MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO,

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

GROUP, INC., respondents.

||| Facts:

Respondent Gallo Winery is a foreign corporation not doing business in the

Philippines but organized and existing under the laws of the State of California,
United States of America (U.S.),

Gallo Winery's GALLO wine trademark was registered in the principal register of the
Philippine Patent Office (now Intellectual Property Office) on November 16, 1971.
On the other hand, petitioners Mighty Corporation and La Campana and their sister
company, Tobacco Industries of the Philippines (Tobacco Industries), are engaged in
the cultivation, manufacture, distribution and sale of tobacco products for which
they have been using the GALLO cigarette trademark since 1973. 8
On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark
and tradename infringement and unfair competition, with a prayer for damages and
preliminary injunction.
Respondents charged petitioners with violating Article 622 They claimed that
petitioners adopted the GALLO trademark to ride on Gallo Winery's GALLO and
ERNEST & JULIO GALLO trademarks' established reputation and popularity, thus
causing confusion, deception and mistake on the part of the purchasing public who
had always associated GALLO and ERNEST & JULIO GALLO trademarks with Gallo
Winery's wines.
ISSUE:
Whether, [a] RA 8293 (Intellectual Property Code of the Philippines [IP Code]) was
applicable in this case; [b] GALLO cigarettes and GALLO wines were identical, similar
or related goods for the reason alone that they were purportedly forms of vice; [c]
both goods passed through the same channels of trade and [d] petitioners were
liable for trademark infringement, unfair competition and damages.

RULING:
(A) THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE

It is a fundamental principle that the validity and obligatory force of a law proceed
from the fact that it has first been promulgated. A law that is not yet effective
cannot be considered as conclusively known by the populace. To make a law binding
even before it takes effect may lead to the arbitrary exercise of the legislative
power. 40 Nova constitutio futuris formam imponere debet non praeteritis. A new
state of the law ought to affect the future, not the past. Any doubt must generally be
resolved against the retroactive operation of laws, whether these are original
enactments, amendments or repeals. 41 There are only a few instances when laws
may be given retroactive effect, 42none of which is present in this case.
The IP Code, repealing the Trademark Law, 43 was approved on June 6, 1997.
Section 241 thereof expressly decreed that it was to take effect only on January 1,
1998, without any provision for retroactive application. Thus, the Makati RTC and
the CA should have limited the consideration of the present case within the
parameters of the Trademark Law and the Paris Convention, the laws in force at the
time of the filing of the complaint.

(B) DISTINCTIONS BETWEEN

TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION

Although the laws on trademark infringement and unfair competition have a

common conception at their root, that is, a person shall not be permitted to
misrepresent his goods or his business as the goods or business of another, the law
on unfair competition is broader and more inclusive than the law on trademark
infringement. The latter is more limited but it recognizes a more exclusive right
derived from the trademark adoption and registration by the person whose goods or
business is first associated with it. The law on trademarks is thus a specialized
subject distinct from the law on unfair competition, although the two subjects are
entwined with each other and are dealt with together in the Trademark Law (now,
both are covered by the IP Code). Hence, even if one fails to establish his exclusive
property right to a trademark, he may still obtain relief on the ground of his
competitor's unfairness or fraud. Conduct constitutes unfair competition if the effect
is to pass off on the public the goods of one man as the goods of another. It is not
necessary that any particular means should be used to this end.
(C) PERTINENT PROVISIONS ON TRADEMARK
INFRINGEMENT UNDER THE PARIS
CONVENTION AND THE TRADEMARK LAW

In summary, the Paris Convention protects well-known trademarks only (to be

determined by domestic authorities), while the Trademark Law protects all
trademarks, whether well-known or not, provided that they have been registered
and are in actual commercial use in the Philippines. Following universal acquiescence
and comity, in case of domestic legal disputes on any conflicting provisions between
the Paris Convention (which is an international agreement) and the Trademark law
(which is a municipal law) the latter will prevail. 54
Under both the Paris Convention and the Trademark Law, the protection of a
registered trademark is limited only to goods identical or similar to those in respect
of which such trademark is registered and only when there is likelihood of confusion.
Under both laws, the time element in commencing infringement cases is material in
ascertaining the registrant's express or implied consent to another's use of its
trademark or a colorable imitation thereof. This is why acquiescence, estoppel or
laches may defeat the registrant's otherwise valid cause of action.
Hence, proof of all the elements of trademark infringement is a condition precedent
to any finding of liability.
(D) THE ACTUAL COMMERCIAL USE IN THE
PHILIPPINES OF GALLO CIGARETTE
TRADEMARK PRECEDED THAT OF
GALLO WINE TRADEMARK.

In view of the foregoing jurisprudence and respondents' judicial admission that

the actual commercial use of the GALLO wine trademark was subsequent to its
registration in 1971 and to Tobacco Industries' commercial use of the GALLO
cigarette trademark in 1973, we rule that, on this account, respondents never
enjoyed the exclusive right to use the GALLO wine trademark to the prejudice of
Tobacco Industries and its successors-in-interest, herein petitioners, either under the
Trademark Law or the Paris Convention

(E) RESPONDENTS' GALLO TRADEMARK

REGISTRATION IS LIMITED TO
WINES ONLY\

We also note that the GALLO trademark registration certificates in the Philippines
and in other countries expressly state that they cover wines only, without any
evidence or indication that registrant Gallo Winery expanded or intended to expand
its business to cigarettes. 63
Thus, by strict application of Section 20 of the Trademark Law, Gallo Winery's
exclusive right to use the GALLO trademark should be limited to wines, the only
product indicated in its registration certificates.
First, the records bear out that most of the trademark registrations took place in the
late 1980s and the 1990s, that is, after Tobacco Industries' use of the GALLO
cigarette trademark in 1973 and petitioners' use of the same mark in 1984.
GALLO wines and GALLO cigarettes are neither the same, identical, similar nor
related goods, a requisite element under both the Trademark Law and the Paris
Convention.
Second, the GALLO trademark cannot be considered a strong and distinct mark in
the Philippines. Respondents do not dispute the documentary evidence that aside
from Gallo Winery's GALLO trademark registration, the Bureau of Patents,
Trademarks and Technology Transfer also issued on September 4, 1992 Certificate of
Registration No. 53356 under the Principal Register approving Productos Alimenticios
Gallo, S.A's April 19, 1990 application for GALLO trademark registration and use for
its "noodles, prepared food or canned noodles, ready or canned sauces for noodles,
semolina, wheat flour and bread crumbs, pastry, confectionery, ice cream, honey,
molasses syrup, yeast, baking powder, salt, mustard, vinegar, species and ice." 122
Third and most important, pursuant to our ruling in Canon Kabushiki Kaisha vs. Court
of Appeals and NSR Rubber Corporation, 123 "GALLO" cannot be considered a "well-
known" mark within the contemplation and protection of the Paris Convention in
this case since wines and cigarettes are not identical or similar goods.
The universal test question is whether the public is likely to be deceived. Nothing
less than conduct tending to pass off one man's goods or business as that of another
constitutes unfair competition. Actual or probable deception and confusion on the
part of customers by reason of defendant's practices must always appear. 125 On
this score, we find that petitioners never attempted to pass off their cigarettes as
those of respondents. There is no evidence of bad faith or fraud imputable to
petitioners in using their GALLO cigarette mark.

PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs. SHOEMART,

INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, respondents.

FAC|||
Facts:
Pearl & Dean (P&D) is engaged in the manufacture of advertising display units
referred to as light boxes. Theseunits utilize specially printed posters sandwiched
between plastic sheets and illuminated with backlights. It was able tosecure
registration over these illuminated display units. The advertising light boxes were
marketed under the trademark“Poster Ads”.In 1985, P&D negotiated with defendant
Shoemart, Inc. (SMI) for the lease and installation of the light boxes inSM North
Edsa. However, since SM North Edsa was under construction, SMI offered
as alternative SM Makati andCubao. During the signing of the Contract,
SMI only returned the Contract with SM Makati. Manager of
petitioner reminded SMI that their agreement includes SM Cubao.
However, SMI did not bother to reply. Instead, respondentinformed
petitioner that they are rescinding the contract for SM Makati due to non-
performance.Two years later, SMI engaged the services of EYD Rainbow Advertising
to make the light boxes. These weredelivered in a staggered basis and installed at
SM Megamall and SM City. In 1989, petitioner received reports that exactcopy of its
light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc.
(NEMI), sister companyof SMI, was set up primarily to sell advertising space in
lighted display units located in SMI’s different branches. Petitioner sent letters to
respondents asking them to cease using the light boxes and the discontinued use of
the trademark “Poster Ads”.Claiming that SMI and NEMI failed to meet its demand,
petitioner filed a case for infringement of trademark andcopy right, unfair
competition and damages. SMI maintained that it independently
developed its poster panels usingcommonly known techniques and available
technology without notice of or reference to P&D’s copyright. In addition, itsaid that
registration of “Poster Ads” obtained by petitioner was only for stationeries such as
letterheads, envelopes andthe like. “Poster Ads” is a generic term which cannot be
appropriated as trademark, and, as such, registration of suchmark is invalid. It
also stressed that P&D is not entitled to the reliefs sought because the
advertising display unitscontained no copyright notice as provided for by law.RTC found
SMI and NEMI jointly and severally liable for infringement of copyright and
trademark. In addition, CA stressed that the protective mantle of the TrademarkLaw
extends only to the goods used by the first user as specified in its certificate of
registration. The registration of thetrademark “Poster Ads” covers only stationeries
such as letterheads, envelopes and calling cards and newsletter.

ISSUES:
(1) If the engineering or technical drawings of an advertising display unit are
granted copyright protection is thelight box depicted in such drawings ipso
facto also protected by such copyright? (2) Should the light box be
registeredseparately? (3) Can the owner of the registered trademark
legally prevent others from using such mark if it is mereabbreviation
of a term descriptive of his goods, services or business?
Held:

1.No. Copyright is purely statutory. As such, the rights are limited to what the statute
confers. It may be obtainedand enjoyed only with respect to the subjects and by the
persons, and on the terms and conditions specified inthe statute.
Accordingly, it can cover only the works falling within the
statutory enumeration or description.Petitioner secured copyright under
classification class “O” work. Thus, copyright protection extended only to
thetechnical drawings and not to the light box itself because the latter
was not at all in the category of “prints,pictorial illustrations, advertising
copies, labels, tags and box wraps.What the law does not include, it excludes, and
for the good reason: the light box was not a literary or artistic piece which could be
copyrighted under the copyright law. And no less clearly, neither could the lack
of statutory authority to make the light box copyrightable be remedied by the
simplistic act of entitling the copyrightcertificate issued by the National Library
as “Advertising Display Units”.It must be noted that copyright is confined to
literary and artistic works which are original intellectualcreations in the
literary and artistic domain protected from the moment of their creation.
2.Yes. Petitioner never secured a patent for the light boxes. It therefore acquired
no patent rights which could haveprotected its invention, if in fact it really was. And
because it had no patent, petitioner could not legally preventanyone from
manufacturing or commercially using the contraption. To be able to effectively and
legally
precludeo t h e r s f r o m c o p y i n g a n d p r o f i t i n g f r o m t h e i n v e n t i o n , a p a
t e n t i s a p r i m o r d i a l r e q u i r e m e n t . N o p a t e n t , n o protection. The
ultimate goal of a patent system is to bring new designs and technologies into the
public throughdisclosure. Ideas, once, disclosed to the public without protection of a
valid patent, are subject to appropriationwithout significant restraint.The Patent Law
has a three-fold purpose: first, patent law seeks to foster and reward invention;
second, itpromotes disclosures of inventions to stimulate further innovation and to
permit the public to practice the inventiononce the patent expires; third, the
stringent requirements for patent protection seek to ensure that ideas in thepublic
domain remain there for the free use of the public. It is only after an exhaustive
examination by the patentoffice that patent is issued. Therefore, not having gone
through the arduous examination for patents, petitioner cannot exclude other s
from the manufacture, sale or commercial use of the light boxes on the sole basis of
itscopyright certificate over the technical drawings.
3.Court agrees with CA that the certificate of registration issued by the
Director of Patents can confer the exclusiveright to use its own symbol
only to those goods specified in the certificate, subject to any conditions
and

limitations specified in the certificate. One who has adopted and used a trademark on his goods
does not preventthe adoption and use of the same trademark by others for products
which are of a different description.Assuming arguendo that “Poster Ads”
could validly qualify as a trademark, the failure of petitioner tosecure a
trademark registration for specific use on the light boxes meant that
there could not have been anytrademark infringement since registration was an
essential element thereof.There is no evidence that petitioner’s use of “poster Ads”
was distinctive or well-known. As noted by CA,petitioner’s expert witness himself
had testified that “Poster Ads” was not too generic a name. SO it was difficult
toidentify it with any company. This fact also prevented the application of
the doctrine of secondary meaning.“Poster Ads” was generic and incapable of
being used as a trademark because it was used in the field of
poster advertising the
very business engaged in by petitioner. Secondary meaning means
that a word or phraseoriginally incapable of exclusive appropriation with
reference to an article in the market might nevertheless havebeen used for so long
and so exclusively by one producer with reference to his article that , in the trade
and tothat branch of the purchasing public, the word or phrase has come to mean that the article
was his property.PETITION WAS DENIED.

379 SCRA 410 – Mercantile Law – Intellectual Property – Law on Copyright – Proper
Subjects of Copyright
FACTS:
Elidad Kho is the owner of KEC Cosmetics Laboratory and she was also the holder of
copyrights over Chin Chun Su and its Oval Facial Cream Container/Case. She also
bought the patent rights over the Chin Chun Su & Device and Chin Chun Su for
medicated cream from one Quintin Cheng, who was the assignee of Shun Yi Factory
– a Taiwanese factory actually manufacturing Chin Chun Suproducts.
Kho filed a petition for injunction against Summerville General Merchandising and
Company to enjoin the latter from advertising and selling Chin Chun Su products, in
similar containers as that of Kho, for this is misleading the public and causing Kho to
lose income; the petition is also to enjoin Summerville from infringing upon Kho’s
copyrights.
Summerville in their defense alleged that they are the exclusive and authorized
importer, re-packer and distributor of Chin Chun Su products; that Shun Yi even
authorized Summerville to register its trade name Chin Chun Su Medicated Cream
with the Philippine Patent Office; that Quintin Cheng, from whom Kho acquired her
patent rights, had been terminated (her services) by Shun Yi.
ISSUE: Whether or not Kho has the exclusive right to use the trade name and its
container.
HELD: No. Kho has no right to support her claim for the exclusive use of the subject
trade name and its container. The name and container of a beauty cream product
are proper subjects of a trademark (not copyright like what she registered for)
inasmuch as the same falls squarely within its definition. In order to be entitled to
exclusively use the same in the sale of the beauty cream product, the user must
sufficiently prove that she registered or used it before anybody else did. Kho’s
copyright and patent registration of the name and container would not guarantee
her the right to the exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights. Consequently, a preliminary
injunction order cannot be issued for the reason that the petitioner has not proven
that she has a clear right over the said name and container to the exclusion of
others, not having proven that she has registered a trademark thereto or used the
same before anyone did.

In-N-Out Burger, Inc. vs. Sehwani Inc., et. al

Facts:
Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the laws
of California. It is a signatory to the Convention of Paris on Protection of Industrial
Property and the TRIPS Agreement. It is engaged mainly in the restaurant business,
but it has never engaged in business in the Philippines.

Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations

organized in the Philippines. Sometime in 1991, Sehwani filed with the BPTTT an
application for the registration of the mark “IN N OUT (the inside of the letter “O”
formed like a star). Its application was approved and a certificate of registration was
issued in its name on 1993. In 2000, Sehwani, Incorporated and Benita Frites, Inc.
entered into a Licensing Agreement, wherein the former entitled the latter to use its
registered mark, “IN N OUT.”

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications
with the Bureau of Trademarks for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow
Design. In 2000, In-N-Out Burger found out that Sehwani, Incorporated had already
obtained Trademark Registration for the mark “IN N OUT (the inside of the letter “O”
formed like a star).” Also in 2000, In-N-Out Burger sent a demand letter directing
Sehwani, Inc. to cease and desist from claiming ownership of the mark “IN-N-OUT”
and to voluntarily cancel its trademark registration. Sehwani Inc. did not accede to
In-N-Out Burger’s demand but it expressed its willingness to surrender its
registration for a consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative
complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and
cancellation of trademark registration.

Issues:
 Whether or not the Intellectual Property Office (an administrative body) have
jurisdiction of cases involving provisions of the IPC (e.g. unfair
competition).[1]
 Whether or not there was unfair competition.
Held:
FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases involving
provisions of the IPC (e.g. unfair competition) due to the following reasons:
 Section 10 of the Intellectual Property Code specifically identifies the
functions of the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.“The Bureau of Legal Affairs shall have the
following functions:
10.1 Hear and decide opposition to the application for registration of
marks; cancellation of trademarks; subject to the provisions of Section 64,
cancellation of patents and utility models, and industrial designs; and petitions for
compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for violations of
laws involving intellectual property rights; Provided, That its jurisdiction is limited
to complaints where the total damages claimed are not less than Two hundred
thousand pesos (P200,000): Provided, futher, That availment of the provisional
remedies may be granted in accordance with the Rules of Court. Xxx

Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction
to decide the petitioner’s administrative case against respondents and the IPO
Director General had exclusive jurisdiction over the appeal of the judgment of the
IPO Director of Legal Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita
Frites were not using their registered trademark but that of In-n-Out Burger.
Sehwani and Benita Frites are also giving their products the general appearance that
would likely influence the purchasers to believe that their products are that of In-N-
Out Burger. The intention to deceive may be inferred from the similarity of the
goods as packed and offered for sale, and, thus, an action will lie to restrain unfair
competition. The respondents’ frauduulent intention to deceive purchasers is also
apparent in their use of the In-N-Out Burger in business signages.
The essential elements of an action for unfair competition are (1) confusing similarity
in the general appearance of the goods and (2) intent to deceive the public and
defraud a competitor. The confusing similarity may or may not result from similarity
in the marks, but may result from other external factors in the packaging or
presentation of the goods. The intent to deceive and defraud may be inferred from
the similarity of the appearance of the goods as offered for sale to the public. Actual
fraudulent intent need not be shown.
 Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc.
FACTS:
Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is
marketed under the brand name “Unasyn.” Sometime in January and February 2003,
Pfizer discovered that Pharmawealth submitted bids for the supply of Sulbactam
Ampicillin to several hospitals without the Pfizer’s consent. Pfizer then demanded
that the hospitals cease and desist from accepting such bids. Pfizer also demanded
that Pharmawealth immediately withdraw its bids to supply Sulbactam Ampicillin.
Pharmawealth and the hospitals ignored the demands.

Pfizer then filed a complaint for patent infringement with a prayer for permanent
injunction and forfeiture of the infringing products. A preliminary injunction effective
for 90 days was granted by the IPO’s Bureau of Legal Affairs (IPO-BLA). Upon
expiration, a motion for extension filed by Pfizer was denied. Pfizer filed a Special
Civil Action for Certiorari in the Court of Appeals (CA) assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of
Makati (RTC) a complaint for infringement and unfair competition, with a prayer for
injunction. The RTC issued a temporary restraining order, and then a preliminary
injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum
shopping. Nevertheless, the CA issued a temporary restraining order. Pharmawealth
again filed a motion to dismiss, alleging that the patent, the main basis of the case,
had already lapsed, thus making the case moot, and that the CA had no jurisdiction
to review the order of the IPO-BLA because this was granted to the Director General.
The CA denied all the motions. Pharmawealth filed a petition for review on Certiorari
with the Supreme Court.

Issues:

a) Can an injunctive relief be issued based on an action of patent infringement when

the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly
different causes of action and yet pray for the same relief?

Held:

a) No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly
states that "[the] patentee shall have the exclusive right to make, use and sell the
patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the
term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent."
Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since
the patent was registered on 16 July 1987, it expired, in accordance with the
provisions of R.A. 165, after 17 years, or 16 July 2004. Thus, after 16 July 2004, Pfizer
no longer possessed the exclusive right to make, use, and sell the products covered
by their patent. The CA was wrong in issuing a temporary restraining order after the
cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive

jurisdiction over decisions of the IPO-BLA. The question in the CA concerns an
interlocutory order, and not a decision. Since the IP Code and the Rules and
Regulations are bereft of any remedy regarding interlocutory orders of the IPO-BLA,
the only remedy available to Pfizer is to apply the Rules and Regulations suppletorily.
Under the Rules, a petition for certiorari to the CA is the proper remedy. This is
consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Yes. Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil action
of certiorari), or the institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other court would make a
favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties
that represent the same interests in both actions; (b) identity of rights asserted and
reliefs prayed for, the reliefs being founded on the same facts; (c) identity of the two
preceding particulars, such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the action under
consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the
rights allegedly violated and the acts allegedly violative of such rights are identical,
regardless of whether the patents on which the complaints were based are different.
In both cases, the ultimate objective of Pfizer was to ask for damages and to
permanently prevent Pharmawealth from selling the contested products. Relevantly,
the Supreme Court has decided that the filing of two actions with the same
objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC
cases, a decision in one case will necessarily amount to res judicata in the other
action.
Smith Kline Beckhan Vs. CA
Smith Kline is a US corporation licensed to do business in the Philippines. In 1981, a
patent was issued to it for its invention entitled “Methods and Compositions for
Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole
Carbamate.” The invention is a means to fight off gastrointestinal parasites from
various cattles and pet animals.
Tryco Pharma is a local corporation engaged in the same business as Smith Kline.
Smith Kline sued Tryco Pharma because the latter was selling a veterinary product
called Impregon which contains a drug called Albendazole which fights off gastro-
intestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos,
cattle and goats.
Smith Kline is claiming that Albendazole is covered in their patent because it is
substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered
by its patent since both of them are meant to combat worm or parasite infestation
in animals. And that Albendazole is actually patented under Smith Kline in the US.
Tryco Pharma averred that nowhere in Smith Kline’s patent does it mention that
Albendazole is present but even if it were, the same is “unpatentable”.
Smith Kline thus invoked the doctrine of equivalents, which implies that the two
substances substantially do the same function in substantially the same way to
achieve the same results, thereby making them truly identical for in spite of the fact
that the word Albendazole does not appear in Tryco Paharma’s letters of patent, it
has ably shown by evidence its sameness with methyl 5 propylthio-2-benzimidazole
carbamate.
ISSUE: Whether or not there is patent infringement in this case
HELD: No. Smith Kline failed to prove that Albendazole is a compound inherent in
the patented invention. Nowhere in the patent is the word Albendazole found.
When the language of its claims is clear and distinct, the patentee is bound thereby
and may not claim anything beyond them. Further, there was a separate patent for
Albendazole given by the US which implies that Albendazole is indeed separate and
distinct from the patented compound here.
A scrutiny of Smith Kline’s evidence fails to prove the substantial sameness of the
patented compound and Albendazole. While both compounds have the effect of
neutralizing parasites in animals, identity of result does not amount to infringement
of patent unless Albendazole operates in substantially the same way or by
substantially the same means as the patented compound, even though it performs
the same function and achieves the same result. In other words, the principle or
mode of operation must be the same or substantially the same.
The doctrine of equivalents thus requires satisfaction of the function-means-and-
result test, the patentee having the burden to show that all three components of
such equivalency test are met.

COFFEE PARTNERS V. SAN FRANCISCO COFFEE & ROASTERY (G.R. NO. 169504)

Facts:
Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners
Ltd. to operate coffee shops in the country using the trademark ‘San Francisco
Coffee.’ Respondent on the other hand, is a local corporation engaged in the
wholesale and retail sale of coffee and uses the business name ‘San Francisco Coffee
& Roastery’ registered with the DTI. Later, respondent filed an infringement and/or
unfair competition complaint against petitioner alleging that the latter was about to
open a coffee shop under the name ‘San Francisco Coffee’ causing confusion in the
minds of the public as it bore a similar name and is engaged also in selling of coffee.
Petitioner contended no infringement would arise because respondent’s tradename
was not registered.
Issue:

Whether or not petitioner’s trademark would infringe respondent’s tradename.

Ruling: YES.
In Prosource International, Inc. v. Horphag Research Management SA, this Court laid
down what constitutes infringement of an unregistered trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property Office;
however, in infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably
imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for
sale, or advertising of any goods, business or services; or the infringing mark or trade
name is applied to labels, signs, prints, packages, wrappers, receptacles, or
advertisements intended to be used upon or in connection with such goods,
business, or services;
(4) The use or application of the infringing mark or trade name is likely to cause
confusion or mistake or to deceive purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or services or the identity of
such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee
thereof.
RA 8293, which took effect on 1 January 1998, has dispensed with the registration
requirement. Section 165.2 of RA 8293 categorically states that trade names shall be
protected, even prior to or without registration with the IPO, against any unlawful
act including any subsequent use of the trade name by a third party, whether as a
trade name or a trademark likely to mislead the public.
It is the likelihood of confusion that is the gravamen of infringement. Applying the
dominancy test or the holistic test, petitioner’s “SAN FRANCISCO COFFEE” trademark
is a clear infringement of respondent’s “SAN FRANCISCO COFFEE & ROASTERY, INC.”
trade name. The descriptive words “SAN FRANCISCO COFFEE” are precisely the
dominant features of respondent’s trade name. Petitioner and respondent are
engaged in the same business of selling coffee, whether wholesale or retail. The
likelihood of confusion is higher in cases where the business of one corporation is
the same or substantially the same as that of another corporation. In this case, the
consuming public will likely be confused as to the source of the coffee being sold at
petitioner’s coffee shops.