[1] a beauty cream product are proper subjects of a trademark inasmuch as the same falls

squarely within its definition. In order to be entitled to exclusively use the same in
ELIDAD C. KHO, doing business under the name and style of KEC the sale of the beauty cream product, the user must sufficiently prove that she
COSMETICS LABORATORY, petitioner,  registered or used it before anybody else did. The petitioner’s copyright and patent
vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL
registration of the name and container would not guarantee her the right to the
MERCHANDISING and COMPANY, and ANG TIAM CHAY, respondents.
exclusive use of the same for the reason that they are not appropriate subjects of the
Actions; Injunctions; A preliminary injunction order may be granted only said intellectual rights. Consequently, a preliminary injunction order cannot be issued
when the application for the issuance of the same shows facts entitling the applicant for the reason that the petitioner has not proven that she has a clear right over the
to the relief demanded.— Pursuant to Section 1, Rule 58 of the Revised Rules of said name and container to the exclusion of others, not having proven that she has
Civil Procedure, one of the grounds for the issuance of a writ of preliminary registered a trademark thereto or used the same before anyone did.
injunction is a proof that the applicant is entitled to the relief demanded, and the
Same; Injunctions; Judgments; Moot and Academic Issues; The decision on
whole or part of such relief consists in restraining the commission or continuance of
the merits of the trial court with respect to the issue of final injunction and damages
the act or acts complained of, either for a limited period or perpetually. Thus, a
renders the issuance of the writ of preliminary injunction moot and academic
preliminary injunction order may be granted only when the application for the
notwithstanding the fact that the same has been appealed to the Court of Appeals.—
issuance of the same shows facts entitling the applicant to the relief demanded. This
We cannot likewise overlook the decision of the trial court in the case for final
is the reason why we have ruled that it must be shown that the invasion of the right
injunction and damages. The disposi-tive portion of said decision held that the
sought to be protected is material and substantial, that the right of complainant is
petitioner does not have trademark rights on the name and container of the beauty
clear and unmistakable, and, that there is an urgent and paramount necessity for the
cream product. The said decision on the merits of the trial court rendered the
writ to prevent serious damage.
issuance of the writ of a preliminary injunction moot and academic notwithstanding
Intellectual Property Law; Trademarks and Trade Names; Copyrights; the fact that the same has been appealed in the Court of Appeals.
Patents; Words and Phrases; “Trademark,” “Copyright,” and “Patent,” Explained
Same; Same; Forum Shopping; Technicalities and Procedural Rules; A
and Distinguished; Trademark, copyright and patents are different intellectual
party improperly raises the technical objection of noncompliance with Supreme
property rights that cannot be interchanged with one another.— Trademark,
Court Circular No. 28-91 by filing a motion to dismiss the petition for certiorari
copyright and patents are different intellectual property rights that cannot be
since the filing of a motion to dismiss is prohibited; Substantial justice and equity
interchanged with one another. A trademark is any visible sign capable of
require the Supreme Court not to revive a dissolved writ of injunction in favor of a
distinguishing the goods (trademark) or services (service mark) of an enterprise and
party without any legal right thereto merely on a technical infirmity.—The petitioner
shall include a stamped or marked container of goods. In relation thereto, a trade
argues that the appellate court erred in not dismissing the petition for certiorari for
name means the name or designation identifying or distinguishing an enterprise.
non-compliance with the rule on forum shopping. We disagree. First, the petitioner
Meanwhile, the scope of a copyright is confined to literary and artistic works which
improperly raised the technical objection of non-compliance with Supreme Court
are original intellectual creations in the literary and artistic domain protected from
Circular No. 28-91 by filing a motion to dismiss the petition for certiorari filed in the
the moment of their creation. Patentable inventions, on the other hand, refer to any
appellate court. This is prohibited by Section 6, Rule 66 of the Revised Rules of
technical solution of a problem in any field of human activity which is new, involves
Civil Procedure which provides that “(I)n petitions for certiorari before the Supreme
an inventive step and is industrially applicable.
Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be
Same; Same; Same; Same; The name and container of a beauty cream observed. Before giving due course thereto, the court may require the respondents to
product are proper subjects of a trademark, and a party’s copyright and patent file their comment to, and not a motion to dismiss, the petition xxx (italics
registration of the name and container would not guarantee him or her the right to supplied)”. Secondly, the issue was raised one month after petitioner had filed her
the exclusive use of the same for the reason that they are not appropriate subjects of answer/comment and after private respondent had replied thereto. Under Section 1,
the said intellectual rights.—Petitioner has no right to support her claim for the Rule 16 of the Revised Rules of Civil Procedure, a motion to dismiss shall be filed
exclusive use of the subject trade name and its container. The name and container of within the time for but before filing the answer to the complaint or pleading asserting

Assignment No. 1- IPL Page 1 of 31

a claim. She therefore could no longer submit a motion to dismiss nor raise defenses
and objections not included in the answer/comment she had earlier tendered. Thirdly,
substantial justice and equity require this Court not to revive a dissolved writ of
injunction in favor of a party without any legal right thereto merely on a technical
infirmity. The granting of an injunctive writ based on a technical ground rather than
compliance with the requisites for the issuance of the same is contrary to the primary
objective of legal procedure which is to serve as a means to dispense justice to the
deserving party.
Judgments; It is well-settled that non-observance of the period for deciding
cases or their incidents does not render such judgments ineffective or void.—The
petitioner likewise contends that the appellate court unduly delayed the resolution of
her motion for reconsideration. But we find that petitioner contributed to this delay
when she filed successive contentious motions in the same proceeding, the last of
which was on October 27, 1993, necessitating counter-manifestations from private
respondents with the last one being filed on November 9, 1993. Nonetheless, it is
well-settled that non-observance of the period for deciding cases or their incidents
does not render such judgments ineffective or void.
Contempt; There is nothing contemptuous about advertisements which
merely announced in plain and straightforward language the promulgation of a
Court of Appeals decision which was subsequently assailed before the Supreme
Court.—We rule that the Court of Appeals correctly denied the petitioner’s several
motions for contempt of court. There is nothing contemptuous about the
advertisements complained of which, as regards the proceedings in CA-G.R. SP No.
27803 merely announced in plain and straightforward language the promulgation of
the assailed Decision of the appellate court. Moreover, pursuant to Section 4 of Rule
39 of the Revised Rules of Civil Procedure, the said decision nullifying the
injunctive writ was immediately executory.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 dated May 24,
1993 of the Court of Appeals setting aside and declaring as null and void the
Orders2 dated February 10, 1992 and March 19, 1992 of the Regional Trial
Court, Branch 90, of Quezon City granting the issuance of a writ of
preliminary injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho filed a complaint for
injunction and damages with a prayer for the issuance of a writ of preliminary
Assignment No. 1- IPL
injunction, docketed as Civil Case No. Q-91-10926, against the respondents
Summerville General Merchandising and Company (Summerville, for brevity)
and Ang Tiam Chay.
The petitioner's complaint alleges that petitioner, doing business under the
name and style of KEC Cosmetics Laboratory, is the registered owner of the
copyrights Chin Chun Su  and Oval Facial Cream Container/Case, as shown
by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that she
also has patent rights on Chin Chun Su & Device and Chin Chun Su for
medicated cream after purchasing the same from Quintin Cheng, the
registered owner thereof in the Supplemental Register of the Philippine
Patent Office on February 7, 1980 under Registration Certificate No. 4529;
that respondent Summerville advertised and sold petitioner's cream products
under the brand name Chin Chun Su, in similar containers that petitioner
uses, thereby misleading the public, and resulting in the decline in the
petitioner's business sales and income; and, that the respondents should be
enjoined from allegedly infringing on the copyrights and patents of the
petitioner.
The respondents, on the other hand, alleged as their defense that
Summerville is the exclusive and authorized importer, re-packer and
distributor of Chin Chun Su products manufactured by Shun Yi Factory of
Taiwan; that the said Taiwanese manufacturing company authorized
Summerville to register its trade name Chin Chun Su Medicated Cream with
the Philippine Patent Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the petitioner obtained the copyrights
through misrepresentation and falsification; and, that the authority of Quintin
Cheng, assignee of the patent registration certificate, to distribute and
market Chin Chun Suproducts in the Philippines had already been
terminated by the said Taiwanese Manufacturing Company.
After due hearing on the application for preliminary injunction, the trial court
granted the same in an Order dated February 10, 1992, the dispositive
portion of which reads:
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing
business under the style of KEC Cosmetic Laboratory, for preliminary
injunction, is hereby granted. Consequentially, plaintiff is required to
file with the Court a bond executed to defendants in the amount of
five hundred thousand pesos (P500,000.00) to the effect that plaintiff
will pay to defendants all damages which defendants may sustain by
reason of the injunction if the Court should finally decide that plaintiff
is not entitled thereto.
SO ORDERED.3
Page 2 of 31
The respondents moved for reconsideration but their motion for
reconsideration was denied by the trial court in an Order dated March 19,
1992.4
On April 24, 1992, the respondents filed a petition for certiorari with the Court
of Appeals, docketed as CA-G.R. SP No. 27803, praying for the nullification
of the said writ of preliminary injunction issued by the trial court. After the
respondents filed their reply and almost a month after petitioner submitted
her comment, or on August 14 1992, the latter moved to dismiss the petition
for violation of Supreme Court Circular No. 28-91, a circular prohibiting forum
shopping. According to the petitioner, the respondents did not state the
docket number of the civil case in the caption of their petition and, more
significantly, they did not include therein a certificate of non-forum shopping.
The respondents opposed the petition and submitted to the appellate court a
certificate of non-forum shopping for their petition.
On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No.
27803 ruling in favor of the respondents, the dispositive portion of which
reads:
WHEREFORE, the petition is hereby given due course and the
orders of respondent court dated February 10, 1992 and March 19,
1992 granting the writ of preliminary injunction and denying
petitioners' motion for reconsideration are hereby set aside and
declared null and void. Respondent court is directed to forthwith
proceed with the trial of Civil Case No. Q-91-10926 and resolve the
issue raised by the parties on the merits.
SO ORDERED.5
In granting the petition, the appellate court ruled that:
The registration of the trademark or brandname "Chin Chun Su" by KEC
with the supplemental register of the Bureau of Patents, Trademarks and
Technology Transfer cannot be equated with registration in the principal
register, which is duly protected by the Trademark Law.1âwphi1.nêt
As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA
373, 393:
"Registration in the Supplemental Register, therefore, serves as
notice that the registrant is using or has appropriated the trademark.
By the very fact that the trademark cannot as yet be on guard and
there are certain defects, some obstacles which the use must still
overcome before he can claim legal ownership of the mark or ask the
Assignment No. 1- IPL
courts to vindicate his claims of an exclusive right to the use of the
same. It would be deceptive for a party with nothing more than a
registration in the Supplemental Register to posture before courts of
justice as if the registration is in the Principal Register.
The reliance of the private respondent on the last sentence
of the Patent office action on application Serial No. 30954
that 'registrants is presumed to be the owner of the mark
until after the registration is declared cancelled' is, therefore,
misplaced and grounded on shaky foundation. The
supposed presumption not only runs counter to the precept
embodied in Rule 124 of the Revised Rules of Practice
before the Philippine Patent Office in Trademark Cases but
considering all the facts ventilated before us in the four
interrelated petitions involving the petitioner and the
respondent, it is devoid of factual basis. As even in cases
where presumption and precept may factually be reconciled,
we have held that the presumption is rebuttable, not
conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30,
1958, Unreported). One may be declared an unfair
competitor even if his competing trademark is registered
(Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil 928; La
Yebana Co. v. chua Seco & Co., 14 Phil 534)." 6
The petitioner filed a motion for reconsideration. This she followed with
several motions to declare respondents in contempt of court for publishing
advertisements notifying the public of the promulgation of the assailed
decision of the appellate court and stating that genuine Chin Chun
Su products could be obtained only from Summerville General
Merchandising and Co.
In the meantime, the trial court went on to hear petitioner's complaint for final
injunction and damages. On October 22, 1993, the trial court rendered a
Decision7 barring the petitioner from using the trademark Chin Chun Su and
upholding the right of the respondents to use the same, but recognizing the
copyright of the petitioner over the oval shaped container of her beauty
cream. The trial court did not award damages and costs to any of the parties
but to their respective counsels were awarded Seventy-Five Thousand Pesos
(P75,000.00) each as attorney's fees. The petitioner duly appealed the said
decision to the Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution 8 denying
the petitioner's motions for reconsideration and for contempt of court in CA-
G.R. SP No. 27803.
Page 3 of 31
Hence, this petition anchored on the following assignment of errors:
I. RESPONDENT HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO RULE ON PETITIONER'S MOTION TO
DISMISS.
II. RESPONDENT HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN REFUSING TO PROMPTLY RESOLVE
PETITIONER'S MOTION FOR RECONSIDERATION.
III. IN DELAYING THE RESOLUTION OF PETITIONER'S MOTION FOR
RECONSIDERATION, THE HONORABLE COURT OF APPEALS
DENIED PETITIONER'S RIGHT TO SEEK TIMELY APPELLATE
RELIEF AND VIOLATED PETITIONER'S RIGHT TO DUE PROCESS.
IV. RESPONDENT HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS
IN CONTEMPT.9
The petitioner faults the appellate court for not dismissing the petition on the
ground of violation of Supreme Court Circular No. 28-91. Also, the petitioner
contends that the appellate court violated Section 6, Rule 9 of the Revised
Internal Rules of the Court of Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it is submitted for
resolution. The appellate court ruled only after the lapse of three hundred
fifty-four (354) days, or on June 3, 1994. In delaying the resolution thereof,
the appellate court denied the petitioner's right to seek the timely appellate
relief. Finally, petitioner describes as arbitrary the denial of her motions for
contempt of court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one
of the grounds for the issuance of a writ of preliminary injunction is a proof
that the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or
acts complained of, either for a limited period or perpetually. Thus, a
preliminary injunction order may be granted only when the application for the
issuance of the same shows facts entitling the applicant to the relief
demanded.10 This is the reason why we have ruled that it must be shown that
the invasion of the right sought to be protected is material and substantial,
that the right of complainant is clear and unmistakable, and, that there is an
urgent and paramount necessity for the writ to prevent serious damage. 11
Assignment No. 1- IPL
In the case at bar, the petitioner applied for the issuance of a preliminary
injunctive order on the ground that she is entitled to the use of the trademark
on Chin Chun Su and its container based on her copyright and patent over
the same. We first find it appropriate to rule on whether the copyright and
patent over the name and container of a beauty cream product would entitle
the registrant to the use and ownership over the same to the exclusion of
others.
Trademark, copyright and patents are different intellectual property rights that
cannot be interchanged with one another. A trademark is any visible sign
capable of distinguishing the goods (trademark) or services (service mark) of
an enterprise and shall include a stamped or marked container of goods. 12 In
relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise.13 Meanwhile, the scope of a copyright is
confined to literary and artistic works which are original intellectual creations
in the literary and artistic domain protected from the moment of their
creation.14 Patentable inventions, on the other hand, refer to any technical
solution of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.15
Petitioner 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 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. The petitioner'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.
We cannot likewise overlook the decision of the trial court in the case for final
injunction and damages. The dispositive portion of said decision held that the
petitioner does not have trademark rights on the name and container of the
beauty cream product. The said decision on the merits of the trial court
rendered the issuance of the writ of a preliminary injunction moot and
academic notwithstanding the fact that the same has been appealed in the
Court of Appeals. This is supported by our ruling in La Vista Association,
Inc. v. Court of Appeals16, to wit:
Considering that preliminary injunction is a provisional remedy which
may be granted at any time after the commencement of the action
and before judgment when it is established that the plaintiff is entitled
Page 4 of 31
 to the relief demanded and only when his complaint shows facts
entitling such reliefs xxx and it appearing that the trial court had
already granted the issuance of a final injunction in favor of petitioner
in its decision rendered after trial on the merits xxx the Court
resolved to Dismiss the instant petition having been rendered moot
and academic. An injunction issued by the trial court after it has
already made a clear pronouncement as to the plaintiff's right
thereto, that is, after the same issue has been decided on the merits,
the trial court having appreciated the evidence presented, is proper,
notwithstanding the fact that the decision rendered is not yet
final xxx. Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the
decision rendered on the merit of the main case for injunction. The
merit of the main case having been already determined in favor of
the applicant, the preliminary determination of its non-existence
ceases to have any force and effect. (italics supplied)
La Vista categorically pronounced that the issuance of a final injunction
renders any question on the preliminary injunctive order moot and academic
despite the fact that the decision granting a final injunction is pending appeal.
Conversely, a decision denying the applicant-plaintiff's right to a final
injunction, although appealed, renders moot and academic any objection to
the prior dissolution of a writ of preliminary injunction.
primary objective of legal procedure which is to serve as a means to
dispense justice to the deserving party.
The petitioner likewise contends that the appellate court unduly delayed the
resolution of her motion for reconsideration. But we find that petitioner
contributed to this delay when she filed successive contentious motions in
the same proceeding, the last of which was on October 27, 1993,
necessitating counter-manifestations from private respondents with the last
one being filed on November 9, 1993. Nonetheless, it is well-settled that non-
observance of the period for deciding cases or their incidents does not render
such judgments ineffective or void. 17With respect to the purported damages
she suffered due to the alleged delay in resolving her motion for
reconsideration, we find that the said issue has likewise been rendered moot
and academic by our ruling that she has no right over the trademark and,
consequently, to the issuance of a writ of preliminary injunction.1âwphi1.nêt
Finally, we rule that the Court of Appeals correctly denied the petitioner's
several motions for contempt of court. There is nothing contemptuous about
the advertisements complained of which, as regards the proceedings in CA-
G.R. SP No. 27803 merely announced in plain and straightforward language
the promulgation of the assailed Decision of the appellate court. Moreover,
pursuant to Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the
said decision nullifying the injunctive writ was immediately executory.

The petitioner argues that the appellate court erred in not dismissing the WHEREFORE, the petition is DENIED. The Decision and Resolution of the
petition for certiorari for non-compliance with the rule on forum shopping. We Court of Appeals dated May 24, 1993 and June 3, 1994, respectively, are
disagree. First, the petitioner improperly raised the technical objection of non- hereby AFFIRMED. With costs against the petitioner.
compliance with Supreme Court Circular No. 28-91 by filing a motion to
dismiss the petition for certiorari filed in the appellate court. This is prohibited SO ORDERED.
by Section 6, Rule 66 of the Revised Rules of Civil Procedure which provides
that "(I)n petitions for certiorari before the Supreme Court and the Court of
Appeals, the provisions of Section 2, Rule 56, shall be observed. Before
giving due course thereto, the court may require the respondents to file their
comment to, and not a motion to dismiss, the petition xxx (italics supplied)".
Secondly, the issue was raised one month after petitioner had filed her
answer/comment and after private respondent had replied thereto. Under
Section 1, Rule 16 of the Revised Rules of Civil Procedure, a motion to
dismiss shall be filed within the time for but before filing the answer to the
complaint or pleading asserting a claim. She therefore could no longer submit
a motion to dismiss nor raise defenses and objections not included in the
answer/comment she had earlier tendered. Thirdly, substantial justice and
equity require this Court not to revive a dissolved writ of injunction in favor of
a party without any legal right thereto merely on a technical infirmity. The
granting of an injunctive writ based on a technical ground rather than
compliance with the requisites for the issuance of the same is contrary to the

Assignment No. 1- IPL Page 5 of 31

[2] an intellectual creation that is susceptible to ownership but the incorporeal right is
distinct from the property in the material object subject to it.—It is to be pointed out
DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, that a trademark refers to a word, name, symbol, emblem, sign or device or any
INC., petitioner,  vs. THE HONORABLE COURT OF APPEALS and LA combination thereof adopted and used by a merchant to identify, and distinguish
TONDEÑA DISTILLERS, INC., respondents. from others, his goods of commerce. It is basically an intellectual creation that is
susceptible to ownership and, consistently therewith, gives rise to its own elements
Trademarks and Tradenames; R.A. No. 623 extends trademark protection
of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along with
in the use of containers duly registered with the Philippine Patent Office.—It is a fact
the applicable jus lex, comprising that ownership. The incorporeal right, however, is
that R.A. No. 623 extends trademark protection in the use of containers duly
distinct from the property in the material object subject to it. Ownership in one does
registered with the Philippine Patent Office.
not necessarily vest ownership in the other. Thus, the transfer or assignment of the
Same; The mere use of registered bottles or containers without the written intellectual property will not necessarily constitute a conveyance of the thing it
consent of the manufacturer is prohibited, the only exceptions being when they are covers, nor would a conveyance of the latter imply the transfer or assignment of the
used as containers for “sisi,” “bagoong,” “patis” and similar native products.—At intellectual right.
the outset, the Court must state that it sees no cogent reason for either departing from
Same; R.A. 623 does not disallow the sale or transfer of ownership of the
or changing the basic rule it laid down in Cagayan Valley Enterprises, Inc. vs. Court
marked bottles or containers.—R.A. No. 623 evidently does not disallow the sale or
of Appeals. The Court has there held: “The above-quoted provisions grant protection
transfer of ownership of the marked bottles or containers. In fact, the contrary is
to a qualified manufacturer who successfully registered with the Philippine Patent
implicit in the law; thus — “Sec. 5. No action shall be brought under this Act against
Office its duly stamped or marked bottles, boxes, casks and other similar containers.
any person to whom the registered manufacturer, bottler or seller, has transferred by
The mere use of registered bottles or containers without the written consent of the
way of sale, any of the containers herein referred to, but the sale of the beverage
manufacturer is prohibited, the only exceptions being when they are used as
contained in the said containers shall not include the sale of the containers unless
containers for ‘sisi,’ ‘bagoong,’ ‘patis’ and similar native products.
specifically so provided.
Same; Replevin; Words and Phrases; Replevin is a possessory action the
Same; Statutory Construction; The statement in Section 5 of R.A. 623 to the
gist of which focuses on the right of possession that, in turn, is dependent on a legal
effect that the “sale of beverage contained in the said containers shall not include
basis that, not infrequently, looks to the ownership of the object sought to be
the sale of the containers unless specifically so provided” is not a rule of
replevied.—Given the nature of the action in Cagayan, as well as its factual milieu,
proscription — it is a rule of construction that, in keeping with the spirit and intent of
the Court indeed hardly has had a choice but to sustain the registrant’s right to the
the law, establishes at best a presumption (of non-conveyance of the container) and
injunctive writ against the unauthorized use of its containers. The case before us,
which by no means can be taken to be either interdictive or conclusive in character.
however, goes beyond just seeking to have such use stopped but it so takes on even
—It cannot be gainsaid that ownership of the containers does pass on to the
the ownership issue as well. Parenthetically, petitioner is not here being charged with
consumer albeit subject to the statutory limitations on the use of the registered
a violation of Section 2 of R.A. No. 623 or of the Trademark Law. The instant suit is
containers and to the trademark rights of the registrant. The statement in Section 5 of
one for replevin (manual delivery) where the claimant must be able to show
R.A. 623 to the effect that the “sale of beverage contained in the said containers shall
convincingly that he is either the owner or clearly entitled to the possession of the
not include the sale of the containers unless specifically so provided” is not a rule of
object sought to be recovered. Replevin is a possessory action the gist of which
proscription. It is a rule of construction that, in keeping with the spirit and intent of
focuses on the right of possession that, in turn, is dependent on a legal basis that, not
the law, establishes at best a presumption (of non-conveyance of the container) and
infrequently, looks to the ownership of the object sought to be replevied.
which by no means can be taken to be either interdictive or conclusive in character.
Same; Same; Same; Trademark refers to a word, name, symbol, emblem, Upon the other hand, LTDI’s sales invoice, stipulating that the “sale does not include
sign or device or any combination thereof adopted and used by a merchant to the bottles with the blown-in marks of ownership of La Tondeña Distillers,” cannot
identify, and distinguish from others, his goods of commerce; Trademark is basically affect those who are not privies thereto.

Assignment No. 1- IPL Page 6 of 31

 Same; While it may be unwarranted for the registrant to simply seize the
empty containers from one engaged in the unauthorized use of said containers, it
would be legally absurd to still allow the latter to recover possession thereof — the
practical and feasible alternative is to merely require the payment of just
compensation to the latter.—While it may be unwarranted then for LTDI to simply
seize the empty containers, this Court finds it to be legally absurd, however, to still
allow petitioner to recover the possession thereof. The fact of the matter is that R.A.
623, as amended, in affording trademark protection to the registrant, has additionally
expressed a prima facie presumption of illegal use by a possessor whenever such use
or possession is without the written permission of the registered manufacturer, a
provision that is neither arbitrary nor without appropriate rationale. Indeed, the
appellate court itself has made a finding of such unauthorized use by petitioner. The
Court sees no other logical purpose for petitioner’s insistence to keep the bottles,
except for such continued use. The practical and feasible alternative is to merely
require the payment of just compensation to petitioner for the bottles seized from it
by LTDI. Conventional wisdom, along with equity and justice to both parties,
dictates it.
VITUG, J.:
The initiatory suit was instituted on 02 November 1987 with the trial court
(docketed Civil Case No. 87-42639) for manual delivery with damages
instituted by La Tondeña Distillers, Inc. ("LTDI"), against Distilleria
Washington ("Washington"). LTDI, under a claim of ownership, sought to
seize from Distilleria Washington 18,157 empty "350 c.c. white flint bottles"
bearing the blown-in marks of "La Tondeña Inc." and "Ginebra San Miguel."
The court, on application of LTDI, issued an order of replevin on 05
November 1987 for the seizure of the empty gin bottles from Washington.
These bottles, it was averred, were being used by Washington for its own
"Gin Seven" products without the consent of LTDI.
LTDI asserted that, being the owner and registrant of the bottles, it was
entitled to the protection so extended by Republic Act ("R.A.") No. 623, as
amended, notwithstanding its sale of the Ginebra San Miguel gin product
contained in said bottles.
Washington countered that R.A. No. 623, invoked by LTDI, should not apply
to gin, an alcoholic beverage which is unlike that of "soda water, mineral or
aerated water, ciders, milks, cream, or other lawful beverages" mentioned in
the law, and that, in any case, ownership of the bottles should, considering
the attendant facts and circumstances, be held lawfully transferred to the
buyers upon the sale of the gin and containers at a single price.
Assignment No. 1- IPL
After hearing the parties, the trial court rendered its decision, dated 03
December 1991, holding against LTDI; viz:
WHEREFORE, premises considered, the complaint is hereby
DISMISSED and plaintiff is ordered:
1. To return to defendant the 18,157 empty bottles seized by virtue of
the writ for the Seizure of Personal Property issued by this Court on
November 6, 1987;
2. In the event of failure to return said empty bottles, plaintiff is ordered
to indemnify defendant in the amount of P18,157.00 representing the
value of the bottles.
3. Costs against plaintiff. 1
LTDI appealed the decision to the Court of Appeals (CA-G.R. CV No. 36971).
The appellate court reversed the court a quo and ruled against Washington;
thus:
WHEREFORE, the appealed decision is hereby REVERSED and SET
ASIDE. The appellant, being the owner, is authorized to retain in its
possession the 18,157 bottles registered in its name delivered to it by
the sheriff following their seizure from the appellee pursuant to the writ
of replevin issued by the trial court on November 6, 1987. Costs
against the appellee. 2
Washington is now before this Court assailing the reversal of the trial court's
decision. In its petition, Washington points out that —
4.00.a. Under the undisputed facts, petitioner is the lawful owner of
the personal properties (18,157 empty bottles) involved in the
petition. Respondent LTDI is precluded by law from claiming the
same;
4.00.b. The decision and resolution appealed from violate equity and
applicable canons in the interpretation and construction of statutes;
and
4.00.c. Liquor products are not covered by Republic Act. No. 623.
The holding of the Court in Cagayan Valley Enterprises, Inc. vs.
Honorable Court of Appeals, 179 SCRA 218 [1989] should be
reviewed and reconsidered in light of the Constitution and House Bill
No. 20585. 3
Page 7 of 31
It is a fact that R.A. No. 623 extends trademark protection in the use of
containers duly registered with the Philippine Patent Office. The pertinent
provisions of R.A. 623, as amended, so reads:
Sec. 1. Persons engaged or licensed to engage in the manufacture,
bottling, or selling of soda water, mineral or aerated waters, cider, milk,
cream or other lawful beverages in bottles, boxes, casks, kegs, or
barrels, and other similar containers, or in the manufacture, compressing
or selling of gases such as oxygen, acetylene, nitrogen, carbon dioxide,
ammonia, hydrogen, chloride, helium, sulphur dioxide, butane, propane,
freon, methyl chloride or similar gases contained in steel cylinders, tanks,
flasks, accumulators or similar containers, with their names or the names
of their principals or products, or other marks of ownership stamped or
marked thereon, may register with the Philippine Patent Office a
description of the names or marks, and the purpose for which the
containers so marked are used by them, under the same conditions,
rules, and regulations, made applicable by law or regulation to the
issuance of trademarks.
Sec. 2. It shall be unlawful for any person, without the written consent of
the manufacturer, bottler, or seller, who has successfully registered the
marks of ownership in accordance with the provisions of the next
preceding section, to fill such bottles, boxes, kegs, barrels, steel
cylinders, tanks, flasks, accumulators, or other similar containers so
marked or stamped, for the purpose of sale, or to sell, dispose of, buy or
traffic in, or wantonly destroy the same, whether filled or not to use the
same for drinking vessels or glasses or drain pipes, foundation pipes, for
any other purpose than that registered by the manufacturer, bottler or
seller. Any violation of this section shall be punished by a fine of not
more than one thousand pesos or imprisonment of not more than one
year or both.
Sec. 3. The use by any person other than the registered manufacturer,
bottler or seller, without written permission of the latter of any such bottle,
cask, barrel, keg, box, steel cylinders, tanks, flask, accumulators, or
other similar containers, or the possession thereof without written
permission of the manufacturer, by any junk dealer or dealer in casks,
barrels, kegs, boxes, steel cylinders, tanks, flasks, accumulators or other
similar containers, the same being duly marked or stamped and
registered as herein provided, shall give rise to a prima
facie  presumption that such use or possession is unlawful. 4
As the outset, the Court must state that is sees no cogent reason for either
departing from or changing the basic rule it laid down in Cagayan Valley
Enterprises, Inc.,  vs. Court of Appeals. 5 The Court has there held:
Assignment No. 1- IPL
The above-quoted provisions grant protection to a qualified manufacturer
who successfully registered with the Philippine Patent Office its duly
stamped or marked bottles, boxes, casks and other similar containers.
The mere use of registered bottles or containers without the written
consent of the manufacturer is prohibited, the only exceptions being
when they are used as containers for "sisi," "bagoong," "patis" and
similar native products.
It is an admitted fact that herein petitioner Cagayan buys form junk
dealers and retailers bottles which bear the marks or names "La
Tondeña, Inc." and "Ginebra San Miguel" and uses them as containers
for its own liquor products. The contention of Cagayan that the
aforementioned bottles without the words "properly of" indicated thereon
are not the registered bottles of LTI, since they do not conform with the
statement or description in the supporting affidavits attached to the
original registration certificate and renewal, is untenable.
Republic Act No. 623 which governs the registration of marked bottles
and containers merely requires that the bottles, in order to be eligible for
registration, must be stamped or marked with the names of the
manufacturers or the names of their principals or products, or other
marks of ownership. No drawings or labels are required but, instead, two
photographs of the container, duly signed by the applicant, showing
clearly and legibly the names and other marks of ownership sought to be
registered and a bottle showing the name or other mark or ownership,
irremovably stamped or marked, shall be submitted.
The claim of petitioner that hard liquor is not included under the term
"other lawful beverages" as provided in Section 1 of Republic Act No.
623, as amended by Republic Act No. 5700, is without merit. The title of
the law itself, which reads "An Act to Regulate the Use of Duly Stamped
or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar
Containers" clearly shows the legislative intent to give protection to all
marked bottles and containers of all lawful beverages regardless of the
nature of their contents. The words "other lawful beverages" is used in its
general sense, referring to all beverages not prohibited by law. Beverage
is defined as a liquor or liquid for drinking. Hard liquor, although
regulated, is not prohibited by law, hence it is within the purview and
coverage of Republic Act No. 623, as amended. 6
Given the nature of the action in Cagayan, as well as its factual milieu, the
Court indeed hardly has had a choice but to sustain the registrant's right to
the injunctive writ against the unauthorized use of its containers. The case
before us, however, goes beyond just seeking to have such use stopped but
it so takes on even the ownership issue as well. Parenthetically, petitioner is
not here being charged with a violation of Section 2 of R.A. No. 623 or of the
Page 8 of 31
Trademark Law. The instant suit is one for replevin (manual delivery) where
the claimant must be able to show convincingly that he is either the owner or
clearly entitled to the possession of the object sought to be recovered.
Replevin is a possessory action the gist of which focuses on the right of
possession that, in turn, is dependent on a legal basis that, not infrequently,
looks to the ownership of the object sought to be replevied.
It is to be pointed out that a trademark refers to a word, name, symbol,
emblem, sign or device or any combination thereof adopted and used by a
merchant to identify, and distinguish from others, his goods of commerce. It
is basically an intellectual creation that is susceptible to ownership 7 and,
consistently therewith, gives rise to its own elements of  jus posidendi,  jus
utendi, jus fruendi, jus disponendi, and  jus abutendi, along with the
applicable jus lex, comprising that ownership. The incorporeal right, however,
is distinct from the property in the material object subject to it. Ownership in
one does not necessarily vest ownership in the other. Thus, the transfer or
assignment of the intellectual property will not necessarily constitute a
conveyance of the thing it covers, nor would a conveyance of the latter imply
the transfer or assignment of the intellectual right. 8
R.A. No. 623 evidently does not disallow the sale or transfer of ownership of
the marked bottles or containers. In fact, the contrary is implicit in the law;
thus —
Sec. 5. No action shall be brought under this Act against any person
to whom the registered manufacturer, bottler or seller, has
transferred by way of sale, any of the containers herein referred to,
but the sale of the beverage contained in the said containers shall
not include the sale of the containers unless specifically so provided.
Sec. 6. The provisions of this Act shall not be interpreted as
prohibiting the use of bottles as containers for "sisi," "bagoong,"
"patis," and similar native products.
Scarcely disputed are certain and specific industry practices in the sale of
gin: The manufacturer sells the product in marked containers, through
dealers, to the public in supermarkets, grocery shops, retail stores and other
sales outlets. The buyer takes the item; he is neither required to return the
bottle nor required to make a deposit to assure its return to the seller. He
could return the bottle and get a refund. A number of bottles at times find
their way to commercial users. It cannot be gainsaid that ownership of the
containers does pass on to the consumer albeit  subject to the statutory
limitation on the use of the registered containers and to the trademark right of
the registrant. The statement in Section 5 of R.A. 623 to the effect that the
"sale of beverage contained in the said containers shall not include the sale
Assignment No. 1- IPL
of the containers unless specifically so provided" is not a rule of proscription.
It is a rule of construction that, in keeping with the spirit and intent of the law,
establishes at best a presumption (of non-conveyance of the container) and
which by no means can be taken to be either interdictive or conclusive in
character. Upon the other hand, LTDI's sales invoice, stipulating that the
"sale does not include the bottles with the blown-in marks of ownership of La
Tondeña Distillers," cannot affect those who are not privies thereto.
While it may be unwarranted then for LTDI to simply seize the empty
containers, this Court finds it to be legally absurd, however, to still allow
petitioner to recover the possession thereof. The fact of the matter is that
R.A. 623, as amended, in affording trademark protection to the registrant,
has additionally expressed a  prima facie  presumption of illegal use by a
possessor whenever such use or possession is without the written
permission of the registered manufacturer, a provision that is neither arbitrary
nor without appropriate rationale. Indeed, the appellate court itself has made
a finding of such unauthorized use by petitioner. The Court sees no other
logical purpose for petitioner's insistence to keep the bottles, except for such
continued use. The practical and feasible alternative is to merely require the
payment of just compensation to petitioner for the bottles seized from it by
LTDI. Conventional wisdom, along with equity and justice to both parties,
dictates it.
WHEREFORE, the decision of the appellate court is MODIFIED by ordering
LTDI to pay petitioner just compensation for the seized bottles. Instead,
however, of remanding the case to the Court of Appeals to receive evidence
on, and thereafter resolve, the assessment thereof, this Court accepts and
accordingly adopts the quantification of P18,157.00 made by the trial court.
No costs.
SO ORDERED.
Page 9 of 31
[3]
ANA L. ANG, petitioner,  vs. TORIBIO TEODORO, respondent.
1.TRADE-MARKS AND TRADE-NAMES; ACT NO. 666.—Respondent has
continuously used "Ang Tibay," both as a trade-mark and as a tradename, in the
manufacture and sale of slippers, shoes, and indoor baseballs since 1910. He
formally registered it as a trade-mark on September 29, 1915, and as a trade-name on
January 3, 1933. Petitioner registered the same trade-mark "Ang Tibay" for pants and
shirts on April 11, 1932, and established a factory for the manufacture of said articles
in the year 1937. Held: That petitioner's registration of the trade-mark "Ang Tibay"
should be cancelled, and that she should be perpet ually enjoined from using said
trade-mark on goods manufactured and sold by her.
2.ID.; ID.; TERM "ANG TIBAY," NOT BEING GEOGRAPHIC OR
DESCRIPTIVE, IS CAPABLE OF EXCLUSIVE APPROPRIATION AS A TRADE
MARK.—An inquiry into the etymology and meaning of the Tagalog words "Ang
Tibay," made in the decision, shows that the phrase is never used adjectively to
define or describe an object. It is, there fore, not a descriptive term within the
meaning of the Trade-mark Law but rather a fanciful or coined phrase which may
properly and legally be appropriated as a trade-mark or trade-name. Hence, it was
originally capable of exclusive appro priation as a trade-mark by the respondent.
3.ID.; ID.; ID.; FUNCTION OP A TRADE-MARK; DOCTRINE OF
"SECONDARY MEANING."—The function of a trade-mark is to point dis
tinctively, either by its own meaning or by association, to the origin or ownership of
the wares to which it is applied. "Ang Tibay," as used by the respondent to des ignate
his wares, had exactly performed that function for twenty-two years before the
petitioner adopted it as a trade-mark in her own business. "Ang Tibay" shoes and
slippers are, by association, known throughout the Philippines as products of the
"Ang Tibay" factory owned and oper ated by the respondent. Even if "Ang Tibay,"
therefore, were not capable of ex clusive appropriation as a trade-mark, the
application of the doctrine of secondary meaning could nevertheless be fully sus
tained because, in any event, by respondent's long and exclusive use of said phrase
with reference to his products and his business, it has acquired a proprietary
connotation. This doctrine is to the effect that a word or phrase originally incapable
of exclusive appropriation with reference to an article on the market, because geo
graphically or otherwise descriptive, might nevertheless have been used so long and
so exclusively by one producer with ref erence to his article that, in that trade and to
that branch of the purchasing- pub lic, the word or phrase has come to mean that the
article was his product.
Assignment No. 1- IPL
4.ID.; ID.; ID.; ID.; TEST OF WHETHER NONCOMPETING GOODS ARE OR
ARE NOT OF THE SAME CLASS.—In the present stage of de velopment of the
law on trade-marks, unfair competition, and unfair trading, the test employed by the
courts to deter mine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two
noncompeting arti cles may be classified under two different classes by the Patent
Office because they are deemed not to possess the same de scriptive properties, they
would neverthe less be held by the courts to belong to the same class if the
simultaneous use on them of identical or closely similar trademarks would be likely
to cause confusion as to the origin, or personal source, of the sec ond user's goods.
They would be consid ered as not falling under the same class only if they are so
dissimilar or so foreign to each other as to make it unlikely that the purchaser would
think the first user made the second user's goods. Such con struction of the law is
induced by cogent reasons of equity and fair dealing dis cussed in the decision.
5.ID.; ID.; ID.; ID.; ID.—Tested by the foregoing rule, and in the light of other
considera tions set out in greater detail in the deci sion, Held: That pants and shirts
are goods similar to shoes and slippers within the meaning of sections 3, 7, 11, 13,
and 20 of the Trade-mark Law (Act No. 666).
OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of
the Court of Appeals reversing that of the Court of First Instance of Manila
and directing the Director of Commerce to cancel the registration of the
trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining
the latter from using said trade-mark on goods manufactured and sold by her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and
later as sole proprietor, has continuously used "Ang Tibay," both as a trade-
mark and as a trade-name, in the manufacture and sale of slippers, shoes,
and indoor baseballs since 1910. He formally registered it as trade-mark on
September 29, 1915, and as trade-name on January 3, 1933. The growth of
his business is a thrilling epic of Filipino industry and business capacity.
Starting in an obscure shop in 1910 with a modest capital of P210 but with
tireless industry and unlimited perseverance, Toribio Teodoro, then an
unknown young man making slippers with his own hands but now a
prominent business magnate and manufacturer with a large factory operated
with modern machinery by a great number of employees, has steadily grown
with his business to which he has dedicated the best years of his life and
which he has expanded to such proportions that his gross sales from 1918 to
1938 aggregated P8,787,025.65. His sales in 1937 amounted to
Page 10 of 31
P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement
from 1919 to 1938 aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for
pants and shirts on April 11, 1932, and established a factory for the
manufacture of said articles in the year 1937. In the following year (1938) her
gross sales amounted to P422,682.09. Neither the decision of the trial court
nor that of the Court of Appeals shows how much petitioner has spent or
advertisement. But respondent in his brief says that petitioner "was unable to
prove that she had spent a single centavo advertising "Ang Tibay" shirts and
pants prior to 1938. In that year she advertised the factory which she had just
built and it was when this was brought to the attention of the appellee that he
consulted his attorneys and eventually brought the present suit."
The trial court (Judge Quirico Abeto) presiding absolved the defendant from
the complaint, with costs against the plaintiff, on the grounds that the two
trademarks are dissimilar and are used on different and non-competing
goods; that there had been no exclusive use of the trade-mark by the plaintiff;
and that there had been no fraud in the use of the said trade-mark by the
defendant because the goods on which it is used are essentially different
from those of the plaintiff. The second division of the Court of Appeals,
composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and Alex
Reyes, with Justice Padilla as  ponente, reversed that judgment, holding that
by uninterrupted an exclusive use since 191 in the manufacture of slippers
and shoes, respondent's trade-mark has acquired a secondary meaning; that
the goods or articles on which the two trade-marks are used are similar or
belong to the same class; and that the use by petitioner of said trade-mark
constitutes a violation of sections 3 and 7 of Act No. 666. The defendant
Director of Commerce did not appeal from the decision of the Court of
Appeals.
First. Counsel for the petitioner, in a well-written brief, makes a frontal
sledge-hammer attack on the validity of respondent's trade-mark "Ang
Tibay." He contends that the phrase "Ang Tibay" as employed by the
respondent on the articles manufactured by him is a descriptive term
because, "freely translate in English," it means "strong, durable, lasting." He
invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot be
the subject of a trade-mark. He cites among others the case of Baxter vs.
Zuazua (5 Phil., 16), which involved the trade-mark "Agua de Kananga" used
on toilet water, and in which this Court held that the word "Kananga," which is
the name of a well-known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could the words "sugar,"
"tobacco," or "coffee." On the other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief, contend that the words "Ang
Tibay" are not descriptive but merely suggestive and may properly be
Assignment No. 1- IPL
regarded as fanciful or arbitrary in the legal sense. The cite several cases in
which similar words have been sustained as valid trade-marks, such as
"Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for
neckties and sweaters. 3
We find it necessary to go into the etymology and meaning of the Tagalog
words "Ang Tibay" to determine whether they are a descriptive term, i.e.,
whether they relate to the quality or description of the merchandise to which
respondent has applied them as a trade-mark. The word "ang" is a definite
article meaning "the" in English. It is also used as an adverb, a contraction of
the word "anong" (what or how). For instance, instead of saying, "Anong
ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root
word from which are derived the verb magpatibay (to strenghten; the
nouns pagkamatibay  (strength, durability), katibayan  (proof, support,
strength), katibay-tibayan  (superior strength); and the adjectives matibay
(strong, durable, lasting), napakatibay (very strong), kasintibay or
magkasintibay  (as strong as, or of equal strength). The phrase "Ang Tibay" is
an exclamation denoting administration of strength or durability. For instance,
one who tries hard but fails to break an object exclaims, "Ang tibay!" (How
strong!") It may also be used in a sentence thus, "Ang tibay ng sapatos mo!"
(How durable your shoes are!") The phrase "ang tibay" is never used
adjectively to define or describe an object. One does not say, "ang tibay
sapatos" or "sapatos ang tibay" is never used adjectively to define or
describe an object. One does not say, "ang tibay sapatos" or "sapatos ang
tibay" to mean "durable shoes," but "matibay na sapatos" or "sapatos na
matibay."
From all of this we deduce that "Ang Tibay" is not a descriptive term within
the meaning of the Trade-Mark Law but rather a fanciful or coined phrase
which may properly and legally be appropriated as a trade-mark or trade-
name. In this connection we do not fail to note that when the petitioner
herself took the trouble and expense of securing the registration of these
same words as a trademark of her products she or her attorney as well as
the Director of Commerce was undoubtedly convinced that said words (Ang
Tibay) were not a descriptive term and hence could be legally used and
validly registered as a trade-mark. It seems stultifying and puerile for her now
to contend otherwise, suggestive of the story of sour grapes. Counsel for the
petitioner says that the function of a trade-mark is to point distinctively, either
by its own meaning or by association, to the origin or ownership of the wares
to which it is applied. That is correct, and we find that "Ang Tibay," as used
by the respondent to designate his wares, had exactly performed that
function for twenty-two years before the petitioner adopted it as a trade-mark
in her own business. Ang Tibay shoes and slippers are, by association,
known throughout the Philippines as products of the Ang Tibay factory owned
and operated by the respondent Toribio Teodoro.
Page 11 of 31
Second. In her second assignment of error petitioner contends that the Court
of Appeals erred in holding that the words "Ang Tibay" had acquired a
secondary meaning. In view of the conclusion we have reached upon the first
assignment of error, it is unnecessary to apply here the doctrine of
"secondary meaning" in trade-mark parlance. This doctrine is to the effect
that a word or phrase originally incapable of exclusive appropriation with
reference to an article of the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase has come to mean that
the article was his product. (G. & C. Merriam Co. vs. Salfield, 198 F., 369,
373.) We have said that the phrase "Ang Tibay," being neither geographic
nor descriptive, was originally capable of exclusive appropriation as a trade-
mark. But were it not so, the application of the doctrine of secondary meaning
made by the Court of Appeals could nevertheless be fully sustained because,
in any event, by respondent's long and exclusive use of said phrase with
reference to his products and his business, it has acquired a proprietary
connotation. (Landers, Frary, and Clark vs. Universal Cooler Corporation, 85
F. [2d], 46.)
Third. Petitioner's third assignment of error is, that the Court of Appeals erred
in holding that pants and shirts are goods similar to shoes and slippers within
the meaning of sections 3 and 7 of Act No. 666. She also contends under her
fourth assignment of error (which we deem convenient to pass upon together
with the third) that there can neither be infringement of trade-mark under
section 3 nor unfair competition under section 7 through her use of the words
"Ang Tibay" in connection with pants and shirts, because those articles do
not belong to the same class of merchandise as shoes and slippers.
The question raised by petitioner involve the scope and application of
sections 3,7, 11, 13, and 20 of the Trade-Mark Law (Act No. 666.) Section 3
provides that "any person entitled to the exclusive use of a trade-mark to
designate the origin or ownership of goods he has made or deals in, may
recover damages in a civil actions from any person who has sold goods of a
similar kind, bearing such trade-mark . . . The complaining party . . . may
have a preliminary injunction, . . . and such injunction upon final hearing, if
the complainant's property in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made perpetual, and this injunction
shall be part of the judgment for damages to be rendered in the same
cause." Section 7 provides that any person who, in selling his goods, shall
give them the general appearance of the goods of another either in the
wrapping of the packages, or in the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers to
believe that the goods offered are those of the complainant, shall be guilty of
unfair competition, and shall be liable to an action for damages and to an
injunction, as in the cases of trade-mark infringement under section 3.
Assignment No. 1- IPL
Section 11 requires the applicant for registration of a trade-mark to state,
among others, "the general class of merchandise to which the trade-mark
claimed has been appropriated." Section 13 provides that no alleged trade-
mark or trade name shall be registered which is identical with a registered or
known trade-mark owned by another and appropriate to the same class of
merchandise, or which to nearly resembles another person's lawful trade-
mark or trade-name as to be likely to cause confusion or mistake in the mind
of the public, or to deceive purchasers. And section 2 authorizes the Director
of Commerce to establish classes of merchandise for the purpose of the
registration of trade-marks and to determine the particular description of
articles included in each class; it also provides that "an application for
registration of a trade-mark shall be registered only for one class of
articles  and only for the particular description of articles mentioned in said
application."
We have underlined the key words used in the statute: "goods of a similar
kin," "general class of merchandise," "same class of merchandise," "classes
of merchandise," and "class of articles," because it is upon their implications
that the result of the case hinges. These phrases, which refer to the same
thing, have the same meaning as the phrase "merchandise of the same
descriptive properties" used in the statutes and jurisprudence of other
jurisdictions.
The burden of petitioner's argument is that under sections 11 and 20 the
registration by respondent of the trade-mark "Ang Tibay" for shoes and
slippers is no safe-guard against its being used by petitioner for pants and
shirts because the latter do not belong to the same class of merchandise or
articles as the former; that she cannot be held guilty of infringement of trade-
mark under section 3 because respondent's mark is not a valid trade-mark,
nor has it acquired a secondary meaning; that pants and shirts do not
possess the same descriptive properties as shoes and slippers; that neither
can she be held guilty of unfair competition under section 7 because the use
by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to
mislead the general public as to their origin or ownership; and that there is
now showing that she in unfairly or fraudulently using that mark "Ang Tibay"
against the respondent. If we were interpreting the statute for the first time
and in the first decade of the twentieth century, when it was enacted, and
were to construe it strictly and literally, we might uphold petitioner's
contentions. But law and jurisprudence must keep abreast with the progress
of mankind, and the courts must breathe life into the statutes if they are to
serve their purpose. Our Trade-mark Law, enacted nearly forty years ago,
has grown in its implications and practical application, like a constitution, in
virtue of the life continually breathed into it. It is not of merely local
application; it has its counterpart in other jurisdictions of the civilized world
from whose jurisprudence it has also received vitalizing nourishment. We
have to apply this law as it has grown and not as it was born. Its growth or
Page 12 of 31
development abreast with that of sister statutes and jurisprudence in other
jurisdictions is reflected in the following observation of a well-known author:
This fundamental change in attitude first manifested itself in the year
1915-1917. Until about then, the courts had proceeded on the theory
that the same trade-mark, used on un-like goods, could not cause
confusion in trade and that, therefore, there could be no objection to
the use and registration of a well-known mark by a third party for a
different class of goods. Since 1916 however, a growing sentiment
began to arise that in the selection of a famous mark by a third party,
there was generally the hidden intention to "have a free ride" on the
trade-mark owner's reputation and good will. (Derenberg, Trade-
Mark Protection & Unfair Trading, 1936 edition, p. 409.)
In the present state of development of the law on Trade-Marks, Unfair
Competition, and Unfair Trading, the test employed by the courts to
determine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two
noncompeting articles may be classified under two different classes by the
Patent Office because they are deemed not to possess the same descriptive
properties, they would, nevertheless, be held by the courts to belong to the
same class if the simultaneous use on them of identical or closely similar
trade-marks would be likely to cause confusion as to the origin, or personal
source, of the second user's goods. They would be considered as not falling
under the same class only if they are so dissimilar or so foreign to each other
as to make it unlikely that the purchaser would think the first user made the
second user's goods.
Such construction of the law is induced by cogent reasons of equity and fair
dealing. The courts have come to realize that there can be unfair competition
or unfair trading even if the goods are non-competing, and that such unfair
trading can cause injury or damage to the first user of a given trade-mark,
first, by prevention of the natural expansion of his business and, second, by
having his business reputation confused with and put at the mercy of the
second user. Then noncompetitive products are sold under the same mark,
the gradual whittling away or dispersion of the identity and hold upon the
public mind of the mark created by its first user, inevitably results. The
original owner is entitled to the preservation of the valuable link between him
and the public that has been created by his ingenuity and the merit of his
wares or services. Experience has demonstrated that when a well-known
trade-mark is adopted by another even for a totally different class of goods, it
is done to get the benefit of the reputation and advertisements of the
originator of said mark, to convey to the public a false impression of some
supposed connection between the manufacturer of the article sold under the
original mark and the new articles being tendered to the public under the
same or similar mark. As trade has developed and commercial changes have
Assignment No. 1- IPL
come about, the law of unfair competition has expanded to keep pace with
the times and the element of strict competition in itself has ceased to be the
determining factor. The owner of a trade-mark or trade-name has a property
right in which he is entitled to protection, since there is damage to him from
confusion of reputation or goodwill in the mind of the public as well as from
confusion of goods. The modern trend is to give emphasis to the unfairness
of the acts and to classify and treat the issue as a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid
down in one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe
vs. Level Brothers Company  (G.R. No. 46817), decided by this Court on April
18, 1941, the respondent company (plaintiff below) was granted injunctive
relief against the use by the petitioner of the trade-mark "Lux" and "Lifebuoy"
for hair pomade, they having been originally used by the respondent for
soap; The Court held in effect that although said articles are noncompetitive,
they are similar or belong to the same class. (2) In Lincoln Motor Co. vs.
Lincoln Automobile Co.  (44 F. [2d], 812), the manufacturer of the well-known
Lincoln automobile was granted injunctive relief against the use of the word
"Lincoln" by another company as part of its firm name. (3) The case of Aunt
Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark
"Aunt Jemima," originally used on flour, which the defendant attempted to
use on syrup, and there the court held that the goods, though different, are
so related as to fall within the mischief which equity should prevent. (4)
In Tiffany & Co., vs. Tiffany Productions, Inc. (264 N.Y.S., 459; 23 Trade-
mark Reporter, 183), the plaintiff, a jewelry concern, was granted injunctive
relief against the defendant, a manufacturer of motion pictures, from using
the name "Tiffany." Other famous cases cited on the margin, wherein the
courts granted injunctive relief, involved the following trade-marks or trade-
names: "Kodak," for cameras and photographic supplies, against its use for
bicycles. 4 "Penslar," for medicines and toilet articles, against its use for
cigars; 5 "Rolls-Royce," for automobiles. against its use for radio
tubes; 6 "Vogue," as the name of a magazine, against its use for
hats; 7 "Kotex," for sanitary napkins, against the use of "Rotex" for vaginal
syringes; 8 "Sun-Maid," for raisins, against its use for flour;  9 "Yale," for locks
and keys, against its use for electric flashlights; 10 and "Waterman," for
fountain pens, against its use for razor blades. 11lawphil.net
Against this array of famous cases, the industry of counsel for the petitioner
has enabled him to cite on this point only the following cases: (1) Mohawk
Milk Products vs. General Distilleries Corporation  (95 F. [2d], 334), wherein
the court held that gin and canned milk and cream do not belong to the same
class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F. [2d],
194), wherein the court held that the words "Popular Mechanics" used as the
title of a magazine and duly registered as a trade-mark were not infringed by
defendant's use of the words "Modern Mechanics and Inventions" on a
competitive magazine, because the word "mechanics" is merely a descriptive
Page 13 of 31
name; and (3) Oxford Book Co. vs. College Entrance Book Co. (98 F. [2d],
688), wherein the plaintiff unsuccessfully attempted to enjoin the defendant
from using the word "Visualized" in connection with history books, the court
holding that said word is merely descriptive. These cases cites and relied
upon by petitioner are obviously of no decisive application to the case at bar.

We think reasonable men may not disagree that shoes and shirts are not as
unrelated as fountain pens and razor blades, for instance. The mere relation
or association of the articles is not controlling. As may readily be noted from
what we have heretofore said, the proprietary connotation that a trade-mark
or trade-name has acquired is of more paramount consideration. The Court
of Appeals found in this case that by uninterrupted and exclusive use since
1910 of respondent's registered trade-mark on slippers and shoes
manufactured by him, it has come to indicate the origin and ownership of said
goods. It is certainly not farfetched to surmise that the selection by petitioner
of the same trade-mark for pants and shirts was motivated by a desire to get
a free ride on the reputation and selling power it has acquired at the hands of
the respondent. As observed in another case, 12 the field from which a person
may select a trade-mark is practically unlimited, and hence there is no
excuse for impinging upon or even closely approaching the mark of a
business rival. In the unlimited field of choice, what could have been
petitioner's purpose in selecting "Ang Tibay" if not for its fame?

Lastly, in her fifth assignment of error petitioner seems to make a frantic

effort to retain the use of the mark "Ang Tibay." Her counsel suggests that
instead of enjoining her from using it, she may be required to state in her
labels affixed to her products the inscription: "Not manufactured by Toribio
Teodoro." We think such practice would be unethical and unworthy of a
reputable businessman. To the suggestion of petitioner, respondent may say,
not without justice though with a tinge of bitterness: "Why offer a perpetual
apology or explanation as to the origin of your products in order to use my
trade-mark instead of creating one of your own?" On our part may we add,
without meaning to be harsh, that a self-respecting person does not remain in
the shelter of another but builds one of his own.

The judgment of the Court of Appeals is affirmed, with costs against the
petitioner in the three instances. So ordered.

Assignment No. 1- IPL Page 14 of 31

[4]
ETEPHA, A.G., petitioner,  vs.DIRECTOR OF PATENTS and WESTMONT
PHARMACEUTICALS, INC., respondents.
Objects of trademarks.—The objects of a trademark are to point out distinctly the
origin or ownership of the article to which it is affixed, to secure to him, who has
been instrumental in bringing into market a superior article of merchandise, the fruit
of his industry and skill, and to prevent fraud and imposition.
Same; Infringement of trademarks; “Colorable imitation” explained.—The validity
of a cause for infringement is predicated upon colorable imitation. The phrase
“colorable imita-tion” denotes such a “close or ingenious imitation as to be
calculated to deceive ordinary persons, or such a resemblance to the original as to
deceive an ordinary purchaser giving such attention as a purchaser usually gives, and
to cause him to purchase the one supposing it to be the other.” (87 C.J.S. 287.)
Same; Word “Tussin” in combination with another word or phrase may be used as a
trademark.—“Tussin” is merely descriptive; it is generic; it furnishes to the buyer no
indication of the origin of the goods; it is open for appropriation by anyone. It is
accordingly barred from registration as a trademark. But while “Tussin” by itself
cannot thus be used exclusively to identify one’s goods, it may properly become the
subject of a trademark “by combination with another word or phrase.” (Annotations,
Lawyers’ Reports, Annotated, 1918 A, p. 966.)
Same; How similarity and dissimilarity of trademarks is determined.—A practical
approach to the problem of similarity or dissimilarity is to go into the whole of the
two trademarks pictured in their manner of display. Inspection should be undertaken
from the viewpoint of prospective buyer. The trademark complained of should be
compared and contrasted with the purchaser’s memory (not in juxtaposition) of the
trademark said to be infringed. (87 C.J.S. 288-291.) Some such factors as “sound;
appearance; form, style, shape, size or format; color; ideas connoted by marks; the
meaning, spelling, and pronunciation of words used and the setting in which the
words appears” may be considered. (87 C.J.S. 291-292.) For, indeed, trademark
infringement is a form of unfair competition. (Clarke vs. Manila Candy Co., 36 Phil.
100, 106; Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4.)
Same; When there is confusion between trademarks.— Confusion is likely between
trademarks only if their overall presentations in any of the particulars of sound,
appearance, or meaning are such as would lead the purchasing public into believing
that the products to which the marks are applied emanated from the same source.
Assignment No. 1- IPL
Same; “Pertussin” and “Atussin” are different.—Considering the two labels in
question—Pertussin and Atussin.—as they appear on the respective labels, these
words are presented to the public in different styles of writing and methods of
design. The horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leave distinct visual impressions. One look is
enough to denude the mind of that illuminating similarity so essential for a trademark
infringement case to prosper. Moreover, the two words do not sound alike— when
pronounced. There is not much phonetic similarity between the two. In Pertussin the
pronunciation of the prefix “Per”, whether correct or incorrect, includes a
combination of three letters P, e and r; whereas, in Atussin the whole words starts
with the single letter A added to the suffix “tussin.” Appeals to the ear are dissimilar.
And this, because in a word-combination, the part that comes first is the most
pronounced.
Same; In the solution of trademark infringement problem, the class of persons who
buy the product should be considered.—In the solution of a trademark infringement
problem, regard too should be given to the class of persons who buy the particular
product and the circumstances ordinarily attendant to its acquisition (87 C.J.S. 295).
The medicinal preparations, clothed with the trademarks in question, are unlike
articles of everyday use such as candies, ice cream, milk, soft drinks and the like
which may be freely obtained by anyone, anytime, anywhere. Petitioner’s and
respondent’s products are to be dispensed upon medical prescription. An intending
buyer must have to go first to a licensed doctor of medicine; he receives instructions
as to what to purchase; he examines the product sold to him; he checks to find out
whether it conforms to the medical prescription. Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of error in the acquisition of one for the other
is quite remote. It is possible that buyers might be able to obtain Pertussin or Atussin
without prescription. When this happens, then the buyer must be one thoroughly
familiar with what he intends to get, else he would not have the temerity to ask for a
medicine—specifically needed to cure a given ailment. For a person who purchases
with open eyes is hardly the man to be deceived.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be registered, given the fact that
PERTUSSIN, another trademark, had been previously registered in the
Patent Office? — the Director of Patents answered affirmatively. Hence this
appeal.
On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York
corporation, sought registration of trademark "Atussin" placed on its
Page 15 of 31
"medicinal preparation of expectorant antihistaminic, bronchodilator sedative,
ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is
used exclusively in the Philippines since January 21, 1959. 1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected.
Petitioner claims that it will be damaged because Atussin is so confusedly
similar to its Pertussin (Registration No. 6089, issued on September 25,
1957) used on a preparation for the treatment of coughs, that the buying
public will be misled into believing that Westmont's product is that of
petitioner's which allegedly enjoys goodwill.
1. The objects of a trademark are "to point out distinctly the origin or
ownership of the articles to which it is affixed, to secure to him who has
been instrumental in bringing into market a superior article or
merchandise the fruit of his industry and skill, and to prevent fraud and
imposition."2 Our over-all task then is to ascertain whether or not Atussin
so resembles Pertussin "as to be likely, when applied to or used in
connection with the goods ... of the applicant, to cause confusion or
mistake or to deceive purchasers". 3 And, we are to be guided by the rule
that the validity of a cause for infringement is predicated upon colorable
imitation. The phrase "colorable imitation" denotes such a "close or
ingenious imitation as to be calculated to deceive ordinary persons, or
such a resemblance to the original as to deceive an ordinary purchaser,
giving such attention as a purchaser usually gives, and to cause him to
purchase the one supposing it to be the other."4
2. That the word "tussin" figures as a component of both trademarks is
nothing to wonder at. The Director of Patents aptly observes that it is "the
common practice in the drug and pharmaceutical industries to 'fabricate'
marks by using syllables or words suggestive of the ailments for which
they are intended and adding thereto distinctive prefixes or
suffixes".5 And appropriately to be considered now is the fact that,
concededly, the "tussin" (in Pertussin and Atussin) was derived from the
Latin root-word "tussis" meaning cough.6
"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no
indication of the origin of the goods; it is open for appropriation by
anyone. It is accordingly barred from registration as trademark. With
jurisprudence holding the line, we feel safe in making the statement that
any other conclusion would result in "appellant having practically a
monopoly"7 of the word "tussin" in a trademark.8
While "tussin" by itself cannot thus be used exclusively to identify one's
goods, it may properly become the subject of a trademark "by
combination with another word or phrase". 9 And this union of words is
Assignment No. 1- IPL
reflected in petitioner's  Pertussin and respondent's Atussin, the first with
prefix "Per" and the second with Prefix "A".1äwphï1.ñët
3. A practical approach to the problem of similarity or dissimilarity is
to go into the whole of the two trademarks pictured in their manner of
display. Inspection should be undertaken from the viewpoint of a
prospective buyer. The trademark complained of should be
compared and contrasted with the purchaser's memory (not in
juxtaposition) of the trademark said to be infringed. 10 Some such
factors as "sound; appearance; form, style, shape, size or format;
color; ideas connoted by marks; the meaning, spelling, and
pronunciation, of words used; and the setting in which the words
appear" may be considered. 11 For, indeed, trademark infringement is
a form of unfair competition. 12
We take a casual look at the two labels — without spelling out the
details — bearing in mind the easy-to-remember earmarks thereof.
Respondent's label underscores the trademark Atussin in bold, block
letters horizontally written. In petitioner's, on the other hand,
Pertussin is printed diagonally upwards and across in semiscript
style with flourishes and with only the first letter "P" capitalized. Each
label plainly shows the source of the medicine: petitioner's at the foot
bears "Etepha Ltd. Schaan Fl", and on top, "Apothecary E.
Taeschner's"; respondent's projects "Westmont Pharmaceuticals,
Inc. New York, USA" at the bottoms, and on the lower left side the
word "Westmont" upon a white diamond shaped enclosure and in red
ink — a color different from that of the words above and below it.
Printed prominently along the left, bottom and right edges of
petitioner's label are indications of the use: "for bronchial catarrh —
whopping-cough — coughs and asthma". Respondent's for its part
briefly represents what its produce actually is - a "cough syrup". The
two labels are entirely different in colors, contents, arrangement of
words thereon, sizes, shapes and general appearance. The
contrasts in pictorial effects and appeals to the eye is so pronounced
that the label of one cannot be mistaken for that of the other, not
even by persons unfamiliar with the two trademarks. 13
On this point the following culled from a recent decision of the United
States Court of Customs and Patent Appeals (June 15, 1956) is
persuasive: 14
Confusion is likely between trademarks, however, only if
their over-all  presentations in any of the particulars of
sound, appearance, or meaning are such as would lead the
purchasing public into believing that the products to which
the marks are applied emanated from the same source. In
Page 16 of 31
 testing this issue, fixed legal rules exist — if not in harmony, of the incautious, unwary, unobservant or unsuspecting type; he
certainly in abundance — but, in the final analysis, the examines the product sold to him; he checks to find out whether it
application of these rules in any given situation necessarily conforms to the medical prescription. The common trade channel is
reflects a matter of individual judgment largely predicated on the pharmacy or the drugstore. Similarly, the pharmacist or druggist
opinion. There is, however, and can be no disagreement with verifies the medicine sold. The margin of error in the acquisition of
the rule that the purchaser is confused, if at all, by the one for the other is quite remote.
marks as a whole.
We concede the possibility that buyers might be able to obtain Pertussin or
4. We now consider exclusively the two words — Pertussin and Attusin without prescription. When this happens, then the buyer must be one
Atussin — as they appear on the respective labels. As previously throughly familiar with what he intends to get, else he would not have the
adverted to, these words are presented to the public in different temerity to ask for a medicine — specifically needed to cure a given ailment.
styles of writing and methods of design. The horizontal plain, block In which case, the more improbable it will be to palm off one for the other. For
letters of Atussin and the diagonally and artistically upward writing of a person who purchases with open eyes is hardly the man to be deceived.
Pertussin leave distinct visual impressions. One look is enough to
denude the mind of that illuminating similarity so essential for a For the reasons given, the appealed decision of the respondent Director of
trademark infringement case to prosper. Patents — giving due course to the application for the registration of
trademark ATTUSIN is hereby affirmed. Costa against petitioner. So ordered.
5. As we take up Pertussin and Atussin once again, we cannot
escape notice of the fact that the two words do not sound alike —
when pronounced. There is not much phonetic similarity between the
two. The Solicitor General well-observed that in Pertussin the
pronunciation of the prefix "Per", whether correct or incorrect,
includes a combination of three letters P, e and r; whereas, in
Atussin the whole starts with the single letter A added to suffix
"tussin". Appeals to the ear are disimilar. And this, because in a word
combination, the part that comes first is the most pronounced. An
expositor of the applicable rule here is the decision in the Syrocol-
Cheracol controversy. 15 There, the ruling is that trademark Syrocol
(a cough medicine preparation) is not confusedly similar to
trademark Cheracol (also a cough medicine preparation). Reason:
the two words "do not look or sound enough alike to justify a holding
of trademark infringement", and the "only similarity is in the last
syllable, and that is not uncommon in names given drug
compounds".

6. In the solution of a trademark infringement problem, regard too

should be given to the class of persons who buy the particular
product and the circumstances ordinarily attendant to its
acquisition. 16 The medicinal preparation clothed with the trademarks
in question, are unlike articles of everyday use such as candies, ice
cream, milk, soft drinks and the like which may be freely obtained by
anyone, anytime, anywhere. Petitioner's and respondent's products
are to be dispensed upon medical prescription. The respective labels
say so. An intending buyer must have to go first to a licensed doctor
of medicine; he receives instructions as to what to purchase; he
reads the doctor's prescription; he knows what he is to buy. He is not

Assignment No. 1- IPL Page 17 of 31

[5]
PRIBHDAS J. MIRPURI, petitioner,  vs. COURT OF APPEALS, DIRECTOR
OF PATENTS and the BARBIZON CORPORATION, respondents.
Intellectual Property; Trademarks and Trade Names; Words and Phrases;
“Trademark,” Defined and Explained.—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.” 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.” 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.
Same; Same; Three Distinct Functions of Trademarks.— 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.
Same; Same; 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.—
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 satisfaction. In other words, the mark actually sells the
goods. 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.
Internet; Words and Phrases; “Internet” and “World Wide Web,” Explained.—The
Internet is a decentralized computer network linked together through routers and
communications protocols that enable anyone connected to it to communicate with
others likewise connected, regardless of physical location. Users of the Internet have
a wide variety of communication methods available to them and a tremendous wealth
Assignment No. 1- IPL
of information that they may access. The growing popularity of the Net has been
driven in large part by the World Wide Web, i.e., a system that facilitates use of the
Net by sorting through the great mass of information available on it. Advertising on
the Net and cybershopping are turning the Internet into a commercial marketplace.—
Maureen O’Rourke, Fencing Cyberspace: Drawing Borders in a Virtual World,
Minnesota Law Review, vol. 82:609- 611, 615-618 [Feb. 1998].
Actions; Judgments; Res Judicata; Requisites; 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.—Res judicata means a
matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by
judgment. 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. Res judicata is 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.
Same; Same; Same; 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, and it is not necessary that a trial should have been
conducted.—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. 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 there
was no actual hearing or arguments on the facts of the case.
Intellectual Property; Convention of Paris for the Protection of Industrial Property;
Trademarks and Trade Names; International Law; Conflict of Laws; 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.—The Convention of Paris for the Protection of
Page 18 of 31
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.
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. 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. Nationals of the various member nations
are thus assured of a certain minimum of international protection of their industrial
property.
Same; Same; Same; Same; Same; Actions; Article 6bis of the Paris Convention
governs protection of well-known trademarks.— 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: This Article governs protection of
wellknown 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.
Same; Same; Same; Same; Same; Same; Article 6bis of the Paris Convention is a
self-executing provision and does not require legislative enactment to give it effect in
the member country.— Article 6bis was first introduced at The Hague in 1925 and
amended in Lisbon in 1952. It is a self-executing provision and does not require
legislative enactment to give it effect in the member country. 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.
Same; Same; Same; Same; Same; Same; The power to determine whether a
trademark is well-known lies in the “competent authority of the country of
registration or use.”—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
Assignment No. 1- IPL
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.
Same; Same; Three Classes of Provisions of the Paris Convention.—The Paris
Convention has 3 classes of provisions: (1) provisions obligating members of the
Union to create and maintain certain national law or regulations; (2) provisions
merely referring to the national law of each country and making it applicable or
permitting each country to pass such legislation as it may choose; and (3) provisions
establishing common legislation for all members of the Union and obligating them to
grant to persons entitled to the benefits of the Convention the rights and advantages
specified in such provisions, notwithstanding anything in their national law to the
contrary—Ladas, supra, at 209; see also Callmann, supra, vol. 2, at 1723-1724.
Provisions under the third class are self-executing and Article 6bis is one of them—
Ladas, supra, vol. 1, at 209.
Same; Same; Trademarks and Trade Names; Actions; Judgments; Res Judicata;
Pleadings and Practice; 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.— 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 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,” 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.
Same; Same; Same; Same; Same; Same; 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.—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
Page 19 of 31
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. 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.
Same; Same; Same; Same; Same; Same; 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, and 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.—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) on confusing similarity of trademarks and Section 8 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. 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. 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. Res judicata
therefore does not apply to the instant case and respondent Court of Appeals did not
err in so ruling.
Same; Same; Same; Same; Intellectual and industrial property rights cases are not
simple property cases.—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. 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 trade names,
are intimately connected with economic development. 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
Assignment No. 1- IPL
industrialization, and thereby bring about social and economic progress. These
advantages have been acknowledged by the Philippine government itself.
Same; Same; Same; World Trade Organization; International Law; Conflict of
Laws; Intellectual Property Code of the Philippines; The Intellectual Property Code
of the Philippines 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).—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.” The Intellectual Property Code took effect on January 1, 1998 and by
its express provision, repealed the Trademark Law, the Patent Law, Articles 188 and
189 of the Revised Penal Code, the Decree on Intellectual Property, and the Decree
on Compulsory Reprinting of Foreign Textbooks. 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).
Same; Same; Same; Same; Same; Same; Agreement on TradeRelated Aspects of
Intellectual Property Rights (TRIPs); 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. —
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. 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.
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. 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 Organizations, the Treaty on
Intellectual Property in Respect of Integrated Circuits, and the Paris Convention
(1967), as revised in Stockholm on July 14, 1967.
Page 20 of 31
Same; Same; Same; Same; Same; Same; Same; Background of World Trade
Organization.—The WTO was created at the Uruguay Round of multilateral trade
negotiations sponsored by the General Agreement on Tariffs and Trade (GATT) in
1994. The GATT was established in 1947 to promote a multilateral trading system
among countries through non-discriminatory trade liberalization, and through fair
and effective rules and disciplines. The GATT was composed of 120 contracting
parties and observers that account for about 90% of the world trade. It, however,
dealt with trade in tangible goods alone. As successor of the GATT, the WTO also
covers trade in services, intellectual property rights and provides for an effective
mechanism for dispute settlement— Growth Opportunities Into the 21st Century, A
Question and Answer Primer Prepared by the Bureau of International Trade
Relations, Department of Trade and Industry, pp. 1, 37 [1994], hereinafter referred to
as DTI-BITR Primer; see News of the Uruguay Round of Multilateral Trade
Negotiations, issued by the Information and Media Relations division of the GATT,
Geneva, p. 5 [5 April 1994]; see also Tañada v. Angara, 272 SCRA 18 [1997].
Same; Same; Same; Same; Same; Same; Same; TRIPs Agreement, Explained.—The
TRIPs Agreement is said to be the most comprehensive multilateral agreement on
intellectual property. It addresses not only and more explicitly the primary regimes
of intellectual property, viz., patent including the protection of new varieties of
plants, trademarks including service marks, and copyright and its related rights; but
also the nontraditional categories of geographical indications including appellations
of origin, industrial design, layout design of integrated circuits, and undisclosed
information including trade secrets. It also establishes standards of protection and
rules of enforcement and provides for the uniform applicability of the WTO dispute
settlement mechanism to resolve disputes among member states.—Anita S.
Regalado, WTO Dispute Settlement Procedure: Its Impact on Copyright Protection,
The Court Systems Journal, vol. 3:67, 78 [March 1998].
Same; Same; Same; Same; Same; Same; Same; Same; 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 multilateral trading system to bring about economic, cultural and
technological independence.—A major proportion of international trade depends on
the protection of intellectual property rights. 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. 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 multilateral trading system to bring about
economic, cultural and technological independence.
Assignment No. 1- IPL
Same; Same; Same; Same; Same; Same; Same; Protectionism and isolationism
belong to the past—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
millennium.—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. 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.” 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 millennium.
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
Page 21 of 31
 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:
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. 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
Assignment No. 1- IPL
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 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
Page 22 of 31
 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 6bis of 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 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.
Assignment No. 1- IPL
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 hereby ordered
revoked and cancelled.
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
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;
Page 23 of 31
 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 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
Assignment No. 1- IPL
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
Page 24 of 31
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 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 judicata is 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
Assignment No. 1- IPL
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:
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. 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
Page 25 of 31
 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 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.
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 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
Assignment No. 1- IPL
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
Page 26 of 31
 (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.
Art. 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
Assignment No. 1- IPL
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:
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 apply more swift and effective solutions and
remedies to old and new problems such as infringement of
internationally-known tradenames and trademarks" 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 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:
Page 27 of 31
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 partecases, 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 6bisof said PARIS CONVENTION as outlined above,
by remanding applications filed by one not entitled to such protection for final
disallowance by the Examination Division.
Assignment No. 1- IPL
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.
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 Philippine Patent
Office procedures in inter partes and 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
Page 28 of 31
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," . . . "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
Assignment No. 1- IPL
(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 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
Page 29 of 31
 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.
Assignment No. 1- IPL
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
Page 30 of 31
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.

August 28, 2019

1st Reading: 1 Thessalonians 2:9-13

Gospel: Matthew 23:27-32

Assignment No. 1- IPL Page 31 of 31