1
"WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly,
FIRST DIVISION
[G.R. No. 114508. November 19, 1999]
PRIBHDAS J. MIRPURI, petitioner, vs. COURT OF APPEALS, DIRECTOR OF
PATENTS and the BARBIZON CORPORATION, respondents.
DECISION
PUNO, J.:
The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty
which the Philippines bound itself to honor and enforce in this country. As to whether or not the
treaty affords protection to a foreign corporation against a Philippine applicant for the
registration of a similar trademark is the principal issue in this case.
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J.
Mirpuri, filed an application with the Bureau of Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies undergarments. Escobar alleged that she had been
manufacturing and selling these products under the firm name "L & BM Commercial" since
March 3, 1970.
Private respondent Barbizon Corporation, a corporation organized and doing business
under the laws of New York, U.S.A., opposed the application. It claimed that:
"The mark BARBIZON of respondent-applicant is confusingly similar to the trademark
BARBIZON which opposer owns and has not abandoned.
That opposer will be damaged by the registration of the mark BARBIZON and its business
reputation and goodwill will suffer great and irreparable injury.
That the respondent-applicant's use of the said mark BARBIZON which resembles the
trademark used and owned by opposer, constitutes an unlawful appropriation of a mark
previously used in the Philippines and not abandoned and therefore a statutory violation of
Section 4 (d) of Republic Act No. 166, as amended." [1]
This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the
pleadings, the parties submitted the case for decision.
On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition
and giving due course to Escobar's application, thus:
Application Serial No. 19010 for the registration of the trademark BARBIZON, of respondent
Lolita R. Escobar, is given due course.
IT IS SO ORDERED."[2]
This decision became final and on September 11, 1974, Lolita Escobar was issued a
certificate of registration for the trademark "Barbizon." The trademark was "for use in
"brassieres and lady's underwear garments like panties." [3]
Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas
J. Mirpuri who, under his firm name then, the "Bonito Enterprises," was the sole and exclusive
distributor of Escobar's "Barbizon" products.
In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of
the trademark required under Section 12 of Republic Act (R.A.) No. 166, the Philippine
Trademark Law. Due to this failure, the Bureau of Patents cancelled Escobar's certificate of
registration.
On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri
filed his own application for registration of Escobar's trademark. Escobar later assigned her
application to herein petitioner and this application was opposed by private respondent. The
case was docketed as Inter Partes Case No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged that:
"(a) The Opposer has adopted the trademark BARBIZON (word), sometime in June 1933 and
has then used it on various kinds of wearing apparel. On August 14, 1934, Opposer obtained
from the United States Patent Office a more recent registration of the said mark under
Certificate of Registration No. 316,161. On March 1, 1949, Opposer obtained from the United
States Patent Office a more recent registration for the said trademark under Certificate of
Registration No. 507,214, a copy of which is herewith attached as Annex `A.' Said Certificate
of Registration covers the following goods-- wearing apparel: robes, pajamas, lingerie,
nightgowns and slips;
(b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON and Bee
design and used the said mark in various kinds of wearing apparel. On March 15, 1977,
Opposer secured from the United States Patent Office a registration of the said mark under
Certificate of Registration No. 1,061,277, a copy of which is herein enclosed as Annex `B.' The
said Certificate of Registration covers the following goods: robes, pajamas, lingerie,
nightgowns and slips;
(c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON and a
Representation of a Woman and thereafter used the said trademark on various kinds of wearing
apparel. Opposer obtained from the United States Patent Office registration of the said mark on
April 5, 1983 under Certificate of Registration No. 1,233,666 for the following goods: wearing
 2
apparel: robes, pajamas, nightgowns and lingerie. A copy of the said certificate of registration is
herewith enclosed as Annex `C.'
(d) All the above registrations are subsisting and in force and Opposer has not abandoned the
use of the said trademarks. In fact, Opposer, through a wholly-owned Philippine subsidiary, the
Philippine Lingerie Corporation, has been manufacturing the goods covered by said
registrations and selling them to various countries, thereby earning valuable foreign exchange
for the country. As a result of respondent-applicant's misappropriation of Opposer's
BARBIZON trademark, Philippine Lingerie Corporation is prevented from selling its goods in
the local market, to the damage and prejudice of Opposer and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the trademark BARBIZON have been used in many countries,
including the Philippines, for at least 40 years and has enjoyed international reputation and
good will for their quality. To protect its registrations in countries where the goods covered by
the registrations are being sold, Opposer has procured the registration of the trademark
BARBIZON in the following countries:Australia, Austria, Abu Dhabi, Argentina, Belgium,
Bolivia, Bahrain, Canada, Chile, Colombia, Denmark, Ecuador, France, West Germany,
Greece, Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco,
Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador, South Africa,
Zambia, Egypt, and Iran, among others;
(f) To enhance its international reputation for quality goods and to further promote goodwill
over its name, marks and products, Opposer has extensively advertised its products, trademarks
and name in various publications which are circulated in the United States and many countries
around the world, including the Philippines;
(g) The trademark BARBIZON was fraudulently registered in the Philippines by one Lolita R.
Escobar under Registration No. 21920, issued on September 11, 1974, in violation of Article
189 (3) of the Revised Penal Code and Section 4 (d) of the Trademark Law. Herein respondent
applicant acquired by assignment the `rights' to the said mark previously registered by Lolita
Escobar, hence respondent-applicant's title is vitiated by the same fraud and criminal
act. Besides, Certificate of Registration No. 21920 has been cancelled for failure of either Lolita
Escobar or herein respondent-applicant, to seasonably file the statutory affidavit of use. By
applying for a re-registration of the mark BARBIZON subject of this opposition, respondent-
applicant seeks to perpetuate the fraud and criminal act committed by Lolita Escobar.
(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and
Representation of a Woman trademarks qualify as well-known trademarks entitled to protection
under Article 6bisof the Convention of Paris for the Protection of Industrial Property and
further amplified by the Memorandum of the Minister of Trade to the Honorable Director of
Patents dated October 25, 1983 [sic],[4]Executive Order No. 913 dated October 7, 1963 and the
Memorandum of the Minister of Trade and Industry to the Honorable Director of Patents dated
October 25, 1983.
(i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON
trademark and constitutes the dominant part of Opposer's two other marks namely, BARBIZON
and Bee design and BARBIZON and a Representation of a Woman. The continued use by
respondent-applicant of Opposer's trademark BARBIZON on goods belonging to Class 25
constitutes a clear case of commercial and criminal piracy and if allowed registration will
violate not only the Trademark Law but also Article 189 of the Revised Penal Code and the
commitment of the Philippines to an international treaty." [5]
Replying to private respondent's opposition, petitioner raised the defense of res judicata.
On March 2, 1982, Escobar assigned to petitioner the use of the business name "Barbizon
International." Petitioner registered the name with the Department of Trade and Industry (DTI)
for which a certificate of registration was issued in 1987.
Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition
for cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate
of registration, and declared private respondent the owner and prior user of the business name
"Barbizon International." Thus:
"WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and
prior user of the business name "BARBIZON INTERNATIONAL" under Certificate of
Registration No. 87-09000 dated March 10, 1987 and issued in the name of respondent, is [sic]
hereby ordered revoked and cancelled. x x x."[6]
Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director of
Patents. On June 18, 1992, the Director rendered a decision declaring private respondent's
opposition barred by res judicata and giving due course to petitioner's application for
registration, to wit:
"WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby DECLARED
BARRED by res judicata and is hereby DISMISSED. Accordingly, Application Serial No.
45011 for trademark BARBIZON filed by Pribhdas J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED."[7]
Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP
No. 28415. On April 30, 1993, the Court of Appeals reversed the Director of Patents finding
that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that the case be
remanded to the Bureau of Patents for further proceedings, viz:
"WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of
Patents in Inter Partes Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded
to the Bureau of Patents for further proceedings, in accordance with this pronouncement. No
costs."[8]
 3
In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its
decision.[9] Hence, this recourse.
Before us, petitioner raises the following issues:
"1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS IN INTER
PARTES CASE NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C HEREOF,
CONSTITUTED RES JUDICATA IN SO FAR AS THE CASE BEFORE THE DIRECTOR
OF PATENTS IS CONCERNED;
2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY APPLIED THE
PRINCIPLE OF RES JUDICATA IN DISMISSING PRIVATE RESPONDENT BARBIZON'S
OPPOSITION TO PETITIONER'S APPLICATION FOR REGISTRATION FOR THE
TRADEMARK BARBIZON, WHICH HAS SINCE RIPENED TO CERTIFICATE OF
REGISTRATION NO. 53920 ON NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE THAT A 'JUDGMENT ON THE MERITS'
REQUIRED A 'HEARING WHERE BOTH PARTIES ARE SUPPOSED TO ADDUCE
EVIDENCE' AND WHETHER THE JOINT SUBMISSION OF THE PARTIES TO A CASE
ON THE BASIS OF THEIR RESPECTIVE PLEADINGS WITHOUT PRESENTING
TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS WITHIN THE MEANING OF
'JUDGMENT ON THE MERITS' AS ONE OF THE REQUISITES TO CONSTITUTE RES
JUDICATA;
4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND INDUSTRY
CANCELLING PETITIONER'S FIRM NAME 'BARBIZON INTERNATIONAL' AND
WHICH DECISION IS STILL PENDING RECONSIDERATION NEVER OFFERED IN
EVIDENCE BEFORE THE DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049
HAS THE RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF THE
BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF DOMESTIC
TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION AND THE TRADEMARK
LAW (R.A. 166) WHICH IS WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION
OF THE DIRECTOR OF PATENTS."[10]
Before ruling on the issues of the case, there is need for a brief background on the function
and historical development of trademarks and trademark law.
A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word,
name, symbol, emblem, sign or device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish them from those manufactured,
sold or dealt in by others." [11] This definition has been simplified in R.A. No. 8293, the
Intellectual Property Code of the Philippines, which defines a "trademark" as "any visible sign
capable of distinguishing goods." [12] In Philippine jurisprudence, the function of a trademark is
to point out distinctly the origin or ownership of the goods 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.[13]
Modern authorities on trademark law view trademarks as performing three distinct
functions: (1) they indicate origin or ownership of the articles to which they are attached; (2)
they guarantee that those articles come up to a certain standard of quality; and (3) they advertise
the articles they symbolize.[14]
Symbols have been used to identify the ownership or origin of articles for several
centuries.[15] As early as 5,000 B.C., markings on pottery have been found by
archaeologists. Cave drawings in southwestern Europe show bison with symbols on their
flanks.[16] Archaeological discoveries of ancient Greek and Roman inscriptions on sculptural
works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some features which are
thought to be marks or symbols. These marks were affixed by the creator or maker of the
article, or by public authorities as indicators for the payment of tax, for disclosing state
monopoly, or devices for the settlement of accounts between an entrepreneur and his
workmen.[17]
In the Middle Ages, the use of many kinds of marks on a variety of goods was
commonplace. Fifteenth century England saw the compulsory use of identifying marks in
certain trades. There were the baker's mark on bread, bottlemaker's marks, smith's marks,
tanner's marks, watermarks on paper, etc.[18] Every guild had its own mark and every master
belonging to it had a special mark of his own. The marks were not trademarks but police marks
compulsorily imposed by the sovereign to let the public know that the goods were not "foreign"
goods smuggled into an area where the guild had a monopoly, as well as to aid in tracing
defective work or poor craftsmanship to the artisan. [19] For a similar reason, merchants also
used merchants' marks. Merchants dealt in goods acquired from many sources and the marks
enabled them to identify and reclaim their goods upon recovery after shipwreck or piracy. [20]
With constant use, the mark acquired popularity and became voluntarily adopted. It was
not intended to create or continue monopoly but to give the customer an index or guarantee of
quality.[21] It was in the late 18th century when the industrial revolution gave rise to mass
production and distribution of consumer goods that the mark became an important
instrumentality of trade and commerce.[22] By this time, trademarks did not merely identify the
goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further
purchases by the consuming public.[23] Eventually, they came to symbolize the goodwill and
business reputation of the owner of the product and became a property right protected by
law.[24] The common law developed the doctrine of trademarks and tradenames "to prevent a
person from palming off his goods as another's, from getting another's business or injuring his
reputation by unfair means, and, from defrauding the public." [25] Subsequently, England and the
United States enacted national legislation on trademarks as part of the law regulating unfair
trade.[26] It became the right of the trademark owner to exclude others from the use of his mark,
or of a confusingly similar mark where confusion resulted in diversion of trade or financial
injury. At the same time, the trademark served as a warning against the imitation or faking of
products to prevent the imposition of fraud upon the public. [27]
Today, the trademark is not merely a symbol of origin and goodwill; it is often the most
effective agent for the actual creation and protection of goodwill. It imprints upon the public
mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further
 4
satisfaction. In other words, the mark actually sells the goods.[28] The mark has become the
"silent salesman," the conduit through which direct contact between the trademark owner and
the consumer is assured. It has invaded popular culture in ways never anticipated that it has
become a more convincing selling point than even the quality of the article to which it
refers.[29] In the last half century, the unparalleled growth of industry and the rapid development
of communications technology have enabled trademarks, tradenames and other distinctive signs
of a product to penetrate regions where the owner does not actually manufacture or sell the
product itself. Goodwill is no longer confined to the territory of actual market penetration; it
extends to zones where the marked article has been fixed in the public mind through
advertising.[30] Whether in the print, broadcast or electronic communications medium,
particularly on the Internet,[31]advertising has paved the way for growth and expansion of the
product by creating and earning a reputation that crosses over borders, virtually turning the
whole world into one vast marketplace.
This is the mise-en-scene of the present controversy. Petitioner brings this action claiming
that "Barbizon" products have been sold in the Philippines since 1970. Petitioner developed this
market by working long hours and spending considerable sums of money on advertisements
and promotion of the trademark and its products. Now, almost thirty years later, private
respondent, a foreign corporation, "swaggers into the country like a conquering hero," usurps
the trademark and invades petitioner's market.[32] Justice and fairness dictate that private
respondent be prevented from appropriating what is not its own. Legally, at the same time,
private respondent is barred from questioning petitioner's ownership of the trademark because
of res judicata.[33]
Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided; a
thing or matter settled by judgment.[34] In res judicata, the judgment in the first action is
considered conclusive as to every matter offered and received therein, as to any other
admissible matter which might have been offered for that purpose, and all other matters that
could have been adjudged therein.[35] Res judicatais an absolute bar to a subsequent action for
the same cause; and its requisites are: (a) the former judgment or order must be final; (b) the
judgment or order must be one on the merits; (c) it must have been rendered by a court having
jurisdiction over the subject matter and parties; (d) there must be between the first and second
actions, identity of parties, of subject matter and of causes of action. [36]
The Solicitor General, on behalf of respondent Director of Patents, has joined cause with
petitioner. Both claim that all the four elements of res judicata have been complied with: that
the judgment in IPC No. 686 was final and was rendered by the Director of Patents who had
jurisdiction over the subject matter and parties; that the judgment in IPC No. 686 was on the
merits; and that the lack of a hearing was immaterial because substantial issues were raised by
the parties and passed upon by the Director of Patents. [37]
The decision in IPC No. 686 reads as follows:
"x x x.
Neither party took testimony nor adduced documentary evidence. They submitted the case for
decision based on the pleadings which, together with the pertinent records, have all been
carefully considered.
Accordingly, the only issue for my disposition is whether or not the herein opposer would
probably be damaged by the registration of the trademark BARBIZON sought by the
respondent-applicant on the ground that it so resembles the trademark BARBIZON allegedly
used and owned by the former to be `likely to cause confusion, mistake or to deceive
purchasers.'
On record, there can be no doubt that respondent-applicant's sought-to-be-registered trademark
BARBIZON is similar, in fact obviously identical, to opposer's alleged trademark BARBIZON,
in spelling and pronunciation. The only appreciable but very negligible difference lies in their
respective appearances or manner of presentation. Respondent-applicant's trademark is in bold
letters (set against a black background), while that of the opposer is offered in stylish script
letters.
It is opposer's assertion that its trademark BARBIZON has been used in trade or commerce in
the Philippines prior to the date of application for the registration of the identical mark
BARBIZON by the respondent-applicant. However, the allegation of facts in opposer's verified
notice of opposition is devoid of such material information. In fact, a reading of the text of said
verified opposition reveals an apparent, if not deliberate, omission of the date (or year) when
opposer's alleged trademark BARBIZON was first used in trade in the Philippines (see par. No.
1, p. 2, Verified Notice of Opposition, Rec.).Thus, it cannot here and now be ascertained
whether opposer's alleged use of the trademark BARBIZON could be prior to the use of the
identical mark by the herein respondent-applicant, since the opposer attempted neither to
substantiate its claim of use in local commerce with any proof or evidence. Instead, the opposer
submitted the case for decision based merely on the pleadings.
On the other hand, respondent-applicant asserted in her amended application for registration
that she first used the trademark BARBIZON for brassiere (or 'brasseire') and ladies underwear
garments and panties as early as March 3, 1970. Be that as it may, there being no testimony
taken as to said date of first use, respondent-applicant will be limited to the filing date, June 15,
1970, of her application as the date of first use (Rule 173, Rules of Practice in Trademark
Cases).
From the foregoing, I conclude that the opposer has not made out a case of probable damage by
the registration of the respondent-applicant's mark BARBIZON.
WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly,
Application Serial No. 19010, for the registration of the trademark BARBIZON of respondent
Lolita R. Escobar, is given due course." [38]
The decision in IPC No. 686 was a judgment on the merits and it was error for the Court
of Appeals to rule that it was not. A judgment is on the merits when it determines the rights and
liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory
objections.[39] It is not necessary that a trial should have been conducted. If the court's judgment
is general, and not based on any technical defect or objection, and the parties had a full legal
opportunity to be heard on their respective claims and contentions, it is on the merits although
 5
there was no actual hearing or arguments on the facts of the case.[40] In the case at bar, the
Director of Patents did not dismiss private respondent's opposition on a sheer
technicality. Although no hearing was conducted, both parties filed their respective pleadings
and were given opportunity to present evidence. They, however, waived their right to do so and
submitted the case for decision based on their pleadings. The lack of evidence did not deter the
Director of Patents from ruling on the case, particularly on the issue of prior use, which goes
into the very substance of the relief sought by the parties. Since private respondent failed to
prove prior use of its trademark, Escobar's claim of first use was upheld.
The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General
allege that IPC No. 686 and IPC No. 2049 also comply with the fourth requisite of res
judicata, i.e., they involve the same parties and the same subject matter, and have identical
causes of action.
Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same
subject matter. Petitioner herein is the assignee of Escobar while private respondent is the same
American corporation in the first case. The subject matter of both cases is the trademark
"Barbizon." Private respondent counter-argues, however, that the two cases do not have
identical causes of action. New causes of action were allegedly introduced in IPC No. 2049,
such as the prior use and registration of the trademark in the United States and other countries
worldwide, prior use in the Philippines, and the fraudulent registration of the mark in violation
of Article 189 of the Revised Penal Code. Private respondent also cited protection of the
trademark under the Convention of Paris for the Protection of Industrial Property, specifically
Article 6bis thereof, and the implementation of Article 6bis by two Memoranda dated
November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director
of Patents, as well as Executive Order (E.O.) No. 913.
The Convention of Paris for the Protection of Industrial Property, otherwise known as the
Paris Convention, is a multilateral treaty that seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks, service marks, trade names and
indications of source or appellations of origin, and at the same time aims to repress unfair
competition.[41] The Convention is essentially a compact among various countries which, as
members of the Union, have pledged to accord to citizens of the other member countries
trademark and other rights comparable to those accorded their own citizens by their domestic
laws for an effective protection against unfair competition. [42] In short, foreign nationals are to
be given the same treatment in each of the member countries as that country makes available to
its own citizens.[43] Nationals of the various member nations are thus assured of a certain
minimum of international protection of their industrial property. [44]
The Convention was first signed by eleven countries in Paris on March 20, 1883. [45] It
underwent several revisions-- at Brussels in 1900, at Washington in 1911, at The Hague in
1925, at London in 1934, at Lisbon in 1958, [46] and at Stockholm in 1967. Both the Philippines
and the United States of America, herein private respondent's country, are signatories to the
Convention. The United States acceded on May 30, 1887 while the Philippines, through its
Senate, concurred on May 10, 1965.[47] The Philippines' adhesion became effective on
September 27, 1965,[48] and from this date, the country obligated itself to honor and enforce the
provisions of the Convention.[49]
In the case at bar, private respondent anchors its cause of action on the first paragraph of
Article 6bis of the Paris Convention which reads as follows:
"Article 6bis
(1) 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, an imitation, or a
translation, liable to create confusion, of a mark considered by the competent authority of
the country of registration or use to be well-known in that country as being already the
mark of a person entitled to the benefits of this Convention and used for identical or
similar goods. These provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an imitation liable to create
confusion therewith.
(2) A period of at least five years from the date of registration shall be allowed for seeking the
cancellation of such a mark. The countries of the Union may provide for a period within which
the prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the cancellation or the prohibition of the use of
marks registered or used in bad faith." [50]
This Article governs protection of well-known trademarks. Under the first paragraph,
each country of the Union bound itself to undertake to refuse or cancel the registration, and
prohibit the use of a trademark which is a reproduction, imitation or translation, or any essential
part of which trademark constitutes a reproduction, liable to create confusion, of a mark
considered by the competent authority of the country where protection is sought, to be well-
known in the country as being already the mark of a person entitled to the benefits of the
Convention, and used for identical or similar goods.
Article 6bis was first introduced at The Hague in 1925 and amended in Lisbon in
1952.[51] It is a self-executing provision and does not require legislative enactment to give it
effect in the member country.[52] It may be applied directly by the tribunals and officials of each
member country by the mere publication or proclamation of the Convention, after its
ratification according to the public law of each state and the order for its execution. [53]
The essential requirement under Article 6bis is that the trademark to be protected must be
"well-known" in the country where protection is sought. The power to determine whether a
trademark is well-known lies in the "competent authority of the country of registration or use."
This competent authority would be either the registering authority if it has the power to decide
this, or the courts of the country in question if the issue comes before a court. [54]
Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the
Ministry of Trade issued a Memorandum to the Director of Patents. The Minister ordered the
Director that:
 6
"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 world-famous trademarks by applicants other than
its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands as
Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la
Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks
should be asked to surrender their certificates of registration, if any, to avoid suits for damages
and other legal action by the trademarks' foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance."[55]
Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another
Memorandum to the Director of Patents, viz:
"Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rule-making
and adjudicatory powers of the Minister of Trade and Industry and provides inter alia, that
`such rule-making and adjudicatory powers should be revitalized in order that the Minister of
Trade and Industry can x x x apply more swift and effective solutions and remedies to old and
new problems x x x such as infringement of internationally-known tradenames and trademarks
x x x' and in view of the decision of the Intermediate Appellate Court in the case of LA
CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359 (17) June
1983][56] which affirms the validity of the MEMORANDUM of then Minister Luis R.
Villafuerte dated 20 November 1980 confirming our obligations under the PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY to which the
Republic of the Philippines is a signatory, you are hereby directed to implement measures
necessary to effect compliance with our obligations under said Convention in general,
and, more specifically, to honor our commitment under Section 6bis[57] thereof, as follows:
1. Whether the trademark under consideration is well-known 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 Office procedures in inter partes and ex parte cases,
according to any of the following criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark being considered is
already well-known in the Philippines such that permission for its use by other than its original
owner will constitute a reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof that goods
bearing the trademark are sold on an international scale, advertisements, the establishment of
factories, sales offices, distributorships, and the like, in different countries, including volume or
other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property office(s) of another country or
countries, taking into consideration the date of such registration;
(d) that the trademark has long been established and obtained goodwill and international
consumer recognition as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming ownership and has the right to
registration under the provisions of the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service
marks, logos, signs, emblems, insignia or other similar devices used for identification and
recognition by consumers.
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 citizen of a country signatory to the PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to the Opposition in cases already or
hereafter filed against the registration of trademarks entitled to protection of Section 6 bis of
said PARIS CONVENTION as outlined above, by remanding applications filed by one not
entitled to such protection for final disallowance by the Examination Division.
5. All pending applications for Philippine registration of signature and other world-famous
trademarks filed by applicants other than their original owners or users shall be rejected
forthwith. Where such applicants have already obtained registration contrary to the
abovementioned PARIS CONVENTION and/or Philippine Law, they shall be directed to
surrender their Certificates of Registration to the Philippine Patent Office for immediate
cancellation proceedings.
x x x."[58]
In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to
reject all pending applications for Philippine registration of signature and other world-famous
trademarks by applicants other than their original owners or users. The Minister enumerated
several internationally-known trademarks and ordered the Director of Patents to require
Philippine registrants of such marks to surrender their certificates of registration.
In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-
known trademarks but laid down guidelines for the Director of Patents to observe in
determining whether a trademark is entitled to protection as a well-known mark in the
Philippines under Article 6bis of the Paris Convention. This was to be established through
 7
Philippine Patent Office procedures in inter partesand ex parte cases pursuant to the criteria
enumerated therein. The Philippine Patent Office was ordered to refuse applications for, or
cancel the registration of, trademarks which constitute a reproduction, translation or imitation
of a trademark owned by a person who is a citizen of a member of the Union. All pending
applications for registration of world-famous trademarks by persons other than their original
owners were to be rejected forthwith. The Ongpin Memorandum was issued pursuant to
Executive Order No. 913 dated October 7, 1983 of then President Marcos which strengthened
the rule-making and adjudicatory powers of the Minister of Trade and Industry for the effective
protection of consumers and the application of swift solutions to problems in trade and
industry.[59]
Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the
1984 landmark case of La Chemise Lacoste, S.A. v. Fernandez.[60] This court ruled therein that
under the provisions of Article 6bis of the Paris Convention, the Minister of Trade and Industry
was the "competent authority" to determine whether a trademark is well-known in this
country.[61]
The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption
of the Paris Convention in 1965. In the case at bar, the first inter partes case, IPC No. 686, was
filed in 1970, before the Villafuerte Memorandum but five (5) years after the effectivity of the
Paris Convention. Article 6bis was already in effect five years before the first case was
instituted. Private respondent, however, did not cite the protection of Article 6bis, neither did it
mention the Paris Convention at all. It was only in 1981 when IPC No. 2049 was instituted that
the Paris Convention and the Villafuerte Memorandum, and, during the pendency of the case,
the 1983 Ongpin Memorandum were invoked by private respondent.
The Solicitor General argues that the issue of whether the protection of Article 6bis of the
Convention and the two Memoranda is barred by res judicata has already been answered
in Wolverine Worldwide, Inc. v. Court of Appeals.[62] In this case, petitioner Wolverine, a
foreign corporation, filed with the Philippine Patent Office a petition for cancellation of the
registration certificate of private respondent, a Filipino citizen, for the trademark "Hush
Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationally-
known trademark in the United States and other countries, and cited protection under the Paris
Convention and the Ongpin Memorandum. The petition was dismissed by the Patent Office on
the ground of res judicata. It was found that in 1973 petitioner's predecessor-in-interest filed
two petitions for cancellation of the same trademark against respondent's predecessor-in-
interest. The Patent Office dismissed the petitions, ordered the cancellation of registration of
petitioner's trademark, and gave due course to respondent's application for registration. This
decision was sustained by the Court of Appeals, which decision was not elevated to us and
became final and executory.[63]
Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the
Trademark Law, its subsequent petition was based on a new cause of action, i.e., the Ongpin
Memorandum and E.O. No. 913 issued in 1983, after finality of the previous decision. We held
that the said Memorandum and E.O. did not grant a new cause of action because it did "not
amend the Trademark Law," x x x "nor did it indicate a new policy with respect to the
registration in the Philippines of world-famous trademarks."[64] This conclusion was based on
the finding that Wolverine's two previous petitions and subsequent petition dealt with the same
issue of ownership of the trademark.[65] In other words, since the first and second cases
involved the same issue of ownership, then the first case was a bar to the second case.
In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in
IPC No. 686. Private respondent's opposition therein was merely anchored on:
(a) "confusing similarity" of its trademark with that of Escobar's;
(b) that the registration of Escobar's similar trademark will cause damage to private
respondent's business reputation and goodwill; and
(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a mark
previously used in the Philippines which act is penalized under Section 4 (d) of the Trademark
Law.
In IPC No. 2049, private respondent's opposition set forth several issues summarized as
follows:
(a) as early as 1933, it adopted the word "BARBIZON" as trademark on its products such as
robes, pajamas, lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was registered with the United States Patent Office in
1934 and 1949; and that variations of the same trademark, i.e., "BARBIZON" with Bee design
and "BARBIZON" with the representation of a woman were also registered with the U.S.
Patent Office in 1961 and 1976;
(c) that these marks have been in use in the Philippines and in many countries all over the world
for over forty years. "Barbizon" products have been advertised in international publications and
the marks registered in 36 countries worldwide;
(d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was based on fraud;
and this fraudulent registration was cancelled in 1979, stripping Escobar of whatsoever right
she had to the said mark;
(e) Private respondent's trademark is entitled to protection as a well-known mark under Article
6bis of the Paris Convention, Executive Order No. 913, and the two Memoranda dated
November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director
of Patents;
(f) Escobar's trademark is identical to private respondent's and its use on the same class of
goods as the latter's amounts to a violation of the Trademark Law and Article 189 of the
Revised Penal Code.
IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the
trademark in the United States and other countries, and the international recognition and
 8
reputation of the trademark established by extensive use and advertisement of private
respondent's products for over forty years here and abroad. These are different from the issues
of confusing similarity and damage in IPC No. 686. The issue of prior use may have been
raised in IPC No. 686 but this claim was limited to prior use in the Philippines only. Prior use in
IPC No. 2049 stems from private respondent's claim as originator of the word and symbol
"Barbizon,"[66] as the first and registered user of the mark attached to its products which have
been sold and advertised worldwide for a considerable number of years prior to petitioner's first
application for registration of her trademark in the Philippines. Indeed, these are substantial
allegations that raised new issues and necessarily gave private respondent a new cause of
action.Res judicata does not apply to rights, claims or demands, although growing out of the
same subject matter, which constitute separate or distinct causes of action and were not put in
issue in the former action.[67]
Respondent corporation also introduced in the second case a fact that did not exist at the
time the first case was filed and terminated. The cancellation of petitioner's certificate of
registration for failure to file the affidavit of use arose only after IPC No. 686. It did not and
could not have occurred in the first case, and this gave respondent another cause to oppose the
second application. Res judicata extends only to facts and conditions as they existed at the time
judgment was rendered and to the legal rights and relations of the parties fixed by the facts so
determined.[68] When new facts or conditions intervene before the second suit, furnishing a new
basis for the claims and defenses of the parties, the issues are no longer the same, and the
former judgment cannot be pleaded as a bar to the subsequent action.[69]
It is also noted that the oppositions in the first and second cases are based on different
laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark Law,
i.e., Section 4 (d)[70]on confusing similarity of trademarks and Section 8 [71] on the requisite
damage to file an opposition to a petition for registration. The opposition in IPC No. 2049
invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913 and the two
Memoranda of the Minister of Trade and Industry. This opposition also invoked Article 189 of
the Revised Penal Code which is a statute totally different from the Trademark Law. [72] Causes
of action which are distinct and independent from each other, although arising out of the same
contract, transaction, or state of facts, may be sued on separately, recovery on one being no bar
to subsequent actions on others.[73] The mere fact that the same relief is sought in the
subsequent action will not render the judgment in the prior action operative as res judicata,
such as where the two actions are based on different statutes. [74] Res judicata therefore does not
apply to the instant case and respondent Court of Appeals did not err in so ruling.
Intellectual and industrial property rights cases are not simple property cases. Trademarks
deal with the psychological function of symbols and the effect of these symbols on the public at
large.[75]Trademarks play a significant role in communication, commerce and trade, and serve
valuable and interrelated business functions, both nationally and internationally. For this
reason, all agreements concerning industrial property, like those on trademarks and tradenames,
are intimately connected with economic development.[76] Industrial property encourages
investments in new ideas and inventions and stimulates creative efforts for the satisfaction of
human needs. They speed up transfer of technology and industrialization, and thereby bring
about social and economic progress.[77] These advantages have been acknowledged by the
Philippine government itself. The Intellectual Property Code of the Philippines declares that "an
effective intellectual and industrial property system is vital to the development of domestic and
creative activity, facilitates transfer of technology, it attracts foreign investments, and ensures
market access for our products." [78] The Intellectual Property Code took effect on January 1,
1998 and by its express provision,[79] repealed the Trademark Law,[80] the Patent
Law,[81] Articles 188 and 189 of the Revised Penal Code, the Decree on Intellectual
Property,[82] and the Decree on Compulsory Reprinting of Foreign Textbooks. [83] The Code was
enacted to strengthen the intellectual and industrial property system in the Philippines as
mandated by the country's accession to the Agreement Establishing the World Trade
Organization (WTO).[84]
The WTO is a common institutional framework for the conduct of trade relations among
its members in matters related to the multilateral and plurilateral trade agreements annexed to
the WTO Agreement.[85] The WTO framework ensures a "single undertaking approach" to the
administration and operation of all agreements and arrangements attached to the WTO
Agreement. Among those annexed is the Agreement on Trade-Related Aspects of Intellectual
Property Rights or TRIPs.[86] Members to this Agreement "desire to reduce distortions and
impediments to international trade, taking into account the need to promote effective and
adequate protection of intellectual property rights, and to ensure that measures and procedures
to enforce intellectual property rights do not themselves become barriers to legitimate trade."
To fulfill these objectives, the members have agreed to adhere to minimum standards of
protection set by several Conventions.[87] These Conventions are: the Berne Convention for the
Protection of Literary and Artistic Works (1971), the Rome Convention or the International
Convention for the Protection of Performers, Producers of Phonograms and Broadcasting
Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the
Paris Convention (1967), as revised in Stockholm on July 14, 1967.[88]
A major proportion of international trade depends on the protection of intellectual
property rights.[89] Since the late 1970's, the unauthorized counterfeiting of industrial property
and trademarked products has had a considerable adverse impact on domestic and international
trade revenues.[90] The TRIPs Agreement seeks to grant adequate protection of intellectual
property rights by creating a favorable economic environment to encourage the inflow of
foreign investments, and strengthening the multi-lateral trading system to bring about
economic, cultural and technological independence.[91] The Philippines and the United States of
America have acceded to the WTO Agreement. This Agreement has revolutionized
international business and economic relations among states, and has propelled the world
towards trade liberalization and economic globalization.[92] Protectionism and isolationism
belong to the past. Trade is no longer confined to a bilateral system. There is now "a new era of
global economic cooperation, reflecting the widespread desire to operate in a fairer and more
open multilateral trading system." [93] Conformably, the State must reaffirm its commitment to
the global community and take part in evolving a new international economic order at the dawn
of the new millenium.
IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.
 9
FIRST DIVISION
G.R. No. L-78325 January 25, 1990
DEL MONTE CORPORATION and PHILIPPINE PACKING
CORPORATION, petitioners,
vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
INDUSTRIES, respondents.
Bito, Misa & Lozada for petitioners.
Reynaldo F. Singson for private respondent.
CRUZ, J.:
The petitioners are questioning the decision of the respondent court upholding the dismissal by
the trial court of their complaint against the private respondent for infringement of trademark
and unfair competition.
Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines. Both the Philippines and the United
States are signatories to the Convention of Paris of September 27, 1965, which grants to the
nationals of the parties rights and advantages which their own nationals enjoy for the repression
of acts of infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized
under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to
manufacture, distribute and sell in the Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo.
On October 27,1965, Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was granted Certificate of
Trademark Registration No. SR-913 by the Philippine Patent Office under the Supplemental
Register. 1 On November 20, 1972, Del Monte also obtained two registration certificates for its
trademark "DEL MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup.3
This logo was registered in the Supplemental Register on September 20, 1983. 4
The product itself was contained in various kinds of bottles, including the Del Monte bottle,
which the private respondent bought from the junk shops for recycling.
Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on
pain of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del
Monte filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle and that its
logo was substantially different from the Del Monte logo and would not confuse the buying
public to the detriment of the petitioners. 6
After trial, the Regional Trial Court of Makati dismissed the complaint. It held that there were
substantial differences between the logos or trademarks of the parties; that the defendant had
ceased using the petitioners' bottles; and that in any case the defendant became the owner of the
said bottles upon its purchase thereof from the junk yards. Furthermore, the complainants had
failed to establish the defendant's malice or bad faith, which was an essential element of
infringement of trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now faulted in this petition
for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in part as
follows:
Sec. 22. Infringement, what constitutes. — Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such use
is likely to cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services or identity of such business; or reproduce,
counterfeit copy or colorably imitate any such mark or trade name and apply such
reproduction, counterfeit copy or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in connection
with such goods, business or services, shall be liable to a civil action by the registrant
for any or all of the remedies herein provided.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and remedies. — A person who has identified in
the mind of the public the goods he manufactures or deals in, his business or services
from those of others, whether or not a mark or tradename is employed, has a property
 10
right in the goodwill of the said goods, business or services so identified, which will be
protected in the same manner as other property rights. Such a person shall have the
remedies provided in section twenty- three, Chapter V hereof.
Any person who shall employ deception or any other means contrary to good faith by
which he shall pass off the goods manufactured by him or in which he deals, or his
business, or services for those of the one having established such goodwill, or who
shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which they are contained, or
the devices or words thereon, or in any other feature of their appearance,
which would likely influence purchasers to believe that the goods offered are
those of a manufacturer or dealer other than the actual manufacturer or dealer,
or who otherwise clothes the goods with such appearance as shall deceive the
public and defraud another of his legitimate trade, or any subsequent vendor
of such goods or any agent of any vendor engaged in selling such goods with
a like purpose;
(b) Any person who by any artifice, or device, or who employs ally other
means calculated to induce the false belief that such person is offering the
services of another who has identified such services in the mind of the public;
or
(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated
to discredit the goods, business or services of another.
To arrive at a proper resolution of this case, it is important to bear in mind the
following distinctions between infringement of trademark and unfair competition.
(1) Infringement of trademark is the unauthorized use of a trademark,
whereas unfair competition is the passing off of one's goods as those of
another.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in
unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is not
necessary. 8
In the challenged decision, the respondent court cited the following test laid down by
this Court in a number of cases:
In determining whether two trademarks are confusingly similar, the two
marks in their entirety as they appear in the respective labels must be
considered in relation to the goods to which they are attached; the discerning
eye of the observer must focus not only on the predorninant words but also on
the other features appearing on both labels. 9
and applying the same, held that there was no colorable imitation of the petitioners'
trademark and logo by the private respondent. The respondent court agreed with the
findings of the trial court that:
In order to resolve the said issue, the Court now attempts to make a comparison of the two
products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or tomato shape design on top of
the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated "made in the Philippines
by Sunshine Sauce Manufacturing Industries" No. 1 Del Monte Avenue,
Malabon, Metro Manila.
4. As to color of logo:
 11
Del Monte: Combination of yellow and dark red, with words "Del Monte
Quality" in white.
Sunshine: White, light green and light red, with words "Sunshine Brand" in
yellow.
5. As to shape of logo:
Del Monte: In the shape of a tomato.
Sunshine: Entirely different in shape.
6. As to label below the cap:
Del Monte: Seal covering the cap down to the neck of the bottle, with picture
of tomatoes with words "made from real tomatoes."
Sunshine: There is a label below the cap which says "Sunshine Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree with the conclusion that
there was no infringement or unfair competition. It seems to us that the lower courts have been
so pre-occupied with the details that they have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test of similarity. 10 Such
comparison requires a careful scrutiny to determine in what points the labels of the products
differ, as was done by the trial judge. The ordinary buyer does not usually make such scrutiny
nor does he usually have the time to do so. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were browsing in a library. Where the housewife
has to return home as soon as possible to her baby or the working woman has to make quick
purchases during her off hours, she is apt to be confused by similar labels even if they do have
minute differences. The male shopper is worse as he usually does not bother about such
distinctions.
The question is not whether the two articles are distinguishable by their label when set side by
side but whether the general confusion made by the article upon the eye of the casual purchaser
who is unsuspicious and off his guard, is such as to likely result in his confounding it with the
original. 11 As observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the attention such
purchasers usually give in buying that class of goods is the touchstone. 12
It has been held that in making purchases, the consumer must depend upon his recollection of
the appearance of the product which he intends to purchase. 13 The buyer having in mind the
mark/label of the respondent must rely upon his memory of the petitioner's mark. 14 Unlike the
judge who has ample time to minutely examine the labels in question in the comfort of his sala,
the ordinary shopper does not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark has been infringed, we
must consider the mark as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it. 15 The court therefore should
be guided by its first impression, 16 for a buyer acts quickly and is governed by a casual glance,
the value of which may be dissipated as soon as the court assumes to analyze carefully the
respective features of the mark. 17
It has also been held that it is not the function of the court in cases of infringement and unfair
competition to educate purchasers but rather to take their carelessness for granted, and to be
ever conscious of the fact that marks need not be identical. A confusing similarity will justify
the intervention of equity. 18 The judge must also be aware of the fact that usually a defendant
in cases of infringement does not normally copy but makes only colorable changes. 19Well has
it been said that the most successful form of copying is to employ enough points of similarity to
confuse the public with enough points of difference to confuse the courts. 20
We also note that the respondent court failed to take into consideration several factors which
should have affected its conclusion, to wit: age, training and education of the usual purchaser,
the nature and cost of the article, whether the article is bought for immediate consumption and
also the conditions under which it is usually purchased . 21Among these, what essentially
determines the attitude of the purchaser, specifically his inclination to be cautious, is the cost of
the goods. To be sure, a person who buys a box of candies will not exercise as much care as one
who buys an expensive watch. As a general rule, an ordinary buyer does not exercise as much
prudence in buying an article for which he pays a few centavos as he does in purchasing a more
valuable thing. 22 Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation. But mass products, low priced articles in wide use,
and matters of everyday purchase requiring frequent replacement are bought by the casual
consumer without great care. 23 In this latter category is catsup.
At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label
is a colorable imitation of the Del Monte trademark. The predominant colors used in the Del
Monte label are green and red-orange, the same with Sunshine. The word "catsup" in both
bottles is printed in white and the style of the print/letter is the same. Although the logo of
Sunshine is not a tomato, the figure nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not normally copy out but
only makes colorable changes, employing enough points of similarity to confuse the public
 12
with enough points of differences to confuse the courts. What is undeniable is the fact that
when a manufacturer prepares to package his product, he has before him a boundless choice of
words, phrases, colors and symbols sufficient to distinguish his product from the others. When
as in this case, Sunshine chose, without a reasonable explanation, to use the same colors and
letters as those used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive .24
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as
between a newcomer who by the confusion has nothing to lose and everything to gain and one
who by honest dealing has already achieved favor with the public, any doubt should be resolved
against the newcomer inasmuch as the field from which he can select a desirable trademark to
indicate the origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is not guilty of
infringement for having used the Del Monte bottle. The reason is that the configuration of the
said bottle was merely registered in the Supplemental Register. In the case of Lorenzana v.
Macagba, 26 we declared that:
(1) Registration in the Principal Register gives rise to a presumption of the validity of
the registration, the registrant's ownership of the mark and his right to the exclusive
use thereof. There is no such presumption in the registration in the Supplemental
Register.
(2) Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein on the issue of ownership which may be contested
through opposition or interference proceedings or, after registration, in a petition for
cancellation.
Registration in the Principal Register is constructive notice of the registrant's claim of
ownership, while registration in the Supplemental Register is merely proof of actual
use of the trademark and notice that the registrant has used or appropriated it. It is not
subject to opposition although it may be cancelled after the issuance. Corollarily,
registration in the Principal Register is a basis for an action for infringement while
registration in the Supplemental Register is not.
(3) In applications for registration in the Principal Register, publication of the
application is necessary. This is not so in applications for registrations in the
Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual use of the bottle's
configuration, the petitioners cannot claim exclusive use thereof because it has not been
registered in the Principal Register. However, we find that Sunshine, despite the many choices
available to it and notwithstanding that the caution "Del Monte Corporation, Not to be Refilled"
was embossed on the bottle, still opted to use the petitioners' bottle to market a product which
Philpack also produces. This clearly shows the private respondent's bad faith and its intention to
capitalize on the latter's reputation and goodwill and pass off its own product as that of Del
Monte.
The Court observes that the reasons given by the respondent court in resolving the case in favor
of Sunshine are untenable. First, it declared that the registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's product. Second, it held that the Sunshine
label was not improper because the Bureau of Patent presumably considered other trademarks
before approving it. Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where this
Court declared that selling oil in containers of another with markings erased, without intent to
deceive, was not unfair competition.
Regarding the fact of registration, it is to be noted that the Sunshine label was registered not in
the Principal Register but only in the Supplemental Register where the presumption of the
validity of the trademark, the registrant's ownership of the mark and his right to its exclusive
use are all absent.
Anent the assumption that the Bureau of Patent had considered other existing patents, it is
reiterated that since registration was only in the Supplemental Register, this did not vest the
registrant with the exclusive right to use the label nor did it give rise to the presumption of the
validity of the registration.
On the argument that no unfair competition was committed, the Shell Case is not on all fours
with the case at bar because:
(1) In Shell, the absence of intent to deceive was supported by the fact that the
respondent therein, before marketing its product, totally obliterated and erased the
brands/mark of the different companies stenciled on the containers thereof, except for
a single isolated transaction. The respondent in the present case made no similar effort.
(2) In Shell, what was involved was a single isolated transaction. Of the many drums
used, there was only one container where the Shell label was not erased, while in the
case at hand, the respondent admitted that it made use of several Del Monte bottles and
without obliterating the embossed warning.
(3) In Shell, the product of respondent was sold to dealers, not to ultimate consumers.
As a general rule, dealers are well acquainted with the manufacturer from whom they
make their purchases and since they are more experienced, they cannot be so easily
deceived like the inexperienced public. There may well be similarities and imitations
which deceive all, but generally the interests of the dealers are not regarded with the
same solicitude as are the interests of the ordinary consumer. For it is the form in
which the wares come to the final buyer that is of significance. 28
As Sunshine's label is an infringement of the Del Monte's trademark, law and equity call for the
cancellation of the private respondent's registration and withdrawal of all its products bearing
the questioned label from the market. With regard to the use of Del Monte's bottle, the same
 13
constitutes unfair competition; hence, the respondent should be permanently enjoined from the
use of such bottles.
The court must rule, however, that the damage prayed for cannot be granted because the
petitioner has not presented evidence to prove the amount thereof. Section 23 of R.A. No. 166
provides:
Sec. 23. Actions and damages and injunction for infringement. — Any person entitled
to the exclusive use of a registered mark or trade name may recover damages in a civil
action from any person who infringes his rights, and the measure of the damages
suffered shall be either the reasonable profit which the complaining party would have
made, had the defendant not infringed his said rights or the profit which the defendant
actually made out of the infringement, or in the event such measure of damages cannot
be readily ascertained with reasonable certainty the court may award as damages
reasonable percentage based upon the amount of gross sales of the defendant or the
value of the services in connection with which the mark or trade name was used in the
infringement of the rights of the complaining party. In cases where actual intent to
mislead the public or to defraud the complaining party shall be shown, in the
discretion of the court, the damages may be doubled.
The complaining party, upon proper showing may also be granted injunction.1âwphi1
Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil
Code, which provides:
Art. 2222. The court may award nominal damages in every obligation arising from any
source enumerated in Art. 1157, or in every case where any property right has been
invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal
damages in the amount of Pl,000.00.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated
December 24, 1986 and the Resolution dated April 27,1987, are REVERSED and SET ASIDE
and a new judgment is hereby rendered:
(1) Canceling the private respondent's Certificate of Register No. SR-6310 and
permanently enjoining the private respondent from using a label similar to that of the
petitioners.
(2) Prohibiting the private respondent from using the empty bottles of the petitioners
as containers for its own products.
(3) Ordering the private respondent to pay the petitioners nominal damages in the
amount of Pl,000.00, and the costs of the suit.
SO ORDERED.
THIRD DIVISION
G.R. No. 195549 September 3, 2014
WILLAWARE PRODUCTS CORPORATION, Petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.
DECISION
PERALTA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking to set aside the Decision1 dated November 24, 2010 and Resolution2 dated February 10,
2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744.
The facts, as found by the Regional Trial Court (RTC), are as follows:
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present
complaint for damages for unfair competition with prayer for permanent injunction to enjoin
[petitioner] Willaware Products Corporation ([petitioner] for short) from manufacturing and
distributing plastic-made automotive parts similar to those of [respondent].
[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, Caloocan City. Since its registration in 1992, [respondent] has been
manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made
automotive parts. [Petitioner], on the other hand, which is engaged in the manufacture and
distribution of kitchenware items made of plastic and metal has its office near that of
[respondent]. [Respondent] further alleged that in view 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.
That sometime in November 2000, [respondent] discovered that [petitioner] 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 [respondent’s] plastic-
made automotive parts and to the same customers.
 14
[Respondent] alleged that it had originated the use of plastic in place of rubber in the
manufacture ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing,
shock absorberbushing, center bearing cushions, among others. [Petitioner’s] manufacture of
the same 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 constitute unfair competition, is and are contrary to law, morals, good customs and
public policy and have caused [respondent] damages in terms oflost and unrealizedprofits in the
amount of TWO MILLION PESOS as of the date of [respondent’s] complaint.
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 of FIVE HUNDRED THOUSAND PESOS (₱500,000.00).
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 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] 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
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 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 use of these plastic automotive parts, it still has no exclusive right to use,
manufacture and sell these as it has no patent over these products. Furthermore, [respondent] is
not the only exclusive manufacturer of these plastic-made automotive parts as there are other
establishments which were already openly selling them to the public. 3
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 competition. The RTC further opined that under the circumstances, in order
for respondent’s property rights to be preserved, petitioner’s acts of manufacturing similar
plastic-made automotive parts such as those of respondent’s and the selling of the sameproducts
to respondent’s customers, which it cultivated over the years, will have to be enjoined. The
dispositive portion of the decision reads:
WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two
Million (₱2,000,000.00) Pesos, as actual damages, One Hundred Thousand (₱100,000.00)
Pesos as attorney’s fees and One Hundred Thousand (₱100,000.00) Pesos for exemplary
damages. The court hereby permanently [enjoins] defendant from manufacturing the plastic-
made automotive parts as those manufactured by plaintiffs.
SO ORDERED. 4 merit by the CA in a Resolution dated February 10, 2011.
Thus, petitioner appealed to the CA.
On appeal, petitioner asserts that ifthere is no intellectual property protecting a good belonging
to 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 away respondent’s employees to get trade secrets. It points out that the plastic spare
parts sold by respondent are traded in the market and the copying of these can be done by
simplybuying a sample for a mold to be made.
Conversely, respondent averred that copyright and patent registrations are immaterial for an
unfair competition case to prosper under Article 28 of the Civil Code. It stresses that the
characteristics of unfair competition are present in the instant case as the parties are trade rivals
and petitioner’s acts are contrary to good conscience for deliberately copying its products and
employing its former employees.
In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the
RTC. Relevant portions of said decision read:
Despite the evidence showing thatWillaware took dishonest steps in advancing its business
interest against Jesichris, however, the Court finds no basis for the award by the RTC of actual
damages. One is entitled to actual damages as one has duly proven. The testimony of Quejada,
who was engaged by Jesichris in 2001 to audit its business, only revealed that there was a
discrepancy 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 decline of the sales in 2002 in comparison with those made in 2001 but it
does not disclose if this pertains to the subject automotive parts or to the other products of
Jesichris like plates.
In any event, it was clearly shown that there was unfair competition on the part of Willaware
that 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 RTC’s award of attorney’s fees and exemplary damages is also maintained.
xxxx
WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial
Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The
award of Two Million Pesos (₱2,000,000.00) actual damages is deleted and in its place, Two
Hundred Thousand Pesos nominal damages is awarded.
SO ORDERED.5
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of
 15
Hence, the present Petition for Review wherein petitioner raises the following issues for our
resolution:
(1) Whether or not there is unfair competition under human relations when the parties
are not competitors and there is actually no damage on the part of Jesichris?
(2) Consequently, if there is no unfair competition, should there be moral damages and
attorney’s fees?
(3) Whether or not the addition of nominal damages is proper although no rights have
been established?
(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it be
considered in the light of the said copyrights were considered to be void by no less
than this Honorable Court in SC GR No. 161295?
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has
established "goodwill?"6
In essence, the issue for our resolution is: whether or not petitioner committed acts amounting
to unfair competition under Article 28 of the Civil Code.
Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code
on humanrelations, and not unfair competition under Republic Act No. 8293,7 as the present
suit is a damage suit and the products are not covered by patent registration. A fortiori, the
existence of patent registration is immaterial in the present case.
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 coverseven 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.8
With that settled, we now come to the issue of whether or not petitioner committed acts
amounting tounfair competition under Article 28 of the Civil Code.
We find the petition bereft of merit.
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."
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 engage in business or to earn a living. Plainly,what the law prohibits is unfair
competition and not competition where the means usedare fair and legitimate.
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.9
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 formeremployees,
deliberately copied respondent’s products and even went to the extent of selling these products
to respondent’s customers.10
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 to unfair competition, viz.:
The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with
the business of [respondent].1âwphi1 [Petitioner’s] acts can be characterized as executed with
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
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 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 indicates that it is banking on his experience gained from working
for [respondent].
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
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
Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of
suddenly shifting his business from manufacturing kitchenware to plastic-made automotive
 16
parts; his luring the employees of the respondent to transfer to his employ and trying to Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
discover the trade secrets of the respondent.12 month ago.

Moreover, when a person starts an opposing place of business, not for the sake of profit to That [petitioner] was clearly outto take [respondent] out of business was buttressed by the
himself, but regardless of loss and for the sole purpose of driving his competitor out of business testimony of [petitioner’s] witness, Joel Torres:
so that later 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 Q: Are you familiar with the [petitioner], Willaware Product Corporation?
indicate that it 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 A: Yes, sir.
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
Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
(sic)?
not? 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 known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes, A: At Mithi Street, Caloocan City, sir.
sir. Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
plastic automotive products of Jesichris? Mr. Salinas: Yes, sir. Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this
court what unusual even (sic) transpired between you and Mr. Salinas on said date?
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’ A: There was, sir.
employees to Willaware.
Q: What is that?
Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?
A: Sir, I was walking at that time together with my wife going to the market and then I passed
Mr. Salinas: Since they transferred there (sic) our place. by the place where they were having a drinking spree, sir.

Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I don’t know the Q: You mentioned they, who were they who were drinking at that time?
exact date.
A: I know one Jun Molina, sir.
Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
your company, is it not? Q: And who else was there?

Mr. Salinas: Yes, sir. A: William Salinas, sir.

Atty. Bautista: How many, more or less? Q: And will you kindly inform us what happened when you spotted upon them drinking?

Mr. Salinas: More or less, three (3). A: Jun Molina called me, sir.

Atty. Bautista: And when, in what year or month did they transfer to you? Q: And what happened after that?

Mr. Salinas: First, November 1. A: At that time, he offered mea glass of wine and before I was able to drink the wine, Mr.
Salinas uttered something, sir.
Atty. Bautista: Year 2000?
Q: And what were those words uttered by Mr. Salinas to you?
 17
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.
FIRST DIVISION
March 22, 2017
G.R. No. 186088
WILTON DY and/or PHILITES ELECTRONIC & LIGHTING PRODUCTS, Petitioner
vs
KONINKLIJKE PHILIPS ELECTRONICS, N.V., Respondent
DECISION
SERENO, CJ.:
This Petition for Review on Certiorari1 filed by petitioner Wilton Dy and/or Philites Electronic
& Lighting Products ("PHILITES") assails the Decision2 and Resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 103350. The appellate court reversed and set aside the
Decision4 of the IPP Office of the Director General (IPP-DG), which affirmed the Decision5 of
the Intellectual Property Philippines Bureau of Legal Affairs (IPP-BLA) upholding petitioner's
trademark application.
THE ANTECEDENT FACTS
On 12 April 2000, petitioner PHILITES filed a trademark application (Application Serial
Number 4-2000-002937) covering its fluorescent bulb, incandescent light, starter and ballast.
After publication, respondent Koninklijke Philips Electronics, N .V. ("PHILIPS") filed a
Verified Notice of Opposition on 17 March 2006, alleging the following:
(a) The approval of Application Serial No. 4-2000-002937 is contrary to the following
provisions of Republic Act No. [RAJ 8293 or the Intellectual Property Code of the Philippines
(IP Code): Sections 123.l(d), (i) and (iii), 123.l(e), 147, and 168.
(b) The approval of Application Serial No. 4-2000-002937 will cause grave and irreparable
damage and injury to oppose.
(c) The use and registration of the applied for mark by [petitioner] will mislead the public as to
the origin, nature, quality, and characteristic of the goods on which it is affixed;
(d) [Petitioner's] application for registration is tantamount to fraud as it seeks to register and
obtain legal protection for an identical or confusingly similar mark that clearly infringes upon
the established rights of the [respondent] over its registered and internationally well-known
mark.
(e) The registration of the trademark PHILITES & LETTER P DEVICE in the name of the
[petitioner] will violate the proprietary rights and interests, business reputation and goodwill of
the [respondent] over its trademark, considering that the distinctiveness of the trademark
PHILIPS will be diluted.
(t) The registration of the applied for mark will not only prejudice the Opposer, but will also
cause [petitioner] to unfairly profit commercially from the goodwill, fame and notoriety of
Opposer's trademark and reputation.
(g) [Petitioner's] registration and use of the applied for mark in connection with goods under
Class 11 will weaken the unique and distinctive significance of mark PHILIPS and will tarnish,
degrade or dilute the distinctive quality of Opposer's trademark and will result in the gradual
attenuation or whittling away of the value of Opposer's trademark, in violation of Opposer's
proprietary rights.6
 18
hence 'Philites.' This Bureau finds that there is no dictionary meaning to the [petitioner's] mark.
It is a coined and arbitrary word capable of appropriation as a trademark. x x x

Moreover, by mere pronouncing the two marks, the phonetic sounds produced when each mark
is uttered are not the same. The last syllable of respondent's mark is uttered in a long vowel
sound, while the last vowel of the opposer's mark is not.

On 8 August 2006, petitioner filed a Verified Answer, stating that its PHILITES & LETTER P
DEVICE trademark and respondent's PHILIPS have vast dissimilarities in terms of spelling,
sound and meaning.7
x x x. This Bureau believes that opposer has no monopoly over the color or diameter or shape
of a light bulb or packaging shape unless registrations were secured to protect the same. The
images of the packages are reproduced below for reference.

At the conclusion of the hearing, on 9 November 2006, IPP-BLA Director Estrellita Beltran-
Abelardo rendered a Decision8 denying the Opposition filed by respondent PHILIPS. The
dispositive portion of the Decision reads:

WHEREFORE, premises considered the OPPOSITION filed by Koninklijke Philips

Electronics, N.V. is hereby DENIED. Accordingly, Application Serial no. 4-2000-002937 filed
by Respondent-Applicant, Wilton Dy and/or Philites Electronic & Lighting Products on 12
April 2000 for the mark "PHILITES & LETTER P DEVICE" used on fluorescent bulb,
incandescent light starter, ballast under class 11, is as it is, hereby GRANTED.

Let the filewrapper of "PHILITES & LETTER P DEVICE," subject matter of this case together
with this Decision be forwarded to the Bureau of Trademarks (BOT) for appropriate action.

SO ORDERED.

In upholding petitioner's trademark application, the IPP-BLA stated that assuming respondent's
mark was well-known in the Philippines, there should have been prior determination of whether
or not the mark under application for registration was "identical with, or confusingly similar to,
or constitutes a translation of such well-known mark in order that the owner of the well-known
mark can prevent its registration."9 From the evidence presented, the IPP-BLA concluded that
the PHILIPS and PHILITES marks were so unlike, both visually and aurally. It held that no
confusion was likely to occur, despite their contemporaneous use, based on the following
observations:
x x x. For one, respondent adopts a yellow to light yellow dominant color while the oppose uses
an orange yellow hue. The mark "Philites" is printed in yellow with light blue background as
compared to the "Philips" mark typed in white against a black background.
It is fundamental in trademark jurisprudence that color alone, unless displayed in an arbitrary
design docs not function as a trademark.

The Philips shield mark has four stars in different sizes located at the north east and south west
portions inside a circle within the shield. There are three wavy lines dissecting the middle of the
circle. None of these appear in the respondent's mark.
[Respondent] declares that the word Philips is the surname of the brothers who founded the
Philips company engaged in manufacturing and selling lighting products. [Petitioner] on the
other hand has testified that the word Philites is coined from the word 'Philippines' and 'lights,'
Secondly, there appears to be other advertising slogans that appear in respondent's package
such as the words, "new", "prolong lite life", "E-coat finished" and "with additional 35% more
than ordinary". These phrases are absent in opposer's package. These phrases can be considered
in the nature of descriptive terms that can be appropriated by anyone. 10
Upon appeal, the IPP-DG rendered a Decision11 on 16 April 2008, affirming the ruling of the
IPP-BLA as follows:
 19
WHEREFORE, premises considered, that instant appeal is hereby DISMISSED for lack of
merit. Accordingly, Decision No. 2006-125 of the Director of the Bureau of Legal Affairs dated
09 November 2006, is hereby AFFIRMED.
Let a copy of this Decision as well as the trademark application and records be furnished and
returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the
Directors of the Bureau of Trademarks, the Administrative, Pinancial and Human Resources
Development Services Bureau, and the library of the Documentation, Information and
Technology Transfer Bureau be furnished a copy of this Decision for information, guidance and
records purposes.
SO ORDERED.
In so ruling, the IPP-DG noted that "[t]he dominant feature of the [respondent's] trademark is
'PHILIPS' while that of the [petitioner's] trademark is 'PHILITES.' While the first syllables of
the marks are identical - 'PHI' - the second syllables are not. The differences in the last syllable
accounted for the variance of the trademarks visually and aurally." 12 Moreover, there were
"glaring differences and dissimilarities in the design and general appearance of the Philips
shield emblem mark and the letter 'P' of Philites mark." 13 Thus, "even if the [petitioner's]
products bearing the trademark PHILIPS are placed side by side with other brands, the
purchaser would not be confused to pick up the [petitioner's] product if this is his choice or
preference, unless the resemblance in the appearance of the trademarks is so glaring which [it]
is not in this case."14
As regards the issue of petitioner submitting a trademark drawing different from that used in the
packaging, the IPP-DG noted that this case involved an opposition to the registration of a mark,
while labels and packaging were technically not a part thereof. 15 At best, respondent supposedly
had the remedy of filing a case for trademark infringement and/or unfair competition. 16
Upon intermediate appellate review, the CA rendered a Decision 17 on 7 October 2008. The
dispositive portion herein reads:
WHEREFORE, premises considered, the Petition for Review is GRANTED. The Decision
dated 16 April 2008 of the Director General of the Intellectual Property Office in Appeal No.
14-06-28; IPC No. 14-2006- 00034 is REVERSED and SET ASIDE. The application for
trademark registration (Application Serial Number 4-2000-002937) of respondent Wilton Dy
and/or Philites Electronic & Lighting Products is DISMISSED. Costs against respondent.
SO ORDERED.
In so ruling, the CA reasoned that the "drawing of the trademark submitted by [petitioner] has a
different appearance from that of [petitioner's] actual wrapper or packaging that contain the
light bulbs, which We find confusingly similar with that of [respondent's] registered trademark
and packaging."18 Moreover, it found to be "self-serving [petitioner's] asseveration that the
mark 'PHILITES' is a coined or arbitrary mark from the words 'Philippines' and 'lights.' Of all
the marks that [petitioner] could possibly think of for his light bulbs, it is odd that [petitioner]
chose a mark with the letters 'PHILI,' which are the same prevalent or dominant five letters
found in [respondent's] trademark 'PHILIPS' for the same products, light bulbs." 19 Hence, the
appellate court concluded that petitioner had intended to ride on the long-established reputation
and goodwill of respondent's trademark.20
On 25 October 2008, petitioner filed a Motion for Reconsideration, which was denied in a
Resolution21 issued by the CA on 18 December 2008.
Hence, this petition.
Respondent filed its Comment22 on 23 June 2009, and petitioner filed its Reply23 on 10
November 2009.
THE ISSUES
From the foregoing, we reduce the issues to the following:
1. Whether or not respondent's mark is a registered and well-known mark in the Philippines;
and
2. Whether or not the mark applied for by petitioner is identical or confusingly similar with that
of respondent.
OUR RULING
The Petition is bereft of merit.
A trademark is "any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a manufacturer or merchant on his goods to identify
and distinguish them from those manufactured, sold, or dealt by othcrs." 24 It is "intellectual
property deserving protection by law,"25 and "susceptible to registration if it is crafted fancifully
or arbitrarily and is capable of identifying and distinguishing the goods of one manufacturer or
seller from those of another." 26
Section 122 of the Intellectual Property Code of the Philippines (IPC) provides that rights to a
mark shall be acquired through registration validly done in accordance with the provisions of
this law.27 Corollary to that rule, Section 123 provides which marks cannot be registered.
Respondent opposes petitioner's application on the ground that PHILITES' registration will
mislead the public over an identical or confusingly similar mark of PHILIPS, which is
registered and internationally well-known mark. Specifically, respondent invokes the following
provisions of Section 123:
 20
Section 123. Registrability. - 123 .1. A mark cannot be registered if it:
xxx
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an
earlier filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark whid1 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, as being already the mark of a person
other than the applicant for registration, and used for identical or similar goods or services:
Provided, That in determining whether a mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philipines which has been obtained as a result of the promotion of the mark. 28
Respondent's mark is a registered and well-known mark in the
Philippines
There is no question that respondent's mark PHILIPS is already a registered and well-known
mark in the Philippines.
As we have said in Fredco Manufacturing Corporation v. Harvard University,29 "[i]ndeed,
Section 123.l(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 Ph iii
ppines. "30
Rule l00(a) of the Rules and Regulations on Trademarks, Service Marks, Tradenames and
Marked or Stamped Containers defines "competent authority" in the following manner:
(c) "Competent authority" for purposes of determining whether a mark is well-known, means
the Court, the Director General, the Director of the Bureau of Legal Affairs, or any
administrative agency or office vested with quasi-judicial or judicial jurisdiction to hear and
adjudicate any action to enforce the rights to a mark.
We thus affirm the following findings of the CA, inasmuch as the trademark of PHILIPS is a
registered and well-known mark, as held in the Supreme Court Decision in Philips Export B. V,
v. CA:31
Petitioner (PHILIPS) is the registered owner in the Philippines of the "PHILIPS" and "PHILIPS
SHIELD EMBLEM" trademarks, as shown by Certificates of Registration Nos. 42271 and
42270. The Philippine trademark registrations of petitioner's "PHILIPS" and "PHILIPS
SHIELD EMBLEM" are also evidenced by Certificates of Registration Nos. R- 1651, R-29134,
R-1674, and R-28981. The said registered trademarks "PHILIPS" and "PHILIPS SHIELD
EMBLEM" cover classes 7, 8, 9, 10, 11, 14, and 16. The assailed Decision itself states that
"(T)he Appellant's trademark is already registered and in use in the Philippines". It also appears
that worldwide, petitioner has thousands of trademark registrations x x x in various countries.
As found by the High Court in Philips Export B.V. vs Court of Appeals, PHILIPS is a
trademark or trade name which was registered as far back as 1922, and has acquired the status
of a well-known mark in the Philippines and internationally as well.32
Petitioner seeks to register a mark
nearly resembling that of respondent,
which may likely to deceive or cause
confusion among consumers.
Despite respondent's diversification to numerous and varied industries, 33 the records show that
both parties are engaged in the same line of business: selling identical or similar goods such as
fluorescent bulbs, incandescent lights, starters and ballasts.
In determining similarity and likelihood of confusion, jurisprudence has developed two tests:
the dominancy test, and the holistic or totality test.34
On one hand, the dominancy test focuses on "the similarity of the prevalent or dominant
features of the competing trademarks that might cause confusion, mistake, and deception in the
mind of the purchasing public. Duplication or imitation is not necessary; neither is it required
that the mark sought to be registered suggests an effort to imitate. Given more consideration are
the aural and visual impressions created by the marks on the buyers of goods, giving little
weight to factors like prices, quality, sales outlets, and market segments. " 35
On the other hand, the holistic or totality test necessitates a "consideration of the entirety of the
marks as applied to the products, including the labels and packaging, in determining confusing
similarity. The discerning eye of the observer must focus not only on the predominant words,
but also on the other features appearing on both labels so that the observer may draw
conclusion on whether one is confusingly similar to the other." 361âwphi1
Applying the dominancy test to this case requires us to look only at the mark submitted by
petitioner in its application, while we give importance to the aural and visual impressions the
mark is likely to create in the minds of the buyers. We agree with the findings of the CA that
the mark "PHILITES" bears an uncanny resemblance or confusing similarity with respondent's
mark "PHILIPS," to wit:
Applying the dominancy test in the instant case, it shows the uncanny resemblance or confusing
similarity between the trademark applied for by respondent with that of petitioner's registered
 21
trademark. An examination of the trademarks shows that their dominant or prevalent feature is
the five-letter "PHILI", "PHILIPS" for petitioner, and "PHILITES" for respondent. The marks
are confusingly similar with each other such that an ordinary purchaser can conclude an
association or relation between the marks. The consuming public does not have the luxury of
time to ruminate the phonetic sounds of the trademarks, to find out which one has a short or
long vowel sound. At bottom, the letters "PHILI'' visually catch the attention of the consuming
public and the use of respondent's trademark will likely deceive or cause confusion. Most
importantly, both trademarks are used in the sale of the same goods, which are light bulbs. 37
The confusing similarity becomes even more prominent when we examine the entirety of the
marks used by petitioner and respondent, including the way the products are packaged. In using
the holistic test, we find that there is a confusing similarity between the registered marks
PHILIPS and PHILITES, and note that the mark petitioner seeks to register is vastly different
from that which it actually uses in the packaging of its products. We quote with approval the
findings of the CA as follows:
Applying 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. A
comparison between petitioner's registered trademark "PHILIPS'' as used in the wrapper or
packaging of its light bulbs and that of respondent's applied for trademark "PHILITES" as
depicted in the container or actual wrapper/packaging of the latter's light bulbs will readily
show that there is a strong similitude and likeness between the two trademarks that will likely
cause deception or confusion to the purchasing public. The fact that the parties' wrapper or
packaging reflects negligible differences considering the use of a slightly different font and hue
of the yellow is of no moment because taken in their entirety, respondent's trademark
"PHILITES" will likely cause confusion or deception to the ordinary purchaser with a modicum
of intelligence.38
WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari is
hereby DENIED. The 7 October 2008 Decision and 18 December 2008 Resolution of the Court
of Appeals in CA-G.R. SP No. 103350 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 185830 June 5, 2013
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES),
INC., Petitioner,
vs.
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L., B.V., Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the December 23, 2008 Decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 104672 which affirmed in toto the Intellectual
Property Office (IPO) Director General’s April 21, 2008 Decision 3 that declared respondent
Renaud Cointreau & Cie (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.
The Facts
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
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
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 November 25, 1986 in France. Bearing Serial No. 72264, such application was
published for opposition in the March-April 1993 issue of the BPTTT Gazette and released for
circulation on May 31, 1993.4
On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the
subject 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 Cointreau’s use of the subject mark will actually create confusion, mistake,
and deception to the buying public as to the origin and sponsorship of the goods, and cause
great and irreparable injury and damage to Ecole’s business reputation and goodwill as a senior
user of the same.5
On October 7, 1993, Cointreau filed its answer claiming to be the true and lawful owner of the
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 school to have set the standard for the teaching of classical French cuisine and
pastry making; and (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 subject mark is a fraudulent misrepresentation. 6
During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos.
60631 and 54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU
PARIS 1895 & DEVICE" for goods and services under classes 21 and 41 of the Nice
Classification, respectively.7
The Ruling of the Bureau of Legal Affairs
 22
In its Decision8 dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the IPO sustained
Ecole’s 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 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 not abroad. It then concluded that Cointreau has not established any
proprietary right entitled to protection in the Philippine jurisdiction because the law on
trademarks rests upon the doctrine of nationality or territoriality.10
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
registered under the name "ECOLE DE CUISINE MANILLE (THE CORDON BLEU OF THE
PHILIPPINES), INC." on May 9, 1980.11
Aggrieved, Cointreau filed an appeal with the IPO Director General.
The Ruling of the IPO Director General
In his Decision dated April 21, 2008, the IPO Director General reversed and set aside the
BLA’s decision, thus, granting Cointreau’s appeal and allowing the registration of the subject
mark.12 He held that while Section 2 of R.A. No. 166 requires actual use of the subject mark in
commerce in the 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 Philippines to be able to acquire ownership of a mark. 13
In resolving the issue of ownership and right to register the subject mark in favor of Cointreau,
he considered Cointreau’s undisputed use of such mark since 1895 for its culinary school in
Paris, France (in which petitioner’s own directress, Ms. Lourdes L. Dayrit, had trained in 1977).
Contrarily, 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 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
Finding the IPO Director General’s reversal of the BLA’s Decision unacceptable, Ecole filed a
Petition for Review16dated June 7, 2008 with the CA.
Ruling of the CA
In its Decision dated December 23, 2008, the CA affirmed the IPO Director General’s Decision
in toto.17 It declared Cointreau as the true and actual owner of the subject mark with a right to
register the same in the Philippines under Section 37 of R.A. No. 166, having registered such
mark in its country of origin on November 25, 1986. 18
The CA likewise held that Cointreau’s right to register the subject mark cannot be barred by
Ecole’s prior use thereof as early as 1948 for its culinary school "LE CORDON BLEU
MANILLE" in the Philippines because its appropriation of the mark was done in bad faith.
Further, Ecole had no certificate of registration that would put Cointreau on notice that the
former had appropriated or has been using the subject mark. In fact, its application for
trademark registration for the same which was just filed on February 24, 1992 is still pending
with the IPO.19
Hence, this petition.
Issues Before the Court
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.
At this point, it should be noted that the instant case shall be resolved under the provisions of
the old Trademark Law, R.A. No. 166, which was the law in force at the time of Cointreau’s
application for registration of the subject mark.
The Court’s Ruling
The petition is without merit.
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 and not Cointreau.
Petitioner’s argument is untenable.
Under Section 220 of R.A. No. 166, in order to register a trademark, one must be the owner
thereof and must have actually used the mark in commerce in the Philippines for two (2)
months prior to the application for registration. Section 2-A21 of the same law sets out to define
how one goes about acquiring ownership thereof. Under Section 2-A, it is clear that actual use
in commerce is also the test of ownership but the provision went further by saying that the mark
must not have been so appropriated by another. Additionally, it is significant to note that
Section 2-A does not require that 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 Philippines for two (2) months prior to registration. 22
Nevertheless, foreign marks which are not registered are still accorded protection against
infringement and/or unfair competition. At this point, it is worthy to emphasize that the
Philippines and France, Cointreau’s country of origin, are both signatories to the Paris
 23
Convention for the Protection of Industrial Property (Paris Convention). 23 Articles 6bis and 8 of
the Paris Convention state:
ARTICLE 6bis
(1) The countries of the Union undertake, ex officio 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, an imitation, or a translation, liable to create
confusion, of a mark considered by the competent authority of the country of registration or use
to be well known in that country as being already the mark of a person entitled to the benefits of
this Convention and used for identical or similar goods.1âwphi1 These provisions shall also
apply when the essential part of the mark constitutes a reproduction of any such well-known
mark or an imitation liable to create confusion therewith.
ARTICLE 8
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)
In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris Convention, to
wit:
Section 37. Rights of foreign registrants. - Persons who are nationals of, domiciled in, or have a
bona fide or effective business or commercial establishment in any foreign country, which is a
party 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 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.
xxxx
Trade-names of persons described in the first paragraph of this section shall be protected
without the obligation of filing or registration whether or not they form parts of marks.
xxxx
In view of the foregoing obligations under the Paris Convention, the Philippines is obligated to
assure nationals of the signatory-countries that they are afforded an effective protection against
violation of their intellectual property rights in the Philippines in the same way that their own
countries are obligated to accord similar protection to Philippine nationals. 24 "Thus, under
Philippine law, a trade name of a national of a State that is a party to the Paris Convention,
whether or not the trade name forms part of a trademark, is protected "without the obligation of
filing or registration.’"25
In the instant case, it is undisputed that Cointreau has been using the subject mark in France
since 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, France. Cointreau was likewise the first registrant of the said mark under
various classes, both abroad and in the Philippines, having secured Home Registration No.
1,390,912 dated November 25, 1986 from its country of origin, as well as several trademark
registrations in the Philippines.26
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.