Handout No. 13 SUGGESTED ANSWERS TO THE 2016 BAR EXAMINATIONS IN MERCANTILE LAW What does doing business in the Philippines under the Foreign Investment Act of 1991 mean? (5%) WI SU ESTED Ai he Philippines “ under the Foreign ing orders; service contracts; opening offices, whether called liaison offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling 180 days or mores participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works; or the exercise of some of the functions normally incident to and in progressive prosecution gain or of the purpose or object of the business organization; t shall not be construed as doing The phrase “doing business ii Investments Act of 1991 include soli of commercial provided that passive equity investmen business Jason is the proud owner of a newly-built house worth PS Million. As a protection against any possible loss or damage to his house, Jason applied for a fire insurance policy thereon with Shure Insurance Corporation (Shure) on October 11, 2016 and paid the premium in cash, It took the company a week to approve Jason's application. On October 18, 2016, Shure mailed the approved policy to Jason which the latter received five (5) days later. However, Jason's house had been razed by fire which transpired a day before his receipt of the approved policy. Jason filed a written claim with Shure under the insurance policy. Shure prays for the denial of the claim on the ground that the theory of cognition applies to contracts of insurance.i son (5Y Decide Jason’s claim with reason (5%) cognition theory whereby me the applicant came to In this case, the loss ptance by Shure of Jason is insurance contract is the ¢ the insurance contract is perfected only from the ti know of the acceptance of the offer by the insurer. occurred a day prior to Jason's knowledge of the acce Elbe, Jason’s application. There being no perfected insurance con act, not entitled to recover from Shure. No. What gover ALTERNATIVE ANSWER: The insurance contract may be deemed perfected allowing Jason to recover from Shure if there is a binding note or cover receipt duly issued by Shure to Jason. ML ABC Appliances Corporation (ABC) is a domestic corporation engaged in the production and sale of televisions and other appliances. YYY Engineers, a Taiwanese company, is the manufacturer of television and other appliances from whom ABC actually purchases appliances. From 2000, when ABC started doing business with YYY, it has been using the mark “TTubes” in the Philippines for the television units that were bought from YYY. In 2015, YYY filed a trademark application for “Tubes”. Later, ABC also filed its application. Both claim the right over the trademark “TTubes” for television products. YYY relies on the principle of “first to file” while ABC involves the “doctrine of prior use” [a] Does the fact that YYY filed its application ahead of ABC mean that YYY has the prior right over the trademark? Explain briefly. (2.5%) SUGGESTED ANSWE. [a] No. Since YYY is not the owner of the trademark, it has no right to apply for registration. Registration of trademark, by itself, is not a mode of acquiring ownership. It is the ownership of a trademark that confers the right to register the same (Birkenstock Orthopaedia GMBH ». Philippine Shoe Expo Marketing Corporation, GR No. 194307, November 20, 2013). {b] Does the prior registration also mean a conclusive assumption that YYY Engineers is in fact the owner of the trademark “TTubes” Briefly explain your answer. (2.5%)Ib] No. Registration mere ity of the registra trademar creates a prima facie presumption of the on of the registrant's ownership of the and the exclusive right to the use thereof, The presumption of ownership accorded to a registrant is rebuttable and must yield to evidence to the contrary. IV X's “MINI-ME" burgers are bestsellers in the country. Its “MINI-ME” Logo, which bears the color blue, is a registered mark and has been so since the year 2010. Y, a competitor of X, has her own burger which she named “ME- TOO” and here logo thereon is printed in bluish-green. When X sued Y for trademark infringement, the trial court ruled in favor of the plaintiff by applying the Holistic Test. The court held that Y infringed on X’s mark since the dissimilarities between the two marks are too trifling and frivolous such that Y's “ME-TOO, “ when compared to X's “MINI-M!I will likely cause confusion among consumers. Is the application of the Holistic Test correct? (5%) IGGESTED ANSWER: The application of the Holistic Test is not correct. In cases involving burger products, the Supreme Court has consistently applied the dominancy test. Under the dominancy test, the focus is on the dominant feature of the competing trademarks. Big Mak has been held to be confusingly similar with Big Mac and so with MeDo and Mejoyboth under the dominancy test. Accordingly, MINI-ME trademark is confusingly similar with the ME-TOO mark (McDonald's Corporation v. LC Big Mak Burger, Inc, GR No. 143993, August 18, 2004). v MS Brewery Corporation (MS) is a manufacturer and distributor of the popular beer “MS Lite.” It faces stiff competition from BA Brewery Corporation (BA) whose sales of its own beer product, “BA Lighter,” has soared to new heights. Meanwhile, sales of the “MS Lite” decreased considerably. ‘The distribution and marketing personnel of MS later discovered that BA has stored thousands of empty bottles of “MS Lite” manufactured by MS in one of its 3