TRADEMARK CASES

IPC Sections 161-170

Submitted to:

PROS. MA. ELENA HOFILEÑA-GEROCHI

Submitted by:

Group 4

SORIANO, Carisa C.
SUMAGUIO, Bill Stephen M.
SUPETRAN, Hanna L.
TUNGALA, Garry Nee G.
VILLALOBOS, Rhoda Crisnelle C.
ZARAGOZA, Ma. Lordjena E.
 TABLE OF CONTENTS

Title of the Case G.R. No. Section

1. Samson vs Cabanos 161693 Secs. 163, 170

2. Coffee Partners, Inc. vs San 169504 Sec. 165
Francisco Coffee
3. GSIS Family Bank – Thrift Bank vs 175278 Sec. 165
BPI Family Bank
4. Coca-cola Bottlers vs Quintin 154491 Sec. 168
Gomez
5. McDo vs L.C. Big Mak 143993 Sec. 168
6. Ana Ang vs Teodoro L-48226 Sec. 168
7. Pearl and Dean vs Shoemart 148222 Sec. 168
8. Mighty Corp. vs E.&J. Gallo Winery 154342 Sec. 168
9. Shell Co. vs Insular Petroleum L-19441 Sec. 168
10. Converse Rubber vs Jacinto 27425 Sec. 168
Rubber
11.Del Monte vs Court of Appeals L-78325 Sec. 168
12. Century Chinese vs People 188526 Sec. 168, 170
13. Torres vs Perez 188225 Sec. 168, 170
14. San Miguel Purefoods Company 217781 Sec. 168
vs Foodsphere
15. Uyco vs Vicente Lo 202423 Sec. 169
16. Willaware vs Jesichris 195549 Sec. 169
17. Batistis vs People 181571 Sec. 170
18. Caterpillar Inc. vs Samson 205972 Sec. 170
G.R. No. 161693 June 28, 2005

MANOLO P. SAMSON, petitioner,

vs.
HON. VICTORIANO B. CABANOS, In his capacity as Acting Presiding Judge, Regional
Trial Court of Antipolo City, Branch 71,
PEOPLE OF THE PHILIPPINES and CATERPILLAR, INC., respondents

FACTS:

Petitioner was charged with the crime of unfair competition before the RTC of Antipolo City. That
on or about the first week of November 1999 and sometime prior or subsequent thereto, in Cainta,
Rizal, Philippines, and within the jurisdiction of this Honorable Court, above-named accused,
owner/proprietor of ITTI Shoes Corporation located at F.P. Felix Avenue, Cainta, Rizal, did then
and there willfully, unlawfully and feloniously distribute, sell and/or offer for sale CATERPILLAR
products such as footwear, garments, clothing, bags, accessories and paraphernalia which are
closely identical to and/or colorable imitations of the authentic Caterpillar products and likewise
using trademarks, symbols and/or designs as would cause confusion, mistake or deception on
the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior
adopter, user and owner of the following internationally famous marks: "CATERPILLAR", "CAT",
"CATERPILLAR", "CAT", "CATERPILLAR & DESIGN", "CAT AND DESIGN", "WALKING
MACHINES" and "TRACK-TYPE TRACTOR & DESIGN".Petitioner moved to quash the
information on the ground that the court has no jurisdiction over the offense charged in the
Information. He argued that Section 170 of Republic Act (R.A.) No. 82934 provides that the
penalty for violation of Section 168 thereof is imprisonment from two (2) to five (5) years and a
fine ranging from fifty thousand pesos (P50,000.00) to two hundred thousand pesos
(P200,000.00), and R.A. No. 76915 amending Batas Pambansa (B.P.) Blg. 1296 vested the
Metropolitan Trial Courts (MTC) exclusive original jurisdiction over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the amount of the fine. Presiding Judge
Felix S. Caballes denied the motion for lack of merit in his order dated January 22, 2003.Petitioner
filed the instant Petition for Certiorari before this Court on pure question of law

ISSUE:

Whether or not the respondent Regional Trial Court has jurisdiction over the offenses charged in
the subject information where the penalty therein range from two (2) years to five (5) years,
pursuant to Section 170 of R.A. 8293, in the light of the enactment of Republic Act No. 7691,
amending B.P. Blg. 129, which vests exclusive original jurisdiction on the Metropolitan Trial Courts
over all offenses punishable with "imprisonment not exceeding six (6) years irrespective of the
amount of fine", in relation to Section 163 of R.A. No. 8293.10

RULING:

The petition must be dismissed.It appears that petitioner had already raised the same issue and
argument before this Court in the case of Samson v. Daway,12 decided on July 21, 2004. That
case involved exactly the same facts and issue as in this case, except that the information for
unfair competition against petitioner was filed before the RTC of Quezon City. We held in that
case:The issues posed for resolution are - (1) Which court has jurisdiction over criminal and civil
cases for violation of intellectual property rights? xxx
Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty
for infringement of registered marks, unfair competition, false designation of origin and false
description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty
Thousand Pesos to Two Hundred Thousand Pesos, to wit:

SEC. 170. Penalties. - Independent of the civil and administrative 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 (P50,000.00) to Two hundred thousand pesos (P200,000.00) shall be imposed
on any person who is found guilty of committing any of the acts mentioned in Section 155
[Infringement], Section 168 [Unfair Competition] and Section 169.1 [False Designation of Origin
and False Description or Representation].

Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under
Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with
appropriate jurisdiction under existing laws, thus -

SEC. 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164 and 166 to 169 shall
be brought before the proper courts with appropriate jurisdiction under existing laws. (Emphasis
supplied)
The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over cases for infringement of registered marks,
unfair competition, false designation of origin and false description or representation, is lodged
with the Court of First Instance (now Regional Trial Court) -
SEC. 27. Jurisdiction of Court of First Instance. - All actions under this Chapter [V - Infringement]
and Chapters VI [Unfair Competition] and VII [False Designation of Origin and False Description
or Representation], hereof shall be brought before the Court of First Instance.

We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No.
8293. The repealing clause of R.A. No. 8293
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it
would not have used the phrases "parts of Acts" and "inconsistent herewith;" and it would have
simply stated "Republic Act No. 165, as amended; Republic Act No. 166, as amended; and
Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including
Presidential Decree No. 285, as amended are hereby repealed." It would have removed all doubts
that said specific laws had been rendered without force and effect. The use of the phrases "parts
of Acts" and "inconsistent herewith" only means that the repeal pertains only to provisions which
are repugnant or not susceptible of harmonization with R.A. No. 8293.

Digested by: Bill Stephen M. Sumaguio

G.R. No. 169504 March 3, 2010

COFFEE PARTNERS, INC., Petitioner,

vs.
SAN FRANCISCO COFFEE & ROASTERY, INC., Respondent.

FACTS:

Petitioner Coffee Partners, Inc (CPI). is a local corporation engaged in the business of
establishing and maintaining coffee shops in the country. It registered with the Securities and
Exchange Commission (SEC) in January 2001. It has a franchise agreement with Coffee Partners
Ltd., a business entity organized and existing under the laws of British Virgin Islands, for a non-
exclusive right to operate coffee shops in the Philippines using trademarks designed by CPL such
as “SAN FRANCISCO COFFEE”. On the other hand, respondent is a local corporation engaged
in the wholesale and retail sale of coffee. It is registered with the SEC in May 1995. It registered
the business name "SAN FRANCISCO COFFEE & ROASTERY, INC (SFCRI)." with the
Department of Trade and Industry (DTI) in June 1995.

In June 2001, respondent SFCRI discovered that petitioner CPI was about to open a coffee shop
under the 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 business of selling coffee. However, petitioner points out that respondent’s
registration of its business name (trade 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 to seek the renewal of its business name registration. Petitioner stresses
respondent’s failure to continue the use of its trade name to designate its goods negates any
allegation of infringement.

ISSUE:

Whether or not CPI’s use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement
of SFCRI’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC.," even if the trade name
is not registered with the Intellectual Property Office (IPO).

RULING:

YES. A trade name need not be registered with the IPO before an infringement suit may be filed
by its owner against the owner of an infringing trademark. All that is required is that the trade
name is previously used in trade or commerce in the Philippines. It is the likelihood of confusion
that is the gravamen of infringement. 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.

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

Applying either the dominancy test or the holistic test, petitioners "SAN FRANCISCO COFFEE"
trademark is a clear infringement of respondents "SAN FRANCISCO COFFEE & ROASTERY,
INC." trade name. The descriptive words "SAN FRANCISCO COFFEE" are precisely the
dominant features of respondent’s 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.

Digested by: Garry Nee G. Tungala

G.R. NO. 175278 September 23, 2015

GSIS FAMILY BANK - THRIFT BANK [Formerly Inc.], Petitioner,

vs.
BPI FAMILY BANK, Respondent.

FACTS:

Petitioner was originally organized as Royal Savings Bank it was placed under receivership and
later temporarily closed. Petitioner reopened and was renamed Comsavings Bank.

Government Service Insurance System (GSIS) acquired petitioner from the Commercial Bank of
Manila. Petitioner sought Securities and Exchange Commission (SEC) approval to change its
corporate name to "GSIS Family Bank, a Thrift Bank.

Petitioner likewise applied with the Department of Trade and Industry (DTI) and Bangko Sentral
ng Pilpinas (BSP) for authority to use "GSIS Family Bank, a Thrift Bank" as its business name.
The DTI and the BSP approved the applications.

Respondent BPI Family Bank

Since its incorporation, the bank has been commonly known as "Family Bank."

In 1985, Family Bank merged with BPI. BPI Family Savings Bank was registered with the SEC
Eventually, it reached respondent's attention that petitioner is using or attempting to use the name
"Family Bank."

Thus, on March 8, 2002, respondent petitioned the SEC Company Registration and Monitoring
Department (SEC CRMD) to disallow or prevent the registration of the name "GSIS Family Bank"
or any other corporate name with the words "Family Bank" in it.

ISSUE:

Whether or not the business name used is identical, deceptively or confusingly similar?

RULING:

YES.

The Court ruled that to fall within the prohibition of the law on the right to the exclusive use of a
corporate name, two requisites must be proven:
(1) the complainant corporation must have acquired a prior right over the use of such corporate
name and
(2) the proposed name is either identical or deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or patently deceptive, confusing or
contrary to existing law.

Both these requisites are present in the case.

a. Respondent was incorporated in 1969 as Family Savings Bank and in 1985 as BPI Family
Bank. Petitioner, on the other hand, was incorporated as GSIS Family - Thrift Bank only in 2002,
or at least seventeen (17) years after respondent started using its name. The respondent has the
prior right over use of the corporate name.
b. The words "Family Bank" present in both petitioner and respondent's corporate name satisfy
the requirement that there be identical names. Petitioner's corporate name is "GSIS Family
Bank—A Thrift Bank" and respondent's corporate name is "BPI Family Bank." The only words
that distinguish the two are "BPI," "GSIS," and "Thrift." The first two words are merely the
acronyms of the proper names by which the two corporations identify themselves; and the third
word simply describes the classification of the bank. The overriding consideration in determining
whether a person, using ordinary care and discrimination, might be misled is the circumstance
that both petitioner and respondent are engaged in the same business of banking. "The likelihood
of confusion is accentuated in cases where the goods or business of one corporation are the
same or substantially the same to that of another corporation."

Judicial notice may also be taken of the action of the IPO in approving respondent’s registration
of the trademark "BPI Family Bank" and its logo on October 17, 2008. The certificate of registration
of a mark shall be prima facie evidence of the validity of the registration, 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.

Digested by: Ma. Lordjena E. Zaragosa

G.R. No. 154491 November 14, 2008

COCA-COLA BOTTLERS, PHILS., INC. (CCBPI), Naga Plant, petitioner,

vs.
QUINTIN J. GOMEZ, a.k.a. "KIT" GOMEZ and DANILO E. GALICIA, a.k.a. "DANNY
GALICIA", respondents.

FACTS:

Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke bottles
in Pepsi’s yard, an act allegedly penalized as unfair competition under the IP Code. MTC issued
the search warrants and the local police seized the goods. Later, a complaint against respondents
was filed for violation of the IP Code. Respondent contended that the hoarding of empty Coke
bottles did not involve fraud and deceit for them to be liable for unfair competition. MTC upheld
the validity of the warrants. RTC voided the warrant for lack of probable cause of the commission
of unfair competition.

ISSUE:

Whether or not respondent’s hoarding of Coke bottles constitute unfair competition.

RULING:

In the context of the present case, the question is whether the act charged - alleged to be hoarding
of empty Coke bottles - constitutes an offense under Section 168.3 (c) of the IP Code.
SECTION 168. Unfair Competition, Rights, Regulation and Remedies.

168.1. A person who has identified in the mind of the public the goods he manufactures or deals
in, his business or services from those of others, whether or not a registered mark is employed,
has a property right in the goodwill of the said goods, business or services so... identified, which
will be protected in the same manner as other property rights.

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

The petitioner theorizes that the above section does not limit the scope of protection on the
particular acts enumerated as it expands the meaning of unfair competition to include "other acts
contrary to good faith of a nature calculated to discredit the goods, business or... services of
another." Allegedly, the respondents' hoarding of Coca Cola empty bottles is one such act.
We do not agree with the petitioner's expansive interpretation of Section 168.3 (c).

What unfair competition is, is further particularized under Section 168.3 when it provides specifics
of what unfair competition is "without in any way limiting the scope of protection against unfair
competition." Part of these particulars is provided under Section 168.3(c)... which provides the
general "catch-all" phrase that the petitioner cites. Under this phrase, a person shall be guilty of
unfair competition "who shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of... another."
The critical question, however, is not the intrinsic unfairness of the act of hoarding; what is...
critical for purposes of Section 168.3 (c) is to determine if the hoarding, as charged, "is of a nature
calculated to discredit the goods, business or services" of the petitioner.
Under all the above approaches, we conclude that the "hoarding" - as defined and charged by
the petitioner - does not fall within the coverage of the IP Code and of Section 168 in particular. It
does not relate to any patent, trademark, trade name or service mark that the... respondents have
invaded, intruded into or used without proper authority from the petitioner.
In this light, hoarding for purposes of destruction is closer to what another law - R.A. No. 623
If it serves any purpose at all in our discussions, it is to show that the underlying factual situation
of the present case is in fact covered by another law, not by the IP Code that the petitioner cites.
Viewed in this light, the lack of probable cause to support the disputed search warrant at once
becomes apparent.

Digested by: Bill Stephen M. Sumaguio

G.R. No. 143993 August 18, 2004

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

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

Facts:

Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation organized under the laws of

Delaware, United States. McDonald’s operates a global chain of fast-food restaurants.
McDonald’s own a family of marks including the “Big Mac” mark for its double-decker hamburger
sandwich. McDonald’s registered this trademark with the United States Trademark Registry on
October 16, 1979. Based on this Home Registration, McDonald’s applied for the registration of
the same mark in the Principal Register of then then Philippine Bureau of Patents, Trademarks
and Technology (PBPTT) – now the Intellectual Property Office (IPO).

Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger sandwiches
in the Philippine market in September 1981. On July 18, 1985, the PBPTT allowed registration of
the “Big Mac” mark in the Philippine Register based on its Home Registration in the United States.
From 1982 to 1990, McDonald’s spent P10.5 million in advertisement for “Big Mac” hamburger
sandwiches alone.

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food outlets
and snack vans in Metro Manila and nearby provinces. Its menu includes hamburger sandwiches
and other food items.

On October 21, 1988, respondent corporation applied with the PBPTT for the registration of the
“Big Mak” mark for its hamburger sandwiches. McDonald’s opposed respondent corporation’s
application on the ground that “Big Mak” was a colorable imitation of its registered “Big Mac” mark
for the same food products. On June 6, 1990, petitioners sued respondents in the Regional Trial
Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair competition.

Issues: Whether respondent corporation is liable for (1) trademark infringement and (2) unfair
competition.

Ruling: YES.

1. On the Issue of Trademark Infringement

Republic Act No. 166, Section 22 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation
of any registered mark or trade-name in connection with the sale, offering for sale, or advertising
of any goods, business or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source or origin of such goods
or services, or identity of such business; or [2] reproduce, counterfeit, copy, or colorably imitate
any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.”
To establish trademark infringement, the following elements must be shown: (1) the validity of
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in "likelihood of confusion." Of these, it is the element of
likelihood of confusion that is the gravamen of trademark infringement.

1st element:

A mark is valid if it is distinctive and not merely generic and descriptive.

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is
neither generic nor descriptive. Generic marks are commonly used as the name or description of
a kind of goods, such as "Lite" for beer. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac"
falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.

2nd element:

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior
valid registrants of the said mark had already assigned his rights to McDonald's.

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (confusion in which the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other) and confusion of
business (though the goods of the parties are different, the defendant's product is such as might
reasonably be assumed to originate with the plaintiff, and the public would then be deceived either
into that belief or into the belief that there is some connection between the plaintiff and defendant
which, in fact, does not exist).

There is confusion of goods in this case since respondents used the "Big Mak" mark on the same
goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.

There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale of
hamburgers, the same business that petitioners are engaged in, also results in confusion of
business. The registered trademark owner may use his mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The registered trademark owner enjoys protection
in product and market areas that are the normal potential expansion of his business.

Furthermore, in determining likelihood of confusion, the SC has relied on the dominancy test
(similarity of the prevalent features of the competing trademarks that might cause confusion) over
the holistic test (consideration of the entirety of the marks as applied to the products, including
the labels and packaging).

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of
confusion. Aurally the two marks are the same, with the first word of both marks phonetically the
same, and the second word of both marks also phonetically the same. Visually, the two marks
have both two words and six letters, with the first word of both marks having the same letters and
the second word having the same first two letters.

2. On the Issue of Unfair Competition

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by him
or in which he deals, or his business, or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.”

The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor.

Unfair competition is broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair competition.
Trademark infringement constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the general appearance
of the goods.

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

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. We hold that as found by the
RTC, respondent corporation is liable for unfair competition.

Digested by: Rhoda Crisnelle C. Villalobos

G.R. No. L-48226 December 14, 1942
ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.

FACTS:

Respondent Teodoro has long been using ‘Ang Tibay’ both as trademark and tradename in the
manufacture and sale of its slippers, shoes and indoor baseballs when he formally registered it.
Meanwhile, petitioner Ang registered the same trademark ‘Ang Tibay’ for its products of pants
and shirts. Respondent moved to cancel the registration of petitioner’s mark. The trial court found
for petitioner Ang. CA reversed the judgment. Petitioner argues the validity of the mark being
descriptive; that it had not acquired secondary meaning in favor of respondent; and that there can
be no infringement/unfair competition because the goods are not similar.

ISSUES:

(1) Whether or not ‘ANG TIBAY’ is a descriptive term not registrable.

(2) Whether or not the trademark ‘ANG TIBAY’ has acquired a secondary meaning.
(3) Whether or not there is trademark infringement and/or unfair competition between unrelated
goods.

RULING:

(1) NO. The phrase “Ang Tibay” is an exclamation denoting administration of strength or durability.
For instance, one who tries hard but fails to break an object exclaims, “Ang tibay!” (How strong!”)
The phrase “ang tibay” is never used adjectively to define or describe an object. One does not
say, “ang tibay sapatos” or “sapatos ang tibay” is never used adjectively to define or describe an
object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” to mean “durable shoes,”
but “matibay na sapatos” or “sapatos na matibay.” From all of this we deduce that “Ang Tibay” is
not a descriptive term within the meaning of the Trade-Mark Law but rather a fanciful or coined
phrase which may properly and legally be appropriated as a trademark or tradename. 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 undoubtedly convinced that said words (Ang Tibay)
were not a descriptive term and hence could be legally used and validly registered as a trademark.

(2) NO. 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 geographically or otherwise descriptive, might
nevertheless have been used so long and so exclusively by one producer with reference to his
article that, in that trade and to that branch of the purchasing public, the word or phrase has come
to mean that the article was his product. We have said that the phrase “Ang Tibay,” being neither
geographic nor descriptive, was originally capable of exclusive appropriation as a trade-mark. But
were it not so, the application of the doctrine of secondary meaning made by the Court of Appeals
could nevertheless be fully sustained because, in any event, by respondent’s long and exclusive
use of said phrase with reference to his products and his business, it has acquired a proprietary
connotation.
(3) YES. In the present state of development of the law on Trade-Marks, Unfair Competition, and
Unfair Trading, the test employed by the courts to determine whether noncompeting goods are or
are not of the same class is confusion as to the origin of the goods of the second user. Although
two noncompeting articles may be classified under two different classes by the Patent Office
because they are deemed not to possess the same descriptive properties, they would,
nevertheless, be held by the courts to belong to the same class if the simultaneous use on them
of identical or closely similar trade-marks would be likely to cause confusion as to the origin, or
personal source, of the second user’s goods. They would be considered as not falling under the
same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the
purchaser would think the first user made the second user’s goods. 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 petitioner of the same
trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and
selling power it has acquired at the hands of the respondent.

Digested by: Carisa C. Soriano

G.R. No. 148222 August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,

vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.

FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units simply
referred to as light boxes. PDI was able to secure a Certificate of Copyright Registration, the
advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in certain SM Makati and SM Cubao. PDI submitted for signature
the contracts covering both stores, but only the contract for SM Makati, however, was returned
signed. Eventually, SMI’s informed PDI that it was rescinding the contract for SM Makati due to
non-performance of the terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at different SM stores.
It was further discovered that SMI’s sister company North Edsa Marketing Inc. (NEMI), sells
advertising space in lighted display units located in SMI’s different branches.
PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light boxes,
remove the same from SMI’s establishments and to discontinue the use of the trademark “Poster
Ads,” as well as the payment of compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case for
infringement of trademark and copyright, unfair competition and damages.

SMI maintained that it independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to PDI’s copyright. SMI noted
that the registration of the mark “Poster Ads” was only for stationeries such as letterheads,
envelopes, and the like. Besides, according to SMI, the word “Poster Ads” is a generic term which
cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. On this
basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral, actual
and exemplary damages and for the cancellation of PDI’s Certification of Copyright Registration,
and Certificate of Trademark Registration.

ISSUE:

Whether the owner of a registered trademark legally prevent others from using such trademark if
it is a mere abbreviation of a term descriptive of his goods, services or business.

RULING:

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a
contraction of “poster advertising.” P & D was able to secure a trademark certificate for it, but one
where the goods specified were “stationeries such as letterheads, envelopes, calling cards and
newsletters. ”Petitioner admitted it did not commercially engage in or market these goods. On the
contrary, it dealt in electrically operated backlit advertising units which, however, were not at all
specified in the trademark certificate.
Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P & D to
secure a trademark registration for specific use on the light boxes meant that there could not have
been any trademark infringement since registration was an essential element thereof.

There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As noted
by the Court of Appeals, petitioner’s expert witnesses himself had testified that ‘Poster Ads’ was
too generic a name. So it was difficult to identify it with any company, honestly speaking. ”This
crucial admission that “Poster Ads” could not be associated with P & D showed that, in the mind
of the public, the goods and services carrying the trademark “Poster Ads” could not be
distinguished from the goods and services of other entities.

“Poster Ads” was generic and incapable of being used as a trademark because it was used in the
field of poster advertising, the very business engaged in by petitioner. “Secondary meaning”
means that a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the purchasing public,
the word or phrase has come to mean that the article was his property.

Digested by: Hanna L. Supetran

G.R. No. 154342 July 14, 2004

MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC., petitioner,

vs.
E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC., respondents.

FACTS:

Gallo Winery, producer of wines and brandy products which is based in California, U.S.A.,
registered its GALLO wine trademark in the Philippines in 1971. Gallo Winery produces different
kinds of wines and brandy products and sells them in many countries under different registered
trademarks, including the GALLO and ERNEST & JULIO GALLO wine trademarks.
On the other hand, petitioners Mighty Corporation and La Campana and their sister company,
Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco products for which they have been using the GALLO
cigarette trademark since 1973.
In May 1984, Tobacco Industries assigned the GALLO cigarette trademark to La Campana which,
on July 16, 1985, applied for trademark registration in the Philippine Patent Office. On July 17,
1985, the National Library issued Certificate of Copyright Registration No. 5834 for La Campana
lifetime copyright claim over GALLO cigarette labels.
Subsequently, La Campana authorized Mighty Corporation to manufacture and sell cigarettes
bearing the GALLO trademark.BIR approved Mighty Corporations use of GALLO 100s cigarette
brand, under licensing agreement with Tobacco Industries, on May 18, 1988, and GALLO
SPECIAL MENTHOL 100s cigarette brand on April 3, 1989.

ISSUE:

Whether or not Mighty Corporation, et al. are liable for trademark infringement.

RULING:

NO.The Supreme Court ruled that Mighty Corporation, et al. are not liable for trademark
infringement or unfair competition and reaffirmed the doctrine that the use of an identical mark
does not, by itself, lead to a legal conclusion that there is trademark infringement. A crucial issue
in any trademark infringement case is the likelihood of confusion, mistake or deceit as to the
identity, source or origin of the goods, or identity of the business as a consequence of using a
certain mark.

In determining likelihood of confusion, the Supreme Court considered the following factors: [a] the
resemblance between the trademarks; [b] the similarity of the goods to which the trademarks are
attached; [c] the likely effect on the purchaser; and [d] the registrant's express or implied consent
and other fair and equitable considerations.

The Supreme Court distinguished between GALLO wines and GALLO cigarettes as follows: (1)
wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages
and smoked; (2) there is a whale of a difference between their descriptive properties, physical
attributes or essential characteristics like form, composition, texture and quality; (3) GALLO
cigarettes are inexpensive items that appeal only to simple folks like farmers, fishermen, laborers
and other low-income workers while GALLO wines are patronized by middle-to-high-income
earners; and (4) GALLO cigarettes are distributed through sidewalk vendors, sari-sari stores and
grocery stores in rural areas, mainly in Misamis Oriental, Pangasinan, Bohol, and Cebu, whereas
GALLO wines are imported and exclusively distributed by a local entity and sold in hotels,
expensive bars and restaurants, and high-end grocery stores and supermarkets.

Based on these distinctions, the High Tribunal declared that wines and cigarettes are non-
competing and totally unrelated products which are not likely to cause confusion vis-à-vis the
goods or business of Gallo Winery and Mighty Corporation, et al. Thus, even though similar marks
are used, there is no trademark infringement if the public does not expect the plaintiff to make or
sell the same class of goods as those made or sold by the defendant.

Digested by: Garry Nee G. Tungala

G.R. No. L-19441 June 30, 1964

SHELL COMPANY OF THE PHILIPPINES, LTD., petitioner,

vs.
INSULAR PETROLEUM REFINING CO., LTD., and COURT OF APPEALS, respondents

FACTS:

Conrado Uichangco, an operator of a Shell service station a certain F. Pecson Lozano, an agent
of the defendant, "tried to convince me that Insoil is a good oil". As a matter of fact, he tried to
show me a chemical analysis of Insoil which he claimed was very close to the analysis of Shell
oil; and he also told me that he could sell this kind of oil (Insoil) to me at a much cheaper price so
that I could make a bigger margin of profits."

The incident between petitioner's operator and respondent's agent, brought about a case for
damages on the allegation of unfair competition and a Criminal Case No. 42020 under the
Revised Penal Code (Art. 189) against Donald Mead, Manager, Pedro Kayanan and F. Tecson
Lozano. In the criminal case, the accused therein were acquitted. In the civil case, the trial court
ruled in favor of Shell. However, it was reversed by CA. Hence, this petition.

ISSUE:

Whether or not the defendant is guilty of unfair competition

RULING:

NO.

The single transaction at bar will not render defendant's act an unfair competition, much in the
same way that the appearance of one swallow does not make a season, summer. It was found
by the Court of Appeals that in all transactions of the low-grade Insoil, except the present one, all
the marks and brands on the containers used were erased or obliterated. The drum in question
did not reach the buying public. It was merely a shell dealer or an operator of a Shell Station who
purchased the drum not to be resold to the public, but to be sold to the petitioner company, with
a view of obtaining evidence against someone who might have been committing unfair business
practices, for the dealer had found that his income was dwindling in his gasoline station.

Digested by: Ma. Lordjena E. Zaragoza

G.R. Nos. L-27425 & L-30505 April 28, 1980

CONVERSE RUBBER CORPORATION and EDWARDSON MANUFACTURING

CORPORATION, plaintiffs-appellants,
vs.
JACINTO RUBBER & PLASTICS CO., INC., and ACE RUBBER & PLASTICS
CORPORATION, defendants-appellants.

FACTS:

This is an action for unfair competition. Plaintiff Converse Rubber Corporation, (is) an American
Corporation, manufacturer (of) canvas rubber shoes under the trade name “Converse Chuck
Taylor All Star”; in the Philippines, it has an exclusive licensee, plaintiff Edwardson Manufacturing
Corporation, for the manufacture and sale in the Philippines of its product. In 1963, plaintiff
Converse and defendant Jacinto entered into protracted negotiations for a licensing agreement
whereby defendant Jacinto would be the exclusive license of plaintiff Converse in the Philippines
for the manufacture and sale of "Chuck Taylor" shoes but with the right to continue manufacturing
and selling its own products. One of the points taken up by parties was the design and general
appearance of "Custombuilt" shoes. Plaintiff Converse insisted on the condition that defendant
Jacinto change the design of "Custombuilt" shoes so as to give "Custombuilt" a general
appearance different from "Chuck Taylor."

After an extensive discussion, defendant Jacinto gave into to the demand of plaintiff Converse; it
submitted to plaintiff Converse for the latter's approval a sketch of a new design for "Custombuilt".
This design was accepted by plaintiff Converse. Defendant Jacinto Rubber then proposed that
the licensing agreement be made in favor of its affiliates, defendant Ace Rubber. However, the
licensing agreement did not materialize, because Hermogenes Jacinto refused to sign the
guarantee. plaintiffs sent a written demand to defendants to stop manufacturing and selling
"Custombuilt" shoes of Identical appearance as "Chuck Taylor". Defendants did not reply to
plaintiffs' letter. Hence, this suit. Plaintiffs contend that "Custombuilt" shoes are Identical in design
and General appearance to "Chuck Taylor" and, claiming prior Identification of "Chuck Taylor" in
the mind of the buying public in the Philippines, they contend that defendants are guilty of unfair
competition by selling "Custombuilt" of the design and with the general appearance of "Chuck
Taylor".

ISSUE:

Whether or not the court a quo erred in arriving at the conclusion that the defendants are guilty of
unfair competition when defendant Jacinto Rubber & Plastics Co., Inc., manufactured and sold
rubber-soled canvass shoes under its registered trade mark "Custombuilt".

RULING:

From said examination, We find the shoes manufactured by defendants to contain, as found by
the trial court, practically all the features of those of the plaintiff Converse Rubber Corporation
and manufactured, sold or marketed by plaintiff Edwardson Manufacturing Corporation, except
for heir respective brands, of course. We fully agree with the trial court that “the respective
designs, shapes, the colors of the ankle patches, the bands, the toe patch and the soles of the
two products are exactly the same ... (such that) at a distance of a few meters, it is impossible to
distinguish “Custombuilt” from “Chuck Taylor”. These elements are more than sufficient to serve
as basis for a charge of unfair competition. Even if not all the details just mentioned were Identical,
with the general appearances alone of the two products, any ordinary, or even perhaps even a
not too perceptive and discriminating customer could be deceived, and, therefore, Custombuilt
could easily be passed off for Chuck Taylor. Jurisprudence supports the view that under such
circumstances, the imitator must be held liable. In R. F. & J. Alexander & Co. Ltd. Et al. Vs. Ang
et al., 97 Phil. 157, at p. 160, this Court held:

By “purchasers” and “public” likely to be deceived by the appearance of the goods, the statute
means the “ordinary purchaser”. And although this Court apparently shifted its position a bit in Dy
Buncio vs. Tan Tiao Bok, 42 Phil. 190, by referring to simulations likely to mislead “the ordinarily
intelligent buyer”, it turned to the general accepted doctrine in E. Spinner & Co. Vs. Neuss
Hesslein, 54 Phil. 224, where it spoke of “the casual purchasers” “who knows the goods only by
name.”

It stands to reason that when the law speaks of purchasers’ it generally refers to ordinary or
average purchasers.

... in cases of unfair competition, while the requisite degree of resemblance or similarity between
the names, brands, or other indicia is not capable of exact definition, it may be stated generally
that the similarity must be such, but need only be such, as is likely to mislead purchasers of
ordinary caution and prudence; or in other words, the ordinary buyer, into the belief that the goods
or wares are those, or that the name or business is that, of another producer or tradesman. It is
not necessary in either case that the resemblance be sufficient to deceive experts, dealers, or
other persons specially familiar with the trademark or goods involved. Nor is it material that a
critical inspection and comparison would disclose differences, or that persons seeing the
trademarks or articles side by side would not be deceived (52 Am. Jur. Pp. 600-601). (Brief for
Plaintiffs as Appellees, pp. 28-29, p. 71, Record.)

Indeed, the very text of the law on unfair competition in this country is clear enough

Digested by: Bill Stephen M. Sumaguio

G.R. No. L-78325 January 25, 1990

DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION, petitioners,

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

FACTS:

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized

under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.

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

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration

by the Bureau of Domestic Trade on April 17, 1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. The
product itself was contained in various kinds of bottles, including the Del Monte bottle, which the
private respondent bought from the junk shops for recycling.

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

ISSUE:

Whether respondent is guilty of infringement and unfair competition.

RULING:

YES.

Section 22 of Republic Act No. 166 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation
of any registered mark or trade-name in connection with the sale, offering for sale, or advertising
of any goods, business or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source or origin of such goods
or services, or identity of such business; or [2] reproduce, counterfeit, copy, or colorably imitate
any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.”

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by him
or in which he deals, or his business, or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.”

The Supreme Court recognizes that there are really distinctions between the designs of the logos
or trademarks of Del Monte and Sunshine Sauce. However, it has been correctly held that side-
by-side comparison is not the final test of similarity. Even if the labels were analyzed together it
is not difficult to see that the Sunshine label is a colorable imitation of the Del Monte trademark.
The predominant colors used in the Del Monte label are green and red-orange, the same with
Sunshine. The word "catsup" in both bottles is printed in white and the style of the print/letter is
the same. Although the logo of Sunshine is not a tomato, the figure nevertheless approximates
that of a tomato.

As previously stated, the person who infringes a trade mark does not normally copy out but only
makes colorable changes, employing enough points of similarity to confuse the public with enough
points of differences to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a boundless choice of words,
phrases, colors and symbols sufficient to distinguish his product from the others. When as in this
case, Sunshine chose, without a reasonable explanation, to use the same colors and letters as
those used by Del Monte though the field of its selection was so broad, the inevitable conclusion
is that it was done deliberately to deceive.

Digested by: Rhoda Crisnelle C. Villalobos

G.R. No. 188526 November 11, 2013

CENTURY CHINESE MEDICINE CO., MING SENG CHINESE DRUGSTORE, XIANG JIAN
CHINESE DRUG STORE, TEK SAN CHINESE DRUG STORE, SIM SIM CHINESE DRUG
STORE, BAN SHIONG TAY CHINESE DRUG STORE and/or WILCENDO TAN MENDEZ,
SHUANG YING CHINESE DRUGSTORE, and BACLARAN CHINESE DRUG
STORE, Petitioners,
vs.
PEOPLE OF THE PHILIPPINES and LING NA LAU, Respondents.

FACTS:

Respondent Ling Na Lau, doing business under the name and style Worldwide Pharmacy, is the
sole distributor and registered trademark owner of TOP GEL T.G. & DEVICE OF A LEAF papaya
whitening soap for a period of ten years from 2003. Respondent claims that the petitioners in this
case were selling counterfeit whitening papaya soaps bearing the general appearance of their
products. There was an investigation, which led to seizures of the petitioner's products because
the NBI ruled that it was counterfeit.

Petitioners contend that the products seized from their respective stores cannot be the subject of
the search warrants and seizure as those Top Gel products are not fruits of any crime, infringed
product nor intended to be used in any crime; that they are legitimate distributors who are
authorized to sell the same, since those genuine top gel products bore the original
trademark/tradename of TOP GEL MCA, owned and distributed by Yu. Petitioners also claim that
despite the RTC's order to release the seized TOP GEL products, not one had been returned;
that one or two samples from each petitioner's' drugstore would have sufficed in case there is a
need to present them in a criminal prosecution, and that confiscation of thousands of these
products was an overkill. Petitioners also argue that the issue that the RTC erred in applying the
rules on search and seizure in anticipation of a civil action was never raised in the RTC.

ISSUE:

Whether or not the CA erred in reversing the RTC's quashal of the assailed search warrants.

RULING:

The petition has no merit.

The applications for the issuance of the assailed search warrants were for violations of Sections
155 and 168, both in relation to Section 170 of Republic Act (RA) No. 8293, otherwise known as
the Intellectual Property Code of the Philippines. Section 155, in relation to Section 170, punishes
trademark infringement; while Section 168, in relation to Section 170, penalizes unfair competition

Sec. 168. Unfair Competition, Rights, Regulation and Remedies. –

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

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

And

SEC. 170. Penalties. - Independent of the civil and administrative 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 (₱50,000.00) to Two hundred thousand pesos (₱200,000.00) shall be imposed
on any person who is found guilty of committing any of the acts mentioned in Section 155
[Infringement], Section 168 [Unfair Competition] and Subsection 169.1 [False Designation of
Origin and False Description or Representation].

Digested by: Ma. Lordjena E. Zaragoza

G.R. No. 188225 November 28, 2012

SHIRLEY F. TORRES, Petitioner,

vs.
IMELDA PEREZ and RODRIGO PEREZ, Respondents.

FACTS:

Before the Court are Petitions for Review on Certiorari. The petition assails the Decision of the
Court of Appeals (CA) which nullified the Orders of the Regional Trial Court (RTC) which had
denied the Motion to Dismiss and/or Withdraw Information filed against respondents for unfair
competition under (Intellectual Property Code of the Philippines).

Respondents Imelda and Rodrigo are spouses who own RGP Footwear Manufacturing (RGP),
which supplies ladies' shoes to Shoe Mart (SM). Sasay's Closet Co. (SCC), was engaged in the
supply, trading, retailing of garments such as underwear, children's wear, women's and men's
wear, and other incidental activities related thereto. For its products, SCC used the trademark
"Naturals with Design," which it filed with the Intellectual Property Office on 24 August 2005 and
registered on 26 February 2007. These products were primarily supplied to SM, which assigned
to them the vendor code "190501" for purposes of identification. Respondent Imelda took over
Sunshine's responsibilities in the partnership.

Respondent Imelda then informed petitioner of the former's decision to dissolve the partnership.
Despite the objections of petitioner to the dissolution of SCC, various amounts were paid to her
by respondents from January to April 2006 representing her share in the partnership assets.
Meanwhile, on 27 March 2006, petitioner established Tezares Enterprise, a sole proprietorship
engaged in supplying and trading of clothing and accessories except footwear. Also in March
2006, she discovered that underwear products bearing the brand "Naturals" were being sold in
SM with vendor code "180195." This code was registered to RGP, a fact confirmed by test buys
conducted by her lawyers on 13 and 14 May 2006.

On 5 June 2006, a search warrant for unfair competition under Section 168 in relation to Section
170 of R.A. 8293 was issued by the RTC of Manila, Branch 24, against respondents at their
address. However, it was quashed by the same court on 20 October 2006 upon motion of
respondents. On 9 June 2006, petitioner filed a criminal complaint for unfair competition against
respondents and Sunshine before the City Prosecution Office. Assistant City Prosecutor Imelda
P. Saulog found probable cause to indict respondents for unfair competition. The indictment was
raffled to RTC Makati City, Branch 149. On 23 October 2006, it issued an Order finding probable
cause for the issuance of a warrant of arrest against respondents.

Respondents filed a petition for review of the prosecutor's resolution before the Department of
Justice (DOJ), which on 13 December 2006 issued its own Resolution reversing the finding of
existence of probable cause against them. The DOJ denied the motion for reconsideration filed
by petitioner on 28 March 2007. Hence, she filed a petition for certiorari before the CA, where it
was docketed as CA-G.R. SP No. 98861. In her petition, she questioned the DOJ Resolution, but
later withdrew the same on 6 December 2007 for an unknown reason.
Following the directive of the DOJ, the prosecutor filed before the RTC of Makati City, Branch
149, a Motion to Dismiss and/or Withdraw Information on 3 April 2007. The trial court denied the
motion in an Order dated 12 February 2008. Respondents moved for reconsideration, but their
motion was denied by the RTC. Aggrieved, they filed a Petition for Certiorari (with Prayer for the
Issuance of a Temporary Restraining Order and thereafter a Preliminary Injunction) before the
CA. In the first assailed Decision of the CA dated 11 March 2009, the CA granted the petition.
The CA sustained the position of respondents that the finding of probable cause for the filing of
an information is an executive function lodged with the prosecutor.

Petitioner moved for reconsideration of the CA Decision, but the motion was denied. She then
brought the matter before this Court via a Petition for Review on Certiorari filed under Rule 45 of
the Rules of Court. Without giving due course to the petition, the Court required respondents to
comment thereon. Upon their compliance, petitioner was required to file a reply, which was later
received on 11 December 2009. On 19 May 2011, she filed her Memorandum.

Meanwhile, following the promulgation of the Decision in CA, respondents filed an Urgent Motion
to Dismiss the criminal complaint for unfair competition before the RTC on 1 April 2009. The
motion was duly opposed by petitioner, arguing that the CA Decision had not yet attained finality
in view of her pending petition before this Court; thus, the motion was premature. The RTC denied
the motion to dismiss for lack of merit. However, upon motion for reconsideration filed by
respondents, it issued the Order dated 29 July 2009 ordering the quashal of the Information
against them. The trial court issued another Order on 19 October 2009 denying petitioner's Motion
for Reconsideration. Petitioner filed a Petition for Certiorari before the CA on the ground that the
trial judge committed grave abuse of discretion amounting to lack or excess of jurisdiction when
he quashed the Information against respondents based on a CA Decision that was not yet final
and executory, being the subject of a petition still pending before this Court. On 29 September
2011, the CA issued the second assailed Decision in CA-G.R. SP No. 111903 affirming the RTC
Orders dated 29 July 2009 and 19 October 2009. Opting not to file a motion for reconsideration,
petitioner again comes before us on a Petition for Review on Certiorari questioning the Decision
in CA.

ISSUE:

Whether there exists probable cause to indict respondents for unfair competition (violation of
Section 168 in relation to Section 170) under R.A. 8293.

RULING:

We now rule on the issue of probable cause. Probable cause, for purposes of filing a criminal
information, is described as "such facts as are sufficient to engender a well-founded belief that a
crime has been committed and the respondent is probably guilty thereof, and should be held for
trial." Thus, the determination of the existence of probable cause necessitates the prior
determination of whether a crime or an offense was committed in the first place. Here, we find
that there was no probable cause to indict respondents, because the crime of unfair competition
was not committed. In positing that respondents were guilty of unfair competition, petitioner makes
a lot of the fact that they used the vendor code of RGP in marketing the "Naturals" products. She
argues that they passed off the "Naturals" products, which they marketed under RGP, as those
of SCC; thus, they allegedly prejudiced the rights of SCC as owner of the trademark. She also
claims that she has the personality to prosecute respondents for unfair competition on behalf of
SCC.

When Judge Untalan denied the Motion to Dismiss and/or Withdraw Information filed by the
prosecution and thereby sustained the position of petitioner, his error lay in the fact that his focus
on the crime of unfair competition was unwarranted. In this case, much more important than the
issue of protection of intellectual property is the change of ownership of SCC. The arguments of
petitioner have no basis, because respondents are the exclusive owners of SCC, of which she is
no longer a partner.

Based on the findings of fact of the CA and the DOJ, respondents have completed the payments
of the share of petitioner in the partnership affairs. Having bought her out of SCC, respondents
were already its exclusive owners who, as such, had the right to use the "Naturals" brand. The
use of the vendor code of RGP was resorted to only for the practical purpose of ensuring that
SM's payments for the "Naturals" products would go to respondents, who were the actual
suppliers.

Furthermore, even if we were to assume that the issue of protection of intellectual property is
paramount in this case, the criminal complaint for unfair competition against respondents cannot
prosper, for the elements of the crime were not present. We have enunciated in CCBPI v. Gomez
that the key elements of unfair competition are "deception, passing off and fraud upon the public."
No deception can be imagined to have been foisted on the public through different vendor codes,
which are used by SM only for the identification of suppliers' products.

WHEREFORE, the Decisions of the CA finding lack of probable cause for respondents' alleged
violation of Section 168 in relation to Section 170 of Republic Act No. 8293 (unfair competition),
are AFFIRMED. The Information against respondents for unfair competition is DISMISSED. SO
ORDERED.

Case Analysis for SHIRLEY F. TORRES, vs. IMELDA PEREZ and RODRIGO PEREZ

In this case the probable cause for the criminal aspect of the crime of Unfair Competition was affirmed
by the Supreme Court. In this regard the intent to "deception, passing off and fraud upon the public."
was ruled by the Court as a requisite before the charge can be filed before the RTC.

Change of ownership of the company or proprietorship, while relevant, is not absolutely determinative
of the crime of Unfair Competition. Not all usages of the vendor code fall under Unfair Competition. As
stated by the Court, usage of vendor codes for practical purposes is not Unfair Competition.

Though the act of unfair competition can be analyzed between the civil and criminal aspects;
divergence can be noticed between the civil and criminal aspects of the case. In the civil case, the
protection of intellectual property rights is paramount. The criminal aspect of the case however is the
prohibition on "deception, passing off and fraud upon the public." Though arising from the same act,
the gravamen of the civil and criminal aspects are different.

Digested by: Carisa C. Soriano

G.R. No. 217781 June 20, 2018

SAN MIGUEL PURE FOODS COMPANY, INC., Petitioner, v. FOODSPHERE,

INC., Respondent.

FACTS:

The parties herein are both engaged in the business of the manufacture, sale, and distribution of
food products, with SMPFCI owning the trademark "PUREFOODS FIESTA HAM" while
Foodsphere, Inc. products (Foodsphere) bear the "CDO" brand. On November 4, 2010, SMPFCI
filed a Complaint3 for trademark infringement and unfair competition with prayer for preliminary
injunction and temporary restraining order against Foodsphere before the Bureau of Legal Affairs
(BLA) of the Intellectual Property Office (IPO) pursuant to Sections 155 and 168 of Republic Act
(R.A.) No. 8293, otherwise known as the Intellectual Property Code (IP Code), for using, in
commerce, a colorable imitation of its registered trademark in connection with the sale, offering
for sale, and advertising of goods that are confusingly similar to that of its registered trademark.
Nevertheless SMPFCI, alleged that its “FIESTA” ham was already sold in the market since 1980
gaining its popularity as a sumptuous ham of great taste to the populace specially during the
holiday season.

In the year 2006 Foodsphere introduced their own “PISTA” ham. The two corporations have been
vigorous in terms of promoting their respective ham products. SMPFCI alleged that Foodsphere
is guilty of unfair competition. This is because there is confusing similarity in the general
appearance of the goods of the parties and intent on the part of Foodsphere, to deceive the public
and defraud SMPFCL According to SMPFCI, there is confusing similarity because the display
panel of both products have a picture of a partly sliced ham served on a plate of fruits, while the
back panel features other ham varieties offered, both "FIESTA" and "PISTA" are printed in white
bold stylized font, and the product packaging for both "FIESTA" and "PISTA". Foodsphere
similarly denied the allegation that it is guilty of unfair competition or passing off its product as that
of SMPFCI. As mentioned, the "PISTA" and "FIESTA" labels are substantially different in the
manner of presentation, carrying their respective house marks. Moreover, its paper ham bags are
labeled with their respective house marks and are given to consumers only after purchase, hence,
they do not factor in when the choice of ham is being made. Also, Foodsphere claims to have
been using the red color for its boxes and it was SMPFCI, by its own admission that switched
colors from green to red in 2009 for its own ham bags.

ISSUE:

Whether or not Foodsphere is guilty of unfair competition under Section 168 of the Intellectual
property code.

RULING:

Yes, Foodsphere is indeed guilty of unfair completion under Section 168 of the Intellectual
Property Code. The Court has held that unfair competition consists of the passing off (or palming
off) or attempting to pass off upon the public of the goods or business of one person as the goods
or business of another with the end and probable effect of deceiving the public. Passing off (or
palming off) takes place where the defendant, by imitative devices on the general appearance of
the goods, misleads prospective purchasers into buying his merchandise under the impression
that they are buying that of his competitors. In other words, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of deceiving the public that
the goods are those of his competitor. The "true test," therefore, of unfair competition has thus
been "whether the acts of the defendant have the intent of deceiving or are calculated to deceive
the ordinary buyer making his purchases under the ordinary conditions of the particular trade to
which the controversy relates."

Thus, the essential elements of an action for unfair competition are: (1) confusing similarity in the
general appearance of the goods; and (2) intent to deceive the public and defraud a competitor.
The confusing similarity may or may not result from similarity in the marks, but may result from
other external factors in the packaging or presentation of the goods. The intent to deceive and
defraud may be inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown. Provided further, Foodsphere's intent to
deceive the public, to defraud its competitor, and to ride on the goodwill of SMPFCI's products is
evidenced by the fact that not only did Foodsphere switch from its old box packaging to the same
paper ham bag packaging as that used by SMPFCI, it also used the same layout design printed
on the same. As the Director General observed, why, of the millions of terms and combinations
of letters, designs, and packaging available, Foodsphere had to choose those so closely similar
to SMPFCI's if there was no intent to pass off upon the public the ham of SMPFCI as its own with
the end and probable effect of deceiving the public.

Digested by: Hanna L. Supetran

G.R. No. 202423 January 28, 2013

CHESTER UYCO, WINSTON UYCHIYONG, and CHERRY C. UYCO-ONG, Petitioners,

vs.
VICENTE LO, Respondent.

FACTS:

The disputed marks in this case are the "HIPOLITO & SEA HORSE & TRIANGULAR DEVICE,"
"FAMA," and other related marks, service marks and trade names of Casa Hipolito S.A. Portugal
appearing in kerosene burners.

Respondent Vicente Lo and Philippine Burners Manufacturing

Corporation (PBMC) filed a complaint against the officers of Wintrade Industrial Sales Corporation
(Wintrade), including petitioners Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong, and of
National Hardware, including Mario Sy Chua, for violation of Section

169.1, in relation to Section 170, of RA 8293.

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 confusion or mistake as to the origin of the product. The law seeks to protect the
public; thus, even if Lo does not have the legal capacity to sue, the State can still prosecute the
petitioners to prevent damage and prejudice to the public.

ISSUES:

Both the CA and the DOJ found probable cause to charge the petitioners with false designation
of origin, in violation of Section 169.1, in relation with Section 170, of Republic Act No. (RA) 8293,
otherwise known as the "Intellectual Property Code of the Philippines.

RULING:

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.

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.

PRINCIPLES:

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.

Digested by: Carisa C. Soriano

G.R. No. 195549 September 3, 2014

WILLAWARE PRODUCTS CORPORATION, Petitioner,

vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.

FACTS:
Jesichris Manufacturing Company filed this present complaint for damages for unfair competition
with prayer for permanent injunction to enjoin Willaware Products Corporation manufacturing and
distributing plastic-made automotive parts similar to those of Jesichris.
Jesichris alleged that it is a duly registered partnership engaged in the manufacture and
distribution of plastic and metal products
Jesichris further alleged that in view of the physical proximity of Willaware office to Jesichris office,
and in view of the fact that some of Jesichris employees had transferred to Willaware. Willare had
developed familiarity with Jesichris’s products, especially its plastic-made automotive parts.
That sometime in November 2000, Jesichris discovered that Willaware had been 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 Jesichris’s plastic-made automotive parts and
to the same customers.

ISSUE:

Whether or not Jesichris violated Section 168 of the Intellectual Property Code.

RULING:

The concept of "unfair competition" under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of "unfair
competition" in American jurisdictions, the term covers even cases of discovery of... trade secrets
of a competitor, bribery of his employees, misrepresentation of all kinds, interference with the
fulfillment of a competitor's contracts, or any malicious interference with the latter's business.

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any
other unjust, oppressive or high-handed method shall give rise to a right of action... by the person
who thereby suffers damage."
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve
an 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 high-handed method. The public injury or interest is a minor factor; the essence of
the matter appears to be a private wrong perpetrated by... unconscionable means.
Here, both characteristics are present.
First, both parties are competitors or trade rivals, both being engaged in the manufacture of
plastic-made automotive parts.
Second, the acts of the petitioner were clearly "contrary to good conscience" as petitioner
admitted having employed respondent's former... employees, deliberately copied respondent's
products and even went to the extent of selling these products to respondent's customers.
As aptly observed by the court a quo, the testimony of petitioner's witnesses indicate that it acted
in bad faith in competing with the business of respondent, to wit:
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve
an 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 high-handed method. The public injury or interest is a minor factor; the essence of
the matter appears to be a private wrong perpetrated by... unconscionable means.

Digested by: Hanna L. Supetran

G.R. No. 181571 December 16, 2009

JUNO BATISTIS, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

FACTS:

Allied Domecq Philippines, Inc., a Philippine corporation exclusively authorized to distribute

Fundador brandy products imported from Spain wholly in finished form, initiated a case against
Juno Batistis for violation of Section 155 (infringement of trademark) of the Intellectual Property
Code (Republic Act No. 8293).

The RTC found Batistis guilty beyond reasonable doubt for infringement of trademark under
Section 155 of the Intellectual Property Code and hereby sentences him to suffer the penalty of
imprisonment of TWO (2) YEARS and to pay a fine of FIFTY THOUSAND (P50,000.00) PESOS.
The CA affirmed the decision of the trial court.

ISSUE:

Whether or not the penalty imposed against Batistis in relation to Sec.170 of the Intellectual
Property Code is correct.

RULING:

NO. The penalty thus fixed was contrary to the Indeterminate Sentence Law, as amended by Act
No. 4225. Section 1 of the Indeterminate Sentence Law, as amended, provides:

Section 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal
Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the
maximum term of which shall be that which, in view of the attending circumstances, could be
properly imposed under the rules of the said Code, and the minimum which shall be within the
range of the penalty next lower to that prescribed by the Code for the offense; and if the offense
is punished by any other law, the court shall sentence the accused to an indeterminate
sentence, the maximum term of which shall not exceed the maximum fixed by said law and
the minimum shall not be less than the minimum term prescribed by the same.

The straight penalty the CA imposed was contrary to the Indeterminate Sentence Law, whose
Section 1 requires that the penalty of imprisonment should be an indeterminate sentence.
According to Spouses Bacar v. Judge de Guzman,Jr.,the imposition of an indeterminate sentence
with maximum and minimum periods in criminal cases not excepted from the coverage of the
Indeterminate Sentence Law pursuant to its Section 228 is mandatory.

The need for specifying the minimum and maximum periods of the indeterminate sentence is to
prevent the unnecessary and excessive deprivation of liberty and to enhance the economic
usefulness of the accused, since he may be exempted from serving the entire sentence,
depending upon his behavior and his physical, mental, and moral record. The requirement of
imposing an indeterminate sentence in all criminal offenses whether punishable by the Revised
Penal Code or by special laws, with definite minimum and maximum terms, as the Court deems
proper within the legal range of the penalty specified by the law must, therefore, be deemed
mandatory.
Therefor, the Supreme Court 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 (2) years, as minimum, to three (3) years, as maximum,
and a fine of ₱50,000.00.

Digested by: Garry Nee G. Tungala

G.R. No. 205972 November 9, 2016

CATERPILLAR, INC., Petitioner

vs.
MANOLO P. SAMSON, Respondent

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

G.R. No. 164352

CATERPILLAR, INC., Petitioner,

vs.
MANOLO P. SAMSON, Respondent.

FACTS:

Caterpillar is a foreign corporation engaged in the manufacture and distribution of footwear,

clothing and related items, among others. Its products are known for six core trademarks, namely,
"CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND DESIGN", "WALKING
MACHINES" and "TRACK-TYPE TRACTOR & DESIGN (Core Marks), all of which are alleged as
internationally known.

On the other hand, Samson, doing business under the names and styles of Itti Shoes Corporation,
Kolm's Manufacturing Corporation and Caterpillar Boutique and General Merchandise, is the
proprietor of various retail outlets in the Philippines selling footwear, bags, clothing, and related
items under the trademark "CATERPILLAR", registered in 1997 under Trademark Registration
No. 64705 issued by the Intellectual Property Office (IPO).

Caterpillar filed both civil and criminal cases against Samson for violation of unfair competition
provided under Section 168.3(a), in relation to Sections 131.3, 123(e) and 170 of R.A. 8293,
otherwise known as the Intellectual Property Code.

ISSUE:

Whether a criminal complaint for unfair competition can proceed independently of, and
simultaneous with, the civil case for the same.

RULING:

YES. The civil case filed by Caterpillar was for unfair competition, damages and cancellation of
trademark, while the criminal cases were the criminal prosecution of Samson for unfair
competition. A common element of all such cases for unfair competition - civil and criminal - was
fraud.

Under Article 33 of the Civil Code, a civil action entirely separate and distinct from the criminal
action may be brought by the injured party in cases of fraud, and such civil action shall proceed
independently of the criminal prosecution. In view of its being an independent civil action did not
operate as a prejudicial question that justified the suspension of the proceedings in criminal cases.
An action for the cancellation of trademark is a remedy available to a person who believes that
he is or will be damaged by the registration of a mark. On the other hand, the criminal actions for
unfair competition involved the determination of whether or not Samson had given his goods the
general appearance of the goods of Caterpillar, with the intent to deceive the public or defraud
Caterpillar as his competitor. In the suit for the cancellation of trademark, the issue of lawful
registration should necessarily be determined, but registration was not a consideration necessary
in unfair competition. Indeed, unfair competition is committed if the effect of the act is "to pass off
to the public the goods of one man as the goods of another;" it is independent of registration. As
fittingly put in R.F. & Alexander & Co. v. Ang, "one may be declared unfair competitor even if his
competing trademark is registered." Clearly, the determination of the lawful ownership of the
trademark in the civil action was not determinative of whether or not the criminal actions for unfair
competition shall proceed against Samson.

Digested by: Rhoda Crisnelle C. Villalobos