,
147.2. The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e) which
with the same phrase "BROAD SPECTRUM FUNGICIDE" written underneath.1awphi1
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
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 Abyadang’s 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.
G.R. NO. 157216 NOVEMBER 20, 2003 I

246 CORPORATION, doing business under the name and style of ROLEX MUSIC IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE COURT OF APPEALS
LOUNGE, petitioner, PERFUNCTORILY BRUSHED ASIDE THE CONTROLLING PRECEDENTS LAID
DOWN BY THIS HONORABLE COURT IN ESSO STANDARD EASTERN, INC. VS.
vs.
COURT OF APPEALS AND UNITED CIGARETTE CORPORATION AND OTHER
HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge of Branch 90 of the COMPANION CASES HOLDING THAT NO TRADEMARK INFRINGEMENT CAN
Regional Trial Court of Quezon City, MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. POSSIBLY OCCUR WHERE THE CONTENDING PARTIES DEAL WITH GOODS
LIMITED, respondents. AND SERVICES THAT ARE TOTALLY UNRELATED AND NON-COMPETING WITH
EACH OTHER.
DECISION II
YNARES-SANTIAGO, J.: IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES RAISED IN
PETITIONERS CERTIORARI PETITION ARE QUESTIONS OF FACT, THE
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONERS
assailing the November 28, 2002 Decision[1] of the Court of Appeals in CA-G.R. SP No. 64660 SUBSTANTIVE DUE PROCESS RIGHTS BUT ALSO THE WELL-SETTLED RULE
which dismissed the petition for certiorari filed by petitioner, as well as the Resolution[2] dated THAT THE ALLEGATIONS OF THE COMPLAINT IS HYPOTHETICALLY ADMITTED
February 13, 2003 denying its motion for reconsideration. WHEN THE MOTION TO DISMISS IS GROUNDED UPON LACK OF CAUSE OF
ACTION. MOREOVER, INDEPENDENT OF THE HYPOTHETICALLY ADMITTED
The undisputed facts show that on November 26, 1998, respondents Montres Rolex S.A. and FACTS EMBODIED IN THE COMPLAINT A QUO, THERE ARE SELF-EVIDENT
Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner FACTS AND IMPLIEDLY ADMITTED FACTS CONTAINED IN PRIVATE
246 Corporation the instant suit for trademark infringement and damages with prayer for the RESPONDENTS PLEADINGS THAT WOULD CLEARLY AND UNMISTAKABLY
issuance of a restraining order or writ of preliminary injunction[3] before the Regional Trial Court SHOW PRIVATE RESPONDENTS LACK OF CAUSE OF ACTION AGAINST HEREIN
of Quezon City, Branch 90. Respondents alleged that sometime in July 1996, petitioner adopted PETITIONER.
and, since then, has been using without authority the mark Rolex in its business name Rolex Music
Lounge as well as in its newspaper advertisements as Rolex Music Lounge, KTV, Disco & Party III
Club.
THE HONORABLE COURT OF APPEALS VIOLATED PETITIONERS RIGHT TO
In its answer raising special affirmative defenses, petitioner argued that respondents have no SUBSTANTIVE DUE PROCESS WHEN IT ARBITRARILY AND CAPRICIOUSLY
cause of action because no trademark infringement exist; that no confusion would arise from the RULED THAT WHAT WAS SPECIFICALLY DENIED IN THE ASSAILED OCTOBER
use by petitioner of the mark Rolex considering that its entertainment business is totally unrelated 20, 2000 ORDER IS PETITIONERS MOTION FOR PRELIMINARY HEARING ON
to the items catered by respondents such as watches, clocks, bracelets and parts thereof. It also DEFENDANTS AFFIRMATIVE DEFENSES AND NOT PETITIONERS MOTION TO
contended that the complaint was not properly verified and certified against forum shopping DISMISS PER SE CONSIDERING THAT:
considering that Atty. Alonzo Ancheta, the counsel of record of respondents who signed the
verification and certification, was not authorized to represent respondents.[4] A. THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER 20, 2000 OF
RESPONDENT JUDGE WHICH SUGGESTS THAT THE RESOLUTION OF PETITIONERS
On July 21, 2000, petitioner filed a motion for preliminary hearing on its affirmative
MOTION TO DISMISS PER SE WAS HELD IN ABEYANCE BY THE RESPONDENT
defenses.[5] Subsequently, on motion of petitioner, the trial court issued a
JUDGE. HENCE THE SAID ORDER DATED OCTOBER 20, 2000 ALSO CONSTITUTES A
subpoena ad testificandumrequiring Atty. Alonzo Ancheta to appear at the preliminary
DENIAL ON THE MERITS OF PETITIONERS MOTION TO DISMISS PER SE AND NOT MERELY
hearing.[6] Respondents, in the meantime, filed a Comment and Opposition[7] to the motion for
OF PETITIONERS MOTION FOR PRELIMINARY HEARING THEREON.
preliminary hearing and a motion to quash the subpoena ad testificandum.

In an Order dated October 27, 2000, the trial court quashed the B. PRIVATE RESPONDENTS COMMENT AND OPPOSITION DATED 11 AUGUST 2000, WHICH WAS
subpoena ad testificandum and denied petitioners motion for preliminary hearing on affirmative CITED AND SUSTAINED BY RESPONDENT JUDGE, CLEARLY TRAVERSED THE MERITS OF
defenses with motion to dismiss.[8] THE GROUNDS FOR PETITIONERS MOTION TO DISMISS PER SE. HENCE, THE SAID 20
OCTOBER 2000 ORDERS DENIAL OF PETITIONERS MOTION IS NOT LIMITED TO THE
With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a petition
MOTION FOR PRELIMINARY HEARING BUT ALSO CONSTITUTES A DENIAL OF
for certiorari with the Court of Appeals contending that the trial court gravely abused its discretion in
PETITIONERS MOTION TO DISMISS PER SE.
issuing the October 27, 2000 and March 16, 2001 orders.

On November 28, 2002, the Court of Appeals dismissed the petition. The motion for IV
reconsideration filed by petitioner was denied. Hence, the instant petition anchored on the following
grounds: IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY. ALONZO ANCHETA
PROPERLY VERIFIED AND CERTIFIED PRIVATE RESPONDENTS COMPLAINT A
QUO, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY In Municipality of Bian Laguna v. Court of Appeals,[13] decided under the old Rules of Civil
PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO THE Procedure, it was held that a preliminary hearing permitted under Rule 16, Section 5, is not
DOCTRINE OF SEPARATE CORPORATE PERSONALITY; CONSIDERING THAT mandatory even when the same is prayed for. It rests largely on the sound discretion of the trial
THE RECORDS OF THIS CASE IS (sic) COMPLETELY BEREFT AND DEVOID OF court, thus
ANY DULY EXECUTED SPECIAL POWER OF ATTORNEY, EMANATING FROM
PRIVATE RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY
SEC. 5. Pleading grounds as affirmative defenses. Any of the grounds for dismissal provided for in
AUTHORIZES ATTY. ALONZO ANCHETA TO REPRESENT PRIVATE
this Rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary
RESPONDENTS MONTRES ROLEX S.A. IN THE FILING OF THE COMPLAINT A
hearing maybe had thereon as if a motion to dismiss had been filed. (Emphasis supplied)
QUO. BY REASON THEREOF, PRIVATE RESPONDENTS COULD NOT BE
DEEMED TO HAVE VOLUNTARILY APPEARED BEFORE THE RESPONDENT
JUDGE; CONSEQUENTLY, THE TRIAL COURT COULD NOT HAVE VALIDLY The use of the word "may" in the aforequoted provision shows that such a hearing is not a matter of
ACQUIRED JURISDICTION OVER THE PERSON OF PRIVATE RESPONDENTS. right demandable from the trial court; it is not mandatory but discretionary. May is an auxiliary verb
indicating liberty, opportunity, permission and possibility.[14] Such interpretation is specifically stated
V under the 1997 Rules of Civil Procedure. Rule 16, Section 6, now provides that a grant of a
preliminary hearing rests on the sound discretion of the court, to wit
IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT JUDGES
QUASHAL OF THE SUBPOENA DATED 14 AUGUST 2000 DIRECTED AGAINST
ATTY. ALONZO ANCHETA, THE HONORABLE COURT OF APPEALS VIOLATED SEC. 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed, any of
NOT ONLY PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO the grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the
SECTION 9, RULE 132 AND SECTION 7 RULE 133 OF THE 1989 REVISED RULES answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a
ON EVIDENCE, AND THE RULING OF THIS HONORABLE COURT IN THE CASE motion to dismiss had been filed. (Emphasis supplied)
OF PEOPLE VS. RIVERA.[9]
In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion could
Simply put, the issues are as follows (1) whether the trial court denied not only petitioners
be ascribed to the trial courts denial of petitioners motion for preliminary hearing on its affirmative
motion for preliminary hearing on its affirmative defenses but its motion to dismiss as well; (2) if the
defenses with motion to dismiss. The issue of whether or not a trademark infringement exists, is a
answer is in the affirmative, whether or not the trial court gravely abused its discretion in denying
question of fact that could best be determined by the trial court.
said motions; and (3) whether the trial court gravely abused its discretion in quashing the
subpoena ad testificandum issued against Atty. Ancheta. Under the old Trademark Law[15] where the goods for which the identical marks are used are
unrelated, there can be no likelihood of confusion and there is therefore no infringement in the use
Anent the first issue, we find that what was denied in the order dated October 27, 2000 was
by the junior user of the registered mark on the entirely different goods.[16] This ruling, however, has
not only the motion for preliminary hearing but the motion to dismiss as well. A reading of
been to some extent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act
the dispositive portion of said order shows that the trial court neither qualified its denial nor held in
No. 8293), which took effect on January 1, 1998. The said section reads:
abeyance the ruling on petitioners motion to dismiss thus

Sec. 123. Registrability. 123.1. A mark cannot be registered if it:


IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena Ad Testificandum is
granted; and the aforecited Motion For Preliminary Hearing On Defendants Affirmative
Defenses With Motion To dismiss The Instant Complaint Based On Said Affirmative xxxxxxxxx
Defenses is denied.[10] (Emphasis supplied)
(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered
In issuing the assailed order, the trial court ruled on the merits of petitioners Motion to well-known in accordance with the preceding paragraph, which is registered in the Philippines with
Dismiss vis--vis respondents Comment and Opposition which clearly traversed the affirmative respect to goods or services which are not similar to those with respect to which registration is
defenses raised by petitioner, to wit: applied for: Provided, That use of the mark in relation to those goods or services would indicate a
connection between those goods or services, and the owner of the registered
mark: Provided, further, That the interest of the owner of the registered mark are likely to be
After carefully going over the pleadings, this Court finds, on the first motion that the arguments
damaged by such use; (Emphasis supplied)
raised in the said motion and the reply filed in connection thereto appear to be meritorious; and on
the second motion, that the arguments raised in the comments and opposition and the rejoinder
filed by the plaintiffs likewise appear to be meritorious.[11] A junior user of a well-known mark on goods or services which are not similar to the goods or
services, and are therefore unrelated, to those specified in the certificate of registration of the
well-known mark is precluded from using the same on the entirely unrelated goods or services,
Moreover, it is presumed that all matters within an issue raised in a case were passed upon
subject to the following requisites, to wit:
by the court. In the absence of evidence to the contrary, the presumption is that the court a
quo discharged its task properly.[12]
1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules and Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely
Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped unrelated to respondents business involving watches, clocks, bracelets, etc. However, the Court
Containers,[17] in determining whether a mark is well known, the following criteria or any cannot yet resolve the merits of the present controversy considering that the requisites for the
combination thereof may be taken into account: application of Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The existence or absence of
these requisites should be addressed in a full blown hearing and not on a mere preliminary
(a) the duration, extent and geographical area of any use of the mark, in particular, the duration,
hearing. The respondent must be given ample opportunity to prove its claim, and the petitioner to
extent and geographical area of any promotion of the mark, including advertising or publicity and
debunk the same.
presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
The same is true with respect to the issue of whether Atty. Alonzo Ancheta was properly
(b) the market share in the Philippines and in other countries, of the goods and/or services to which authorized to sign the verification and certification against forum shopping in behalf of
the mark applies; respondents. This could be properly resolved during the trial together with the substantive issues
raised by petitioner.
(c) the degree of the inherent or acquired distinction of the mark; Considering that the trial court correctly denied petitioners motion for preliminary hearing on
its affirmative defenses with motion to dismiss, there exists no reason to compel Atty. Ancheta to
(d) the quality-image or reputation acquired by the mark; testify. Hence, no abuse of discretion was committed by the trial court in quashing the
subpoena ad testificandum issued against Atty. Ancheta.
(e) the extent to which the mark has been registered in the world; Grave abuse of discretion implies such capricious and whimsical exercise of judgment as
equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or
(f) the exclusivity of the registration attained by the mark in the world; despotic manner by reason of passion or personal hostility, and it must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act
at all in contemplation of law. None of these was committed by the trial court; hence, the Court of
(g) the extent to which the mark has been used in the world; Appeals correctly dismissed the petition.

(h) the exclusivity of use attained by the mark in the world; WHEREFORE, in view of all the foregoing, the petition for review on certiorari filed by
petitioner is DENIED. The November 28, 2002 Decision and the February 13, 2003 Resolution of
the Court of Appeals in CA-G.R. SP No. 64660 which dismissed the petition for certiorari filed by
(i) the commercial value attributed to the mark in the world; petitioner are AFFIRMED.

SO ORDERED.
(j) the record of successful protection of the rights in the mark;

(k) the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and

(l) the presence of absence of identical or similar marks validly registered for or used on identical or
similar goods or services and owned by persons other than the person claiming that his mark is a
well-known mark.

2. The use of the well-known mark on the entirely unrelated goods or services would indicate a
connection between such unrelated goods or services and those goods or services specified in the
certificate of registration in the well known mark. This requirement refers to the likelihood of
confusion of origin or business or some business connection or relationship between the registrant
and the user of the mark.

3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if the
registrant will be precluded from expanding its business to those unrelated good or services, or if
the interests of the registrant of the well-known mark will be damaged because of the inferior quality
of the good or services of the user.[18]
G.R. No. 185830 June 5, 2013 1895 & DEVICE" for goods and services under classes 21 and 41 of the Nice Classification,
respectively.7
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES), INC., Petitioner,
vs. The Ruling of the Bureau of Legal Affairs
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L., B.V., Respondents.
In its Decision8 dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the IPO sustained Ecole’s
DECISION opposition to the subject mark, necessarily resulting in the rejection of Cointreau’s
application.9 While noting the certificates of registration obtained from other countries and other
PERLAS-BERNABE, J.: pertinent materials showing the use of the subject mark outside the Philippines, the BLA did not find
such evidence sufficient to establishCointreau’s claim of prior use of the same in the Philippines. It
emphasized that the adoption and use of trademark must be in commerce in the Philippines and
Assailed in this petition for review on certiorari1 is the December 23, 2008 Decision2 of the Court of not abroad. It then concluded that Cointreau has not established any proprietary right entitled to
Appeals (CA) in CA-G.R. SP No. 104672 which affirmed in toto the Intellectual Property Office (IPO) protection in the Philippine jurisdiction because the law on trademarks rests upon the doctrine of
Director General’s April 21, 2008 Decision3 that declared respondent Renaud Cointreau & Cie nationality or territoriality.10
(Cointreau) as the true and lawful owner of the mark "LE CORDON BLEU & DEVICE" and thus, is
entitled to register the same under its name.
On the other hand, the BLA found that the subject mark, which was the predecessor of the mark
"LE CORDON BLEU MANILLE" has been known and used in the Philippines since 1948 and
The Facts registered under the name "ECOLE DE CUISINE MANILLE (THE CORDON BLEU OF THE
PHILIPPINES), INC." on May 9, 1980.11
On June 21, 1990, Cointreau, a partnership registered under the laws of France, filed before the
(now defunct) Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) of the Aggrieved, Cointreau filed an appeal with the IPO Director General.
Department of Trade and Industry a trademark application for the mark "LE CORDON BLEU &
DEVICE" for goods falling under classes 8, 9, 16, 21, 24, 25, 29, and 30 of the International
The Ruling of the IPO Director General
Classification of Goods and Services for the Purposes of Registrations of Marks ("Nice
Classification") (subject mark). The application was filed pursuant to Section 37 of Republic Act No.
166, as amended (R.A. No. 166), on the basis of Home Registration No. 1,390,912, issued on In his Decision dated April 21, 2008, the IPO Director General reversed and set aside the BLA’s
November 25, 1986 in France. Bearing Serial No. 72264, such application was published for decision, thus, granting Cointreau’s appeal and allowing the registration of the subject mark. 12 He
opposition in the March-April 1993 issue of the BPTTT Gazette and released for circulation on May held that while Section 2 of R.A. No. 166 requires actual use of the subject mark in commerce in the
31, 1993.4 Philippines for at least two (2) months before the filing date of the application, only the owner
thereof has the right to register the same, explaining that the user of a mark in the Philippines is not
ipso facto its owner. Moreover, Section 2-A of the same law does not require actual use in the
On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject
Philippines to be able to acquire ownership of a mark. 13
application, averring that: (a) it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE
MANILLE," which it has been using since 1948 in cooking and other culinary activities, including in
its restaurant business; and (b) it has earned immense and invaluable goodwill such that In resolving the issue of ownership and right to register the subject mark in favor of Cointreau, he
Cointreau’s use of the subject mark will actually create confusion, mistake, and deception to the considered Cointreau’s undisputed use of such mark since 1895 for its culinary school in Paris,
buying public as to the origin and sponsorship of the goods, and cause great and irreparable injury France (in which petitioner’s own directress, Ms. Lourdes L. Dayrit, had trained in 1977). Contrarily,
and damage to Ecole’s business reputation and goodwill as a senior user of the same.5 he found that while Ecole may have prior use of the subject mark in the Philippines since 1948, it
failed to explain how it came up with such name and mark. The IPO Director General therefore
On October 7, 1993, Cointreau filed its answer claiming to be the true and lawful owner of the concluded that Ecole has unjustly appropriated the subject mark, rendering it beyond the mantle of
protection of Section 4(d)14 of R.A. No. 166.15
subject mark. It averred that: (a) it has filed applications for the subject mark’s registration in
various jurisdictions, including the Philippines; (b) Le Cordon Bleu is a culinary school of worldwide
acclaim which was established in Paris, France in 1895; (c) Le Cordon Bleu was the first cooking Finding the IPO Director General’s reversal of the BLA’s Decision unacceptable, Ecole filed a
school to have set the standard for the teaching of classical French cuisine and pastry making; and Petition for Review16dated June 7, 2008 with the CA.
(d) it has trained students from more than eighty (80) nationalities, including Ecole’s directress, Ms.
Lourdes L. Dayrit. Thus, Cointreau concluded that Ecole’s claim of being the exclusive owner of the
Ruling of the CA
subject mark is a fraudulent misrepresentation.6

In its Decision dated December 23, 2008, the CA affirmed the IPO Director General’s Decision in
During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos.
toto.17 It declared Cointreau as the true and actual owner of the subject mark with a right to register
60631 and 54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU PARIS
the same in the Philippines under Section 37 of R.A. No. 166, having registered such mark in its ARTICLE 6bis
country of origin on November 25, 1986.18
(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of
The CA likewise held that Cointreau’s right to register the subject mark cannot be barred by Ecole’s an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark
prior use thereof as early as 1948 for its culinary school "LE CORDON BLEU MANILLE" in the which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark
Philippines because its appropriation of the mark was done in bad faith. Further, Ecole had no considered by the competent authority of the country of registration or use to be well known in that
certificate of registration that would put Cointreau on notice that the former had appropriated or has country as being already the mark of a person entitled to the benefits of this Convention and used
been using the subject mark. In fact, its application for trademark registration for the same which for identical or similar goods. These provisions shall also apply when the essential part of the mark
was just filed on February 24, 1992 is still pending with the IPO. 19 constitutes a reproduction of any such well-known mark or an imitation liable to create confusion
therewith.
Hence, this petition.
ARTICLE 8
Issues Before the Court
A trade name shall be protected in all the countries of the Union without the obligation of filing or
registration, whether or not it forms part of a trademark. (Emphasis and underscoring supplied)
The sole issue raised for the Court’s resolution is whether the CA was correct in upholding the IPO
Director General’s ruling that Cointreau is the true and lawful owner of the subject mark and thus,
entitled to have the same registered under its name. In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris Convention, to wit:

At this point, it should be noted that the instant case shall be resolved under the provisions of the Section 37. Rights of foreign registrants. - Persons who are nationals of, domiciled in, or have a
old Trademark Law, R.A. No. 166, which was the law in force at the time of Cointreau’s application bona fide or effective business or commercial establishment in any foreign country, which is a party
for registration of the subject mark. to any international convention or treaty relating to marks or trade-names, or the repression of
unfair competition to which the Philippines may be a party, shall be entitled to the benefits and
subject to the provisions of this Act to the extent and under the conditions essential to give effect to
The Court’s Ruling
any such convention and treaties so long as the Philippines shall continue to be a party thereto,
except as provided in the following paragraphs of this section.
The petition is without merit.
xxxx
In the petition, Ecole argues that it is the rightful owner of the subject mark, considering that it was
the first entity that used the same in the Philippines. Hence, it is the one entitled to its registration
Trade-names of persons described in the first paragraph of this section shall be protected without
and not Cointreau.
the obligation of filing or registration whether or not they form parts of marks.

Petitioner’s argument is untenable.


xxxx

Under Section 220 of R.A. No. 166, in order to register a trademark, one must be the owner thereof
In view of the foregoing obligations under the Paris Convention, the Philippines is obligated to
and must have actually used the mark in commerce in the Philippines for two (2) months prior to the
assure nationals of the signatory-countries that they are afforded an effective protection against
application for registration. Section 2-A21 of the same law sets out to define how one goes about
violation of their intellectual property rights in the Philippines in the same way that their own
acquiring ownership thereof. Under Section 2-A, it is clear that actual use in commerce is also the
countries are obligated to accord similar protection to Philippine nationals. 24 "Thus, under Philippine
test of ownership but the provision went further by saying that the mark must not have been so
law, a trade name of a national of a State that is a party to the Paris Convention, whether or not the
appropriated by another. Additionally, it is significant to note that Section 2-A does not require that
trade name forms part of a trademark, is protected "without the obligation of filing or registration.’"25
the actual use of a trademark must be within the Philippines. Thus, as correctly mentioned by the
CA, under R.A. No. 166, one may be an owner of a mark due to its actual use but may not yet have
the right to register such ownership here due to the owner’s failure to use the same in the In the instant case, it is undisputed that Cointreau has been using the subject mark in France since
Philippines for two (2) months prior to registration.22 1895, prior to Ecole’s averred first use of the same in the Philippines in 1948, of which the latter
was fully aware thereof. In fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its
foundress, Pat Limjuco Dayrit), had trained in Cointreau’s Le Cordon Bleu culinary school in Paris,
Nevertheless, foreign marks which are not registered are still accorded protection against
France. Cointreau was likewise the first registrant of the said mark under various classes, both
infringement and/or unfair competition. At this point, it is worthy to emphasize that the Philippines
abroad and in the Philippines, having secured Home Registration No. 1,390,912 dated November
and France, Cointreau’s country of origin, are both signatories to the Paris Convention for the
25, 1986 from its country of origin, as well as several trademark registrations in the Philippines.26
Protection of Industrial Property (Paris Convention).23 Articles 6bis and 8 of the Paris Convention
state:
On the other hand, Ecole has no certificate of registration over the subject mark but only a pending
application covering services limited to Class 41 of the Nice Classification, referring to the operation
of a culinary school. Its application was filed only on February 24, 1992, or after Cointreau filed its
trademark application for goods and services falling under different classes in 1990. Under the
foregoing circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be
said to have validly appropriated the same.

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

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

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

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

SO ORDERED.
G.R. No. 101897. March 5, 1993. Lyceum of Eastern Mindanao, Inc.; and

LYCEUM OF THE PHILIPPINES, INC., petitioner, Lyceum of Southern Philippines

vs. Petitioner's original complaint before the SEC had included three (3) other entities:

COURT OF APPEALS, LYCEUM OF APARRI, LYCEUM OF CABAGAN, LYCEUM OF 1. The Lyceum of Malacanay;
CAMALANIUGAN, INC., LYCEUM OF LALLO, INC., LYCEUM OF TUAO, INC., BUHI LYCEUM,
CENTRAL LYCEUM OF CATANDUANES, LYCEUM OF SOUTHERN PHILIPPINES, LYCEUM
OF EASTERN MINDANAO, INC. and WESTERN PANGASINAN LYCEUM, INC., respondents. 2. The Lyceum of Marbel; and

DECISION 3. The Lyceum of Araullo

FELICIANO, J : The complaint was later withdrawn insofar as concerned the Lyceum of Malacanay and the Lyceum
of Marbel, for failure to serve summons upon these two (2) entities. The case against the Liceum of
Araullo was dismissed when that school motu proprio change its corporate name to "Pamantasan
Petitioner is an educational institution duly registered with the Securities and Exchange
ng Araullo."
Commission ("SEC"). When it first registered with the SEC on 21 September 1950, it used the
corporate name Lyceum of the Philippines, Inc. and has used that name ever since.
The background of the case at bar needs some recounting. Petitioner had sometime before
commenced in the SEC a proceeding (SEC-Case No. 1241) against the Lyceum of Baguio, Inc. to
On 24 February 1984, petitioner instituted proceedings before the SEC to compel the private
require it to change its corporate name and to adopt another name not "similar [to] or identical" with
respondents, which are also educational institutions, to delete the word "Lyceum" from their
that of petitioner. In an Order dated 20 April 1977, Associate Commissioner Julio Sulit held that the
corporate names and permanently to enjoin them from using "Lyceum" as part of their respective
corporate name of petitioner and that of the Lyceum of Baguio, Inc. were substantially identical
names.
because of the presence of a "dominant" word, i.e., "Lyceum," the name of the geographical
location of the campus being the only word which distinguished one from the other corporate name.
Some of the private respondents actively participated in the proceedings before the SEC. These The SEC also noted that petitioner had registered as a corporation ahead of the Lyceum of Baguio,
are the following, the dates of their original SEC registration being set out below opposite their Inc. in point of time, 1 and ordered the latter to change its name to another name "not similar or
respective names: identical [with]" the names of previously registered entities.

Western Pangasinan Lyceum — 27 October 1950 The Lyceum of Baguio, Inc. assailed the Order of the SEC before the Supreme Court in a case
docketed as G.R. No. L-46595. In a Minute Resolution dated 14 September 1977, the Court denied
Lyceum of Cabagan — 31 October 1962 the Petition for Review for lack of merit. Entry of judgment in that case was made on 21 October
1977. 2

Lyceum of Lallo, Inc. — 26 March 1972


Armed with the Resolution of this Court in G.R. No. L-46595, petitioner then wrote all the
educational institutions it could find using the word "Lyceum" as part of their corporate name, and
Lyceum of Aparri — 28 March 1972 advised them to discontinue such use of "Lyceum." When, with the passage of time, it became
clear that this recourse had failed, petitioner instituted before the SEC SEC-Case No. 2579 to
Lyceum of Tuao, Inc. — 28 March 1972 enforce what petitioner claims as its proprietary right to the word "Lyceum." The SEC hearing
officer rendered a decision sustaining petitioner's claim to an exclusive right to use the word
"Lyceum." The hearing officer relied upon the SEC ruling in the Lyceum of Baguio, Inc. case
Lyceum of Camalaniugan — 28 March 1972
(SEC-Case No. 1241) and held that the word "Lyceum" was capable of appropriation and that
petitioner had acquired an enforceable exclusive right to the use of that word.
The following private respondents were declared in default for failure to file an answer despite
service of summons:
On appeal, however, by private respondents to the SEC En Banc, the decision of the hearing
officer was reversed and set aside. The SEC En Banc did not consider the word "Lyceum" to have
Buhi Lyceum; become so identified with petitioner as to render use thereof by other institutions as productive of
confusion about the identity of the schools concerned in the mind of the general public. Unlike its
Central Lyceum of Catanduanes; hearing officer, the SEC En Banc held that the attaching of geographical names to the word
"Lyceum" served sufficiently to distinguish the schools from one another, especially in view of the We do not consider that the corporate names of private respondent institutions are "identical with,
fact that the campuses of petitioner and those of the private respondents were physically quite or deceptively or confusingly similar" to that of the petitioner institution. True enough, the corporate
remote from each other. 3 names of private respondent entities all carry the word "Lyceum" but confusion and deception are
effectively precluded by the appending of geographic names to the word "Lyceum." Thus, we do
not believe that the "Lyceum of Aparri" can be mistaken by the general public for the Lyceum of the
Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991,
Philippines, or that the "Lyceum of Camalaniugan" would be confused with the Lyceum of the
however, the Court of Appeals affirmed the questioned Orders of the SEC En Banc. 4 Petitioner
Philippines.
filed a motion for reconsideration, without success.

Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion which in turn referred to a
Before this Court, petitioner asserts that the Court of Appeals committed the following errors:
locality on the river Ilissius in ancient Athens "comprising an enclosure dedicated to Apollo and
adorned with fountains and buildings erected by Pisistratus, Pericles and Lycurgus frequented by
1. The Court of Appeals erred in holding that the Resolution of the Supreme Court in G.R. No. the youth for exercise and by the philosopher Aristotle and his followers for teaching." 8 In time, the
L-46595 did not constitute stare decisis as to apply to this case and in not holding that said word "Lyceum" became associated with schools and other institutions providing public lectures and
Resolution bound subsequent determinations on the right to exclusive use of the word Lyceum. concerts and public discussions. Thus today, the word "Lyceum" generally refers to a school or an
institution of learning. While the Latin word "lyceum" has been incorporated into the English
2. The Court of Appeals erred in holding that respondent Western Pangasinan Lyceum, Inc. was language, the word is also found in Spanish (liceo) and in French (lycee). As the Court of Appeals
incorporated earlier than petitioner. noted in its Decision, Roman Catholic schools frequently use the term; e.g., "Liceo de Manila,"
"Liceo de Baleno" (in Baleno, Masbate), "Liceo de Masbate," "Liceo de Albay." 9 "Lyceum" is in fact
as generic in character as the word "university." In the name of the petitioner, "Lyceum" appears to
3. The Court of Appeals erred in holding that the word Lyceum has not acquired a secondary be a substitute for "university;" in other places, however, "Lyceum," or "Liceo" or "Lycee" frequently
meaning in favor of petitioner. denotes a secondary school or a college. It may be (though this is a question of fact which we need
not resolve) that the use of the word "Lyceum" may not yet be as widespread as the use of
4. The Court of Appeals erred in holding that Lyceum as a generic word cannot be appropriated by "university," but it is clear that a not inconsiderable number of educational institutions have adopted
the petitioner to the exclusion of others. 5 "Lyceum" or "Liceo" as part of their corporate names. Since "Lyceum" or "Liceo" denotes a school
or institution of learning, it is not unnatural to use this word to designate an entity which is organized
and operating as an educational institution.
We will consider all the foregoing ascribed errors, though not necessarily seriatim. We begin by
noting that the Resolution of the Court in G.R. No. L-46595 does not, of course, constitute res
adjudicata in respect of the case at bar, since there is no identity of parties. Neither is stare decisis It is claimed, however, by petitioner that the word "Lyceum" has acquired a secondary meaning in
pertinent, if only because the SEC En Banc itself has re-examined Associate Commissioner Sulit's relation to petitioner with the result that that word, although originally a generic, has become
ruling in the Lyceum of Baguio case. The Minute Resolution of the Court in G.R. No. L-46595 was appropriable by petitioner to the exclusion of other institutions like private respondents herein.
not a reasoned adoption of the Sulit ruling.
The doctrine of secondary meaning originated in the field of trademark law. Its application has,
The Articles of Incorporation of a corporation must, among other things, set out the name of the however, been extended to corporate names sine the right to use a corporate name to the
corporation. 6 Section 18 of the Corporation Code establishes a restrictive rule insofar as corporate exclusion of others is based upon the same principle which underlies the right to use a particular
names are concerned: trademark or tradename. 10 In Philippine Nut Industry, Inc. v. Standard Brands, Inc., 11 the
doctrine of secondary meaning was elaborated in the following terms:
"SECTION 18. Corporate name. — No corporate name may be allowed by the Securities an
Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that " . . . a word or phrase originally incapable of exclusive appropriation with reference to an article on
of any existing corporation or to any other name already protected by law or is patently deceptive, the market, because geographically or otherwise descriptive, might nevertheless have been used
confusing or contrary to existing laws. When a change in the corporate name is approved, the so long and so exclusively by one producer with reference to his article that, in that trade and to that
Commission shall issue an amended certificate of incorporation under the amended name." branch of the purchasing public, the word or phrase has come to mean that the article was his
(Emphasis supplied) product." 12

The policy underlying the prohibition in Section 18 against the registration of a corporate name The question which arises, therefore, is whether or not the use by petitioner of "Lyceum" in its
which is "identical or deceptively or confusingly similar" to that of any existing corporation or which corporate name has been for such length of time and with such exclusivity as to have become
is "patently deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of associated or identified with the petitioner institution in the mind of the general public (or at least
fraud upon the public which would have occasion to deal with the entity concerned, the evasion of that portion of the general public which has to do with schools). The Court of Appeals recognized
legal obligations and duties, and the reduction of difficulties of administration and supervision over this issue and answered it in the negative:
corporations. 7
"Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive secondary in importance; we refer to this earlier registration simply to underscore the fact that
appropriation with reference to an article in the market, because geographical or otherwise petitioner's use of the word "Lyceum" was neither the first use of that term in the Philippines nor an
descriptive might nevertheless have been used so long and so exclusively by one producer with exclusive use thereof. Petitioner's use of the word "Lyceum" was not exclusive but was in truth
reference to this article that, in that trade and to that group of the purchasing public, the word or shared with the Western Pangasinan Lyceum and a little later with other private respondent
phrase has come to mean that the article was his produce (Ana Ang vs. Toribio Teodoro, 74 Phil. institutions which registered with the SEC using "Lyceum" as part of their corporation names. There
56). This circumstance has been referred to as the distinctiveness into which the name or phrase may well be other schools using Lyceum or Liceo in their names, but not registered with the SEC
has evolved through the substantial and exclusive use of the same for a considerable period of time. because they have not adopted the corporate form of organization.
Consequently, the same doctrine or principle cannot be made to apply where the evidence did not
prove that the business (of the plaintiff) has continued for so long a time that it has become of
We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive
consequence and acquired a good will of considerable value such that its articles and produce right to use the word "Lyceum" in its corporate name and that other institutions may use "Lyceum"
have acquired a well-known reputation, and confusion will result by the use of the disputed name
as part of their corporate names. To determine whether a given corporate name is "identical" or
(by the defendant) (Ang Si Heng vs. Wellington Department Store, Inc., 92 Phil. 448).
"confusingly or deceptively similar" with another entity's corporate name, it is not enough to
ascertain the presence of "Lyceum" or "Liceo" in both names. One must evaluate corporate names
With the foregoing as a yardstick, [we] believe the appellant failed to satisfy the aforementioned in their entirety and when the name of petitioner is juxtaposed with the names of private
requisites. No evidence was ever presented in the hearing before the Commission which respondents, they are not reasonably regarded as "identical" or "confusingly or deceptively similar"
sufficiently proved that the word 'Lyceum' has indeed acquired secondary meaning in favor of the with each other.
appellant. If there was any of this kind, the same tend to prove only that the appellant had been
using the disputed word for a long period of time. Nevertheless, its (appellant) exclusive use of the
WHEREFORE, the petitioner having failed to show any reversible error on the part of the public
word (Lyceum) was never established or proven as in fact the evidence tend to convey that the
respondent Court of Appeals, the Petition for Review is DENIED for lack of merit, and the Decision
cross-claimant was already using the word 'Lyceum' seventeen (17) years prior to the date the
of the Court of Appeals dated 28 June 1991 is hereby AFFIRMED. No pronouncement as to costs.
appellant started using the same word in its corporate name. Furthermore, educational institutions
of the Roman Catholic Church had been using the same or similar word like 'Liceo de Manila,'
'Liceo de Baleno' (in Baleno, Masbate), 'Liceo de Masbate,' 'Liceo de Albay' long before appellant SO ORDERED.
started using the word 'Lyceum'. The appellant also failed to prove that the word 'Lyceum' has
become so identified with its educational institution that confusion will surely arise in the minds of
the public if the same word were to be used by other educational institutions.

In other words, while the appellant may have proved that it had been using the word 'Lyceum' for a
long period of time, this fact alone did not amount to mean that the said word had acquired
secondary meaning in its favor because the appellant failed to prove that it had been using the
same word all by itself to the exclusion of others. More so, there was no evidence presented to
prove that confusion will surely arise if the same word were to be used by other educational
institutions. Consequently, the allegations of the appellant in its first two assigned errors must
necessarily fail." 13 (Underscoring partly in the original and partly supplied)

We agree with the Court of Appeals. The number alone of the private respondents in the case at
bar suggests strongly that petitioner's use of the word "Lyceum" has not been attended with the
exclusivity essential for applicability of the doctrine of secondary meaning. It may be noted also that
at least one of the private respondents, i.e., the Western Pangasinan Lyceum, Inc., used the term
"Lyceum" seventeen (17) years before the petitioner registered its own corporate name with the
SEC and began using the word "Lyceum." It follows that if any institution had acquired an exclusive
right to the word "Lyceum," that institution would have been the Western Pangasinan Lyceum, Inc.
rather than the petitioner institution.

In this connection, petitioner argues that because the Western Pangasinan Lyceum, Inc. failed to
reconstruct its records before the SEC in accordance with the provisions of R.A. No. 62, which
records had been destroyed during World War II, Western Pangasinan Lyceum should be deemed
to have lost all rights it may have acquired by virtue of its past registration. It might be noted that the
Western Pangasinan Lyceum, Inc. registered with the SEC soon after petitioner had filed its own
registration on 21 September 1950. Whether or not Western Pangasinan Lyceum, Inc. must be
deemed to have lost its rights under its original 1933 registration, appears to us to be quite
G.R. No. 190706 July 21, 2014 real estate development projects constitutes unfair competition as well as false or fraudulent
declaration.6
SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG GRAND TOWER
CORPORATION) and SHANG PROPERTIES, INC. (formerly EDSA PROPERTIES HOLDINGS, Petitioners denied committing unfair competition and false or fraudulent declaration, maintaining
INC.), Petitioners, that they could register the mark "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS
vs. SHANGRI-LA PLACE" under their names. They contended that respondent is barred from claiming
ST. FRANCIS DEVELOPMENT CORPORATION, Respondent. ownership and exclusive use ofthe mark "ST. FRANCIS" because the same is geographically
descriptive ofthe goods or services for which it is intended to be used. 7 This is because
respondent’s as well as petitioners’ real estate development projects are locatedalong the streets
DECISION
bearing the name "St. Francis," particularly, St. FrancisAvenue and St. Francis Street (now known
as Bank Drive),8 both within the vicinity of the Ortigas Center.
PERLAS-BERNABE, J.:
The BLA Rulings
Assailed in this petition for review on certiorari1 is the Decision2 dated December 18, 2009 of the
Court of Appeals (CA) in CA-G.R. SP No. 105425 which affirmed with modification the
On December 19, 2006, the BLA rendered a Decision9 in the IPV Case, and found that petitioners
Decision3 dated September 3, 2008 of the Intellectual Property Office (IPO) Director-General. The
committed acts of unfair competition against respondent by its use of the mark "THE ST. FRANCIS
CA: (a) affirmed the denial of the application for registration of the mark "ST. FRANCIS TOWERS"
TOWERS" but not with its use of the mark "THE ST. FRANCIS SHANGRI-LA PLACE." It, however,
filed by petitioners Shang Properties Realty Corporation and Shang Properties, Inc. (petitioners);
refused to award damages in the latter’s favor, considering that there was no evidence presented
( b) found petitioners to have committed unfair competition for using the marks "THE ST. FRANCIS
to substantiate the amount of damages it suffered due to the former’s acts. The BLA found that "ST.
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE"; (c) ordered petitioners to cease and
FRANCIS," being a name of a Catholic saint, may be considered as an arbitrary mark capable of
desist from using "ST. FRANCIS" singly or as part of a composite mark; and (d) ordered petitioners
registration when used in real estate development projects as the name has no direct connection or
to jointly and severally pay respondent St. Francis Square Development Corporation (respondent)
significance when used in association with real estate. The BLA neither deemed "ST. FRANCIS" as
a fine in the amount of ₱200,000.00.
a geographically descriptive mark, opiningthat there is no specific lifestyle, aura, quality or
characteristic that the real estate projects possess except for the fact that they are located along St.
The Facts Francis Avenueand St. Francis Street (now known as Bank Drive), Ortigas Center. In this light, the
BLA found that while respondent’s use of the mark "ST. FRANCIS" has not attained exclusivity
Respondent – a domestic corporation engaged in the real estate business and the developer of the considering that there are other real estate development projects bearing the name "St. Francis" in
St. Francis Square Commercial Center, built sometime in 1992, located at Ortigas Center, other areas,10 it must nevertheless be pointed out that respondent has been known to be the only
Mandaluyong City, Metro Manila (Ortigas Center)4 – filed separate complaints against petitioners real estate firm to transact business using such name within the Ortigas Center vicinity. Accordingly,
before the IPO - Bureau of Legal Affairs (BLA), namely: (a) an intellectual property violation case the BLA considered respondent to have gained goodwill and reputation for its mark, which
for unfair competition, false or fraudulent declaration, and damages arising from petitioners’ use therefore entitles it to protection against the use by other persons, at least, to those doing business
and filing of applications for the registration of the marks "THE ST. FRANCIS TOWERS" and "THE within the Ortigas Center.11
ST. FRANCIS SHANGRI-LA PLACE," docketed as IPV Case No. 10-2005-00030 (IPV Case); and
(b) an inter partes case opposing the petitioners’ application for registration of the mark "THE ST. Meanwhile, on March 28, 2007, the BLA rendered a Decision12 in the St. Francis Towers IP Case,
FRANCIS TOWERS" for use relative to the latter’s business, particularly the construction of denying petitioners’ application for registration of the mark "THE ST. FRANCIS TOWERS."
permanent buildings or structures for residential and office purposes, docketed as Inter PartesCase Excluding the word "TOWERS" in view of petitioners’ disclaimer thereof, the BLA ruled that
No. 14-2006-00098 (St. Francis Towers IP Case); and (c) an inter partes case opposing the petitioners cannot register the mark "THE ST. FRANCIS" since it is confusingly similar to
petitioners’ application for registration of the mark "THE ST. FRANCIS SHANGRI-LA PLACE," respondent’s"ST. FRANCIS" marks which are registered with the Department of Trade and
docketed as IPC No. 14-2007-00218 (St. Francis Shangri-La IP Case).5 Industry(DTI). It held that respondent had a better right over the use of the mark "ST. FRANCIS"
because of the latter’s appropriation and continuous usage thereof for a long period of time. 13 A
In its complaints, respondent alleged that it has used the mark "ST. FRANCIS" to identify its little over a year after, or on March 31, 2008, the BLA then rendered a Decision14 in the St. Francis
numerous property development projects located at Ortigas Center, such as the aforementioned St. Shangri-La IP Case, allowing petitioners’ application for registration of the mark "THE ST.
Francis Square Commercial Center, a shopping mall called the "St. Francis Square," and a FRANCIS SHANGRI-LA PLACE." It found that respondent cannot preclude petitioners from using
mixed-use realty project plan thatincludes the St. Francis Towers. Respondent added that as a the mark "ST. FRANCIS" as the records show that the former’s use thereof had not been attended
result of its continuous use of the mark "ST. FRANCIS" in its real estate business,it has gained with exclusivity. More importantly, it found that petitioners had adequately appended the word
substantial goodwill with the public that consumers and traders closely identify the said mark with "Shangri-La" to its composite mark to distinguish it from that of respondent, in which case, the
its property development projects. Accordingly, respondent claimed that petitioners could not have former had removed any likelihood of confusion that may arise from the contemporaneous use by
the mark "THE ST. FRANCIS TOWERS" registered in their names, and that petitioners’ use of the both parties of the mark "ST. FRANCIS."
marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" in their own
Both parties appealed the decision in the IPV Case, while petitioners appealed the decision in the the CA stated that even on the assumption that "ST. FRANCIS" was indeed a geographically
St. Francis Towers IP Case. Due to the identity of the parties and issues involved, the IPO descriptive mark, adequateprotection must still begiven to respondent pursuant to the Doctrine of
Director-General ordered the consolidation of the separate appeals.15 Records are, however, bereft Secondary Meaning.20
of any showing that the decision in the St. Francis Shangri-La IP Casewas appealed by either party
and, thus, is deemed to have lapsed into finality.
Dissatisfied, petitioners filed the present petition.

The IPO Director-General Ruling


The Issue Before the Court

In a Decision16 dated September 3, 2008, then IPO Director-General Adrian S. Cristobal, Jr.
With the decisions in both Inter PartesCases having lapsed into finality, the sole issue thus left for
affirmedthe rulings of the BLA that: (a) petitioners cannot register the mark "THEST. FRANCIS
the Court’s resolution is whether or not petitioners are guilty of unfair competition in using the marks
TOWERS"; and (b) petitioners are not guilty of unfair competition in its use of the mark "THE ST.
"THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE."
FRANCIS SHANGRI-LA PLACE." However, the IPO DirectorGeneral reversed the BLA’s
findingthat petitioners committed unfair competition through their use of the mark "THE ST.
FRANCIS TOWERS," thus dismissing such charge. He foundthat respondent could not be entitled The Court’s Ruling
to the exclusive use of the mark "ST. FRANCIS," even at least to the locality where it conducts its
business, because it is a geographically descriptive mark, considering that it was petitioners’ as The petition is meritorious.
well as respondent’s intention to use the mark "ST. FRANCIS"in order to identify, or at least
associate, their real estate development projects/businesses with the place or location where they
are situated/conducted, particularly, St. Francis Avenue and St. Francis Street (now known as Bank Section 168 of Republic Act No. 8293,21 otherwise known as the "Intellectual Property Code of the
Drive), Ortigas Center. He further opined that respondent’s registration of the name "ST. FRANCIS" Philippines" (IP Code), provides for the rules and regulations on unfair competition.
with the DTI is irrelevant since what should be controlling are the trademark registrations with the
IPO itself.17 Also, the IPO Director-General held that since the parties are both engaged in the real To begin, Section 168.1 qualifies who is entitled to protection against unfair competition. It states
estate business, it would be "hard to imagine that a prospective buyer will be enticed to buy, rent or that "[a]person who has identified in the mind of the public the goods he manufacturesor deals in,
purchase [petitioners’] goods or servicesbelieving that this is owned by [respondent] simply his business or services from those of others, whether or not a registered mark is employed, has a
because of the name ‘ST. FRANCIS.’ The prospective buyer would necessarily discuss things with property right in the goodwill of the said goods, business or services so identified, which will be
the representatives of [petitioners] and would readily know that this does not belong to protected inthe same manner as other property rights."
[respondent]."18
Section 168.2proceeds to the core of the provision, describing forthwith who may be found guilty of
Disagreeing solely with the IPO Director-General’s ruling on the issue of unfair competition (the and subject to an action of unfair competition – that is, "[a]ny person who shall employ deception or
bone of contention in the IPV Case), respondent elevated the sameto the CA. 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
In contrast, records do not show that either party appealed the IPO Director-General’s ruling on the goodwill, or who shall commit any acts calculated to produce said result x x x."
issue ofthe registrability of the mark "THE ST. FRANCIS TOWERS" (the bone of contention in the
St. Francis Towers IP Case). As such, said pronouncement isalso deemed to have lapsed into Without limiting its generality, Section 168.3goes on to specify examples of acts which are
finality. considered as constitutive of unfair competition, viz.:

The CA Ruling 168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:
In a Decision19 dated December 18, 2009, the CA found petitioners guilty of unfair competition not
only withrespect to their use of the mark "THE ST. FRANCIS TOWERS" but alsoof the mark "THE (a) Any person who is selling his goods and gives them the general appearance of goods of
ST. FRANCIS SHANGRI-LA PLACE." Accordingly, itordered petitioners to cease and desist from another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
using "ST. FRANCIS" singly or as part of a composite mark, as well as to jointly and severally pay packages in which they are contained, or the devices or words thereon, or in any other feature of
respondent a fine in the amount of ₱200,000.00. 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
The CA did not adhere to the IPO Director-General’s finding that the mark "ST. FRANCIS" is otherwise clothes the goods with such appearance as shall deceive the public and defraud another
geographically descriptive, and ruled that respondent – which has exclusively and continuously of his legitimate trade, or any subsequent vendor ofsuch goods or any agent of any vendor
used the mark "ST. FRANCIS" for more than a decade, and,hence, gained substantial goodwill and engaged in selling such goods with a like purpose;
reputation thereby – is very muchentitled to be protected against the indiscriminate usage by other
companies of the trademark/name it has so painstakingly tried to establish and maintain. Further,
(b) Any person who by any artifice, or device, or who employs any other means calculated to make a goods/place association – that is, to believe that the goods for which the mark is sought to
induce the false belief that such person is offering the service of another who has identified such be registered originatein that place.1âwphi1 To hold sucha belief, it is necessary, of course, that
services in the mind of the public; or the purchasers perceive the mark as a place name, from which the question of obscurity or
remoteness then comes to the fore.32The more a geographical area is obscure and remote, it
becomes less likely that the public shall have a goods/place association with such area and thus,
(c) Any person who shall make any false statement in the course of trade or who shall commit any
the mark may not be deemed as geographically descriptive. However, where there is no genuine
other act contrary to good faith of a nature calculated to discredit the goods, business or services of
issue that the geographical significance of a term is its primary significanceand where the
another.
geographical place is neither obscure nor remote, a public association of the goods with the place
may ordinarily be presumed from the fact that the applicant’s own goods come from the
Finally, Section 168.4 dwells on a matter of procedure by stating that the "[t]he remedies provided geographical place named in the mark.33
by Sections 156,22157,23 and 16124 shall apply mutatis mutandis."
Under Section 123.234 of the IP Code, specific requirements have to be met in order to conclude
The statutory attribution of the unfair competition concept is wellsupplemented by jurisprudential that a geographically-descriptive mark has acquired secondary meaning, to wit: (a) the secondary
pronouncements. In the recent case of Republic Gas Corporation v. Petron Corporation,25 the meaning must have arisen as a result of substantial commercial use of a mark in the Philippines; (b)
Court has echoed the classic definition of the term which is "‘the passing off (or palming off) or such use must result in the distinctiveness of the mark insofar as the goods or theproducts are
attempting to pass off upon the public of the goods or business of one person as the goods or concerned; and (c) proof of substantially exclusive and continuous commercial use in the
business of another with the end and probable effect of deceiving the public.’ Passing off (or Philippines for five (5) years beforethe date on which the claim of distinctiveness is made. Unless
palming off) takes place where the defendant, by imitative devices on the general appearance of secondary meaning has been established, a geographically-descriptive mark, dueto its general
the goods, misleads prospective purchasers into buying his merchandise under the impression that public domain classification, is perceptibly disqualified from trademark registration. Section 123.1(j)
they are buying that of his competitors. [In other words], the defendant gives his goods the general of the IP Code states this rule as follows:
appearance of the goods of his competitor with the intention of deceiving the publicthat the goods
are those of his competitor."26The "true test" of unfair competition has thus been "whether the acts
SEC. 123. Registrability. –
of the defendant have the intent of deceiving or are calculated to deceive the ordinary buyer making
his purchases under the ordinary conditions of theparticular trade to which the controversy relates."
Based on the foregoing, it is therefore essential to prove the existence of fraud, or the intent to 123.1 A mark cannot be registered if it:
deceive, actual or probable,27 determined through a judicious scrutiny of the factual circumstances
attendant to a particular case.28
xxxx

Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair competition.
(j) Consists exclusively of signs orof indications that may serve in trade to designate the kind,
The CA’scontrary conclusion was faultily premised on its impression that respondenthad the right to
quality, quantity, intended purpose, value, geographical origin, time or production of the goods or
the exclusive use of the mark "ST. FRANCIS," for which the latter had purportedly established
rendering of the services, or other characteristics of the goods or services; (Emphasis supplied) x x
considerable goodwill. What the CA appears to have disregarded or been mistaken in its
xx
disquisition, however, is the geographicallydescriptive nature of the mark "ST. FRANCIS" which
thus bars its exclusive appropriability, unless a secondary meaning is acquired. As deftly explained
in the U.S. case of Great Southern Bank v. First Southern Bank:29 "[d]escriptive geographical terms Cognizant of the foregoing, the Court disagrees with the CA that petitioners committed unfair
are inthe ‘public domain’ in the sense that every seller should have the right to inform customers of competition due to the mistaken notion that petitioner had established goodwill for the mark "ST.
the geographical origin of his goods. A ‘geographically descriptive term’ is any noun or adjective FRANCIS" precisely because said circumstance, by and of itself, does not equateto fraud under the
that designates geographical location and would tend to be regarded by buyers as descriptive of parameters of Section 168 of the IP Code as above-cited. In fact, the records are bereft of any
the geographic location of origin of the goods or services. A geographically descriptive term can showing thatpetitioners gave their goods/services the general appearance that it was respondent
indicate any geographic location on earth, such as continents, nations, regions, states, cities, which was offering the same to the public. Neither did petitioners employ any means to induce the
streets and addresses, areas of cities, rivers, and any other location referred to by a recognized public towards a false belief that it was offering respondent’s goods/services. Nor did petitioners
name. In order to determine whether or not the geographic term in question is descriptively used, make any false statement or commit acts tending to discredit the goods/services offered by
the following question is relevant: (1) Is the mark the name of the place or region from which the respondent. Accordingly, the element of fraud which is the core of unfair competition had not been
goods actually come? If the answer is yes, then the geographic term is probably used in a established.
descriptive sense, and secondary meaning is required for protection." 30
Besides, respondent was not able toprove its compliance with the requirements stated in Section
In Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc.,31 it was held that 123.2 of the IP Code to be able to conclude that it acquired a secondary meaning – and, thereby,
secondary meaningis established when a descriptive mark no longer causes the public to associate an exclusive right – to the "ST. FRANCIS" mark, which is, as the IPO Director-General correctly
the goods with a particular place, but to associate the goods with a particular source.In other words, pointed out, geographically-descriptive of the location in which its realty developments have been
it is not enough that a geographically-descriptive mark partakes of the name of a place known built, i.e., St. Francis Avenue and St. Francis Street (now known as "Bank Drive"). Verily, records
generally to the public to be denied registration as it is also necessary to show that the public would would reveal that while it is true that respondent had been using the mark "ST. FRANCIS" since
1992, its use thereof has been merely confined to its realty projects within the Ortigas Center, as
specifically mentioned.As its use of the mark is clearly limited to a certain locality, it cannot be said
thatthere was substantial commercial use of the same recognizedall throughout the country.
Neither is there any showing of a mental recognition in buyers’ and potential buyers’ minds that
products connected with the mark "ST. FRANCIS" are associated with the same source 35 – that is,
the enterprise of respondent. Thus, absent any showing that there exists a clear
goods/service-association between the realty projects located in the aforesaid area and herein
respondent as the developer thereof, the latter cannot besaid to have acquired a secondary
meaning as to its use of the "ST. FRANCIS" mark.

In fact, even on the assumption that secondary meaning had been acquired, said finding only
accords respondents protectional qualification under Section 168.1 of the IP Code as above quoted.
Again, this does not automatically trigger the concurrence of the fraud element required under
Section 168.2 of the IP Code, as exemplified by the acts mentioned in Section 168.3 of the same.
Ultimately, as earlier stated, there can be no unfair competition without this element. In this respect,
considering too the notoriety of the Shangri-La brand in the real estate industry which dilutes
petitioners' propensity to merely ride on respondent's goodwill, the more reasonable conclusion is
that the former's use of the marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS
SHANGRI-LA PLACE" was meant only to identify, or at least associate, their real estate project/s
with its geographical location. As aptly observed by the IPO DirectorGeneral:36

In the case at hand, the parties are business competitors engaged in real estate or property
development, providing goods and services directly connected thereto. The "goods" or "products"
or "services" are real estate and the goods and the services attached to it or directly related to it,
like sale or lease of condominium units, offices, and commercial spaces, such as restaurants, and
other businesses. For these kinds of goods or services there can be no description of its
geographical origin as precise and accurate as that of the name of the place where they are
situated. (Emphasis and underscoring supplied)

Hence, for all the reasons above-discussed, the Court hereby grants the instant petition, and, thus,
exonerates petitioners from the charge of unfair competition in the IPV Case. As the decisions in
the Inter Partes Cases were not appealed, the registrability issues resolved therein are hereby
deemed to have attained finality and, therefore, are now executory.

WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2009 of the Court of
Appeals in CA-G.R. SP No. 105425 is hereby REVERSED and SET ASIDE. Accordingly, the
Decision dated September 3, 2008 of the Intellectual Property Office-Director General is
REINSTATED.

SO ORDERED.
G.R. No. 190065 August 16, 2010 entirely different features and distinctive presentation, thus it cannot result in confusion, mistake or
deception on the part of the purchasing public. Dermaline contended that, in determining if the
DERAMALINE, INC., petitioners, subject trademarks are confusingly similar, a comparison of the words is not the only determinant,
vs. but their entirety must be considered in relation to the goods to which they are attached, including
MYRA PHARMACEUTICALS, INC., respondent. the other features appearing in both labels. It claimed that there were glaring and striking
dissimilarities between the two trademarks, such that its trademark DERMALINE DERMALINE,
INC. speaks for itself (Res ipsa loquitur). Dermaline further argued that there could not be any
relation between its trademark for health and beauty services from Myras trademark classified
DECISION under medicinal goods against skin disorders.

NACHURA, J.: The parties failed to settle amicably. Consequently, the preliminary conference was terminated and
they were directed to file their respective position papers. [10]
This is a petition for review on certiorari[1] seeking to reverse and set aside the Decision dated
August 7, 2009[2] and the Resolution dated October 28, 2009[3] of the Court of Appeals (CA) in On April 10, 2008, the IPO-Bureau of Legal Affairs rendered Decision No.
CA-G.R. SP No. 108627. 2008-70[11] sustaining Myras opposition pursuant to Section 123.1(d) of R.A. No. 8293. It disposed

The antecedent facts and proceedings WHEREFORE, the Verified Opposition is, as it is, hereby
SUSTAINED. Consequently, Application Serial No. 4-2006-011536 for the
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the Intellectual Property mark DERMALINE, DERMALINE, INC. Stylized Wordmark for Dermaline, Inc.
Office (IPO) an application for registration of the trademark DERMALINE DERMALINE, INC. under class 44 covering the aforementioned goods filed on 21 October 2006,
(Application No. 4-2006011536). The application was published for Opposition in the IPO is as it is hereby, REJECTED.
E-Gazette on March 9, 2007.
Let the file wrapper of DERMALINE, DERMALINE, INC. Stylized Wordmark
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a Verified subject matter of this case be forwarded to the Bureau of Trademarks (BOT)
Opposition[4] alleging that the trademark sought to be registered by Dermaline so resembles its for appropriate action in accordance with this Decision.
trademark DERMALIN and will likely cause confusion, mistake and deception to the purchasing
public. Myra said that the registration of Dermalines trademark will violate Section 123[5] of SO ORDERED.[12]
Republic Act (R.A.) No. 8293 (Intellectual Property Code of the Philippines). It further alleged that
Dermalines use and registration of its applied trademark will diminish the distinctiveness and dilute Aggrieved, Dermaline filed a motion for reconsideration, but it was denied under Resolution No.
the goodwill of Myras DERMALIN, registered with the IPO way back July 8, 1986, renewed for ten 2009-12(D)[13] dated January 16, 2009.
(10) years on July 8, 2006. Myrahas been extensively using DERMALIN commercially since
October 31, 1977, and said mark is still valid and subsisting. Expectedly, Dermaline appealed to the Office of the Director General of the IPO. However, in an
Order[14] dated April 17, 2009, the appeal was dismissed for being filed out of time.
Myra claimed that, despite Dermalines attempt to differentiate its applied mark, the dominant
feature is the term DERMALINE, which is practically identical with its own DERMALIN, more Undaunted, Dermaline appealed to the CA, but it affirmed and upheld the Order dated April 17,
particularly that the first eight (8) letters of the marks are identical, and that notwithstanding the 2009 and the rejection of Dermalines application for registration of trademark.The CA likewise
additional letter E by Dermaline, the pronunciation for both marks are identical. Further, both marks denied Dermalines motion for reconsideration; hence, this petition raising the issue of whether the
have three (3) syllables each, with each syllable identical in sound and appearance, even if the last CA erred in upholding the IPOs rejection of Dermalines application for registration of trademark.
syllable of DERMALINE consisted of four (4) letters while DERMALIN consisted only of three (3).
The petition is without merit.
Myra also pointed out that Dermaline applied for the same mark DERMALINE on June 3, 2003 and
was already refused registration by the IPO. By filing this new application for registration, A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any
Dermaline appears to have engaged in a fishing expedition for the approval of its combination thereof, adopted and used by a manufacturer or merchant on his goods to identify and
mark. Myra argued that its intellectual property right over its trademark is protected under Section distinguish them from those manufactured, sold, or dealt by others. [15] Inarguably, it is an
147[6] of R.A. No. 8293. intellectual property deserving protection by law. In trademark controversies, each case must be
scrutinized according to its peculiar circumstances, such that jurisprudential precedents should only
Myra asserted that the mark DERMALINE DERMALINE, INC. is aurally similar to its own mark be made to apply if they are specifically in point.[16]
such that the registration and use of Dermalines applied mark will enable it to obtain benefit As Myra correctly posits, as a registered trademark owner, it has the right under Section 147 of R.A.
from Myras reputation, goodwill and advertising and will lead the public into believing that No. 8293 to prevent third parties from using a trademark, or similar signs or containers for goods or
Dermaline is, in any way, connected to Myra. Myra added that even if the subject application was services, without its consent, identical or similar to its registered trademark, where such use would
under Classification 44[7] for various skin treatments, it could still be connected to the DERMALIN result in a likelihood of confusion.
mark under Classification 5[8] for pharmaceutical products, since ultimately these goods are very
closely related. In determining likelihood of confusion, case law has developed two (2) tests, the Dominancy Test
and the Holistic or Totality Test.
[9]
In its Verified Answer, Dermaline countered that a simple comparison of the trademark
DERMALINE DERMALINE, INC. vis--vis Myras DERMALIN trademark would show that they have
The Dominancy Test focuses on the similarity of the prevalent features of the competing letters in lower case, and the portion DERMALINE, INC. is written in upper case letters, below and
trademarks that might cause confusion or deception.[17] It is applied when the trademark sought to smaller than the long-hand portion; while Myras mark DERMALIN is written in an upright font, with
be registered contains the main, essential and dominant features of the earlier registered a capital D and followed by lower case letters the likelihood of confusion is still apparent. This is
trademark, and confusion or deception is likely to result. Duplication or imitation is not even because they are almost spelled in the same way, except for Dermalines mark which ends with the
required; neither is it necessary that the label of the applied mark for registration should suggest an letter E, and they are pronounced practically in the same manner in three (3) syllables, with the
effort to imitate. The important issue is whether the use of the marks involved would likely cause ending letter E in Dermalines mark pronounced silently. Thus, when an ordinary purchaser, for
confusion or mistake in the mind of or deceive the ordinary purchaser, or one who is accustomed to example, hears an advertisement of Dermalines applied trademark over the radio, chances are he
buy, and therefore to some extent familiar with, the goods in question. [18] Given greater will associate it with Myras registered mark.
consideration are the aural and visual impressions created by the marks in the public mind, giving
little weight to factors like prices, quality, sales outlets, and market segments. [19] The test of Further, Dermalines stance that its product belongs to a separate and different classification from
dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293 which provides Myras products with the registered trademark does not eradicate the possibility of mistake on the
part of the purchasing public to associate the former with the latter, especially considering that both
155.1. Use in commerce any reproduction, counterfeit, copy, classifications pertain to treatments for the skin.
or colorable imitation of a registered mark or the same container or
a dominant feature thereof in connection with the sale, offering for sale, Indeed, the registered trademark owner may use its mark on the same or similar products, in
distribution, advertising of any goods or services including other preparatory different segments of the market, and at different price levels depending on variations of the
steps necessary to carry out the sale of any goods or services on or in products for specific segments of the market. The Court is cognizant that the registered trademark
connection with which such use is likely to cause confusion, or to cause owner enjoys protection in product and market areas that are the normal potential expansion of his
mistake, or to deceive; (emphasis supplied) business. Thus, we have held

Modern law recognizes that the protection to which the owner of a trademark is
On the other hand, the Holistic Test entails a consideration of the entirety of the marks as entitled is not limited to guarding his goods or business from actual market
applied to the products, including labels and packaging, in determining confusing similarity. The competition with identical or similar products of the parties, but extends to all
scrutinizing eye of the observer must focus not only on the predominant words but also on the other cases in which the use by a junior appropriator of a trade-mark or trade-name
features appearing in both labels so that a conclusion may be drawn as to whether one is is likely to lead to a confusion of source, as where prospective
confusingly similar to the other.[20] 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.
Relative to the question on confusion of marks and trade names, jurisprudence has 576) or is in any way connected with the activities of the infringer; or when it
noted two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the forestalls the normal potential expansion of his business (v. 148 ALR 77,
ordinarily prudent purchaser would be induced to purchase one product in the belief that he was 84; 52 Am. Jur. 576, 577).[23] (Emphasis supplied)
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 Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such
product, and the public would then be deceived either into that belief or into the belief that there is that, considering the current proliferation of health and beauty products in the market, the
some connection between the two parties, though inexistent.[21] purchasers would likely be misled that Myra has already expanded its business through Dermaline
from merely carrying pharmaceutical topical applications for the skin to health and beauty services.
In rejecting the application of Dermaline for the registration of its mark DERMALINE Verily, when one applies for the registration of a trademark or label which is almost the same or that
DERMALINE, INC., the IPO applied the Dominancy Test. It declared that both confusion of goods very closely resembles one already used and registered by another, the application should be
and service and confusion of business or of origin were apparent in both trademarks. It also noted rejected and dismissed outright, even without any opposition on the part of the owner and user of a
that, per Bureau Decision No. 2007-179 dated December 4, 2007, it already sustained the previously registered label or trademark. This is intended not only to avoid confusion on the part of
opposition of Myra involving the trademark DERMALINE of Dermaline under Classification 5. The the public, but also to protect an already used and registered trademark and an established
IPO also upheld Myras right under Section 138 of R.A. No. 8293, which provides that a certification goodwill.[24]
of registration of a mark is prima facie evidence of the validity of the registration, the registrants
ownership of the mark, and of the registrants exclusive right to use the same in connection with the Besides, the issue on protection of intellectual property, such as trademarks, is factual in
goods and those that are related thereto specified in the certificate. nature. The findings of the IPO, upheld on appeal by the same office, and further sustained by the
CA, bear great weight and deserves respect from this Court. Moreover, the decision of the IPO had
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while already attained finality when Dermaline failed to timely file its appeal with the IPO Office of the
there are no set rules that can be deduced as what constitutes a dominant feature with respect to Director General.
trademarks applied for registration; usually, what are taken into account are signs, color, design,
peculiar shape or name, or some special, easily remembered earmarks of the brand that readily WHEREFORE, the petition is DENIED. The Decision dated August 7, 2009 and the Resolution
attracts and catches the attention of the ordinary consumer.[22] dated October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 108627 are AFFIRMED. Costs
against petitioner.
Dermalines insistence that its applied trademark DERMALINE DERMALINE, INC. had differences
too striking to be mistaken from Myras DERMALIN cannot, therefore, be sustained. While it is true SO ORDERED.
that the two marks are presented differently Dermalines mark is written with the first DERMALINE
in script going diagonally upwards from left to right, with an upper case D followed by the rest of the
G.R. No. 138900 September 20, 2005 1. That upon the filing of this complaint, a temporary restraining order be
immediately issued restraining defendants, their officers, employees, agents,
representatives, dealers, retailers or assigns from committing the acts herein
complained of, and, specifically, for the defendants, their officers, employees,
LEVI STRAUSS & CO., AND LEVI STRAUSS (PHILS.), INC., petitioners, agents, representatives, dealers and retailers or assigns, to cease and desist
from manufacturing, distributing, selling, offering for sale, advertising, or
vs. otherwise using denims, jeans or pants with the design herein complained of
as substantially, if not exactly similar, to plaintiffs Dockers and Design
CLINTON APPARELLE, INC., respondents. trademark.

2. That after notice and hearing, and pending trial on the merits, a writ of
preliminary injunction be issued enjoining defendants, their officers,
employees, agents, dealers, retailers, or assigns from manufacturing,
DECISION distributing, selling, offering for sale, advertising, jeans the design herein
complained of as substantially, if not exactly similar, to plaintiffs Dockers and
TINGA, J.: Design trademark.

Before us is a petition for review on certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure 3. That after trial on the merits, judgment be rendered as follows:
filed by Levi Strauss & Co. (LS & Co.) and Levi Strauss (Philippines), Inc. (LSPI) assailing the Court
of Appeals Decision[2] and Resolution[3] respectively dated 21 December 1998 and 10 May 1999. a. Affirming and making permanent the writ of preliminary injunction;
The questioned Decision granted respondents prayer for a writ of preliminary injunction in
its Petition[4] and set aside the trial courts orders dated 15 May 1998[5] and 4 June 1998[6] which b. Ordering that all infringing jeans in the possession of either or both
respectively granted petitioners prayer for the issuance of a temporary restraining order (TRO) and defendants as the evidence may warrant, their officers, employees, agents,
application for the issuance of a writ of preliminary injunction. retailers, dealers or assigns, be delivered to the Honorable Court of plaintiffs,
and be accordingly destroyed;[13]
This case stemmed from the Complaint[7] for Trademark Infringement, Injunction and Damages
filed by petitioners LS & Co. and LSPI against respondent Clinton Apparelle, Inc. * (Clinton Aparelle)
together with an alternative defendant, Olympian Garments, Inc. (Olympian Garments), before the Acting on the prayer for the issuance of a TRO, the trial court issued an Order[14] setting it for
Regional Trial Court of Quezon City, Branch 90.[8] The Complaint was docketed as Civil Case No. hearing on 5 May 1998. On said date, as respondent failed to appear despite notice and the other
Q-98-34252, entitled Levi Strauss & Co. and Levi Strauss (Phils.), Inc. v. Clinton Aparelle, Inc. defendant, Olympian Garments, had yet to be notified, the hearing was re-scheduled on 14 May
and/or Olympian Garments, Inc. 1998.[15]

The Complaint alleged that LS & Co., a foreign corporation duly organized and existing under the On 14 May 1998, neither Clinton Apparelle nor Olympian Garments appeared. Clinton Apparelle
laws of the State of Delaware, U.S.A., and engaged in the apparel business, is the owner by prior claimed that it was not notified of such hearing. Only Olympian Garments allegedly had been
adoption and use since 1986 of the internationally famous Dockers and Design trademark. This issued with summons. Despite the absence of the defendants, the hearing on the application for
ownership is evidenced by its valid and existing registrations in various member countries of the the issuance of a TRO continued.[16]
Paris Convention. In the Philippines, it has a Certificate of Registration No. 46619 in the Principal
Register for use of said trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and jackets The following day, the trial court issued an Order[17] granting the TRO applied for, the pertinent
under Class 25.[9] portions of which state:

The Dockers and Design trademark was first used in the Philippines in or about May 1988, by LSPI, Considering the absence of counsel/s for the defendant/s during the summary
a domestic corporation engaged in the manufacture, sale and distribution of various products hearing scheduled on May 5, 1998 and also during the re-scheduled summary
bearing trademarks owned by LS & Co. To date, LSPI continues to manufacture and sell Dockers hearing held on May 14, 1998 set for the purpose of determining whether or
Pants with the Dockers and Design trademark.[10] not a Temporary Restraining Order shall be issued, this Court allowed the
counsel for the plaintiffs to present on May 14, 1998 their
LS & Co. and LSPI further alleged that they discovered the presence in the local market of jeans arguments/evidences in support of their application. After hearing the
under the brand name Paddocks using a device which is substantially, if not exactly, similar to the arguments presented by the counsel for the plaintiffs during the summary
Dockers and Design trademark owned by and registered in the name of LS & Co., without its hearing, this Court is of the considered and humble view that grave injustice
consent. Based on their information and belief, they added, Clinton Apparelle manufactured and and irreparable injury to the plaintiffs would arise before the matter of whether
continues to manufacture such Paddocks jeans and other apparel. or not the application for the issuance of a Writ of Preliminary Injunction can be
heard, and that, in the interest of justice, and in the meantime, a Temporary
However, since LS & Co. and LSPI are unsure if both, or just one of impleaded Restraining Order be issued.
defendants are behind the manufacture and sale of the Paddocks jeans complained of, they
brought this suit under Section 13, Rule 3[11] of the 1997 Rules of Civil Procedure.[12] WHEREFORE, let this Temporary Restraining Order be issued restraining the
The Complaint contained a prayer that reads as follows: defendants, their officers, employees, agents, representatives, dealers,
retailers or assigns from committing the acts complained of in the verified
Complaint, and specifically, for the defendants, their officers, employees, petitioners prior adoption, use and registration of the Dockers and Design trademark; and (6) the
agents, representatives, dealers and retailers or assigns, to cease and desist affidavit of one Mercedes Abad of Trends MBL, Inc. which detailed the methodology and procedure
from manufacturing, distributing, selling, offering for sale, advertising or used in their survey and the results thereof.[21]
otherwise using denims, jeans or pants with the design complained of in the
verified Complaint as substantially, if not exactly similar, to plaintiffs Dockers
and Design trademark; until after the application/prayer for the issuance of a
Writ of Preliminary Injunction is heard/resolved, or until further orders from this
Court. Clinton Apparelle thereafter filed a Motion to Dismiss[22] and a Motion for Reconsideration[23] of
the Order granting the writ of preliminary injunction. Meantime, the trial court issued
The hearing on the application for the issuance of a Writ of Preliminary an Order[24] approving the bond filed by petitioners.
Injunction as embodied in the verified Complaint is set on May 26, 1998 On 22 June 1998, the trial court required[25] the parties to file their respective citation of authorities/
(Tuesday) at 2:00 P.M. which setting is intransferable in character considering jurisprudence/Supreme Court decisions on whether or not the trial court may issue the writ of
that the lifetime of this Temporary Restraining Order is twenty (20) days from preliminary injunction pending the resolution of the Motion for Reconsideration and the Motion to
date hereof.[18] Dismiss filed by respondent.

On 4 June 1998, the trial court issued another Order[19] granting the writ of preliminary On 2 October 1998, the trial court denied Clinton Apparelles Motion to Dismiss and Motion for
injunction, to wit: Reconsideration in an Omnibus Order,[26] the pertinent portions of which provide:
ORDER
After carefully going over the contents of the pleadings in relation to pertinent
This resolves the plaintiffs application or prayer for the issuance of a writ of portions of the records, this Court is of the considered and humble view that:
preliminary injunction as embodied in the verified complaint in this case.
Parenthetically, this Court earlier issued a temporary restraining order.
(see Order dated May 15, 1998; see also Order dated May 26, 1998)
On the first motion, the arguments raised in the plaintiffs aforecited
After a careful perusal of the contents of the pleadings and documents on Consolidated Opposition appears to be meritorious. Be that as it may, this
record insofar as they are pertinent to the issue under consideration, this Court Court would like to emphasize, among other things, that the complaint states a
finds that at this point in time, the plaintiffs appear to be entitled to the relief cause of action as provided under paragraphs 1 to 18 thereof.
prayed for and this Court is of the considered belief and humble view that,
without necessarily delving on the merits, the paramount interest of justice will On the second motion, the arguments raised in the plaintiffs aforecited
be better served if the status quo shall be maintained and that an injunction Consolidated Opposition likewise appear to be impressed with merit. Besides,
bond of P2,500,000.00 appears to be in order. (see Sections 3 and 4, Rule 58, there appears to be no strong and cogent reason to reconsider and set aside
1997 Rules of Civil Procedure) this Courts Order dated June 4, 1998 as it has been shown so far that the
trademark or logo of defendants is substantially, if not exactly, similar to
IN VIEW OF THE FOREGOING, the plaintiffs prayer for the issuance of a writ plaintiffs DOCKERS and DESIGN trademark or logo as covered by BPTTT
of preliminary injunction is GRANTED. Accordingly, upon the plaintiffs filing, Certificate of Registration No. 46619 even as the BPTTT Certificate of
within ten (10) days from their receipt hereof, an injunction bond Registration No. 49579 of Clinton Apparelle, Inc. is only for the mark or word
of P2,500,000.00 executed to the defendants to the effect that the plaintiffs will PADDOCKS (see Records, p. 377) In any event, this Court had issued an
pay all damages the defendants may sustain by reason of this injunction in Order dated June 18, 1998 for the issuance of the writ of preliminary injunction
case the Court should finally decide that the plaintiffs are not entitled thereto, after the plaintiffs filed the required bond of P2,500,000.00.
let a writ of preliminary injunction issue enjoining or restraining the commission
of the acts complained of in the verified Complaint in this case, and specifically, IN VIEW OF THE FOREGOING, the aforecited Motion To Dismiss and Motion
for the defendants, their officers, employees, agents, representatives, dealers For Reconsideration are both DENIED for lack of merit, and accordingly, this
and retailers or assigns or persons acting in their behalf to cease and desist Courts Order dated June 18, 1998 for the issuance of the writ of preliminary
from manufacturing, distributing, selling, offering for sale, advertising, or injunction is REITERATED so the writ of preliminary injunction could be
otherwise using, denims, jeans or pants with the design complained of in the implemented unless the implementation thereof is restrained by the Honorable
verified Complaint in this case, which is substantially, if not exactly, similar to Court of Appeals or Supreme Court.
plaintiffs DOCKERS and DESIGN trademark or logo as covered by the Bureau
of Patents, Trademarks and Technology Transfer Certificate of Registration No. The writ of preliminary injunction was thereafter issued on 8 October 1998. [27]
46619, until after this case shall have been decided on the merits and/or until
further orders from this Court.[20]

The evidence considered by the trial court in granting injunctive relief were as follows: (1)
a certified true copy of the certificate of trademark registration for Dockers and Design; (2) a pair of Thus, Clinton Apparelle filed with the Court of Appeals a Petition[28] for certiorari, prohibition and
DOCKERS pants bearing the Dockers and Design trademark; (3) a pair of Paddocks pants bearing mandamus with prayer for the issuance of a temporary restraining order and/or writ of preliminary
respondents assailed logo; (4) the Trends MBL Survey Report purportedly proving that there was injunction, assailing the orders of the trial court dated 15 May 1998, 4 June 1998 and 2 October
confusing similarity between two marks; (5) the affidavit of one Bernabe Alajar which recounted 1998.
transcendent remedy to be used cautiously as it affects the respective rights of the parties, and only
On 20 October 1998, the Court of Appeals issued a Resolution[29] requiring herein petitioners to file upon full conviction on the part of the court of its extreme necessity. An extraordinary remedy,
their comment on the Petition and at the same time issued the prayed-for temporary restraining injunction is designed to preserve or maintain the status quo of things and is generally availed of to
order. prevent actual or threatened acts until the merits of the case can be heard.[34] It may be resorted to
only by a litigant for the preservation or protection of his rights or interests and for no other purpose
The appellate court rendered on 21 December 1998 its now assailed Decision granting Clinton during the pendency of the principal action.[35] It is resorted to only when there is a pressing
Apparelles petition. The Court of Appeals held that the trial court did not follow the procedure necessity to avoid injurious consequences, which cannot be remedied under any standard
required by law for the issuance of a temporary restraining order as Clinton Apparelle was not duly compensation. The resolution of an application for a writ of preliminary injunction rests upon the
notified of the date of the summary hearing for its issuance. Thus, the Court of Appeals ruled that existence of an emergency or of a special recourse before the main case can be heard in due
the TRO had been improperly issued.[30] course of proceedings.[36]

Section 3, Rule 58, of the Rules of Court enumerates the grounds for the issuance of a preliminary
injunction:

The Court of Appeals also held that the issuance of the writ of preliminary injunction is questionable. SEC. 3. Grounds for issuance of preliminary injunction. A preliminary
In its opinion, herein petitioners failed to sufficiently establish its material and substantial right to injunction may be granted when it is established:
have the writ issued. Secondly, the Court of Appeals observed that the survey presented by
petitioners to support their contentions was commissioned by petitioners. The Court of Appeals (a) That the applicant is entitled to the relief demanded, and the whole or part
remarked that affidavits taken ex-parte are generally considered to be inferior to testimony given in of such relief consists in restraining the commission or continuance of the act
open court. The appellate court also considered that the injury petitioners have suffered or are or acts complained of, or in requiring the performance of an act or acts, either
currently suffering may be compensated in terms of monetary consideration, if after trial, a final for a limited period or perpetually;
judgment shall be rendered in their favor.[31]
(b) That the commission, continuance, or non-performance of the act or acts
In addition, the Court of Appeals strongly believed that the implementation of the questioned writ complained of during the litigation would probably work injustice to the
would effectively shut down respondents business, which in its opinion should not be sanctioned. applicant; or
The Court of Appeals thus set aside the orders of the trial court dated 15 May 1998 and 4 June
1998, respectively issuing a temporary restraining order and granting the issuance of a writ of
preliminary injunction.

With the denial of their Motion for Reconsideration,[32] petitioners are now before this Court seeking
a review of the appellate courts Decision and Resolution. LS & Co. and LSPI claim that the Court of (c) That a party, court, agency or a person is doing, threatening, or is
Appeals committed serious error in: (1) disregarding the well-defined limits of the writ of certiorari attempting to do, or is procuring or suffering to be done, some act or acts
that questions on the sufficiency of evidence are not to be resolved in such a petition; (2) in holding probably in violation of the rights of the applicant respecting the subject of the
that there was no confusion between the two marks; (3) in ruling that the erosion of petitioners action or proceeding, and tending to render the judgment ineffectual.
trademark is not protectable by injunction; (4) in ignoring the procedure previously agreed on by the
parties and which was adopted by the trial court; and (5) in declaring that the preliminary injunction Under the cited provision, a clear and positive right especially calling for judicial protection must be
issued by the trial court will lead to the closure of respondents business. shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will
not issue to protect a right not in esse and which may never arise, or to restrain an act which does
In its Comment,[33] Clinton Apparelle maintains that only questions of law may be raised in an not give rise to a cause of action. There must exist an actual right.[37] There must be a patent
appeal by certiorari under Rule 45 of the Rules of Court. It asserts that the question of whether the showing by the complaint that there exists a right to be protected and that the acts against which
Court of Appeals erred in: (1) disregarding the survey evidence; (2) ruling that there was no the writ is to be directed are violative of said right.[38]
confusion between the two marks; and (c) finding that the erosion of petitioners trademark may not
be protected by injunction, are issues not within the ambit of a petition for review on certiorari under There are generally two kinds of preliminary injunction: (1) a prohibitory injunction which commands
Rule 45. Clinton Apparelle also contends that the Court of Appeals acted correctly when it a party to refrain from doing a particular act; and (2) a mandatory injunction which commands the
overturned the writ of preliminary injunction issued by the trial court. It believes that the issued writ performance of some positive act to correct a wrong in the past.[39]
in effect disturbed the status quo and disposed of the main case without trial.
The Court of Appeals did not err in reviewing proof adduced by petitioners to support its application
There is no merit in the petition. for the issuance of the writ. While the matter of the issuance of a writ of preliminary injunction is
addressed to the sound discretion of the trial court, this discretion must be exercised based upon
At issue is whether the issuance of the writ of preliminary injunction by the trial court was proper the grounds and in the manner provided by law. The exercise of discretion by the trial court in
and whether the Court of Appeals erred in setting aside the orders of the trial court. injunctive matters is generally not interfered with save in cases of manifest abuse. [40] And to
determine whether there was abuse of discretion, a scrutiny must be made of the bases, if any,
Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at any considered by the trial court in granting injunctive relief. Be it stressed that injunction is the strong
stage of an action prior to the judgment or final order requiring a party or a court, agency or a arm of equity which must be issued with great caution and deliberation, and only in cases of great
person to refrain from a particular act or acts. Injunction is accepted as the strong arm of equity or a injury where there is no commensurate remedy in damages.[41]
has become famous and causes dilution of the distinctive quality of the mark. This is intended to
In the present case, we find that there was scant justification for the issuance of the writ of protect famous marks from subsequent uses that blur distinctiveness of the mark or tarnish or
preliminary injunction. disparage it.[44]

Petitioners anchor their legal right to Dockers and Design trademark on the Certificate of Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that: (1)
Registration issued in their favor by the Bureau of Patents, Trademarks and Technology the trademark sought to be protected is famous and distinctive; (2) the use by respondent of
Transfer.* According to Section 138 of Republic Act No. 8293,[42] this Certificate of Registration Paddocks and Design began after the petitioners mark became famous; and (3) such subsequent
is prima facie evidence of the validity of the registration, the registrants ownership of the mark and use defames petitioners mark. In the case at bar, petitioners have yet to establish whether Dockers
of the exclusive right to use the same in connection with the goods or services and those that are and Design has acquired a strong degree of distinctiveness and whether the other two elements
related thereto specified in the certificate. Section 147.1 of said law likewise grants the owner of the are present for their cause to fall within the ambit of the invoked protection. The Trends MBL
registered mark the exclusive right to prevent all third parties not having the owners consent from Survey Report which petitioners presented in a bid to establish that there was confusing similarity
using in the course of trade identical or similar signs for goods or services which are identical or between two marks is not sufficient proof of any dilution that the trial court must enjoin.
similar to those in respect of which the trademark is registered if such use results in a likelihood of
confusion.

However, attention should be given to the fact that petitioners registered trademark consists of two
elements: (1) the word mark Dockers and (2) the wing-shaped design or logo. Notably, there is only
one registration for both features of the trademark giving the impression that the two should be The Court also finds that the trial courts order granting the writ did not adequately detail the
considered as a single unit. Clinton Apparelles trademark, on the other hand, uses the Paddocks reasons for the grant, contrary to our ruling in University of the Philippines v. Hon. Catungal
word mark on top of a logo which according to petitioners is a slavish imitation of the Dockers Jr., [45] wherein we held that:
design. The two trademarks apparently differ in their word marks (Dockers and Paddocks), but
again according to petitioners, they employ similar or identical logos. It could thus be said that The trial court must state its own findings of fact and cite particular law to justify
respondent only appropriates petitioners logo and not the word mark Dockers; it uses only a portion grant of preliminary injunction. Utmost care in this regard is demanded.[46]
of the registered trademark and not the whole.

Given the single registration of the trademark Dockers and Design and considering that respondent
only uses the assailed device but a different word mark, the right to prevent the latter from using the The trial court in granting the injunctive relief tersely ratiocinated that the plaintiffs appear
challenged Paddocks device is far from clear. Stated otherwise, it is not evident whether the single to be entitled to the relief prayed for and this Court is of the considered belief and humble view that,
registration of the trademark Dockers and Design confers on the owner the right to prevent the use without necessarily delving on the merits, the paramount interest of justice will be better served if
of a fraction thereof in the course of trade. It is also unclear whether the use without the owners the status quo shall be maintained. Clearly, this statement falls short of the requirement laid down
consent of a portion of a trademark registered in its entirety constitutes material or substantial by the above-quoted case. Similarly, in Developers Group of Companies, Inc. v. Court of
invasion of the owners right. Appeals,[47] we held that it was not enough for the trial court, in its order granting the writ, to simply
say that it appeared after hearing that plaintiff is entitled to the relief prayed for.
It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the
dominant or central feature of petitioners trademarkthe feature that prevails or is retained in the
minds of the publican imitation of which creates the likelihood of deceiving the public and
constitutes trademark infringement.[43] In sum, there are vital matters which have yet and may only In addition, we agree with the Court of Appeals in its holding that the damages the petitioners had
be established through a full-blown trial. suffered or continue to suffer may be compensated in terms of monetary consideration. As held
in Government Service Insurance System v. Florendo:[48]
From the above discussion, we find that petitioners right to injunctive relief has not been clearly and
unmistakably demonstrated. The right has yet to be determined. Petitioners also failed to show a writ of injunction should never have been issued when an action for damages
proof that there is material and substantial invasion of their right to warrant the issuance of an would adequately compensate the injuries caused. The very foundation of the
injunctive writ. Neither were petitioners able to show any urgent and permanent necessity for the jurisdiction to issue the writ of injunction rests in the probability of irreparable
writ to prevent serious damage. injury, inadequacy of pecuniary estimation and the prevention of the multiplicity
of suits, and where facts are not shown to bring the case within these
Petitioners wish to impress upon the Court the urgent necessity for injunctive relief, urging that the conditions, the relief of injunction should be refused.[49]
erosion or dilution of their trademark is protectable. They assert that a trademark owner does not
have to wait until the mark loses its distinctiveness to obtain injunctive relief, and that the mere use We also believe that the issued injunctive writ, if allowed, would dispose of the case on the merits
by an infringer of a registered mark is already actionable even if he has not yet profited thereby or as it would effectively enjoin the use of the Paddocks device without proof that there is basis for
has damaged the trademark owner. such action. The prevailing rule is that courts should avoid issuing a writ of preliminary injunction
that would in effect dispose of the main case without trial. [50] There would be a prejudgment of the
Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish main case and a reversal of the rule on the burden of proof since it would assume the proposition
goods or services, regardless of the presence or absence of: (1) competition between the owner of which petitioners are inceptively bound to prove.[51]
the famous mark and other parties; or (2) likelihood of confusion, mistake or deception. Subject to
the principles of equity, the owner of a famous mark is entitled to an injunction against another Parenthetically, we find no flaw in the Court of Appeals disquisition on the consequences of the
persons commercial use in commerce of a mark or trade name, if such use begins after the mark issued injunction. An exercise of caution, we believe that such reflection is necessary to weigh the
alleged entitlement to the writ vis--vis its possible effects. The injunction issued in the instant case
is of a serious nature as it tends to do more than to maintain the status quo. In fact, the assailed
injunction if sustained would bring about the result desired by petitioners without a trial on the
merits.

Then again, we believe the Court of Appeals overstepped its authority when it declared that the
alleged similarity as to the two logos is hardly confusing to the public. The only issue brought before
the Court of Appeals through respondents Petition under Rule 65 of the Rules of Court involved the
grave abuse of discretion allegedly committed by the trial court in granting the TRO and the writ of
preliminary injunction. The appellate court in making such a statement went beyond that issue and
touched on the merits of the infringement case, which remains to be decided by the trial court. In
our view, it was premature for the Court of Appeals to declare that there is no confusion between
the two devices or logos. That matter remains to be decided on by the trial court.

Finally, we have no contention against the procedure adopted by the trial court in resolving the
application for an injunctive writ and we believe that respondent was accorded due process. Due
process, in essence, is simply an opportunity to be heard. And in applications for preliminary
injunction, the requirement of hearing and prior notice before injunction may issue has been
relaxed to the point that not all petitions for preliminary injunction must undergo a trial-type hearing,
it being a hornbook doctrine that a formal or trial-type hearing is not at all times and in all instances
essential to due process. Due process simply means giving every contending party the opportunity
to be heard and the court to consider every piece of evidence presented in their favor. Accordingly,
this Court has in the case of Co v. Calimag, Jr.,[52] rejected a claim of denial of due process where
such claimant was given the opportunity to be heard, having submitted his counter-affidavit and
memorandum in support of his position.[53]

After a careful consideration of the facts and arguments of the parties, the Court finds that
petitioners did not adequately prove their entitlement to the injunctive writ. In the absence of proof
of a legal right and the injury sustained by the applicant, an order of the trial court granting the
issuance of an injunctive writ will be set aside for having been issued with grave abuse of
discretion.[54] Conformably, the Court of Appeals was correct in setting aside the assailed orders of
the trial court.
WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated 21
December 1998 and its Resolution dated 10 May 1999 are AFFIRMED. Costs against petitioners.

SO ORDERED.
G. R. No. 169504 March 3, 2010 fraudulent means, passed off its mark as that of respondent, or that it had diverted business away
from respondent.
COFFEE PARTNERS, INC.
vs. Mr. David Puyat, president of petitioner corporation, testified that the coffee shop in Libis, Quezon
SAN FRANCISCO COFFEE AND ROASTERY, INC. City opened sometime in June 2001 and that another coffee shop would be opened in Glorietta
Mall, Makati City. He stated that the coffee shop was set up pursuant to a franchise agreement
executed in January 2001 with CPL, a British Virgin Island Company owned by Robert Boxwell. Mr.
Puyat said he became involved in the business when one Arthur Gindang invited him to invest in a
DECISION
coffee shop and introduced him to Mr. Boxwell. For his part, Mr. Boxwell attested that the coffee
shop SAN FRANCISCO COFFEE has branches in Malaysia and Singapore. He added that he
formed CPL in 1997 along with two other colleagues, Shirley Miller John and Leah Warren, who
CARPIO, J.:
were former managers of Starbucks Coffee Shop in the United States. He said they decided to
invest in a similar venture and adopted the name SAN FRANCISCO COFFEE from the famous city
The Case
in California where he and his former colleagues once lived and where special coffee roasts came
from.
This is a petition for review[1] of the 15 June 2005 Decision[2] and the 1 September 2005
Resolution[3] of the Court of Appeals in CA-G.R. SP No. 80396. In its 15 June 2005 Decision, the
The Ruling of the Bureau of Legal Affairs-Intellectual Property Office
Court of Appeals set aside the 22 October 2003 Decision[4] of the Office of the Director
General-Intellectual Property Office and reinstated the 14 August 2002 Decision[5] of the Bureau of
In its 14 August 2002 Decision, the BLA-IPO held that petitioners trademark infringed on
Legal Affairs-Intellectual Property Office. In its 1 September 2005 Resolution, the Court of Appeals
respondents trade name. It ruled that the right to the exclusive use of a trade name with freedom
denied petitioners motion for reconsideration and respondents motion for partial reconsideration.
from infringement by similarity is determined from priority of adoption. Since respondent registered
its business name with the DTI in 1995 and petitioner registered its trademark with the IPO in 2001
The Facts
in the Philippines and in 1997 in other countries, then respondent must be protected from
infringement of its trade name.
Petitioner Coffee Partners, Inc. is a local corporation engaged in the business of establishing and
maintaining coffee shops in the country. It registered with the Securities and Exchange
The BLA-IPO also held that respondent did not abandon the use of its trade name as substantial
Commission (SEC) in January 2001. It has a franchise agreement [6] with Coffee Partners Ltd.
evidence indicated respondent continuously used its trade name in connection with the purpose for
(CPL), a business entity organized and existing under the laws of British Virgin Islands, for a
which it was organized. It found that although respondent was no longer involved in blending,
non-exclusive right to operate coffee shops in the Philippines using trademarks designed by CPL
roasting, and distribution of coffee because of the creation of BCCPI, it continued making plans and
such as SAN FRANCISCO COFFEE.
doing research on the retailing of coffee and the setting up of coffee carts. The BLA-IPO ruled that
for abandonment to exist, the disuse must be permanent, intentional, and voluntary.
Respondent is a local corporation engaged in the wholesale and retail sale of coffee. It registered
with the SEC in May 1995. It registered the business name SAN FRANCISCO COFFEE &
The BLA-IPO held that petitioners use of the trademark SAN FRANCISCO COFFEE will likely
ROASTERY, INC. with the Department of Trade and Industry (DTI) in June 1995. Respondent had
cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial
since built a customer base that included Figaro Company, Tagaytay Highlands, Fat Willys, and
impression of the words SAN FRANCISCO which is the dominant portion of respondents trade
other coffee companies.
name and petitioners trademark. It held that no significant difference resulted even with a
diamond-shaped figure with a cup in the center in petitioner's trademark because greater weight is
In 1998, respondent formed a joint venture company with Boyd Coffee USA under the company
given to words the medium consumers use in ordering coffee products.
name Boyd Coffee Company Philippines, Inc. (BCCPI). BCCPI engaged in the processing, roasting,
and wholesale selling of coffee. Respondent later embarked on a project study of setting up coffee
On the issue of unfair competition, the BLA-IPO absolved petitioner from liability. It found that
carts in malls and other commercial establishments in Metro Manila.
petitioner adopted the trademark SAN FRANCISCO COFFEE because of the authority granted to it
by its franchisor. The BLA-IPO held there was no evidence of intent to defraud on the part of
In June 2001, respondent discovered that petitioner was about to open a coffee shop under the
petitioner.
name SAN FRANCISCO COFFEE in Libis, Quezon City. According to respondent, petitioners shop
caused confusion in the minds of the public as it bore a similar name and it also engaged in the
The BLA-IPO also dismissed respondents claim of actual damages because its claims of profit loss
business of selling coffee. Respondent sent a letter to petitioner demanding that the latter stop
were based on mere assumptions as respondent had not even started the operation of its coffee
using the name SAN FRANCISCO COFFEE. Respondent also filed a complaint with the Bureau of
carts. The BLA-IPO likewise dismissed respondents claim of moral damages, but granted its claim
Legal Affairs-Intellectual Property Office (BLA-IPO) for infringement and/or unfair competition with
of attorneys fees.
claims for damages.
Both parties moved for partial reconsideration. Petitioner protested the finding of infringement,
In its answer, petitioner denied the allegations in the complaint. Petitioner alleged it filed with the
while respondent questioned the denial of actual damages. The BLA-IPO denied the parties partial
Intellectual Property Office (IPO) applications for registration of the mark SAN FRANCISCO
motion for reconsideration. The parties appealed to the Office of the Director General-Intellectual
COFFEE & DEVICE for class 42 in 1999 and for class 35 in 2000. Petitioner maintained its mark
Property Office (ODG-IPO).
could not be confused with respondents trade name because of the notable distinctions in their
appearances. Petitioner argued respondent stopped operating under the trade name SAN
The Ruling of the Office of the Director General-
FRANCISCO COFFEE when it formed a joint venture with Boyd Coffee USA. Petitioner contended Intellectual Property Office
respondent did not cite any specific acts that would lead one to believe petitioner had, through
settled that absent any circumstance requiring the overturning of the factual conclusions made by
In its 22 October 2003 Decision, the ODG-IPO reversed the BLA-IPO. It ruled that petitioners use of the quasi-judicial body or tribunal, particularly if affirmed by the Court of Appeals, the Court
the trademark SAN FRANCISCO COFFEE did not infringe on respondent's trade name. The necessarily upholds such findings of fact.[8]
ODG-IPO found that respondent had stopped using its trade name after it entered into a joint
venture with Boyd Coffee USA in 1998 while petitioner continuously used the trademark since June Coming now to the main issue, in Prosource International, Inc. v. Horphag Research Management
2001 when it opened its first coffee shop in Libis, Quezon City. It ruled that between a subsequent SA,[9] this Court laid down what constitutes infringement of an unregistered trade name, thus:
user of a trade name in good faith and a prior user who had stopped using such trade name, it
would be inequitable to rule in favor of the latter. (1) The trademark being infringed is registered in the Intellectual Property
Office; however, in infringement of trade name, the same need not be
The Ruling of the Court of Appeals registered;

In its 15 June 2005 Decision, the Court of Appeals set aside the 22 October 2003 decision of the (2) The trademark or trade name is reproduced, counterfeited, copied, or
ODG-IPO in so far as it ruled that there was no infringement. It reinstated the 14 August 2002 colorably imitated by the infringer;
decision of the BLA-IPO finding infringement. The appellate court denied respondents claim for (3) The infringing mark or trade name is used in connection with the sale,
actual damages and retained the award of attorneys fees. In its 1 September 2005 Resolution, the offering for sale, or advertising of any goods, business or services; or the
Court of Appeals denied petitioners motion for reconsideration and respondents motion for partial infringing mark or trade name is applied to labels, signs, prints, packages,
reconsideration. wrappers, receptacles, or advertisements intended to be used upon or in
connection with such goods, business, or services;
The Issue
The sole issue is whether petitioners use of the trademark SAN FRANCISCO COFFEE constitutes (4) The use or application of the infringing mark or trade name is likely to cause confusion or
infringement of respondents trade name SAN FRANCISCO COFFEE & ROASTERY, INC., mistake or to deceive purchasers or others as to the goods or services themselves or as to the
even if the trade name is not registered with the Intellectual Property Office (IPO). source or origin of such goods or services or the identity of such business; and

The Courts Ruling (5) It is without the consent of the trademark or trade name owner or the assignee
thereof.[10] (Emphasis supplied)
The petition has no merit.
Clearly, a trade name need not be registered with the IPO before an infringement suit may be filed
Petitioner contends that when a trade name is not registered, a suit for infringement is not available. by its owner against the owner of an infringing trademark. All that is required is that the trade name
Petitioner alleges respondent has abandoned its trade name. Petitioner points out that respondents is previously used in trade or commerce in the Philippines.[11]
registration of its business name with the DTI expired on 16 June 2000 and it was only in 2001
when petitioner opened a coffee shop in Libis, Quezon City that respondent made a belated effort Section 22 of Republic Act No. 166,[12] as amended, required registration of a trade name as a
to seek the renewal of its business name registration. Petitioner stresses respondents failure to condition for the institution of an infringement suit, to wit:
continue the use of its trade name to designate its goods negates any allegation of infringement.
Petitioner claims no confusion is likely to occur between its trademark and respondents trade name Sec. 22. Infringement, what constitutes. Any person who shall use, without
because of a wide divergence in the channels of trade, petitioner serving ready-made coffee while the consent of the registrant, any reproduction, counterfeit, copy, or
respondent is in wholesale blending, roasting, and distribution of coffee. Lastly, petitioner avers the colorable imitation of any registered mark or trade name in connection with the
proper noun San Francisco and the generic word coffee are not capable of exclusive appropriation. 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
Respondent maintains the law protects trade names from infringement even if they are not deceive purchasers or others as to the source or origin of such goods or
registered with the IPO. Respondent claims Republic Act No. 8293 (RA 8293)[7]dispensed with services, or identity of such business; or reproduce, counterfeit, copy, or
registration of a trade name with the IPO as a requirement for the filing of an action for infringement. colorably imitate any such mark or trade name and apply such reproduction,
All that is required is that the trade name is previously used in trade or commerce in the Philippines. counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
Respondent insists it never abandoned the use of its trade name as evidenced by its letter to wrappers, receptacles, or advertisements intended to be used upon or in
petitioner demanding immediate discontinuation of the use of its trademark and by the filing of the connection with such goods, business, or services, shall be liable to a civil
infringement case. Respondent alleges petitioners trademark is confusingly similar to respondents action by the registrant for any or all of the remedies herein provided.
trade name. Respondent stresses ordinarily prudent consumers are likely to be misled about the (Emphasis supplied)
source, affiliation, or sponsorship of petitioners coffee.
However, RA 8293, which took effect on 1 January 1998, has dispensed with the registration
As to the issue of alleged abandonment of trade name by respondent, the BLA-IPO found that requirement. Section 165.2 of RA 8293 categorically states that trade names shall be protected,
respondent continued to make plans and do research on the retailing of coffee and the even prior to or without registration with the IPO, against any unlawful act including any subsequent
establishment of coffee carts, which negates abandonment. This finding was upheld by the Court of use of the trade name by a third party, whether as a trade name or a trademark likely to mislead the
Appeals, which further found that while respondent stopped using its trade name in its business of public. Thus:
selling coffee, it continued to import and sell coffee machines, one of the services for which the use
of the business name has been registered. The binding effect of the factual findings of the Court of Sec. 165.2 (a) Notwithstanding any laws or regulations providing for any
Appeals on this Court applies with greater force when both the quasi-judicial body or tribunal like obligation to register trade names, such names shall be protected, even
the BLA-IPO and the Court of Appeals are in complete agreement on their factual findings. It is also
prior to or without registration, against any unlawful act committed by third The court of appeals was correct in setting aside the 22 October 2003 Decision of the Office of the
parties. Director General-Intellectual Property Office and in reinstating the 14 August 2002 Decision of the
Bureau of Legal Affairs-Intellectual Property Office.
(b) in particular, any subsequent use of a trade name by a third party, whether as
a trade name or a mark or collective mark, or any such use of a similar trade name or WHEREFORE, we DENY the petition for review. We AFFIRM the 15 June 2005 Decision and 1
mark, likely to mislead the public, shall be deemed unlawful. (emphasis supplied) September 2005 Resolution of the Court of Appeals in CA-G.R. SP no. 80396.

It is the likelihood of confusion that is the gravamen of infringement. But there is no absolute Costs against petitioner.
standard for likelihood of confusion. Only the particular, and sometimes peculiar, circumstances of
each case can determine its existence. Thus, in infringement cases, precedents must be evaluated
in the light of each particular case.[13]

In determining similarity and likelihood of confusion, our jurisprudence has developed two tests:
The dominancy test and the holistic test. The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might cause confusion and deception, thus
constituting infringement. If the competing trademark contains the main, essential, and dominant
features of another, and confusion or deception is likely to result, infringement occurs. Exact
duplication or imitation is not required. The question is whether the use of the marks involved is
likely to cause confusion or mistake in the mind of the public or to deceive consumers. [14]

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. [15] the discerning
eye of the observer must focus not only on the predominant words but also on the other features
appearing on both marks in order that the observer may draw his conclusion whether one is
confusingly similar to the other.[16]

Applying either the dominancy test or the holistic test, petitioners San Francisco Coffee trademark
is a clear infringement of respondents San Francisco Coffee & Roastery, Inc. trade name. The
descriptive words San Francisco coffee are precisely the dominant features of respondents trade
name. Petitioner and respondent are engaged in the same business of selling coffee, whether
wholesale or retail. The likelihood of confusion is higher in cases where the business of one
corporation is the same or substantially the same as that of another corporation. In this case, the
consuming public will likely be confused as to the source of the coffee being sold at petitioners
coffee shops. Petitioners argument that San Francisco is just a proper name referring to the famous
city in California and that coffee is simply a generic term, is untenable. Respondent has acquired an
exclusive right to the use of the trade name San Francisco Coffee & Roastery, Inc. Since
the registration of the business name with the DTI in 1995. Thus, respondents use of its trade name
from then on must be free from any infringement by similarity. Of course, this does not mean that
respondent has exclusive use of the geographic word San Francisco or the generic word coffee.
Geographic or generic words are not, per se, subject to exclusive appropriation. It is only the
combination of the words San Francisco coffee, which is respondents trade name in its coffee
business, that is protected against infringement on matters related to the coffee business to avoid
confusing or deceiving the public.

In Philips Export B.V. v. Court of Appeals,[17] this court held that a corporation has an exclusive right
to the use of its name. The right proceeds from the theory that it is a fraud on the corporation which
has acquired a right to that name and perhaps carried on its business thereunder, that another
should attempt to use the same name, or the same name with a slight variation in such a way as to
induce persons to deal with it in the belief that they are dealing with the corporation which has given
a reputation to the name.[18]

This court is not just a court of law, but also of equity. We cannot allow petitioner to profit by the
name and reputation so far built by respondent without running afoul of the basic demands of fair
play. Not only the law but equity considerations hold petitioner liable for infringement of
respondents trade name.
G.R. No. 202423 January 28, 2013 they also argued that the marks "Made in Portugal" and "Original Portugal" are merely descriptive
and refer to the source of the design and the history of manufacture.
CHESTER UYCO, WINSTON UYCHIYONG, and CHERRY C. UYCO-ONG, Petitioners,
vs. In a separate Answer, Chua admitted that he had dealt with Wintrade for several years and had
VICENTE LO, Respondent. sold its products. He had not been aware that Wintrade had lost the authority to manufacture,
distribute, and deal with products containing the subject marks, and he was never informed of
Wintrade’s loss of authority. Thus, he could have not been part of any conspiracy.
RESOLUTION

BRION, J.: After the preliminary investigation, the Chief State Prosecutor found probable cause to indict the
petitioners for violation of Section 169.1, in relation with Section 170, of RA 8293. This law
punishes any person who uses in commerce any false designation of origin which is likely to cause
We resolve the motion for reconsideration1 dated October 22, 2012 filed by petitioners Chester confusion or mistake as to the origin of the product. The law seeks to protect the public; thus, even
Uyco, Winston Uychiyong and Cherry C. Uyco-Ong to set aside the Resolution2 dated September if Lo does not have the legal capacity to sue, the State can still prosecute the petitioners to prevent
12, 2012 of this Court, which affirmed the decision3 dated March 9, 2012 and the resolution4 dated damage and prejudice to the public.
June 21, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 111964. The CA affirmed the
resolution5 dated September 1, 2008 of the Department of Justice (DOJ). Both the CA and the DOJ
On appeal, the DOJ issued a resolution affirming the finding of probable case. It gave credence to
found probable cause to charge the petitioners with false designation of origin, in violation of
Lo’s assertion that he is the proper assignee of the subject marks. More importantly, it took note of
Section 169.1, in relation with Section 170, of Republic Act No. (RA) 8293, otherwise known as the
the petitioners’ admission that they used the words "Made in Portugal" when in fact, these products
"Intellectual Property Code of the Philippines."6
were made in the Philippines. Had they intended to refer to the source of the design or the history
of the manufacture, they should have explicitly said so in their packaging. It then concluded that the
The disputed marks in this case are the "HIPOLITO & SEA HORSE & TRIANGULAR DEVICE," petitioners’ defenses would be better ventilated during the trial and that the admissions of the
"FAMA," and other related marks, service marks and trade names of Casa Hipolito S.A. Portugal petitioners make up a sufficient basis for probable cause.
appearing in kerosene burners. Respondent Vicente Lo and Philippine Burners Manufacturing
Corporation (PBMC) filed a complaint against the officers of Wintrade Industrial SalesCorporation
(Wintrade), including petitioners Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong, and of The CA found no grave abuse of discretion on the part of the DOJ and affirmed the DOJ’s ruling.
National Hardware, including Mario Sy Chua, for violation of Section 169.1, in relation to Section
170, of RA 8293. When the petitioners filed their petition before us, we denied the petition for failure to sufficiently
show any reversible error in the assailed judgment to warrant the exercise of the Court’s
discretionary power.
Lo claimed in his complaint that Gasirel-Industria de Comercio e Componentes para Gass, Lda.
(Gasirel), the owner of the disputed marks, executed a deed of assignment transferring these
marks in his favor, to be used in all countries except for those in Europe and America.7 In a test buy, We find no reversible error on the part of the CA and the DOJ to merit reconsideration. The
Lo purchased from National Hardware kerosene burners with the subject marks and the petitioners reiterate their argument that the products bought during the test buy bearing the
designations "Made in Portugal" and "Original Portugal" in the wrappers. These products were trademarks in question were not manufactured by, or in any way connected with, the petitioners
manufactured by Wintrade. Lo claimed that as the assignee for the trademarks, he had not and/or Wintrade. They also allege that the words "Made in Portugal" and "Original Portugal" refer to
authorized Wintrade to use these marks, nor had Casa Hipolito S.A. Portugal. While a prior the origin of the design and not to the origin of the goods.
authority was given to Wintrade’s predecessor-in-interest, Wonder Project & Development
Corporation (Wonder), Casa Hipolito S.A. Portugal had already revoked this authority through a
The petitioners again try to convince the Court that they have not manufactured the products
letter of cancellation dated May 31, 1993.8 The kerosene burners manufactured by Wintrade have
bearing the marks "Made in Portugal" and "Original Portugal" that were bought during the test buy.
caused confusion, mistake and deception on the part of the buying public. Lo stated that the real
However, their own admission and the statement given by Chua bear considerable weight.
and genuine burners are those manufactured by its agent, PBMC.

The admission in the petitioners’ Joint Affidavit is not in any way hypothetical, as they would have
In their Answer, the petitioners stated that they are the officers of Wintrade which owns the subject
us believe. They narrate incidents that have happened. They refer to Wintrade’s former association
trademarks and their variants. To prove this assertion, they submitted as evidence the certificates
with Casa Hipolito S.A. Portugal; to their decision to produce the burners in the Philippines; to their
of registration with the Intellectual Property Office. They alleged that Gasirel, not Lo, was the real
use of the disputed marks; and to their justification for their use. It reads as follows:
party-in-interest. They allegedly derived their authority to use the marks from Casa Hipolito S.A.
Portugal through Wonder, their predecessor-in-interest. Moreover, PBMC had already ceased to be
a corporation and, thus, the licensing agreement between PBMC and Lo could not be given effect, 24. As earlier mentioned, the predecessor-in-interest of Wintrade was the former exclusive licensee
particularly because the agreement was not notarized and did not contain the provisions required of Casa Hipolito SA of Portugal since the 1970’s, and that Wintrade purchased all the rights on the
by Section 87 of RA 8293. The petitioners pointed out that Lo failed to sufficiently prove that the said trademarks prior to the closure of said company. Indeed, the burners sold by Wintrade used to
burners bought from National Hardware were those that they manufactured. But at the same time, be imported from Portugal, but Wintrade later on discovered the possibility of obtaining these
burners from other sources or of manufacturing the same in the Philippines.
Wintrade’s decision to procure these burners from sources other than Portugal is certainly its
management prerogative. The presence of the words "made in Portugal" and "original Portugal" on
the wrappings of the burners and on the burners themselves which are manufactured by Wintrade
is an allusion to the fact that the origin of the design of said burners can be traced back to Casa
Hipolito SA of Portugal, and that the history of the manufacture of said burners are rooted in
Portugal. These words were not intended to deceive or cause mistake and confusion in the minds
of the buying public.9

Chua, the owner of National Hardware — the place where the test buy was conducted — admits
that Wintrade has been furnishing it with kerosene burners with the markings "Made in Portugal" for
the past 20 years, to wit:

5. I hereby manifests (sic) that I had been dealing with Wintrade Industrial Sales Corporation
(WINTRADE for brevity) for around 20 years now by buying products from it. I am not however
aware that WINTRADE was no longer authorized to deal, distribute or sell kerosene burner bearing
the mark HIPOLITO and SEA HORSE Device, with markings "Made in Portugal" on the wrapper as
I was never informed of such by WINTRADE nor was ever made aware of any notices posted in the
newspapers informing me of such fact. Had I been informed, I would have surely stopped dealing
with WINTRADE.101âwphi1

Thus, the evidence shows that petitioners, who are officers of Wintrade, placed the words "Made in
Portugal" and "Original Portugal" with the disputed marks knowing fully well — because of their
previous dealings with the Portuguese company — that these were the marks used in the products
of Casa Hipolito S.A. Portugal. More importantly, the products that Wintrade sold were admittedly
produced in the Philippines, with no authority from Casa Hipolito S.A. Portugal. The law on
trademarks and trade names precisely precludes a person from profiting from the business
reputation built by another and from deceiving the public as to the origins of products. These facts
support the consistent findings of the State Prosecutor, the DOJ and the CA that probable cause
exists to charge the petitioners with false designation of origin. The fact that the evidence did not
come from Lo, but had been given by the petitioners, is of no significance.

The argument that the words "Made in Portugal" and "Original Portugal" refer to the origin of the
design and not to the origin of the goods does not negate the finding of probable cause; at the
same time, it is an argument that the petitioners are not barred by this Resolution from raising as a
defense during the hearing of the case.

WHEREFORE, premises considered, we hereby DENY the motion for reconsideration for lack of
merit.

SO ORDERED.
G.R. No. 195549 September 3, 2014 In its Answer, [petitioner] denies all the allegations of the [respondent] except for the following facts:
that it is engaged in the manufacture and distribution of kitchenware items made of plastic and
WILLAWARE PRODUCTS CORPORATION, Petitioner, metal and that there’s physical proximity of [petitioner’s] office to [respondent]’s office, and that
someof [respondent’s] employees had transferred to [petitioner] and that over the years [petitioner]
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent. had developed familiarity with [respondent’s] products, especially its plastic made automotive parts.

As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the
DECISION
plastic-made automotive parts are mere reproductions of original parts and their construction and
composition merely conforms to the specificationsof the original parts of motor vehicles they intend
PERALTA, J.: to replace. Thus, [respondent] cannot claim that it "originated" the use of plastic for these
automotive parts. Even assuming for the sake of argument that [respondent] indeed originated the
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking use of these plastic automotive parts, it still has no exclusive right to use, manufacture and sell
to set aside the Decision1 dated November 24, 2010 and Resolution2 dated February 10, 2011 of these as it has no patent over these products. Furthermore, [respondent] is not the only exclusive
the Court of Appeals (CA) in CA-G.R. CV No. 86744. manufacturer of these plastic-made automotive parts as there are other establishments which were
already openly selling them to the public.3

The facts, as found by the Regional Trial Court (RTC), are as follows:
After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly invaded
the rights or interest of respondent by deliberately copying and performing acts amounting to unfair
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present complaint competition. The RTC further opined that under the circumstances, in order for respondent’s
for damages for unfair competition with prayer for permanent injunction to enjoin [petitioner] property rights to be preserved, petitioner’s acts of manufacturing similar plastic-made automotive
Willaware Products Corporation ([petitioner] for short) from manufacturing and distributing parts such as those of respondent’s and the selling of the sameproducts to respondent’s customers,
plastic-made automotive parts similar to those of [respondent]. which it cultivated over the years, will have to be enjoined. The dispositive portion of the decision
reads:
[Respondent] alleged that it is a duly registeredpartnership engaged in the manufacture and
distribution of plastic and metal products, with principal office at No. 100 Mithi Street, Sampalukan, WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two Million
Caloocan City. Since its registration in 1992, [respondent] has been manufacturing in its Caloocan (₱2,000,000.00) Pesos, as actual damages, One Hundred Thousand (₱100,000.00) Pesos as
plant and distributing throughout the Philippines plastic-made automotive parts. [Petitioner], on the attorney’s fees and One Hundred Thousand (₱100,000.00) Pesos for exemplary damages. The
other hand, which is engaged in the manufacture and distribution of kitchenware items made of court hereby permanently [enjoins] defendant from manufacturing the plastic-made automotive
plastic and metal has its office near that of [respondent]. [Respondent] further alleged that in view parts as those manufactured by plaintiffs.
of the physical proximity of [petitioner’s] office to [respondent’s] office, and in view of the fact that
some of the [respondent’s] employeeshad transferred to [petitioner], [petitioner] had developed
familiarity with [respondent’s] products, especially its plastic-made automotive parts. SO ORDERED.4

That sometime in November 2000, [respondent] discovered that [petitioner] had been Thus, petitioner appealed to the CA.
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondent’s] plastic-made On appeal, petitioner asserts that ifthere is no intellectual property protecting a good belonging to
automotive parts and to the same customers. another,the copying thereof for production and selling does not add up to unfair competition as
competition is promoted by law to benefit consumers. Petitioner further contends that it did not lure
[Respondent] alleged that it had originated the use of plastic in place of rubber in the manufacture away respondent’s employees to get trade secrets. It points out that the plastic spare parts sold by
ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing, shock respondent are traded in the market and the copying of these can be done by simplybuying a
absorberbushing, center bearing cushions, among others. [Petitioner’s] manufacture of the same sample for a mold to be made.
automotive parts with plastic materialwas taken from [respondent’s] idea of using plastic for
automotive parts. Also, [petitioner] deliberately copied [respondent’s] products all of which acts Conversely, respondent averred that copyright and patent registrations are immaterial for an unfair
constitute unfair competition, is and are contrary to law, morals, good customs and public policy competition case to prosper under Article 28 of the Civil Code. It stresses that the characteristics of
and have caused [respondent] damages in terms oflost and unrealizedprofits in the amount of TWO unfair competition are present in the instant case as the parties are trade rivals and petitioner’s acts
MILLION PESOS as of the date of [respondent’s] complaint. are contrary to good conscience for deliberately copying its products and employing its former
employees.
Furthermore, [petitioner’s] tortuous conduct compelled [respondent] to institute this action and
thereby to incur expenses in the way of attorney’s fees and other litigation expenses in the amount In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the RTC.
of FIVE HUNDRED THOUSAND PESOS (₱500,000.00). Relevant portions of said decision read:
Despite the evidence showing thatWillaware took dishonest steps in advancing its business interest Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code on
against Jesichris, however, the Court finds no basis for the award by the RTC of actual damages. humanrelations, and not unfair competition under Republic Act No. 8293,7 as the present suit is a
One is entitled to actual damages as one has duly proven. The testimony of Quejada, who was damage suit and the products are not covered by patent registration. A fortiori, the existence of
engaged by Jesichris in 2001 to audit its business, only revealed that there was a discrepancy patent registration is immaterial in the present case.
between the sales of Jesichris from 2001 to 2002. No amount was mentioned. As for Exhibit "Q,"
which is a copy of the comparative income statement of Jesichris for 1999-2002, it shows the
The concept of "unfair competition"under Article 28 is very much broader than that covered by
decline of the sales in 2002 in comparison with those made in 2001 but it does not disclose if this
intellectual property laws. Under the present article, which follows the extended concept of "unfair
pertains to the subject automotive parts or to the other products of Jesichris like plates.
competition" in American jurisdictions, the term coverseven cases of discovery of trade secrets of a
competitor, bribery of his employees, misrepresentation of all kinds, interference with the fulfillment
In any event, it was clearly shown that there was unfair competition on the part of Willaware that of a competitor’s contracts, or any malicious interference with the latter’s business. 8
prejudiced Jesichris. It is only proper that nominal damages be awarded in the amount of Two
Hundred Thousand Pesos (₱200,000.00) in order to recognize and vindicate Jesichris’ rights. The
With that settled, we now come to the issue of whether or not petitioner committed acts amounting
RTC’s award of attorney’s fees and exemplary damages is also maintained.
tounfair competition under Article 28 of the Civil Code.

xxxx
We find the petition bereft of merit.

WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial Court
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or industrial
of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The award of Two
enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust,
Million Pesos (₱2,000,000.00) actual damages is deleted and in its place, Two Hundred Thousand
oppressive or high-handed method shall give rise to a right of action by the person who thereby
Pesos nominal damages is awarded.
suffers damage."

SO ORDERED.5
From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper sebut
the use of unjust, oppressive or high- handed methods which may deprive others of a fair chance to
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of merit engage in business or to earn a living. Plainly,what the law prohibits is unfair competition and not
by the CA in a Resolution dated February 10, 2011. competition where the means usedare fair and legitimate.

Hence, the present Petition for Review wherein petitioner raises the following issues for our In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve an
resolution: injury to a competitor or trade rival, and (2) it must involve acts which are characterized as "contrary
to good conscience," or "shocking to judicial sensibilities," or otherwise unlawful; in the language of
our law, these include force, intimidation, deceit, machination or any other unjust, oppressive or
(1) Whether or not there is unfair competition under human relations when the parties are not
high-handed method. The public injury or interest is a minor factor; the essence of the matter
competitors and there is actually no damage on the part of Jesichris?
appears to be a private wrong perpetrated by unconscionable means. 9

(2) Consequently, if there is no unfair competition, should there be moral damages and attorney’s
Here, both characteristics are present.
fees?

First, both parties are competitors or trade rivals, both being engaged in the manufacture of
(3) Whether or not the addition of nominal damages is proper although no rights have been
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to good
established?
conscience" as petitioner admitted having employed respondent’s formeremployees, deliberately
copied respondent’s products and even went to the extent of selling these products to respondent’s
(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it be considered in customers.10
the light of the said copyrights were considered to be void by no less than this Honorable Court in
SC GR No. 161295?
To bolster this point, the CA correctly pointed out that petitioner’s hiring of the former employees of
respondent and petitioner’s act of copying the subject plastic parts of respondent were tantamount
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has established to unfair competition, viz.:
"goodwill?"6
The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with the
In essence, the issue for our resolution is: whether or not petitioner committed acts amounting to business of [respondent].1âwphi1 [Petitioner’s] acts can be characterized as executed with
unfair competition under Article 28 of the Civil Code. mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court
observes that [petitioner] is engaged in the production of plastic kitchenware previous to its Mr. Salinas: Yes, sir.
manufacturing of plasticautomotive spare parts, it engaged the services of the then mold setter and
maintenance operator of [respondent], De Guzman, while he was employed by the latter. De
Atty. Bautista: How many, more or less?
Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic automotive
spare parts were not being made. It baffles the Court why [petitioner] cannot rely onits own mold
setter and maintenance operator to remedy its problem. [Petitioner’s] engagement of De Guzman Mr. Salinas: More or less, three (3).
indicates that it is banking on his experience gained from working for [respondent].
Atty. Bautista: And when, in what year or month did they transfer to you?
Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this Mr. Salinas: First, November 1.
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the same
position he occupied with [respondent]. These sequence of events relating to his employment by
[petitioner] is suspect too like the situation with De Guzman.11 Atty. Bautista: Year 2000?

Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of suddenly Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
shifting his business from manufacturing kitchenware to plastic-made automotive parts; his luring month ago.
the employees of the respondent to transfer to his employ and trying to discover the trade secrets
of the respondent.12 That [petitioner] was clearly outto take [respondent] out of business was buttressed by the
testimony of [petitioner’s] witness, Joel Torres:
Moreover, when a person starts an opposing place of business, not for the sake of profit to himself,
but regardless of loss and for the sole purpose of driving his competitor out of business so that later Q: Are you familiar with the [petitioner], Willaware Product Corporation?
on he can take advantage of the effects of his malevolent purpose, he is guilty of wanton
wrong.13 As aptly observed by the courta quo, the testimony of petitioner’s witnesses indicate that it
A: Yes, sir.
acted in bad faith in competing with the business of respondent, to wit: [Petitioner], thru its General
Manager, William Salinas, Jr., admitted that it was never engaged in the business of plastic-made
automotive parts until recently, year 2000: Q: Will you kindly inform this court where is the office of this Willaware Product Corporation (sic)?

Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic) not? A: At Mithi Street, Caloocan City, sir.
Manufacturer of kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes, sir. Atty.
Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co., you have Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this court
known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes, sir. Atty. what unusual even (sic) transpired between you and Mr. Salinas on said date?
Bautista: In fact, you have been (sic) physically become familiar with these products, plastic
automotive products of Jesichris? Mr. Salinas: Yes, sir.
A: There was, sir.

How [petitioner] was able to manufacture the same products, in terms of color, size, shape and
composition as those sold by Jesichris was due largely to the sudden transfer ofJesichris’ Q: What is that?
employees to Willaware.
A: Sir, I was walking at that time together with my wife going to the market and then I passed by the
Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company? place where they were having a drinking spree, sir.

Mr. Salinas: Since they transferred there (sic) our place. Q: You mentioned they, who were they who were drinking at that time?

Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I don’t know the exact A: I know one Jun Molina, sir.
date.
Q: And who else was there?
Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to your
company, is it not? A: William Salinas, sir.
Q: And will you kindly inform us what happened when you spotted upon them drinking?

A: Jun Molina called me, sir.

Q: And what happened after that?

A: At that time, he offered mea glass of wine and before I was able to drink the wine, Mr. Salinas
uttered something, sir.

Q: And what were those words uttered by Mr. Salinas to you?

A: "O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?"

Q: And what did you do after that, after hearing those words?

A: And he added these words, sir. "sabihin mo sa amo mo, dalawang taon na lang pababagsakin
ko na siya."

Q: Alright, hearing those words, will you kindly tell this court whom did you gather to be referred to
as your "amo"?

A: Mr. Jessie Ching, sir.14

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

However, since the award of Two Million Pesos (₱2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (₱200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (₱50,000.00).

WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are hereby
AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to Fifty Thousand
Pesos (₱50,000.00).

SO ORDERED.
G.R. No. 181571 December 16, 2009 Salvador, a corporation duly organized and existing under the laws of the
Republic of the Philippines and engaged in manufacturing of Fundador Brandy
JUNO BATISTIS, petitioner, under license of Pedro Domecq, S.A. Cadiz, Spain, and/or copyright owner of
vs. the said product, did then and there wilfully, unlawfully and feloniously
PEOPLE OF THE PHILIPPINES, respondent reproduce, sell and offer for sale, without prior authority and consent of said
manufacturing company, the accused giving their own low quality product the
general appearance and other features of the original Fundador Brandy of the
DECISION said manufacturing company which would be likely induce the public to believe
that the said fake Fundador Brandy reproduced and/or sold are the real
BERSAMIN, J.: Fundador Brandy produced or distributed by the Allied Domecq Spirits and
Wines Limited, U.K. and Allied Domecq Philippines, Inc. to the damage and
On January 23, 2006, the Regional Trial Court (RTC), Branch 24, in Manila convicted prejudice of the latter and the public.
Juno Batistis for violations of Section 155 (infringement of trademark) and Section 168 (unfair
competition) of the Intellectual Property Code (Republic Act No. 8293).[1] Contrary to law.[12]

On September 13, 2007, the Court of Appeals (CA) affirmed the conviction With Batistis pleading not guilty on June 3, 2003,[13] the RTC proceeded to trial.
for infringement of trademark, but reversed the conviction for unfair competition for failure of the On January 23, 2006, the RTC found Batistis guilty beyond reasonable doubt of infringement of
State to prove guilt beyond reasonable doubt.[2] trademark and unfair competition, viz:

Batistis now appeals via petition for review on certiorari to challenge the CAs affirmance ACCORDINGLY, this Court finds the accused JUNO BATISTIS Guilty
of his conviction for infringement of trademark. Beyond Reasonable Doubt of the crime of Violation of Section 155 of the
We affirm the conviction, but we modify the penalty by imposing an indeterminate Intellectual Property Code and hereby sentences him to suffer the penalty of
sentence, conformably with the Indeterminate Sentence Law and pertinent jurisprudence. imprisonment of TWO (2) YEARS and to pay a fine of FIFTY
THOUSAND (P50,000.00) PESOS.
Antecedents
This Court likewise finds accused JUNO BATISTIS Guilty Beyond
The Fundador trademark characterized the brandy products manufactured by Pedro Reasonable Doubt of the crime of Violation of Section 168 (sic) penalty of
Domecq, S.A. of Cadiz, Spain.[3] It was duly registered in the Principal Register of the Philippines imprisonment of TWO (2) YEARS and to pay a fine of FIFTY THOUSAND
Patent Office on July 12, 1968 under Certificate of Registration No. 15987,[4] for a term of 20 years (Php50,000.00) PESOS.
from November 5, 1970. The registration was renewed for another 20 years effective November 5,
1990.[5] Accused is further ordered to indemnify the private complainant the
sum of TWENTY-FIVE (Php25,000.00) PESOS as actual damages.
Allied Domecq Philippines, Inc., a Philippine corporation exclusively authorized[6] to
distribute Fundador brandy products imported from Spain wholly in finished form,[7] initiated this The following items recovered from the premises of the accused and
case against Batistis. Upon its request, agents of the National Bureau of Investigation (NBI) subject of the case are hereby ordered destroyed, pursuant to existing rules
conducted a test-buy in the premises of Batistis, and thereby confirmed that he was actively and regulations:
engaged in the manufacture, sale and distribution of counterfeit Fundador brandy products.[8] Upon
application of the NBI agents based on the positive results of the test-buy,[9] Judge Antonio M. Twenty (20) empty Carlos 1 bottles
Eugenio, Jr. of the Manila RTC issued on December 20, 2001 Search Warrant No. Ten (10) Black Label empty bottles
01-2576,[10] authorizing the search of the premises of Batistis located at No.1664 Onyx St., San Two (2) empty bottles of Jhonny (sic) Walker Swing
Andres Bukid, Sta. Ana, Manila. The search yielded 20 empty Carlos I bottles, 10 empty bottles One(1) empty bottle of Remy Martin XO
of Black Label whiskey, two empty bottles of Johnny Walker Swing, an empty bottle of Remy Martin One (1) empty bottle of Chabot
XO, an empty bottle of Chabot, 241 empty Fundador bottles, 163 boxes of Fundador, a half sack Two hundred forty-one (241) empty Fundador bottles
of Fundador plastic caps, two filled bottles of Fundador brandy, and eight cartons of One hundred sixty-three (163) Fundador boxes
empty Jose Cuervo bottles.[11] One half (1/2 sack of Fundador plastic caps, and
Two (2) filled Fundador bottles
The Office of the City Prosecutor of Manila formally charged Batistis in the RTC Eight (8) boxes of empty Jose Cuervo bottles
in Manila with two separate offenses, namely, infringement of trademark and unfair competition,
through the following information, to wit: WITH COSTS AGAINST ACCUSED

That on or about December 20, 2001, in the City of Manila, Philippines, the SO ORDERED.[14]
said accused, being then in possession of two hundred forty one (241) empty
Fundador bottles, one hundred sixty three Fundador boxes, one half (1/2) sack Batistis appealed to the CA, which, on September 13, 2007, affirmed his conviction
of Fundador plastic caps, and two (2) Fundador bottles with intention of for infringement of trademark, but acquitted him of unfair competition,[15] disposing:
deceiving and defrauding the public in general and Allied Domecq Spirits and
Wines and Allied Domecq Philippines, Inc. represented by Atty. Leonardo P.
WHEREFORE, premises considered, the Appeal of Appellant JUNO
BATISTIS is hereby PARTIALLY GRANTED. The challenged Decision is Firstly: The petition for review replicates Batistis appellant's brief filed in the CA,[19] a true
AFFIRMED in so far as the charge against him for Violation of Section 155 of indication that the errors he submits for our review and reversal are those he had attributed to the
the Intellectual Property Code is concerned. RTC. He thereby rests his appeal on his rehashed arguments that the CA already discarded. His
appeal is, therefore, improper, considering that his petition for review on certiorari should raise only
However, for failure of the prosecution to prove to a moral certainty the the errors committed by the CA as the appellate court, not the errors of the RTC.
guilt of the said Appellant, for violation of Section 168 of the same code a
judgment of ACQUITTAL is hereby rendered in his favor. Secondly: Batistis assigned errors stated in the petition for review on certiorari require a
re-appreciation and re-examination of the trial evidence. As such, they raise issues evidentiary and
SO ORDERED.[16] factual in nature. The appeal is dismissible on that basis, because, one, the petition for review
thereby violates the limitation of the issues to only legal questions, and, two, the Court, not being a
After the CA denied his motion for reconsideration, Batistis brought this appeal. trier of facts, will not disturb the factual findings of the CA, unless they were mistaken, absurd,
speculative, conflicting, tainted with grave abuse of discretion, or contrary to the findings reached
by the court of origin.[20]
Issue

Batistis contends that:


Whether a question of law or a question of fact is involved is explained in Belgica v.
THE REGIONAL TRIAL COURT ERRED IN CONVICTING THE ACCUSED Belgica:[21]
ON THE BASIS OF THE SELF-SERVING AFFIDAVITS AND TESTIMONIES
OF THE POLICE OFFICERS WHO CONDUCTED THE RAID ON THE xxx [t]here exists a question of law when there is doubt on what the law
HOUSE OF THE ACCUSED. applicable to a certain set of facts is. Questions of fact, on the other hand,
arise when there is an issue regarding the truth or falsity of the statement of
facts. Questions on whether certain pieces of evidence should be accorded
He submits that the only direct proofs of his guilt were the self-serving testimonies of the probative value or whether the proofs presented by one party are clear,
NBI raiding team; that he was not present during the search; that one of the NBI raiding agents convincing and adequate to establish a proposition are issues of fact. Such
failed to immediately identify him in court; and that aside from the two bottles of Fundador brandy, questions are not subject to review by this Court. As a general rule, we review
the rest of the confiscated items were not found in his house. cases decided by the CA only if they involve questions of law raised and
distinctly set forth in the petition.[22]
Ruling
Thirdly: The factual findings of the RTC, its calibration of the testimonies of the witnesses,
The petition for review has no merit. and its assessment of their probative weight are given high respect, if not conclusive effect, unless
cogent facts and circumstances of substance, which if considered, would alter the outcome of the
case, were ignored, misconstrued or misinterpreted.[23]
1.
Appeal confined only to Questions of Law To accord with the established doctrine of finality and bindingness of the trial courts
findings of fact, we do not disturb such findings of fact of the RTC, particularly after their affirmance
Pursuant to Section 3,[17] Rule 122, and Section 9,[18] Rule 45, of the Rules of Court, the by the CA, for Batistis, as appellant, did not sufficiently prove any extraordinary circumstance
review on appeal of a decision in a criminal case, wherein the CA imposes a penalty other justifying a departure from such doctrine.
than death, reclusion perpetua, or life imprisonment, is by petition for review on certiorari. 2.
Findings of fact were even correct
A petition for review on certiorari raises only questions of law. Sec. 1, Rule 45, Rules of
Court, explicitly so provides, viz:
A review of the decision of the CA, assuming that the appeal is permissible, even
indicates that both the RTC and the CA correctly appreciated the evidence against the accused,
Section 1. Filing of petition with Supreme Court.A party desiring to and correctly applied the pertinent law to their findings of fact.
appeal by certiorari from a judgment, final order or resolution of the Court of
Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial
Court or other courts, whenever authorized by law, may file with the Supreme Article 155 of the Intellectual Property Code identifies the acts constituting infringement
Court a verified petition for review on certiorari. The petition may include an of trademark, viz:
application for a writ of preliminary injunction or other provisional remedies
and shall raise only questions of law, which must be distinctly set forth. Section 155. Remedies; Infringement. Any person who shall, without
The petitioner may seek the same provisional remedies by verified motion filed the consent of the owner of the registered mark:
in the same action or proceeding at any time during its pendency.
155.1. Use in commerce any reproduction, counterfeit, copy, or
Accordingly, we reject the appeal for the following reasons: colorable imitation of a registered mark or the same container or a dominant
feature thereof in connection with the sale, offering for sale, distribution, We rule that the penalty thus fixed was contrary to the Indeterminate Sentence
advertising of any goods or services including other preparatory steps Law,[26] as amended by Act No. 4225. We modify the penalty.
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 Section 1 of the Indeterminate Sentence Law, as amended, provides:
deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered Section 1. Hereafter, in imposing a prison sentence for an offense
mark or a dominant feature thereof and apply such reproduction, counterfeit, punished by the Revised Penal Code, or its amendments, the court shall
copy or colorable imitation to labels, signs, prints, packages, wrappers, sentence the accused to an indeterminate sentence the maximum term of
receptacles or advertisements intended to be used in commerce upon or in which shall be that which, in view of the attending circumstances, could be
connection with the sale, offering for sale, distribution, or advertising of goods properly imposed under the rules of the said Code, and the minimum which
or services on or in connection with which such use is likely to cause confusion, shall be within the range of the penalty next lower to that prescribed by the
or to cause mistake, or to deceive, shall be liable in a civil action for Code for the offense; and if the offense is punished by any other law, the
infringement by the registrant for the remedies hereinafter set forth: Provided, court shall sentence the accused to an indeterminate sentence, the
That the infringement takes place at the moment any of the acts stated in maximum term of which shall not exceed the maximum fixed by said law
Subsection 155.1 or this subsection are committed regardless of whether there and the minimum shall not be less than the minimum term prescribed by
is actual sale of goods or services using the infringing material. the same.

Harvey Tan, Operations Manager of Pedro Domecq, S.A. whose task involved the
detection of counterfeit products in the Philippines, testified that the seized Fundadorbrandy, when The straight penalty the CA imposed was contrary to the Indeterminate Sentence
compared with the genuine product, revealed several characteristics of counterfeiting, namely: (a) Law, whose Section 1 requires that the penalty of imprisonment should be an indeterminate
the Bureau of Internal Revenue (BIR) seal label attached to the confiscated products did not reflect sentence. According to Spouses Bacar v. Judge de Guzman,Jr.,[27] the imposition of an
the word tunay when he flashed a black light against the BIR label; (b) the tamper evident ring on indeterminate sentence with maximum and minimum periods in criminal cases not excepted from
the confiscated item did not contain the word Fundador; and (c) the word Fundador on the label the coverage of the Indeterminate Sentence Law pursuant to its Section 2[28] is mandatory, viz:
was printed flat with sharper edges, unlike the raised, actually embossed, and finely printed
genuine Fundadortrademark.[24]
The need for specifying the minimum and maximum periods of the
There is no question, therefore, that Batistis exerted the effort to make the counterfeit indeterminate sentence is to prevent the unnecessary and excessive
products look genuine to deceive the unwary public into regarding the products as genuine. The deprivation of liberty and to enhance the economic usefulness of the accused,
buying public would be easy to fall for the counterfeit products due to their having been given the since he may be exempted from serving the entire sentence, depending upon
appearance of the genuine products, particularly with the difficulty of detecting whether the his behavior and his physical, mental, and moral record. The requirement of
products were fake or real if the buyers had no experience and the tools for detection, like black imposing an indeterminate sentence in all criminal offenses whether
light. He thereby infringed the registered Fundador trademark by the colorable imitation of it punishable by the Revised Penal Code or by special laws, with definite
through applying the dominant features of the trademark on the fake products, particularly the two minimum and maximum terms, as the Court deems proper within the
bottles filled with Fundador brandy.[25] His acts constituted infringement of trademark as set forth in legal range of the penalty specified by the law must, therefore, be
Section 155, supra. deemed mandatory.

3.
Penalty Imposed should be an Indeed, the imposition of an indeterminate sentence is mandatory. For instance,
Indeterminate Penalty and Fine in Argoncillo v. Court of Appeals,[29] three persons were prosecuted for and found guilty of illegal
fishing (with the use of explosives) as defined in Section 33, Presidential Decree No. 704, as
amended by Presidential Decree No. 1058, for which the prescribed penalty was imprisonment
Section 170 of the Intellectual Property Code provides the penalty for infringement of from 20 years to life imprisonment. The trial court imposed on each of the accused a straight
trademark, to wit: penalty of 20 years imprisonment, and the CA affirmed the trial court. On appeal, however, this
Court declared the straight penalty to be erroneous, and modified it by imposing imprisonment
Section 170. Penalties. - Independent of the civil and administrative ranging from 20 years, as minimum, to 25 years, as maximum.
sanctions imposed by law, a criminal penalty of imprisonment from two (2)
years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) We are aware that an exception was enunciated in People v. Nang Kay,[30] a prosecution
to Two hundred thousand pesos(P200,000), shall be imposed on any person for illegal possession of firearms punished by a special law (that is, Section 2692, Revised
who is found guilty of committing any of the acts mentioned in Section 155, Administrative Code, as amended by Commonwealth Act 56 and Republic Act No. 4) with
Section 168 and Subsection 169.1. (Arts. 188 and 189, Revised Penal Code). imprisonment of not less than five years nor more than ten years. There, the Court sustained the
straight penalty of five years and one day imposed by the trial court (Court of First Instance of Rizal)
The CA affirmed the decision of the RTC imposing the the penalty of imprisonment of because the application of the Indeterminate Sentence Law would be unfavorable to the accused
TWO (2) YEARS and to pay a fine of FIFTY THOUSAND (P50,000.00) PESOS. by lengthening his prison sentence. Yet, we cannot apply the Nang Kay exception herein, even if
this case was a prosecution under a special law like that in Nang Kay. Firstly, the trial court in Nang
Kay could well and lawfully have given the accused the lowest prison sentence of five years
because of the mitigating circumstance of his voluntary plea of guilty, but, herein, both the trial court
and the CA did not have a similar circumstance to justify the lenity towards the accused. Secondly,
the large number of Fundador articles confiscated from his house (namely, 241 empty bottles
of Fundador, 163 Fundador boxes, a half sack full of Fundador plastic caps, and two filled bottles
of Fundador Brandy) clearly demonstrated that Batistis had been committing a grave economic
offense over a period of time, thereby deserving for him the indeterminate, rather than the straight
and lower, penalty.

ACCORDINGLY, we affirm the decision dated September 13, 2007 rendered in


C.A.-G.R. CR No. 30392 entitled People of the Philippines v. Juno Batistis, but modify the penalty
to imprisonment ranging from two years, as minimum, to three years, as maximum, and a fine
of P50,000.00.

The accused shall pay the costs of suit.

SO ORDERED.