SECOND DIVISION
motion.
G.R. No. 183404 : October 13, 2010
BERRIS AGRICULTURAL CO., INC., Petitioner, v. NORVY ABYADANG, Respondent.
DECISION
NACHURA, J.:
This petition for review 1  on certiorari under Rule 45 of the Rules of Court seeks the reversal
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of the Decision dated April 14, 2008 2  and the Resolution dated June 18, 2008 3  of the Court of
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Appeals (CA) in CA-G.R. SP No. 99928.
The antecedents
On January 16, 2004, respondent Norvy A. Abyadang (Abyadang), proprietor of NS Northern
Organic Fertilizer, with address at No. 43 Lower QM, Baguio City, filed with the Intellectual
Property Office (IPO) a trademark application for the mark "NS D-10 PLUS" for use in
connection with Fungicide (Class 5) with active ingredient 80% Mancozeb. The
application, under Application Serial No. 4-2004-00450, was given due course and was
published in the IPO e-Gazette for opposition on July 28, 2005.
On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with business
address in Barangay Masiit, Calauan, Laguna, filed with the IPO Bureau of Legal Affairs
(IPO-BLA) a Verified Notice of Opposition 4  against the mark under application allegedly
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because "NS D-10 PLUS" is similar and/or confusingly similar to its registered
trademark "D-10 80 WP," also used for Fungicide (Class 5) with active ingredient 80%
Mancozeb. The opposition was docketed as IPC No. 14-2005-00099.
After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-Abelardo
(Director Abelardo) of the IPO-BLA issued Decision No. 2006-24 5  (BLA decision), the
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dispositive portion of which reads
WHEREFORE, viewed in the light of all the foregoing, this Bureau finds and so holds that
Respondent-Applicants mark "NS D-10 PLUS" is confusingly similar to the Opposers mark
and as such, the opposition is hereby SUSTAINED. Consequently, trademark application
bearing Serial No. 4-2004-00450 for the mark "NS D-10 PLUS" filed on January 16, 2004 by
Norvy A. Ab[yada]ng covering the goods fungicide under Class 5 of the International
Classification of goods is, as it is hereby, REJECTED.
Let the filewrapper of the trademark "NS D-10 PLUS" subject matter under consideration be
forwarded to the Administrative, Financial and Human Resources Development Services
Bureau (AFHRDSB) for appropriate action in accordance with this Order with a copy to be
furnished the Bureau of Trademark (BOT) for information and to update its records.
6
SO ORDERED. chanroblesvirtuallawlibrary
Abyadang filed a motion for reconsideration, and Berris, in turn, filed its opposition to the
On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D) 7  (BLA resolution),
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denying the motion for reconsideration and disposing as follows
IN VIEW OF THE FOREGOING, the Motion for Reconsideration filed by the Respondent-
Applicant is hereby DENIED FOR LACK OF MERIT. Consequently, Decision No. 2006-24 dated
April 28, 2006 STANDS.
Let the filewrapper of the trademark "NS D-10 PLUS" subject matter under consideration be
forwarded to the Bureau of Trademarks for appropriate action in accordance with this
Resolution.
SO ORDERED.8 chanroblesvirtuallawlibrary
Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of the Director
General, Intellectual Property Philippines (IPPDG), docketed as Appeal No. 14-06-13.
With the filing of the parties respective memoranda, Director General Adrian S. Cristobal, Jr. of
the IPPDG rendered a decision dated July 20, 2007,9  ruling as follows
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Wherefore, premises considered[,] the appeal is hereby DENIED. Accordingly, the appealed
Decision of the Director is hereby AFFIRMED.
Let a copy of this Decision as well as the trademark application and records be furnished and
returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the
Directors of the Bureau of Trademarks, the Administrative, Financial and Human Resources
Development Services Bureau, and the library of the Documentation, Information and
Technology Transfer Bureau be furnished a copy of this Decision for information, guidance,
and records purposes.
SO ORDERED.10 chanroblesvirtuallawlibrary
Undeterred, Abyadang filed a petition for review11  before the CA.
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In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It held
In sum, the petition should be granted due to the following reasons: 1) petitioners mark "NS
D-10 PLUS" is not confusingly similar with respondents trademark "D-10 80 WP"; 2)
respondent failed to establish its ownership of the mark "D-10 80 WP" and 3) respondents
trademark registration for "D-10 80 WP" may be cancelled in the present case to avoid
multiplicity of suits.
WHEREFORE, the petition is GRANTED. The decision dated July 20, 2007 of the IPO Director
General in Appeal No. 14-06-13 (IPC No. 14-2005-00099) is REVERSED and SET ASIDE, and a
new one is entered giving due course to petitioners application for registration of the mark
"NS D-10 PLUS," and canceling respondents trademark registration for "D-10 80 WP."
SO ORDERED.12 chanroblesvirtuallawlibrary
Berris filed a Motion for Reconsideration, but in its June 18, 2008 Resolution, the CA denied
the motion for lack of merit. Hence, this petition anchored on the following arguments
I. The Honorable Court of Appeals finding that there exists no confusing similarity between
Petitioners and respondents marks is based on misapprehension of facts, surmise and
conjecture and not in accord with the Intellectual Property Code and applicable Decisions of
this Honorable Court [Supreme Court].
II. The Honorable Court of Appeals Decision reversing and setting aside the technical findings
of the Intellectual Property Office even without a finding or, at the very least, an allegation of
grave abuse of discretion on the part of said agency is not in accord with law and earlier
pronouncements of this Honorable Court [Supreme Court].
III. The Honorable Court of Appeals Decision ordering the cancellation of herein Petitioners
duly registered and validly existing trademark in the absence of a properly filed Petition for
Cancellation before the Intellectual Property Office is not in accord with the Intellectual
Property Code and applicable Decisions of this Honorable Court [Supreme Court]. 13 chanroblesvirtuallawlibrary
The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No.
829314 (Intellectual Property Code of the Philippines), specifically Sections 121 to 170 thereof.
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It took effect on January 1, 1998. Prior to its effectivity, the applicable law was R.A. No.
166,15  as amended.
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Interestingly, R.A. No. 8293 did not expressly repeal in its entirety R.A. No. 166, but merely
provided in Section 239.1 16  that Acts and parts of Acts inconsistent with it were repealed. In
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other words, only in the instances where a substantial and irreconcilable conflict is found
between the provisions of R.A. No. 8293 and of R.A. No. 166 would the provisions of the latter
be deemed repealed.
R.A. No. 8293 defines a "mark" as 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. 17  It also defines a "collective mark" as any visible sign designated
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as such in the application for registration and capable of distinguishing the origin or any other
common characteristic, including the quality of goods or services of different enterprises
which use the sign under the control of the registered owner of the collective mark. 18
On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or
merchant on his goods to identify and distinguish them from those manufactured, sold, or
dealt by another.19  A trademark, being a special property, is afforded protection by law. But
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for one to enjoy this legal protection, legal protection ownership of the trademark should
rightly be established.
The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public.
Section 12220  of R.A. No. 8293 provides that the rights in a mark shall be acquired by
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means of its valid registration with the IPO. A certificate of registration of a mark, once
issued, constitutes prima facie evidence of the validity of the registration, of the
registrants ownership of the mark, and of the registrants exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in the
certificate.21  R.A. No. 8293, however, requires the applicant for registration or the
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registrant to file a declaration of actual use (DAU) of the mark, with evidence to that
effect, within three (3) years from the filing of the application for registration;
otherwise, the application shall be refused or the mark shall be removed from the
register.22  In other words, the prima facie presumption brought about by the
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registration of a mark may be challenged and overcome, in an appropriate action, by
proof of the nullity of the registration or of non-use of the mark, except when
excused.23  Moreover, the presumption may likewise be defeated by evidence of prior use by
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another person, i.e., it will controvert a claim of legal appropriation or of ownership based on
registration by a subsequent user . This is because a trademark is a creation of use and
belongs to one who first used it in trade or commerce.24 chanroblesvirtuallawlibrary
The determination of priority of use of a mark is a question of fact. Adoption of the mark
alone does not suffice. One may make advertisements, issue circulars, distribute price lists on
certain goods, but these alone will not inure to the claim of ownership of the mark until the
goods bearing the mark are sold to the public in the market. Accordingly, receipts, sales
invoices, and testimonies of witnesses as customers, or orders of buyers, best prove the actual
use of a mark in trade and commerce during a certain period of time. 25 chanroblesvirtuallawlibrary
In the instant case, both parties have submitted proof to support their claim of ownership of
their respective trademarks.
Culled from the records, Berris, as oppositor to Abyadangs application for registration of his
trademark, presented the following evidence: (1) its trademark application dated November
29, 200226  with Application No. 4-2002-0010272; (2) its IPO certificate of registration dated
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October 25, 2004,27  with Registration No. 4-2002-010272 and July 8, 2004 as the date of
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registration; (3) a photocopy of its packaging 28  bearing the mark "D-10 80 WP"; (4)
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photocopies of its sales invoices and official receipts; 29  and (5) its notarized DAU dated April
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23, 2003,30  stating that the mark was first used on June 20, 2002, and indicating that, as proof
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of actual use, copies of official receipts or sales invoices of goods using the mark were attached
as Annex "B."
On the other hand, Abyadangs proofs consisted of the following: (1) a photocopy of the
packaging31  for his marketed fungicide bearing mark "NS D-10 PLUS"; (2) Abyadangs
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Affidavit dated February 14, 2006,32  stating among others that the mark "NS D-10 PLUS" was
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his own creation derived from: N for Norvy, his name; S for Soledad, his wifes name; D the first
letter for December, his birth month; 10 for October, the 10th month of the year, the month of
his business name registration; and PLUS to connote superior quality; that when he applied
for registration, there was nobody applying for a mark similar to "NS D-10 PLUS"; that he did
not know of the existence of Berris or any of its products; that "D-10" could not have been
associated with Berris because the latter never engaged in any commercial activity to sell "D-
10 80 WP" fungicide in the local market; and that he could not have copied Berris mark
because he registered his packaging with the Fertilizer and Pesticide Authority (FPA) ahead of
Berris; (3) Certification dated December 19, 2005 33  issued by the FPA, stating that "NS D-10
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PLUS" is owned and distributed by NS Northern Organic Fertilizer, registered with the FPA
since May 26, 2003, and had been in the market since July 30, 2003; (4) Certification dated
October 11, 200534  issued by the FPA, stating that, per monitoring among dealers in Region I
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and in the Cordillera Administrative Region registered with its office, the Regional Officer
neither encountered the fungicide with mark "D-10 80 WP" nor did the FPA provincial officers
from the same area receive any report as to the presence or sale of Berris product; (5)
Certification dated March 14, 2006 35  issued by the FPA, certifying that all pesticides must be
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registered with the said office pursuant to Section 9 36  of Presidential Decree (P.D.) No.
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114437  and Section 1, Article II of FPA Rules and Regulations No. 1, Series of 1977; (6)
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Certification dated March 16, 2006 38 issued by the FPA, certifying that the pesticide "D-10 80
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WP" was registered by Berris on November 12, 2004; and (7) receipts from Sunrise Farm
Supply39  in La Trinidad, Benguet of the sale of Abyadangs goods referred to as "D-10" and "D-
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10+."
Based on their proffered pieces of evidence, both Berris and Abyadang claim to be the prior
user of their respective marks.
We rule in favor of Berris.
Berris was able to establish that it was using its mark "D-10 80 WP" since June 20, 2002,
even before it filed for its registration with the IPO on November 29, 2002, as shown by its
DAU which was under oath and notarized, bearing the stamp of the Bureau of Trademarks of
the IPO on April 25, 2003,40  and which stated that it had an attachment as Annex "B" sales
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invoices and official receipts of goods bearing the mark. Indeed, the DAU, being a notarized
document, especially when received in due course by the IPO, is evidence of the facts it stated
and has the presumption of regularity, entitled to full faith and credit upon its face. Thus, the
burden of proof to overcome the presumption of authenticity and due execution lies on the
party contesting it, and the rebutting evidence should be clear, strong, and convincing as
to preclude all controversy as to the falsity of the certificate. 41  What is more, the DAU is
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buttressed by the Certification dated April 21, 2006 42  issued by the Bureau of Trademarks
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that Berris mark is still valid and existing.
Hence, we cannot subscribe to the contention of Abyadang that Berris DAU is fraudulent based
only on his assumption that Berris could not have legally used the mark in the sale of its goods
way back in June 2002 because it registered the product with the FPA only on November 12,
2004. As correctly held by the IPPDG in its decision on Abyadangs appeal, the question of
whether or not Berris violated P.D. No. 1144, because it sold its product without prior
registration with the FPA, is a distinct and separate matter from the jurisdiction and concern
of the IPO. Thus, even a determination of violation by Berris of P.D. No. 1144 would not
controvert the fact that it did submit evidence that it had used the mark "D-10 80 WP" earlier
than its FPA registration in 2004.
Furthermore, even the FPA Certification dated October 11, 2005, stating that the office had
neither encountered nor received reports about the sale of the fungicide "D-10 80 WP" within
Region I and the Cordillera Administrative Region, could not negate the fact that Berris was
selling its product using that mark in 2002, especially considering that it first traded its goods
in Calauan, Laguna, where its business office is located, as stated in the DAU.
Therefore, Berris, as prior user and prior registrant, is the owner of the mark "D-10 80 WP."
As such, Berris has in its favor the rights conferred by Section 147 of R.A. No. 8293, which
provides
Sec. 147. Rights Conferred.
147.1. The owner of a registered mark shall have the exclusive right to prevent all third
parties not having the owners consent from using in the course of trade identical or
similar signs or containers for goods or services which are identical or similar to those in
respect of which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a likelihood of
confusion shall be presumed.
147.2. The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e)
which is registered in the Philippines, shall extend to goods and services which are not similar
to those in respect of which the mark is registered: Provided, That use of that mark in relation
to those goods or services would indicate a connection between those goods or services and
the owner of the registered mark: Provided, further, That the interests of the owner of the
registered mark are likely to be damaged by such use.
Now, we confront the question, "Is Abyadangs mark NS D-10 PLUS confusingly similar to that
of Berris D-10 80 WP such that the latter can right fully prevent the IPO registration of the
former?"
We answer in the affirmative.
According to Section 123.1(d) of R.A. No. 8293, a mark cannot be registered if it is identical
with a registered mark belonging to a different proprietor with an earlier filing or priority
date, with respect to: (1) the same goods or services; (2) closely related goods or services;
or (3) near resemblance of such mark as to likely deceive or cause confusion.
In determining similarity and likelihood of confusion, jurisprudence has developed teststhe
Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the
similarity of the prevalent or dominant features of the competing trademarks that
might cause confusion, mistake, and deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it required that the mark sought to be
registered suggests an effort to imitate. Given more consideration are the aural and visual
impressions created by the marks on the buyers of goods, giving little weight to factors
like prices, quality, sales outlets, and market segments. 43
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In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the
marks as applied to the products, including the labels and packaging, in determining confusing
similarity. The discerning eye of the observer must focus not only on the predominant
words but also on the other features appearing on both label s so that the observer may
draw conclusion on whether one is confusingly similar to the other. 44 chanroblesvirtuallawlibrary
Comparing Berris mark "D-10 80 WP" with Abyadangs mark "NS D-10 PLUS," as appearing on
their respective packages, one cannot but notice that both have a common component which
is "D-10." On Berris package, the "D-10" is written with a bigger font than the "80 WP."
Admittedly, the "D-10" is the dominant feature of the mark. The "D-10," being at the
beginning of the mark, is what is most remembered of it. Although, it appears in Berris
certificate of registration in the same font size as the "80 WP," its dominancy in the "D-
10 80 WP" mark stands since the difference in the form does not alter its distinctive
character.45 chanroblesvirtuallawlibrary
Applying the Dominancy Test, it cannot be gainsaid that Abyadangs "NS D-10 PLUS" is similar
to Berris "D-10 80 WP," that confusion or mistake is more likely to occur. Undeniably, both
marks pertain to the same type of goods fungicide with 80% Mancozeb as an active
ingredient and used for the same group of fruits, crops, vegetables, and ornamental
plants, using the same dosage and manner of application. They also belong to the same
classification of goods under R.A. No. 8293. Both depictions of "D-10," as found in both marks,
are similar in size, such that this portion is what catches the eye of the purchaser. Undeniably,
the likelihood of confusion is present.

This likelihood of confusion and mistake is made more manifest when the Holistic Test is
applied, taking into consideration the packaging, for both use the same type of material (foil
type) and have identical color schemes (red, green, and white); and the marks are both
predominantly red in color, with the same phrase "BROAD SPECTRUM FUNGICIDE" written
underneath.

Considering these striking similarities, predominantly the "D-10," the buyers of both products,
mainly farmers, may be misled into thinking that "NS D-10 PLUS" could be an upgraded
formulation of the "D-10 80 WP."

Moreover, notwithstanding the finding of the IPPDG that the "D-10" is a fanciful component of
the trademark, created for the sole purpose of functioning as a trademark, and does not give
the name, quality, or description of the product for which it is used, nor does it describe the
place of origin, such that the degree of exclusiveness given to the mark is closely
restricted,46  and considering its challenge by Abyadang with respect to the meaning he has
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given to it, what remains is the fact that Berris is the owner of the mark "D-10 80 WP,"
inclusive of its dominant feature "D-10," as established by its prior use, and prior
registration with the IPO. Therefore, Berris properly opposed and the IPO correctly rejected
Abyadangs application for registration of the mark "NS D-10 PLUS."

Verily, the protection of trademarks as intellectual property is intended not only to

preserve the goodwill and reputation of the business established on the goods bearing
the mark through actual use over a period of time, but also to safeguard the public as
consumers against confusion on these goods.47  On this matter of particular concern,
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administrative agencies, such as the IPO, by reason of their special knowledge and expertise
over matters falling under their jurisdiction, are in a better position to pass judgment thereon.
Thus, their findings of fact in that regard are generally accorded great respect, if not finality by
the courts, as long as they are supported by substantial evidence, even if such evidence might
not be overwhelming or even preponderant. It is not the task of the appellate court to weigh
once more the evidence submitted before the administrative body and to substitute its own
judgment for that of the administrative agency in respect to sufficiency of evidence. 48 chanroblesvirtuallawlibrary

Inasmuch as the ownership of the mark "D-10 80 WP" fittingly belongs to Berris, and
because the same should not have been cancelled by the CA, we consider it proper not to
belabor anymore the issue of whether cancellation of a registered mark may be done absent a
petition for cancellation.

WHEREFORE, the petition is GRANTED. The assailed Decision dated April 14, 2008 and
Resolution dated June 18, 2008 of the Court of Appeals in CA-G.R. SP No. 99928 are REVERSED
and SET ASIDE. Accordingly, the Decision No. 2006-24 dated April 28, 2006 and the
Resolution No. 2006-09(D) dated August 2, 2006 in IPC No. 14-2005-00099, and the
Decision dated July 20, 2007 in Appeal No. 14-06-13 are REINSTATED. Costs against
respondent.

SO ORDERED.

ON CONFUSINGLY SIMILAR MARKS
G.R. No. 190065               August 16, 2010
DERMALINE, INC., Petitioner,  similar to its own mark such that the registration and use of Dermaline’s
vs.
MYRA PHARMACEUTICALS, INC. Respondent.
NACHURA, J.:
This is a petition for review on certiorari 1 seeking to reverse and set aside
the Decision dated August 7, 2009 2 and the Resolution dated October 28,
20093 of the Court of Appeals (CA) in CA-G.R. SP No. 108627.
The antecedent facts and proceedings—
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the
Intellectual Property Office (IPO) an application for registration of the
trademark "DERMALINE DERMALINE, INC." (Application No. 4-
2006011536). The application was published for Opposition in the IPO E-
Gazette on March 9, 2007.
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a
Verified Opposition4 alleging that the trademark sought to be registered by
Dermaline so resembles its trademark "DERMALIN" and will likely cause
confusion, mistake and deception to the purchasing public. Myra said that
the registration of Dermaline’s trademark will violate Section 123 5 of
Republic Act (R.A.) No. 8293 (Intellectual Property Code of the Philippines).
It further alleged that Dermaline’s use and registration of its applied
trademark will diminish the distinctiveness and dilute the goodwill of
Myra’s "DERMALIN," registered with the IPO way back July 8, 1986,
renewed for ten (10) years on July 8, 2006. Myra has been extensively using
"DERMALIN" commercially since October 31, 1977, and said mark is still
valid and subsisting.
Myra claimed that, despite Dermaline’s attempt to differentiate its applied
mark, the dominant feature is the term "DERMALINE," which is practically
identical with its own "DERMALIN," more particularly that the first eight (8)
letters of the marks are identical, and that notwithstanding the additional
letter "E" by Dermaline, the pronunciation for both marks are identical.
Further, both marks have three (3) syllables each, with each syllable
identical in sound and appearance, even if the last syllable of "DERMALINE"
consisted of four (4) letters while "DERMALIN" consisted only of three (3).
Myra also pointed out that Dermaline applied for the same mark
"DERMALINE" on June 3, 2003 and was already refused registration by
the IPO. By filing this new application for registration, Dermaline appears
to have engaged in a fishing expedition for the approval of its mark.
Myra argued that its intellectual property right over its trademark is
protected under Section 1476 of R.A. No. 8293.
Myra asserted that the mark "DERMALINE DERMALINE, INC." is aurally
applied mark will enable it to obtain benefit from Myra’s reputation,
goodwill and advertising and will lead the public into believing that
Dermaline is, in any way, connected to Myra. Myra added that even if the
subject application was under Classification 447 for various skin treatments,
it could still be connected to the "DERMALIN" mark under Classification
58 for pharmaceutical products, since ultimately these goods are very closely
related.
In its Verified Answer,9 Dermaline countered that a simple comparison of
the trademark "DERMALINE DERMALINE, INC." vis-à -vis Myra’s
"DERMALIN" trademark would show that they have entirely different
features and distinctive presentation, thus it cannot result in confusion,
mistake or deception on the part of the purchasing public. Dermaline
contended that, in determining if the subject trademarks are confusingly
similar, a comparison of the words is not the only determinant, but
their entirety must be considered in relation to the goods to which
they are attached, including the other features appearing in both
labels. It claimed that there were glaring and striking dissimilarities
between the two trademarks, such that its trademark "DERMALINE
DERMALINE, INC." speaks for itself (Res ipsa loquitur). Dermaline further
argued that there could not be any relation between its trademark for health
and beauty services from Myra’s trademark classified under medicinal
goods against skin disorders.
The parties failed to settle amicably. Consequently, the preliminary
conference was terminated and they were directed to file their respective
position papers.10
On April 10, 2008, the IPO-Bureau of Legal Affairs rendered Decision No.
2008-7011 sustaining Myra’s opposition pursuant to Section 123.1(d) of R.A.
No. 8293. It disposed—
WHEREFORE, the Verified Opposition is, as it is, hereby SUSTAINED.
Consequently, Application Serial No. 4-2006-011536 for the mark
‘DERMALINE, DERMALINE, INC. Stylized Wordmark’ for Dermaline, Inc.
under class 44 covering the aforementioned goods filed on 21 October 2006,
is as it is hereby, REJECTED.
Let the file wrapper of ‘DERMALINE, DERMALINE, INC. Stylized Wordmark’
subject matter of this case be forwarded to the Bureau of Trademarks (BOT)
for appropriate action in accordance with this Decision.
SO ORDERED.12
Aggrieved, Dermaline filed a motion for reconsideration, but it was denied
under Resolution No. 2009-12(D)13 dated January 16, 2009.
Expectedly, Dermaline appealed to the Office of the Director General of the
IPO. However, in an Order14 dated April 17, 2009, the appeal was dismissed
for being filed out of time.
Undaunted, Dermaline appealed to the CA, but it affirmed and upheld the
Order dated April 17, 2009 and the rejection of Dermaline’s application for
registration of trademark. The CA likewise denied Dermaline’s motion for
reconsideration; hence, this petition raising the issue of whether the CA
erred in upholding the IPO’s rejection of Dermaline’s application for
registration of trademark.
The petition is without merit. A trademark is any distinctive word, name,
symbol, emblem, sign, or device, or any combination thereof, adopted and
used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others. 15 Inarguably, it is an
intellectual property deserving protection by law. In trademark
controversies, each case must be scrutinized according to its peculiar
circumstances, such that jurisprudential precedents should only be made to
apply if they are specifically in point.16
As Myra correctly posits, as a registered trademark owner, it has the right
under Section 147 of R.A. No. 8293 to prevent third parties from using
a trademark, or similar signs or containers for goods or services,
without its consent, identical or similar to its registered trademark,
where such use would result in a likelihood of confusion.
In determining likelihood of confusion, case law has developed two (2) tests,
the Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the prevalent features of
the competing trademarks that might cause confusion or deception. 17 It is
applied when the trademark sought to be registered contains the main,
essential and dominant features of the earlier registered trademark,
and confusion or deception is likely to result. Duplication or imitation is
not even required; neither is it necessary that the label of the applied mark
for registration should suggest an effort to imitate. The important issue is
whether the use of the marks involved would likely cause confusion or
mistake in the mind of or deceive the ordinary purchaser, or one who
is accustomed to buy, and therefore to some extent familiar with, the
goods in question.18 Given greater consideration are the aural and visual
impressions created by the marks in the public mind, giving little weight to
factors like prices, quality, sales outlets, and market segments. 19 The test of
dominancy is now explicitly incorporated into law in Section 155.1 of R.A.
No. 8293 which provides—
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale, distribution,
advertising of any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to
deceive; (emphasis supplied)
On the other hand, the Holistic Test entails a consideration of the entirety of
the marks as applied to the products, including labels and packaging, in
determining confusing similarity. The scrutinizing eye of the observer must
focus not only on the predominant words but also on the other features
appearing in both labels so that a conclusion may be drawn as to whether
one is confusingly similar to the other.20
Relative to the question on confusion of marks and trade names,
jurisprudence has noted two (2) types of confusion, viz: (1) confusion of
goods (product confusion), where the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the
other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of
which registration is applied for by one party, is such as might reasonably
be assumed to originate with the registrant of an earlier product, and the
public would then be deceived either into that belief or into the belief that
there is some connection between the two parties, though inexistent.21
In rejecting the application of Dermaline for the registration of its
mark "DERMALINE DERMALINE, INC.," the IPO applied the Dominancy
Test. It declared that both confusion of goods and service and
confusion of business or of origin were apparent in both trademarks. It
also noted that, per Bureau Decision No. 2007-179 dated December 4, 2007,
it already sustained the opposition of Myra involving the trademark
"DERMALINE" of Dermaline under Classification 5. The IPO also upheld
Myra’s right under Section 138 of R.A. No. 8293, which provides that a
certification of registration of a mark is prima facie evidence of the validity
of the registration, the registrant’s ownership of the mark, and of the
registrant’s exclusive right to use the same in connection with the goods and
those that are related thereto specified in the certificate.

We agree with the findings of the IPO. As correctly applied by the IPO in this
case, while there are no set rules that can be deduced as what constitutes a
dominant feature with respect to trademarks applied for registration;
usually, what are taken into account are signs, color, design, peculiar
shape or name, or some special, easily remembered earmarks of the
brand that readily attracts and catches the attention of the ordinary
consumer.22
Dermaline’s insistence that its applied trademark "DERMALINE
DERMALINE, INC." had differences "too striking to be mistaken" from
Myra’s "DERMALIN" cannot, therefore, be sustained. While it is true that the
two marks are presented differently – Dermaline’s mark is written with the
first "DERMALINE" in script going diagonally upwards from left to right,
with an upper case "D" followed by the rest of the letters in lower case, and
the portion "DERMALINE, INC." is written in upper case letters, below and
smaller than the long-hand portion; while Myra’s mark "DERMALIN" is
written in an upright font, with a capital "D" and followed by lower case
letters – the likelihood of confusion is still apparent. This is because
they are almost spelled in the same way, except for Dermaline’s mark
which ends with the letter "E," and they are pronounced practically in
the same manner in three (3) syllables, with the ending letter "E" in
Dermaline’s mark pronounced silently. Thus, when an ordinary
purchaser, for example, hears an advertisement of Dermaline’s applied
trademark over the radio, chances are he will associate it with Myra’s
registered mark.
Further, Dermaline’s stance that its product belongs to a separate and
different classification from Myra’s products with the registered trademark
does not eradicate the possibility of mistake on the part of the purchasing
public to associate the former with the latter, especially considering that
both classifications pertain to treatments for the skin.
1avvphi1
Indeed, the registered trademark owner may use its mark on the same or
similar products, in different segments of the market, and at different price
levels depending on variations of the products for specific segments of the
market. The Court is cognizant that the registered trademark owner enjoys
protection in product and market areas that are the normal potential
expansion of his business. Thus, we have held –
Modern law recognizes that the protection to which the owner of a
trademark is entitled is not limited to guarding his goods or business from
actual market competition with identical or similar products of the parties,
but extends to all cases in which the use by a junior appropriator of a trade-
mark or trade-name is likely to lead to a confusion of source, as where
prospective purchasers would be misled into thinking that the complaining
party has extended his business into the field (see 148 ALR 56 et seq; 53 Am
Jur. 576) or is in any way connected with the activities of the infringer; or
when it forestalls the normal potential expansion of his business (v. 148
ALR 77, 84; 52 Am. Jur. 576, 577).23 (Emphasis supplied)
Thus, the public may mistakenly think that Dermaline is connected to
or associated with Myra, such that, considering the current
proliferation of health and beauty products in the market, the
purchasers would likely be misled that Myra has already expanded its
business through Dermaline from merely carrying pharmaceutical
topical applications for the skin to health and beauty services.
Verily, when one applies for the registration of a trademark or label
which is almost the same or that very closely resembles one already
used and registered by another, the application should be rejected and
dismissed outright, even without any opposition on the part of the
owner and user of a previously registered label or trademark. This is
intended not only to avoid confusion on the part of the public, but also
to protect an already used and registered trademark and an
established goodwill.24
Besides, the issue on protection of intellectual property, such as trademarks, is factual in
nature. The findings of the IPO, upheld on appeal by the same office, and further
sustained by the CA, bear great weight and deserves respect from this Court. Moreover,
the decision of the IPO had already attained finality when Dermaline failed to timely file
its appeal with the IPO Office of the Director General.
WHEREFORE, the petition is DENIED. The Decision dated August 7, 2009 and the
Resolution dated October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 108627 are
AFFIRMED. Costs against petitioner.
SO ORDERED.

ON PROTECTION OF UNREGISTERED MARKS IN THE PHILIPPINES
G.R. No. 185830               June 5, 2013
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES),
INC., Petitioner,  first cooking school to have set the standard for the teaching of classical
vs.
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L.,
B.V., Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the December 23, 2008
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 104672 which
affirmed in toto the Intellectual Property Office (IPO) Director General’s
April 21, 2008 Decision 3 that declared respondent Renaud Cointreau & Cie
(Cointreau) as the true and lawful owner of the mark "LE CORDON BLEU &
DEVICE" and thus, is entitled to register the same under its name.
The Facts
On June 21, 1990, Cointreau, a partnership registered under the laws of
France, filed before the (now defunct) Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT) of the Department of Trade and Industry a
trademark application for the mark "LE CORDON BLEU & DEVICE" for
goods falling under classes 8, 9, 16, 21, 24, 25, 29, and 30 of the
International Classification of Goods and Services for the Purposes of
Registrations of Marks ("Nice Classification") (subject mark). The
application was filed pursuant to Section 37 of Republic Act No. 166, as
amended (R.A. No. 166), on the basis of Home Registration No. 1,390,912,
issued on November 25, 1986 in France. Bearing Serial No. 72264, such
application was published for opposition in the March-April 1993 issue of
the BPTTT Gazette and released for circulation on May 31, 1993.4
On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an
opposition to the subject application, averring that: (a) it is the owner of the
mark "LE CORDON BLEU, ECOLE DE CUISINE MANILLE," which it has
been using since 1948 in cooking and other culinary activities,
including in its restaurant business; and (b) it has earned immense and
invaluable goodwill such that Cointreau’s use of the subject mark will
actually create confusion, mistake, and deception to the buying public as to
the origin and sponsorship of the goods, and cause great and irreparable
injury and damage to Ecole’s business reputation and goodwill as a senior
user of the same.5
On October 7, 1993, Cointreau filed its answer claiming to be the true and
lawful owner of the subject mark. It averred that: (a) it has filed applications
for the subject mark’s registration in various jurisdictions, including the
Philippines; (b) Le Cordon Bleu is a culinary school of worldwide acclaim
which was established in Paris, France in 1895; (c) Le Cordon Bleu was the
French cuisine and pastry making; and (d) it has trained students from more
than eighty (80) nationalities, including Ecole’s directress, Ms. Lourdes L.
Dayrit. Thus, Cointreau concluded that Ecole’s claim of being the exclusive
owner of the subject mark is a fraudulent misrepresentation.6
During the pendency of the proceedings, Cointreau was issued Certificates
of Registration Nos. 60631 and 54352 for the marks "CORDON BLEU &
DEVICE" and "LE CORDON BLEU PARIS 1895 & DEVICE" for goods and
services under classes 21 and 41 of the Nice Classification, respectively.7
The Ruling of the Bureau of Legal Affairs= SUSTAINED PETITIONER’S
OPPOSITION, DID NOT FIND EVIDENCE SUFFICEIENT TO ESTABLISH
COINTREU’S CLAIM OF PRIOR USE.
In its Decision8 dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the
IPO sustained Ecole’s opposition to the subject mark, necessarily resulting
in the rejection of Cointreau’s application. 9 While noting the certificates of
registration obtained from other countries and other pertinent materials
showing the use of the subject mark outside the Philippines, the BLA did
not find such evidence sufficient to establishCointreau’s claim of prior
use of the same in the Philippines. It emphasized that the adoption and
use of trademark must be in commerce in the Philippines and not abroad. It
then concluded that Cointreau has not established any proprietary right
entitled to protection in the Philippine jurisdiction because the law on
trademarks rests upon the doctrine of nationality or territoriality.10
On the other hand, the BLA found that the subject mark, which was the
predecessor of the mark "LE CORDON BLEU MANILLE" has been known and
used in the Philippines since 1948 and registered under the name "ECOLE
DE CUISINE MANILLE (THE CORDON BLEU OF THE PHILIPPINES), INC." on
May 9, 1980.11
Aggrieved, Cointreau filed an appeal with the IPO Director General.
The Ruling of the IPO Director General= REVERSED BLA’S DECISION
In his Decision dated April 21, 2008, the IPO Director General reversed and
set aside the BLA’s decision, thus, granting Cointreau’s appeal and allowing
the registration of the subject mark. 12 He held that while Section 2 of R.A.
No. 166 requires actual use of the subject mark in commerce in the
Philippines for at least two (2) months before the filing date of the
application, only the owner thereof has the right to register the same,
explaining that the user of a mark in the Philippines is not ipso facto its
owner. Moreover, Section 2-A of the same law does not require actual use in
the Philippines to be able to acquire ownership of a mark. 13
In resolving the issue of ownership and right to register the subject mark in
favor of Cointreau, he considered Cointreau’s undisputed use of such
mark since 1895 for its culinary school in Paris, France (in which
petitioner’s own directress, Ms. Lourdes L. Dayrit, had trained in 1977).
Contrarily, he found that while Ecole may have prior use of the subject mark
in the Philippines since 1948, it failed to explain how it came up with such
name and mark. The IPO Director General therefore concluded that Ecole
has unjustly appropriated the subject mark, rendering it beyond the mantle
of protection of Section 4(d)14 of R.A. No. 166.15
Finding the IPO Director General’s reversal of the BLA’s Decision
unacceptable, Ecole filed a Petition for Review 16dated June 7, 2008 with the
CA.
Ruling of the CA= AFFIRMED IPO DIRECTOR GENERAL’S DECISION
In its Decision dated December 23, 2008, the CA affirmed the IPO Director
General’s Decision in toto.17 It declared Cointreau as the true and actual
owner of the subject mark with a right to register the same in the
Philippines under Section 37 of R.A. No. 166, having registered such mark
in its country of origin on November 25, 1986.18
The CA likewise held that Cointreau’s right to register the subject mark
cannot be barred by Ecole’s prior use thereof as early as 1948 for its
culinary school "LE CORDON BLEU MANILLE" in the Philippines because its
appropriation of the mark was done in bad faith. Further, Ecole had no
certificate of registration that would put Cointreau on notice that the former
had appropriated or has been using the subject mark. In fact, its application
for trademark registration for the same which was just filed on February 24,
1992 is still pending with the IPO.19
Hence, this petition.
Issues Before the Court
The sole issue raised for the Court’s resolution is whether the CA was
correct in upholding the IPO Director General’s ruling that Cointreau is the
true and lawful owner of the subject mark and thus, entitled to have the
same registered under its name.
At this point, it should be noted that the instant case shall be resolved under
the provisions of the old Trademark Law, R.A. No. 166, which was the law in
force at the time of Cointreau’s application for registration of the subject
mark.
The Court’s Ruling
The petition is without merit.
In the petition, Ecole argues that it is the rightful owner of the subject mark,
considering that it was the first entity that used the same in the Philippines.
Hence, it is the one entitled to its registration and not Cointreau.
Petitioner’s argument is untenable.
Under Section 220 of R.A. No. 166, in order to register a trademark, one
must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for
registration. Section 2-A21 of the same law sets out to define how one goes
about acquiring ownership thereof. Under Section 2-A, it is clear that
actual use in commerce is also the test of ownership but the provision
went further by saying that the mark must not have been so
appropriated by another. Additionally, it is significant to note that Section
2-A does not require that the actual use of a trademark must be within the
Philippines. Thus, as correctly mentioned by the CA, under R.A. No. 166, one
may be an owner of a mark due to its actual use but may not yet have the
right to register such ownership here due to the owner’s failure to use the
same in the Philippines for two (2) months prior to registration. 22
Nevertheless, foreign marks which are not registered are still accorded
protection against infringement and/or unfair competition. At this point, it
is worthy to emphasize that the Philippines and France, Cointreau’s
country of origin, are both signatories to the Paris Convention for the
Protection of Industrial Property (Paris Convention). 23 Articles 6bis and 8 of
the Paris Convention state:
ARTICLE 6bis
(1) The countries of the Union undertake, ex officio if their legislation so
permits, or at the request of an interested party, to refuse or to cancel the
registration, and to prohibit the use, of a trademark which constitutes a
reproduction, an imitation, or a translation, liable to create confusion, of a
mark considered by the competent authority of the country of registration
or use to be well known in that country as being already the mark of a
person entitled to the benefits of this Convention and used for identical or
similar goods.  These provisions shall also apply when the essential part of
1âwphi1
the mark constitutes a reproduction of any such well-known mark or an
imitation liable to create confusion therewith.
ARTICLE 8
A trade name shall be protected in all the countries of the Union
without the obligation of filing or registration, whether or not it forms
part of a trademark. (Emphasis and underscoring supplied)
In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris
Convention, to wit:
Section 37. Rights of foreign registrants. - Persons who are nationals of,
domiciled in, or have a bona fide or effective business or commercial
establishment in any foreign country, which is a party to any international
convention or treaty relating to marks or trade-names, or the repression of
unfair competition to which the Philippines may be a party, shall be entitled
to the benefits and subject to the provisions of this Act to the extent and
under the conditions essential to give effect to any such convention and
treaties so long as the Philippines shall continue to be a party thereto,
except as provided in the following paragraphs of this section.
xxxx
Trade-names of persons described in the first paragraph of this section shall
be protected without the obligation of filing or registration whether or not
they form parts of marks.
xxxx
In view of the foregoing obligations under the Paris Convention, the
Philippines is obligated to assure nationals of the signatory-countries that
they are afforded an effective protection against violation of their
intellectual property rights in the Philippines in the same way that their
own countries are obligated to accord similar protection to Philippine
nationals.24 "Thus, under Philippine law, a trade name of a national of a
State that is a party to the Paris Convention, whether or not the trade
name forms part of a trademark, is protected "without the obligation
of filing or registration.’"25
In the instant case, it is undisputed that Cointreau has been using the
subject mark in France since 1895, prior to Ecole’s averred first use of
the same in the Philippines in 1948, of which the latter was fully aware
thereof. In fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and
even its foundress, Pat Limjuco Dayrit), had trained in Cointreau’s Le
Cordon Bleu culinary school in Paris, France.
Cointreau was likewise the first registrant of the said mark under various
classes, both abroad and in the Philippines, having secured Home
Registration No. 1,390,912 dated November 25, 1986 from its country of
origin, as well as several trademark registrations in the Philippines. 26
On the other hand, Ecole has no certificate of registration over the subject
mark but only a pending application covering services limited to Class
41 of the Nice Classification, referring to the operation of a culinary
school. Its application was filed only on February 24, 1992, or after
Cointreau filed its trademark application for goods and services falling
under different classes in 1990. Under the foregoing circumstances, even
if Ecole was the first to use the mark in the Philippines, it cannot be
said to have validly appropriated the same.
It is thus clear that at the time Ecole started using the subject mark, the
same was already being used by Cointreau, albeit abroad, of which
Ecole’s directress was fully aware, being an alumna of the latter’s
culinary school in Paris, France. Hence, Ecole cannot claim any tinge of
ownership whatsoever over the subject mark as Cointreau is the true and
lawful owner thereof. As such, the IPO Director General and the CA were
correct in declaring Cointreau as the true and lawful owner of the subject
mark and as such, is entitled to have the same registered under its name.
In any case, the present law on trademarks, Republic Act No. 8293,
otherwise known as the Intellectual Property Code of the Philippines,
as amended, has already dispensed with the requirement of prior
actual use at the time of registration.27 Thus, there is more reason to allow
the registration of the subject mark under the name of Cointreau as its true
and lawful owner.
As a final note, "the function of a trademark is to point out distinctly the
origin or ownership of the goods (or services) to which it is affixed; to
secure to him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill; to assure
the public that they are procuring the genuine article; to prevent fraud and
imposition; and to protect the manufacturer against substitution and sale of
an inferior and different article as his product." 28 As such, courts will
protect trade names or marks, although not registered or properly
selected as trademarks, on the broad ground of enforcing justice and
protecting one in the fruits of his toil.29
WHEREFORE, the petition is DENIED. Accordingly, the December 23, 2008
Decision of the Court of Appeals in CA-G.R. SP No. 104672 is hereby
AFFIRMED in toto.
SO ORDERED.
ON THE REQUIREMENT OF USE AND BENEFITS OF TM REGISTRATION
G.R. No. 194307               November 20, 2013
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly
BIRKENSTOCK ORTHOPAEDIE GMBH),Petitioner,  Actual Use (10th Year DAU) for Registration No. 56334 on or before October
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this Petition for Review on Certiorari  are the Court of Appeals
1
(CA) Decision  dated June 25, 2010 and Resolution  dated October 27, 2010
2 3
in CA-G.R. SP No. 112278 which reversed and set aside the Intellectual
Property Office (IPO) Director General’s Decision  dated December 22, 2009
4
that allowed the registration of various trademarks in favor of petitioner
Birkenstock Orthopaedie GmbH & Co. KG.
The Facts
Petitioner, a corporation duly organized and existing under the laws of
Germany, applied for various trademark registrations before the IPO,
namely: (a) "BIRKENSTOCK" under Trademark Application Serial No.
(TASN) 4-1994-091508 for goods falling under Class 25 of the International
Classification of Goods and Services (Nice Classification) with filing date of
March 11, 1994; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE
COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A
FOOT, CROSS AND SUNBEA M" under TASN 4-1994-091509 for goods
falling under Class 25 of the Nice Classification with filing date of March 11,
1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING
OF ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS
AND SUNBEAM" under TASN 4-1994-095043 for goods falling under Class
10 of the Nice Classification with filing date of September 5, 1994 (subject
applications).5
However, registration proceedings of the subject applications were
suspended in view of an existing registration of the mark "BIRKENSTOCK
AND DEVICE" under Registration No. 56334 dated October 21, 1993
(Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine
Shoe Expo Marketing Corporation.  In this regard, on May 27, 1997
6
petitioner filed a petition for cancellation of Registration No. 56334 on the
ground that it is the lawful and rightful owner of the Birkenstock marks
(Cancellation Case).  During its pendency, however, respondent and/or its
7
predecessor-in-interest failed to file the required 10th Year Declaration of
21, 2004,  thereby resulting in the cancellation of such mark.  Accordingly,
8 9
the cancellation case was dismissed for being moot and academic. 10
The aforesaid cancellation of Registration No. 56334 paved the way for the
publication of the subject applications in the IPO e-Gazette on February 2,
2007.  In response, respondent filed three (3) separate verified notices of
11
oppositions to the subject applications docketed as Inter Partes Case Nos.
14-2007-00108, 14-2007-00115, and 14-2007-00116,  claiming, inter alia,
12
that: (a) it, together with its predecessor-in-interest, has been using
Birkenstock marks in the Philippines for more than 16 years through the
mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject
applications are identical to the one covered by Registration No. 56334 and
thus, petitioner has no right to the registration of such marks; (c) on
November 15, 1991, respondent’s predecessor-in-interest likewise obtained
a Certificate of Copyright Registration No. 0-11193 for the word
"BIRKENSTOCK" ; (d) while respondent and its predecessor-in-interest
failed to file the 10th Yea r DAU, it continued the use of "BIRKENSTOCK AND
DEVICE" in lawful commerce; and (e) to record its continued ownership and
exclusive right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-
010273 as a " re-application " of its old registration, Registration No.
56334.  On November 13, 2007, the Bureau of Legal Affairs (BLA) of the IPO
13
issued Order No. 2007-2051 consolidating the aforesaid inter partes cases
(Consolidated Opposition Cases). 14
The Ruling of the BLA = SUSTAINED RESPONDENT’S OPPOSITION, EVEN IF
REGISTRATION IS CANCELLED PRIOR RIGHT IS NOT LOST AS PROOF OF
CONTINUOR AND INTERRUPTED USE IN TRADE AND BUSINESS WAS
PRESENTED AND THAT PETITIONER’S MARK IS NOT WELL-KNOWN IN
THE PH
In its Decision  dated May 28, 2008, the BLA of the IPO sustained
15
respondent’s opposition, thus, ordering the rejection of the subject
applications. It ruled that the competing marks of the parties are confusingly
similar since they contained the word "BIRKENSTOCK" and are used on the
same and related goods. It found respondent and its predecessor-in-interest
as the prior user and adopter of "BIRKENSTOCK" in the Philippines, while
on the other hand, petitioner failed to present evidence of actual use in the
trade and business in this country. It opined that while Registration No.
56334 was cancelled, it does not follow that prior right over the mark
was lost, as proof of continuous and uninterrupted use in trade and
business in the Philippines was presented. The BLA likewise opined
that petitioner’s marks are not well -known in the Philippines and
internationally and that the various certificates of registration
submitted by petitioners were all photocopies and, therefore, not
admissible as evidence. 16
Aggrieved, petitioner appealed to the IPO Director General.
The Ruling of the IPO Director General = REVERSED BLA, NO MORE REASON
TO REJEST ON THE GROUND OF PRIOR REGISTRATION OF ANOTHER
PROPERIETOR
In his Decision  dated December 22, 2009, the IPO Director General
17
reversed and set aside the ruling of the BLA, thus allowing the registration
of the subject applications. He held that with the cancellation of Registration
No. 56334 for respondent’s failure to file the 10th Year DAU, there is no
more reason to reject the subject applications on the ground of prior
registration by another proprietor.  More importantly, he found that the
18
evidence presented proved that petitioner is the true and lawful owner and
prior user of "BIRKENSTOCK" marks and thus, entitled to the registration of
the marks covered by the subject applications.  The IPO Director General
19
further held that respondent’s copyright for the word "BIRKENSTOCK" is of
no moment since copyright and trademark are different forms of intellectual
property that cannot be interchanged. 20
Finding the IPO Director General’s reversal of the BLA unacceptable,
respondent filed a petition for review with the CA.
Ruling of the CA = REINSTATED DECISION OF BLA APPROVING THE
OPPOSITION OF RESPONDENT, MARKS ARE CONFUSINGLT SIMILAR,
when respondent’s predecessor-in-interest adopted and started its actual
use of "BIRKENSTOCK," there is neither an existing registration nor a
pending application for the same and thus, it cannot be said that it acted in
bad faith in adopting and starting the use of such mark.  
24
In its Decision  dated June 25, 2010, the CA reversed and set aside the ruling
21
of the IPO Director General and reinstated that of the BLA. It disallowed the
registration of the subject applications on the ground that the marks
covered by such applications "are confusingly similar, if not outright
identical" with respondent’s mark.  It equally held that respondent’s failure
22
to file the 10th Year DAU for Registration No. 56334 "did not deprive
petitioner of its ownership of the ‘BIRKENSTOCK’ mark since it has
submitted substantial evidence showing its continued use, promotion and
advertisement thereof up to the present."  It opined that when respondent’s
23
predecessor-in-interest adopted and started its actual use of
"BIRKENSTOCK," there is neither an existing registration nor a pending
application for the same and thus, it cannot be said that it acted in bad faith
in adopting and starting the use of such mark.  Finally, the CA agreed with
24
respondent that petitioner’s documentary evidence, being mere
photocopies, were submitted in violation of Section 8.1 of Office Order No.
79, Series of 2005 (Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for Reconsideration  dated July 20,
25
2010, which was, however, denied in a Resolution  dated October 27, 2010.
26
Hence, this petition. 27
Issues Before the Court
The primordial issue raised for the Court’s resolution is whether or not the
subject marks should be allowed registration in the name of petitioner.
The Court’s Ruling
The petition is meritorious.
A. Admissibility of Petitioner’s Documentary Evidence.
In its Comment  dated April 29, 2011, respondent asserts that the
28
documentary evidence submitted by petitioner in the Consolidated
Opposition Cases, which are mere photocopies, are violative of Section 8.1 of
the Rules on Inter Partes Proceedings, which requires certified true copies
of documents and evidence presented by parties in lieu of originals.  As 29
such, they should be deemed inadmissible.
The Court is not convinced.
It is well-settled that "the rules of procedure are mere tools aimed at
facilitating the attainment of justice, rather than its frustration. A strict and
rigid application of the rules must always be eschewed when it would
subvert the primary objective of the rules, that is, to enhance fair trials and
expedite justice. Technicalities should never be used to defeat the
substantive rights of the other party. Every party-litigant must be
afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities."  "Indeed, the primordial policy is a faithful observance
30
of [procedural rules], and their relaxation or suspension should only
be for persuasive reasons and only in meritorious cases, to relieve a
litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed."  This is especially true with quasi-judicial and administrative
31
bodies, such as the IPO, which are not bound by technical rules of
procedure.  On this score, Section 5 of the Rules on Inter Partes Proceedings
32
provides:
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter
Partes cases. – The rules of procedure herein contained primarily apply in
the conduct of hearing of Inter Partes cases. The Rules of Court may be
applied suppletorily. The Bureau shall not be bound by strict technical rules
of procedure and evidence but may adopt, in the absence of any applicable
rule herein, such mode of proceedings which is consistent with the
requirements of fair play and conducive to the just, speedy and inexpensive
disposition of cases, and which will give the Bureau the greatest possibility
to focus on the contentious issues before it. (Emphasis and underscoring
supplied)
In the case at bar, while petitioner submitted mere photocopies as
documentary evidence in the Consolidated Opposition Cases, it should be
noted that the IPO had already obtained the originals of such documentary
evidence in the related Cancellation Case earlier filed before it. Under this
circumstance and the merits of the instant case as will be subsequently
discussed, the Court holds that the IPO Director General’s relaxation of
procedure was a valid exercise of his discretion in the interest of substantial
justice.
33
Having settled the foregoing procedural matter, the Court now proceeds to
resolve the substantive issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166,  the governing law for Registration No. 56334,
34
requires the filing of a DAU on specified periods,  to wit:
35
Section 12. Duration. – Each certificate of registration shall remain in force
for twenty years: Provided, That registrations under the provisions of this
Act shall be cancelled by the Director, unless within one year following the
fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of
registration, the registrant shall file in the Patent Office an affidavit showing
that the mark or trade-name is still in use or showing that its non-use is due
to special circumstance which excuse such non-use and is not due to any
intention to abandon the same, and pay the required fee.
The Director shall notify the registrant who files the above- prescribed
affidavits of his acceptance or refusal thereof and, if a refusal, the reasons
therefor. (Emphasis and underscoring supplied)
The aforementioned provision clearly reveals that failure to file the
DAU within the requisite period results in the automatic cancellation
of registration of a trademark. In turn, such failure is tantamount to
the abandonment or withdrawal of any right or interest the registrant
has over his trademark. 36
In this case, respondent admitted that it failed to file the 10th Year
DAU for Registration No. 56334 within the requisite period, or on or
before October 21, 2004. As a consequence, it was deemed to have
abandoned or withdrawn any right or interest over the mark
"BIRKENSTOCK." Neither can it invoke Section 236  of the IP Code which
37
pertains to intellectual property rights obtained under previous intellectual
property laws, e.g., RA 166, precisely because it already lost any right or
interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the
mark "BIRKENSTOCK."
Under Section 2  of RA 166, which is also the law governing the subject
38
applications, in order to register a trademark, one must be the owner
thereof and must have actually used the mark in commerce in the
Philippines for two (2) months prior to the application for registration.
Section 2-A  of the same law sets out to define how one goes about
39
acquiring ownership thereof. Under the same section, it is clear that actual
use in commerce is also the test of ownership but the provision went
further by saying that the mark must not have been so appropriated by
another. Significantly, to be an owner, Section 2-A does not require that the
actual use of a trademark must be within the Philippines. Thus, under RA
166, one may be an owner of a mark due to its actual use but may not
yet have the right to register such ownership here due to the owner’s
failure to use the same in the Philippines for two (2) months prior to
registration. 40
It must be emphasized that registration of a trademark, by itself, is not
a mode of acquiring ownership.  If the applicant is not the owner of the
1âwphi1
trademark, he has no right to apply for its registration. Registration
merely creates a prima facie presumption of the validity of the registration,
of the registrant’s ownership of the trademark, and of the exclusive right to
the use thereof. Such presumption, just like the presumptive regularity in
the performance of official functions, is rebuttable and must give way to
evidence to the contrary.41
Clearly, it is not the application or registration of a trademark that vests
ownership thereof, but it is the ownership of a trademark that confers the
right to register the same. A trademark is an industrial property over
which its owner is entitled to property rights which cannot be
appropriated by unscrupulous entities that, in one way or another,
happen to register such trademark ahead of its true and lawful owner.
The presumption of ownership accorded to a registrant must then
necessarily yield to superior evidence of actual and real ownership of a
trademark.
The Court’s pronouncement in Berris Agricultural Co., Inc. v.
Abyadang  is instructive on this point:
42
The ownership of a trademark is acquired by its registration and its actual
use by the manufacturer or distributor of the goods made available to the
purchasing public. x x x A certificate of registration of a mark, once issued,
constitutes prima facie evidence of the validity of the registration, of the
registrant’s ownership of the mark, and of the registrant’s exclusive right to
use the same in connection with the goods or services and those that are
related thereto specified in the certificate. x x x In other words, the prima
facie presumption brought about by the registration of a mark may be
challenged and overcome in an appropriate action, x x x by evidence of prior
use by another person, i.e. , it will controvert a claim of legal appropriation
or of ownership based on registration by a subsequent user. This is because
a trademark is a creation of use and belongs to one who first used it in trade
or commerce. (Emphasis and underscoring supplied)
43
In the instant case, petitioner was able to establish that it is the owner
of the mark "BIRKENSTOCK." It submitted evidence relating to the
origin and history of "BIRKENSTOCK" and its use in commerce long
before respondent was able to register the same here in the
Philippines. It has sufficiently proven that "BIRKENSTOCK" was first
adopted in Europe in 1774 by its inventor, Johann Birkenstock, a
shoemaker, on his line of quality footwear and thereafter, numerous
generations of his kin continuously engaged in the manufacture and sale of
shoes and sandals bearing the mark "BIRKENSTOCK" until it became the
entity now known as the petitioner. Petitioner also submitted various
certificates of registration of the mark "BIRKENSTOCK" in various
countries and that it has used such mark in different countries
worldwide, including the Philippines. 44
On the other hand, aside from Registration No. 56334 which had been
cancelled, respondent only presented copies of sales invoices and
advertisements, which are not conclusive evidence of its claim of
ownership of the mark "BIRKENSTOCK" as these merely show the
transactions made by respondent involving the same. 45
In view of the foregoing circumstances, the Court finds the petitioner to be
the true and lawful owner of the mark "BIRKENSTOCK" and entitled to its
registration, and that respondent was in bad faith in having it registered in
its name. In this regard, the Court quotes with approval the words of the IPO
Director General, viz.:
The facts and evidence fail to show that [respondent] was in good faith in
using and in registering the mark BIRKENSTOCK. BIRKENSTOCK,
obviously of German origin, is a highly distinct and arbitrary mark. It is
very remote that two persons did coin the same or identical marks. To come
up with a highly distinct and uncommon mark previously appropriated by
another, for use in the same line of business, and without any plausible
explanation, is incredible. The field from which a person may select a
trademark is practically unlimited. As in all other cases of colorable
imitations, the unanswered riddle is why, of the millions of terms and
combinations of letters and designs available, [respondent] had to come up
with a mark identical or so closely similar to the [petitioner’s] if there was
no intent to take advantage of the goodwill generated by the [petitioner’s]
mark. Being on the same line of business, it is highly probable that the
[respondent] knew of the existence of BIRKENSTOCK and its use by the
[petitioner], before [respondent] appropriated the same mark and had
it registered in its name.46
WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010
and Resolution dated October 27, 2010 of the Court of Appeals in CA-G.R. SP
No. 112278 are REVERSED and SET ASIDE. Accordingly, the Decision dated
December 22, 2009 of the IPO Director General is hereby REINSTATED.
SO ORDERED.
On Unfair Competition
On geographically descriptive terms
Doctrine of Secondary Meaning
G.R. No. 190706               July 21, 2014
SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG
GRAND TOWER CORPORATION) and SHANG PROPERTIES, INC.
(formerly EDSA PROPERTIES HOLDINGS, INC.), Petitioners,  construction of permanent buildings or structures for residential and office
vs.
ST. FRANCIS DEVELOPMENT CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Respondent (ST FRANCIS) – a domestic corporation engaged in the real
estate business and the developer of the St. Francis Square Commercial
Center filed 3 separate complaints against respondent Shang Properties
Realty Corporation for: unfair competition (The St. Francis Towers and The
St. Francis Shangri-La Place; opposition of registration of both marks)
Assailed in this petition for review on certiorari  is the Decision  dated
1 2
December 18, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105425
which affirmed with modification the Decision  dated September 3, 2008 of
3
the Intellectual Property Office (IPO) Director-General. The CA: (a) affirmed
the denial of the application for registration of the mark "ST. FRANCIS
TOWERS" filed by petitioners Shang Properties Realty Corporation and
Shang Properties, Inc. (petitioners); ( b) found petitioners to have
committed unfair competition for using the marks "THE ST. FRANCIS
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE"; (c) ordered
petitioners to cease and desist from using "ST. FRANCIS" singly or as part of
a composite mark; and (d) ordered petitioners to jointly and severally pay
respondent St. Francis Square Development Corporation (respondent) a fine
in the amount of ₱200,000.00.
The Facts
Respondent (ST FRANCIS) – a domestic corporation engaged in the real
estate business and the developer of the St. Francis Square Commercial
Center, built sometime in 1992, located at Ortigas Center, Mandaluyong City,
Metro Manila (Ortigas Center)  – filed separate complaints against
4
petitioners before the IPO - Bureau of Legal Affairs (BLA), namely: (a) an
intellectual property violation case for unfair competition, false or
fraudulent declaration, and damages arising from petitioners’ use and filing
of applications for the registration of the marks "THE ST. FRANCIS
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE," docketed as IPV
Case No. 10-2005-00030 (IPV Case); and (b) an inter partes case opposing
the petitioners’ application for registration of the mark "THE ST. FRANCIS
TOWERS" for use relative to the latter’s business, particularly the
purposes, docketed as Inter PartesCase No. 14-2006-00098 (St. Francis
Towers IP Case); and (c) an inter partes case opposing the petitioners’
application for registration of the mark "THE ST. FRANCIS SHANGRI-LA
PLACE," docketed as IPC No. 14-2007-00218 (St. Francis Shangri-La IP
Case).
5
In its complaints, respondent alleged that it has used the mark "ST.
FRANCIS" to identify its numerous property development projects located
at Ortigas Center, such as the aforementioned St. Francis Square Commercial
Center, a shopping mall called the "St. Francis Square," and a mixed-use
realty project plan thatincludes the St. Francis Towers. Respondent added
that as a result of its continuous use of the mark "ST. FRANCIS" in its
real estate business,it has gained substantial goodwill with the public
that consumers and traders closely identify the said mark with its
property development projects. Accordingly, respondent claimed that
petitioners could not have the mark "THE ST. FRANCIS TOWERS" registered
in their names, and that petitioners’ use of the marks "THE ST. FRANCIS
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE" in their own real
estate development projects constitutes unfair competition as well as false
or fraudulent declaration.
6
Petitioners (SHANG) denied committing unfair competition and false or
fraudulent declaration, maintaining that they could register the mark "THE
ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE"
under their names. They contended that respondent is barred from
claiming ownership and exclusive use ofthe mark "ST. FRANCIS"
because the same is geographically descriptive ofthe goods or services
for which it is intended to be used.  This is because respondent’s as well
7
as petitioners’ real estate development projects are locatedalong the
streets bearing the name "St. Francis," particularly, St. FrancisAvenue
and St. Francis Street (now known as Bank Drive),  both within the
8
vicinity of the Ortigas Center.
The BLA Rulings = RULED IN FAVOR OF RESPONDENT ST. FRANCIS
- committed acts of unfair competition against respondent by its use of
the mark "THE ST. FRANCIS TOWERS" but not with its use of the mark
"THE ST. FRANCIS SHANGRI-LA PLACE."
-The BLA neither deemed "ST. FRANCIS" as a geographically descriptive
mark, opining that there is no specific lifestyle, aura, quality or
characteristic that the real estate projects possess except for the fact that
they are located along St. Francis Avenueand St. Francis Street
- BLA found that while respondent’s use of the mark "ST. FRANCIS" has not
attained exclusivity considering that there are other real estate
development projects bearing the name "St. Francis" in other areas,  it must
10
nevertheless be pointed out that respondent has been known to be the only
real estate firm to transact business using such name within the Ortigas
Center vicinity. Accordingly, the BLA considered respondent to have
gained goodwill and reputation for its mark, which therefore entitles it
to protection against the use by other persons, at least, to those doing
business within the Ortigas Center. 11
- in the St. Francis Towers IP Case, denying petitioners’ application for
registration of the mark "THE ST. FRANCIS TOWERS." Excluding the word
"TOWERS" in view of petitioners’ disclaimer thereof, the BLA ruled that
petitioners cannot register the mark "THE ST. FRANCIS" since it is
confusingly similar to respondent’s"ST. FRANCIS" marks which are
registered with the Department of Trade and Industry(DTI).
- the BLA then rendered a Decision  in the St. Francis Shangri-La IP Case,
14
allowing petitioners’ application for registration of the mark "THE ST.
FRANCIS SHANGRI-LA PLACE."
On December 19, 2006, the BLA rendered a Decision  in the IPV Case, and
9
found that petitioners committed acts of unfair competition against
respondent by its use of the mark "THE ST. FRANCIS TOWERS" but not
with its use of the mark "THE ST. FRANCIS SHANGRI-LA PLACE." It,
however, refused to award damages in the latter’s favor, considering that
there was no evidence presented to substantiate the amount of damages it
suffered due to the former’s acts. The BLA found that "ST. FRANCIS,"
being a name of a Catholic saint, may be considered as an arbitrary
mark capable of registration when used in real estate development
projects as the name has no direct connection or significance when
used in association with real estate.
The BLA neither deemed "ST. FRANCIS" as a geographically descriptive
mark, opiningthat there is no specific lifestyle, aura, quality or characteristic
that the real estate projects possess except for the fact that they are located
along St. Francis Avenueand St. Francis Street (now known as Bank Drive),
Ortigas Center. In this light, the BLA found that while respondent’s use of the
mark "ST. FRANCIS" has not attained exclusivity considering that there are
other real estate development projects bearing the name "St. Francis" in
other areas,  it must nevertheless be pointed out that respondent has been
10
known to be the only real estate firm to transact business using such name
within the Ortigas Center vicinity. Accordingly, the BLA considered
respondent to have gained goodwill and reputation for its mark, which
therefore entitles it to protection against the use by other persons, at least,
to those doing business within the Ortigas Center. 11
Meanwhile, on March 28, 2007, the BLA rendered a Decision  in the St.
12
Francis Towers IP Case, denying petitioners’ application for
registration of the mark "THE ST. FRANCIS TOWERS." Excluding the
word "TOWERS" in view of petitioners’ disclaimer thereof, the BLA
ruled that petitioners cannot register the mark "THE ST. FRANCIS"
since it is confusingly similar to respondent’s"ST. FRANCIS" marks
which are registered with the Department of Trade and Industry(DTI).
It held that respondent had a better right over the use of the mark "ST.
FRANCIS" because of the latter’s appropriation and continuous usage
thereof for a long period of time.  A little over a year after, or on March 31,
13
2008, the BLA then rendered a Decision  in the St. Francis Shangri-La IP
14
Case, allowing petitioners’ application for registration of the mark
"THE ST. FRANCIS SHANGRI-LA PLACE."
It found that respondent cannot preclude petitioners from using the mark
"ST. FRANCIS" as the records show that the former’s use thereof had not
been attended with exclusivity. More importantly, it found that petitioners
had adequately appended the word "Shangri-La" to its composite mark to
distinguish it from that of respondent, in which case, the former had
removed any likelihood of confusion that may arise from the
contemporaneous use by both parties of the mark "ST. FRANCIS."
Both parties appealed the decision in the IPV Case, while petitioners
appealed the decision in the St. Francis Towers IP Case. Due to the identity
of the parties and issues involved, the IPO Director-General ordered the
consolidation of the separate appeals.  Records are, however, bereft of any
15
showing that the decision in the St. Francis Shangri-La IP Casewas appealed
by either party and, thus, is deemed to have lapsed into finality.
The IPO Director-General Ruling = affirmed ruling of BLA. However, the IPO
DirectorGeneral reversed the BLA’s findingthat petitioners committed
unfair competition through their use of the mark "THE ST. FRANCIS
TOWERS," thus dismissing such charge. He foundthat respondent could not
be entitled to the exclusive use of the mark "ST. FRANCIS," even at least to
the locality where it conducts its business, because it is a geographically
descriptive mark, considering that it was petitioners’ as well as
respondent’s intention to use the mark
In a Decision  dated September 3, 2008, then IPO Director-General Adrian S.
16
Cristobal, Jr. affirmedthe rulings of the BLA that: (a) petitioners cannot
register the mark "THEST. FRANCIS TOWERS"; and (b) petitioners are
not guilty of unfair competition in its use of the mark "THE ST. FRANCIS
SHANGRI-LA PLACE."
However, the IPO DirectorGeneral reversed the BLA’s findingthat
petitioners committed unfair competition through their use of the mark
"THE ST. FRANCIS TOWERS," thus dismissing such charge. He foundthat
respondent could not be entitled to the exclusive use of the mark "ST.
FRANCIS," even at least to the locality where it conducts its business,
because it is a geographically descriptive mark, considering that it was
petitioners’ as well as respondent’s intention to use the mark "ST.
FRANCIS"in order to identify, or at least associate, their real estate
development projects/businesses with the place or location where they are
situated/conducted, particularly, St. Francis Avenue and St. Francis Street
(now known as Bank Drive), Ortigas Center. He further opined that
respondent’s registration of the name "ST. FRANCIS" with the DTI is
irrelevant since what should be controlling are the trademark
registrations with the IPO itself.  Also, the IPO Director-General held that
17
since the parties are both engaged in the real estate business, it would be
"hard to imagine that a prospective buyer will be enticed to buy, rent or
purchase [petitioners’] goods or servicesbelieving that this is owned by
[respondent] simply because of the name ‘ST. FRANCIS.’ The prospective
buyer would necessarily discuss things with the representatives of
[petitioners] and would readily know that this does not belong to
[respondent]." 18
Disagreeing solely with the IPO Director-General’s ruling on the issue of
unfair competition (the bone of contention in the IPV Case), respondent
elevated the sameto the CA.
In contrast, records do not show that either party appealed the IPO
Director-General’s ruling on the issue ofthe registrability of the mark "THE
ST. FRANCIS TOWERS" (the bone of contention in the St. Francis Towers IP
Case). As such, said pronouncement isalso deemed to have lapsed into
finality.
The CA Ruling= the CA found petitioners guilty of unfair competition not
only withrespect to their use of the mark "THE ST. FRANCIS TOWERS" but
alsoof the mark "THE ST. FRANCIS SHANGRI-LA PLACE.", St. Francis not
geographically descriptive since it has exclusively and contiously used the
mark St. Francis for more than a decade, that even on the assumption that it
is geographically descriptive, adequate protection pursuant doctrine of
secondary meaning
In a Decision  dated December 18, 2009, the CA found petitioners guilty of
19
unfair competition not only withrespect to their use of the mark "THE ST.
FRANCIS TOWERS" but alsoof the mark "THE ST. FRANCIS SHANGRI-LA
PLACE." Accordingly, itordered petitioners to cease and desist from using
"ST. FRANCIS" singly or as part of a composite mark, as well as to jointly and
severally pay respondent a fine in the amount of ₱200,000.00.
The CA did not adhere to the IPO Director-General’s finding that the mark
"ST. FRANCIS" is geographically descriptive, and ruled that respondent –
which has exclusively and continuously used the mark "ST. FRANCIS" for
more than a decade, and,hence, gained substantial goodwill and reputation
thereby – is very muchentitled to be protected against the indiscriminate
usage by other companies of the trademark/name it has so painstakingly
tried to establish and maintain. Further, the CA stated that even on the
assumption that "ST. FRANCIS" was indeed a geographically
descriptive mark, adequateprotection must still begiven to respondent
pursuant to the Doctrine of Secondary Meaning. 20
Dissatisfied, petitioners filed the present petition.
The Issue Before the Court
With the decisions in both Inter PartesCases having lapsed into finality, the
sole issue thus left for the Court’s resolution is whether or not petitioners
are guilty of unfair competition in using the marks "THE ST. FRANCIS
TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE."
The Court’s Ruling
The petition is meritorious.
Section 168 of Republic Act No. 8293,  otherwise known as the "Intellectual
21
Property Code of the Philippines" (IP Code), provides for the rules and
regulations on unfair competition.
To begin, Section 168.1 qualifies who is entitled to protection against unfair
competition. It states that "[a]person who has identified in the mind of
the public the goods he manufacturesor deals in, his business or
services from those of others, whether or not a registered mark is
employed, has a property right in the goodwill of the said goods,
business or services so identified, which will be protected inthe same
manner as other property rights."
Section 168.2proceeds to the core of the provision, describing forthwith
who may be found guilty of and subject to an action of unfair competition
– that is, "[a]ny person who shall employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or services
for those of the one having established such goodwill, or who shall
commit any acts calculated to produce said result x x x."
Without limiting its generality, Section 168.3goes on to specify examples of
acts which are considered as constitutive of unfair competition, viz.:
168.3. In particular, and without in any way limiting the scope of protection
against unfair competition, the following shall be deemed guilty of unfair
competition:
(a) Any person who is selling his goods and gives them the
general appearance of goods of another manufacturer or
dealer, either as to the goods themselves or in the wrapping of
the packages in which they are contained, or the devices or
words thereon, or in any other feature of their appearance,
which would be likely to influence purchasers to believe that
the goods offered are those of a manufacturer or dealer, other
than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the
public and defraud another of his legitimate trade, or any
subsequent vendor ofsuch goods or any agent of any vendor
engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs
any other means calculated to induce the false belief that such
person is offering the service of another who has identified
such services in the mind of the public; or
(c) Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary to
good faith of a nature calculated to discredit the goods,
business or services of another.
Finally, Section 168.4 dwells on a matter of procedure by stating that the
"[t]he remedies provided by Sections 156, 157,  and 161  shall apply
22 23 24
mutatis mutandis."
The statutory attribution of the unfair competition concept is
wellsupplemented by jurisprudential pronouncements. In the recent case of
Republic Gas Corporation v. Petron Corporation,  the Court has echoed
25
the classic definition of the term which is "‘the passing off (or palming off)
or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect
of deceiving the public.’ Passing off (or palming off) takes place where
the defendant, by imitative devices on the general appearance of the
goods, misleads prospective purchasers into buying his merchandise
under the impression that they are buying that of his competitor s. [In
other words], the defendant gives his goods the general appearance of
the goods of his competitor with the intention of deceiving the
publicthat the goods are those of his competitor." The "true test" of
26
unfair competition has thus been "whether the acts of the defendant
have the intent of deceiving or are calculated to deceive the ordinary
buyer making his purchases under the ordinary conditions of
theparticular trade to which the controversy relates." Based on the
foregoing, it is therefore essential to prove the existence of fraud, or the
intent to deceive, actual or probable,  determined through a judicious
27
scrutiny of the factual circumstances attendant to a particular case.28
Here, the Court finds the element of fraud to be wanting; hence, there
can be no unfair competition.
The CA’scontrary conclusion was faultily premised on its impression that
respondenthad the right to the exclusive use of the mark "ST. FRANCIS," for
which the latter had purportedly established considerable goodwill. What
the CA appears to have disregarded or been mistaken in its disquisition,
however, is the geographicallydescriptive nature of the mark "ST. FRANCIS"
which thus bars its exclusive appropriability, unless a secondary meaning is
acquired
. As deftly explained in the U.S. case of Great Southern Bank v. First Southern
Bank:  "[d]escriptive geographical terms are inthe ‘public domain’ in the
29
sense that every seller should have the right to inform customers of the
geographical origin of his goods. A ‘geographically descriptive term’ is any
noun or adjective that designates geographical location and would tend to
be regarded by buyers as descriptive of the geographic location of origin of
the goods or services. A geographically descriptive term can indicate any
geographic location on earth, such as continents, nations, regions, states,
cities, streets and addresses, areas of cities, rivers, and any other location
referred to by a recognized name. In order to determine whether or not the
geographic term in question is descriptively used, the following question is
relevant: (1) Is the mark the name of the place or region from which the
goods actually come? If the answer is yes, then the geographic term is
probably used in a descriptive sense, and secondary meaning is required for
protection."30
In Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc.,  it 31
was held that secondary meaning is established when a descriptive
mark no longer causes the public to associate the goods with a
particular place, but to associate the goods with a particular source.In
other words, it is not enough that a geographically-descriptive mark
partakes of the name of a place known generally to the public to be denied
registration as it is also necessary to show that the public would make a
goods/place association – that is, to believe that the goods for which
the mark is sought to be registered originatein that place.   1âwphi1
To hold sucha belief, it is necessary, of course, that the purchasers perceive
the mark as a place name, from which the question of obscurity or
remoteness then comes to the fore. The more a geographical area is
32
obscure and remote, it becomes less likely that the public shall have a
goods/place association with such area and thus, the mark may not be
deemed as geographically descriptive. However, where there is no
genuine issue that the geographical significance of a term is its primary
significanceand where the geographical place is neither obscure nor remote,
a public association of the goods with the place may ordinarily be presumed
from the fact that the applicant’s own goods come from the geographical
place named in the mark. 33
Under Section 123.2  of the IP Code, specific requirements have to be met in
34
order to conclude that a geographically-descriptive mark has acquired
secondary meaning, to wit:
(a) the secondary meaning must have arisen as a result of substantial
commercial use of a mark in the Philippines;
(b) such use must result in the distinctiveness of the mark insofar as
the goods or theproducts are concerned; and
(c) proof of substantially exclusive and continuous commercial use in
the Philippines for five (5) years beforethe date on which the claim of
distinctiveness is made.
Unless secondary meaning has been established, a geographically-
descriptive mark, dueto its general public domain classification, is
perceptibly disqualified from trademark registration. Section 123.1(j) of the
IP Code states this rule as follows:
SEC. 123. Registrability. –
123.1 A mark cannot be registered if it:
xxxx
(j) Consists exclusively of signs orof indications that may serve in trade to
designate the kind, quality, quantity, intended purpose, value, geographical
origin, time or production of the goods or rendering of the services, or other
characteristics of the goods or services; (Emphasis supplied) x x x x
Cognizant of the foregoing, the Court disagrees with the CA that petitioners
committed unfair competition due to the mistaken notion that petitioner
had established goodwill for the mark "ST. FRANCIS" precisely because said
circumstance, by and of itself, does not equateto fraud under the parameters
of Section 168 of the IP Code as above-cited. In fact, the records are bereft
of any showing thatpetitioners gave their goods/services the general
appearance that it was respondent which was offering the same to the
public. Neither did petitioners employ any means to induce the public
towards a false belief that it was offering respondent’s goods/services. Nor
did petitioners make any false statement or commit acts tending to discredit
the goods/services offered by respondent
. Accordingly, the element of fraud which is the core of unfair competition
had not been established.
Besides, respondent was not able toprove its compliance with the
requirements stated in Section 123.2 of the IP Code to be able to
conclude that it acquired a secondary meaning – and, thereby, an
exclusive right – to the "ST. FRANCIS" mark, which is, as the IPO Director-
General correctly pointed out, geographically-descriptive of the location in
which its realty developments have been built, i.e., St. Francis Avenue and St.
Francis Street (now known as "Bank Drive"). Verily, records would reveal
that while it is true that respondent had been using the mark "ST.
FRANCIS" since 1992, its use thereof has been merely confined to its
realty projects within the Ortigas Center, as specifically mentioned.As
its use of the mark is clearly limited to a certain locality, it cannot be
said thatthere was substantial commercial use of the same
recognizedall throughout the country. Neither is there any showing of a
mental recognition in buyers’ and potential buyers’ minds that products
connected with the mark "ST. FRANCIS" are associated with the same
source  – that is, the enterprise of respondent. Thus, absent any showing
35
that there exists a clear goods/service-association between the realty
projects located in the aforesaid area and herein respondent as the
developer thereof, the latter cannot besaid to have acquired a
secondary meaning as to its use of the "ST. FRANCIS" mark.
In fact, even on the assumption that secondary meaning had been acquired,
said finding only accords respondents protectional qualification under
Section 168.1 of the IP Code as above quoted. Again, this does not
automatically trigger the concurrence of the fraud element required
under Section 168.2 of the IP Code, as exemplified by the acts
mentioned in Section 168.3 of the same. Ultimately, as earlier stated,
there can be no unfair competition without this element. In this respect,
considering too the notoriety of the Shangri-La brand in the real estate
industry which dilutes petitioners' propensity to merely ride on
respondent's goodwill, the more reasonable conclusion is that the
former's use of the marks "THE ST. FRANCIS TOWERS" and "THE ST.
FRANCIS SHANGRI-LA PLACE" was meant only to identify, or at least
associate, their real estate project/s with its geographical location. As
aptly observed by the IPO DirectorGeneral: 36
In the case at hand, the parties are business competitors engaged in real
estate or property development, providing goods and services directly
connected thereto. The "goods" or "products" or "services" are real estate
and the goods and the services attached to it or directly related to it, like
sale or lease of condominium units, offices, and commercial spaces, such as
restaurants, and other businesses. For these kinds of goods or services
there can be no description of its geographical origin as precise and
accurate as that of the name of the place where they are situated.
(Emphasis and underscoring supplied)
Hence, for all the reasons above-discussed, the Court hereby grants the
instant petition, and, thus, exonerates petitioners from the charge of unfair
competition in the IPV Case. As the decisions in the Inter Partes Cases were
not appealed, the registrability issues resolved therein are hereby
deemed to have attained finality and, therefore, are now executory.
WHEREFORE, the petition is GRANTED. The Decision dated December 18,
2009 of the Court of Appeals in CA-G.R. SP No. 105425 is hereby REVERSED
and SET ASIDE. Accordingly, the Decision dated September 3, 2008 of the
Intellectual Property Office-Director General is REINSTATED.
SO ORDERED.

On corporate names, arbitrary marks and corporate names vs. TM
G.R. NO. 175278 (GSIS FAMILY BANK, A THRIFT BANK VS.FAMILY
BANK)
GSIS FAMILY BANK - THRIFT BANK [Formerly Inc.], Petitioner,  SEC the corporate name "Family First Savings Bank," which was amended to
vs.
BPI FAMILY BANK, Respondent.
DECISION
JARDELEZA, J.:
This is a Petition for Review on Certiorari filed by GSIS Family Bank - Thrift
Bank  assailing the Court of Appeals Decision  dated March 29, 2006
1 2
(Decision) and Resolution  dated October 23, 2006 which denied
3
petitioner's petition for review of the Securities and Ex.change Commission
Decision dated February 22, 2005 (SEC En Banc Decision). The SEC En Banc
Decision  prohibited petitioner from using the word "Family" as part of its
4
corporate name and ordered petitioner to delete the word from its name. 5
Facts
Petitioner (GSIS) was originally organized as Royal Savings Bank and
started operations in 1971. Beginning 1983 and 1984, petitioner
encountered liquidity problems. On July 9, 1984, it was placed under
receivership and later temporarily closed by the Central Bank of the
Philippines. Two (2) months after its closure, petitioner reopened and
was renamed Comsavings Bank, Inc. under the management of the
Commercial Bank of Manila. 6
In 1987, the Government Service Insurance System (GSIS) acquired
petitioner from the Commercial Bank of Manila. Petitioner's management
and control was thus transferred to GSIS.  To improve its marketability to
7
the public, especially to the members of the GSIS, petitioner sought
Securities and Exchange Commission (SEC) approval to change its
corporate name to "GSIS Family Bank, a Thrift Bank."  Petitioner 8
likewise applied with the Department of Trade and Industry (DTI) and
Bangko Sentral ng Pilpinas (BSP) for authority to use "GSIS Family Bank, a
Thrift Bank" as its business name. The DTI and the BSP approved the
applications.  Thus, petitioner operates under the corporate name "GSIS
9
Family Bank – a Thrift Bank," pursuant to the DTI Certificate of Registration
No. 741375 and the Monetary Board Circular approval. 10
Respondent BPI Family Bank was a product of the merger between the
Family Bank and Trust Company (FBTC) and the Bank of the Philippine
Islands (BPI).  On June 27, 1969, the Gotianum family registered with the
11
"Family Savings Bank," and then later to "Family Bank and Trust
Company."  Since its incorporation, the bank has been commonly known as
12
"Family Bank." In 1985, Family Bank merged with BPI, and the latter
acquired all the rights, privileges, properties, and interests of Family Bank,
including the right to use names, such as "Family First Savings Bank,"
"Family Bank," and "Family Bank and Trust Company." BPI Family Savings
Bank was registered with the SEC as a wholly-owned subsidiary of BPI. BPI
Family Savings Bank then registered with the Bureau of Domestic Trade the
trade or business name "BPI Family Bank," and acquired a reputation and
goodwill under the name. 13
Proceedings before the SEC
Eventually, it reached respondent’s attention that petitioner is using or
attempting to use the name "Family Bank." Thus, on March 8, 2002,
respondent petitioned the SEC Company Registration and Monitoring
Department (SEC CRMD) to disallow or prevent the registration of the name
"GSIS Family Bank" or any other corporate name with the words "Family
Bank" in it. Respondent claimed exclusive ownership to the name "Family
Bank," having acquired the name since its purchase and merger with Family
Bank and Trust Company way back 1985.  Respondent also alleged that
14
through the years, it has been known as "BPI Family Bank" or simply
"Family Bank" both locally and internationally. As such, it has acquired a
reputation and goodwill under the name, not only with clients here and
abroad, but also with correspondent and competitor banks, and the public
in general.
15
Respondent prayed the SEC CRMD to disallow or prevent the
registration of the name "GSIS Family Bank" or any other corporate
name with the words "Family Bank" should the same be presented for
registration.
Respondent likewise prayed the SEC CRMD to issue an order directing
petitioner or any other corporation to change its corporate name if the
names have already been registered with the SEC. 16
The SEC CRMD was thus confronted with the issue of whether the names
BPI Family Bank and GSIS Family Bank are confusingly similar as to require
the amendment of the name of the latter corporation.
The SEC CRMD declared that upon the merger of FBTC with the BPI in 1985,
the latter acquired the right to the use of the name of the absorbed
corporation. Thus, BPI Family Bank has a prior right to the use of the name
Family Bank in the banking industry, arising from its long and extensive
nationwide use, coupled with its registration with the Intellectual Property
Office (IPO) of the name "Family Bank" as its trade name. Applying the rule
of "priority in registration" based on the legal maxim first in time, first in
right, the SEC CRMD concluded that BPI has the preferential right to the use
of the name "Family Bank." More, GSIS and Comsavings Bank were then fully
aware of the existence and use of the name "Family Bank" by FBTC prior to
the latter's merger with BPI.
17
The SEC CRMD also held that there exists a confusing similarity between the
corporate names BPI Family Bank and GSIS Family Bank. It explained that
although not identical, the corporate names are indisputably similar, as to
cause confusion in the public mind, even with the exercise of reasonable
care and observation, especially so since both corporations are engaged in
the banking business.18
In a decision  dated May 19, 2003, the SEC CRMD said, PREMISES
19
CONSIDERED respondent GSIS FAMILY BANK is hereby directed to refrain
from using the word "Family" as part of its name and make good its
commitment to change its name by deleting or dropping the subject word
from its corporate name within [thirty (30) days] from the date of actual
receipt hereof.
20
Petitioner appealed  the decision to the SEC En Banc, which denied the
21
appeal, and upheld the SEC CRMD in the SEC En Banc Decision.  Petitioner
22
elevated the SEC En Banc Decision to the Court of Appeals, raising the
following issues:
1. Whether the use by GSIS Family Bank of the words "Family Bank"
is deceptively and confusingly similar to the name BPI Family Bank;
2. Whether the use by Comsavings Bank of "GSIS Family Bank" as its
business constitutes unfair competition;
3. Whether BPI Family Bank is guilty of forum shopping;
4. Whether the approval of the DTI and the BSP of petitioner's
application to use the name GSIS Family Bank constitutes its
authority to the lawful and valid use of such trade name or trade
mark;
5. Whether the application of respondent BPI Family Bank for the
exclusive use of the name "Family Bank," a generic name, though not
yet approved by IPO of the Bureau of Patents, has barred the GSIS
Family Bank from using such trade mark or name. 23
Court of Appeals Ruling
The Court of Appeals ruled that the approvals by the BSP and by the DTI of
petitioner’s application to use the name "GSIS Family Bank" do not
constitute authority for its lawful and valid use. It said that the SEC has
absolute jurisdiction, supervision and control over all corporations.  The
24
Court of Appeals held that respondent was entitled to the exclusive use
of the corporate name because of its prior adoption of the name
"Family Bank" since 1969. There is confusing similarity in the corporate
25
names because "[c]onfusion as to the possible association with GSIS might
arise if we were to allow Comsavings Bank to add its parent company’s
acronym, ‘GSIS’ to ‘Family Bank.’ This is true especially considering both
companies belong to the banking industry. Proof of actual confusion need
not be shown. It suffices that confusion is probably or likely to occur." The
26
Court of Appeals also ruled out forum shopping because not all the
requirements of litis pendentia are present. 27
The dispositive portion of the decision read,
WHEREFORE, the instant petition for review is hereby DISMISSED for lack
of merit.28
After its Motion for Reconsideration was denied,  petitioner brought the
29
decision to this Court via a Petition for Review on Certiorari.30
Issues in the Petition
Petitioner raised the following issues in its petition:
I. The Court of Appeals gravely erred in affirming the SEC Resolution
finding the word "Family" not generic despite its unregistered
status with the IPO of the Bureau of Patents and the use by GSIS-
Family Bank in its corporate name of the words "[F]amily [B]ank" as
deceptive and [confusingly similar] to the name BPI Family Bank; 31
II. The Court of Appeals gravely erred when it ruled that the
respondent is not guilty of forum shopping despite the filing of three
(3) similar complaints before the DTI and BSP and with the SEC
without the requisite certification of non-forum shopping attached
thereto; 32
III. The Court of Appeals gravely erred when it completely
disregarded the opinion of the Banko Sentral ng Pilipinas that the
use by the herein petitioner of the trade name GSIS Family Bank –
Thrift Bank is not similar or does not deceive or likely cause any
deception to the public. 33
Court's Ruling
We uphold the decision of the Court of Appeals.
Section 18 of the Corporation Code provides,
Section 18. Corporate name. – No corporate name may be allowed by the
Securities and Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing corporation or to
any other name already protected by law or is patently deceptive, confusing
or contrary to existing laws. When a change in the corporate name is
approved, the Commission shall issue an amended certificate of
incorporation under the amended name.
In Philips Export B.V. v. Court of Appeals,  this Court ruled that to fall within
34
the prohibition of the law on the right to the exclusive use of a corporate
name, two requisites must be proven, namely:
(1) that the complainant corporation acquired a prior right
over the use of such corporate name; and
(2) the proposed name is either
(a) identical or
(b) deceptive or confusingly similar to that of any
existing corporation or to any other name already
protected by law; or
(c) patently deceptive, confusing or contrary to existing
law.35
These two requisites are present in this case. On the first requisite of a prior
right, Industrial Refractories Corporation of the Philippines v. Court of
Appeals (IRCP case)  is instructive. In that case, Refractories Corporation of
36
the Philippines (RCP) filed before the SEC a petition to compel Industrial
Refractories Corporation of the Philippines (IRCP) to change its corporate
name on the ground that its corporate name is confusingly similar with that
of RCP’s such that the public may be confused into believing that they are
one and the same corporation. The SEC and the Court of Appeals found for
petitioner, and ordered IRCP to delete or drop from its corporate name the
word "Refractories." Upon appeal of IRCP, this Court upheld the decision of
the CA.
Applying the priority of adoption rule to determine prior right, this Court
said that RCP has acquired the right to use the word "Refractories" as part of
its corporate name, being its prior registrant. In arriving at this conclusion,
the Court considered that RCP was incorporated on October 13, 1976 and
since then continuously used the corporate name "Refractories Corp. of the
Philippines." Meanwhile, IRCP only started using its corporate name
"Industrial Refractories Corp. of the Philippines" when it amended its
Articles of Incorporation on August 23, 1985.37
In this case, respondent was incorporated in 1969 as Family Savings Bank
and in 1985 as BPI Family Bank. Petitioner, on the other hand, was
incorporated as GSIS Family – Thrift Bank only in 2002,  or at least
38
seventeen (17) years after respondent started using its name. Following
the precedent in the IRCP case, we rule that respondent has the prior
right over the use of the corporate name.
The second requisite in the Philips Export case likewise obtains on two
points: the proposed name is (a) identical or (b) deceptive or confusingly
similar to that of any existing corporation or to any other name already
protected by law.
On the first point (a), the words "Family Bank" present in both petitioner
and respondent's corporate name satisfy the requirement that there be
identical names in the existing corporate name and the proposed one.
Respondent cannot justify its claim under Section 3 of the Revised
Guidelines in the Approval of Corporate and Partnership Names,  to wit:
39
3. The name shall not be identical, misleading or confusingly similar to one
already registered by another corporation or partnership with the
Commission or a sole proprietorship registered with the Department of
Trade and Industry.
If the proposed name is similar to the name of a registered firm, the
proposed name must contain at least one distinctive word different from the
name of the company already registered.
Section 3 states that if there be identical, misleading or confusingly similar
name to one already registered by another corporation or partnership with
the SEC, the proposed name must contain at least one distinctive word
different from the name of the company already registered. To show
contrast with respondent's corporate name, petitioner used the words
"GSIS" and "thrift." But these are not sufficiently distinct words that
differentiate petitioner's corporate name from respondent's. While
"GSIS" is merely an acronym of the proper name by which petitioner is
identified, the word "thrift" is simply a classification of the type of bank
that petitioner is. Even if the classification of the bank as "thrift" is
appended to petitioner's proposed corporate name, it will not make the said
corporate name distinct from respondent's because the latter is likewise
engaged in the banking business.
This Court used the same analysis in Ang mga Kaanib sa Iglesia ng Dios Kay
Kristo Hesus, H.S.K. sa Bansang Pilipinas, Inc. v. Iglesia ng Dios Kay Cristo
Jesus, Haligi at Suhay ng Katotohanan.  In that case, Iglesia ng Dios Kay
40
Cristo Jesus filed a case before the SEC to compel Ang mga Kaanib sa Iglesia
ng Dios Kay Kristo Hesus to change its corporate name, and to prevent it
from using the same or similar name on the ground that the same causes
confusion among their members as well as the public. Ang mga Kaanib sa
Iglesia ng Dios Kay Kristo Hesus claimed that it complied with SEC
Memorandum Circular No. 14-2000 by adding not only two, but eight words
to their registered name, to wit: "Ang Mga Kaanib" and "Sa Bansang
Pilipinas, Inc.," which effectively distinguished it from Iglesia ng Dios Kay
Cristo Jesus. This Court rejected the argument, thus:
The additional words "Ang Mga Kaanib" and "Sa Bansang Pilipinas,
Inc." in petitioner's name are, as correctly observed by the SEC,
merely descriptive of and also referring to the members, or kaanib,
of respondent who are likewise residing in the Philippines. These
words can hardly serve as an effective differentiating medium
necessary to avoid confusion or difficulty in distinguishing
petitioner from respondent. This is especially so, since both
petitioner and respondent corporations are using the same acronym
– H.S.K.; not to mention the fact that both are espousing religious
beliefs and operating in the same place. Xxx 41
On the second point (b), there is a deceptive and confusing similarity
between petitioner's proposed name and respondent's corporate name, as
found by the SEC.  In determining the existence of confusing similarity in
42
corporate names, the test is whether the similarity is such as to mislead a
person using ordinary care and discrimination.  And even without such
43
proof of actual confusion between the two corporate names, it suffices that
confusion is probable or likely to occur.
44
Petitioner's corporate name is "GSIS Family Bank—A Thrift Bank" and
respondent's corporate name is "BPI Family Bank." The only words that
distinguish the two are "BPI," "GSIS," and "Thrift." The first two words are
merely the acronyms of the proper names by which the two corporations
identify themselves; and the third word simply describes the classification
of the bank. The overriding consideration in determining whether a person,
using ordinary care and discrimination, might be misled is the circumstance
that both petitioner and respondent are engaged in the same business of
banking. "The likelihood of confusion is accentuated in cases where the
goods or business of one corporation are the same or substantially the same
to that of another corporation."
45
Respondent alleged that upon seeing a Comsavings Bank branch with the
signage "GSIS Family Bank" displayed at its premises, some of the
respondent’s officers and their clients began asking questions. These
include whether GSIS has acquired Family Bank; whether there is a joint
arrangement between GSIS and Family Bank; whether there is a joint
arrangement between BPI and GSIS regarding Family Bank; whether
Comsavings Bank has acquired Family Bank; and whether there is there an
arrangement among Comsavings Bank, GSIS, BPI, and Family Bank
regarding BPI Family Bank and GSIS Family Bank.  The SEC made a finding
46
that "[i]t is not a remote possibility that the public may entertain the idea
that a relationship or arrangement indeed exists between BPI and GSIS due
to the use of the term ‘Family Bank’ in their corporate names."
47
Findings of fact of quasi-judicial agencies, like the SEC, are generally
accorded respect and even finality by this Court, if supported by
substantial evidence, in recognition of their expertise on the specific
matters under their consideration, more so if the same has been
upheld by the appellate court, as in this case. 48
Petitioner cannot argue that the word "family" is a generic or descriptive
name, which cannot be appropriated exclusively by respondent. "Family,"
as used in respondent's corporate name, is not generic.
Generic marks are commonly used as the name or description of a kind of
goods, such as "Lite" for beer or "Chocolate Fudge" for chocolate soda drink.
Descriptive marks, on the other hand, convey the characteristics,
function, qualities or ingredients of a product to one who has never
seen it or does not know it exists, such as "Arthriticare" for arthritis
medication.49
Under the facts of this case, the word "family" cannot be separated from the
word "bank."  In asserting their claims before the SEC up to the Court of
50
Appeals, both petitioner and respondent refer to the phrase "Family Bank"
in their submissions. This coined phrase, neither being generic nor
descriptive, is merely suggestive and may properly be regarded as arbitrary.
Arbitrary marks are "words or phrases used as a mark that appear to be
random in the context of its use. They are generally considered to be
easily remembered because of their arbitrariness. They are original and
unexpected in relation to the products they endorse, thus, becoming
themselves distinctive."  
51
Suggestive marks, on the other hand, "are marks which merely suggest
some quality or ingredient of goods. xxx The strength of the suggestive
marks lies on how the public perceives the word in relation to the product
or service." 52
In Ang v. Teodoro,  this Court ruled that the words "Ang Tibay" is not a
53
descriptive term within the meaning of the Trademark Law but rather a
fanciful or coined phrase.  In so ruling, this Court considered the etymology
54
and meaning of the Tagalog words, "Ang Tibay" to determine whether they
relate to the quality or description of the merchandise to which respondent
therein applied them as trademark, thus:
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
strengthen); the nouns pagkamatibay (strength, durability), katibayan
(proof, support, strength), katibaytibayan (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 admiration 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" 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. xxx  (Underscoring supplied).
55
The word "family" is defined as "a group consisting of parents and children
living together in a household" or "a group of people related to one another
by blood or marriage."  Bank, on the other hand, is defined as "a financial
56
establishment that invests money deposited by customers, pays it out when
requested, makes loans at interest, and exchanges currency."  By 57
definition, there can be no expected relation between the word
"family" and the banking business of respondent. Rather, the words
suggest that respondent’s bank is where family savings should be deposited.
More, as in the Ang case, the phrase "family bank" cannot be used to define
an object.
Petitioner’s argument that the opinion of the BSP and the certificate of
registration granted to it by the DTI constitute authority for it to use "GSIS
Family Bank" as corporate name is also untenable.
The enforcement of the protection accorded by Section 18 of the
Corporation Code to corporate names is lodged exclusively in the SEC.
The jurisdiction of the SEC is not merely confined to the adjudicative
functions provided in Section 5 of the SEC Reorganization Act,  as 58
amended.  By express mandate, the SEC has absolute jurisdiction,
59
supervision and control over all corporations.  It is the SEC’s duty to
60
prevent confusion in the use of corporate names not only for the
protection of the corporations involved, but more so for the protection
of the public. It has authority to de-register at all times, and under all
circumstances corporate names which in its estimation are likely to
generate confusion. 61
The SEC  correctly applied Section 18 of the Corporation Code, and Section
62
15 of SEC Memorandum Circular No. 14-2000, pertinent portions of which
provide:
In implementing Section 18 of the Corporation Code of the Philippines (BP
69), the following revised guidelines in the approval of corporate and
partnership names are hereby adopted for the information and guidance of
all concerned:
xxx
15. Registrant corporations or partnership shall submit a letter
undertaking to change their corporate or partnership name in case
another person or firm has acquired a prior right to the use of the said
firm name or the same is deceptively or confusingly similar to one
already registered unless this undertaking is already included as one of the
provisions of the articles of incorporation or partnership of the registrant.
The SEC, after finding merit in respondent's claims, can compel petitioner to
abide by its commitment "to change its corporate name in the event that
another person, firm or entity has acquired a prior right to use of said name
or one similar to it."
63
Clearly, the only determination relevant to this case is that one made by the
SEC in the exercise of its express mandate under the law. The BSP opinion
invoked by petitioner even acknowledges that "the issue on whether a
proposed name is identical or deceptively similar to that of any of
existing corporation is matter within the official jurisdiction and
competence of the SEC." 64
Judicial notice  may also be taken of the action of the IPO in approving
65
respondent’s registration of the trademark "BPI Family Bank" and its logo
on October 17, 2008. The certificate of registration of a mark shall be prima
facie evidence of the validity of the registration, the registrant’s ownership
of the mark, and of the registrant’s exclusive right to use the same in
connection with the goods or services and those that are related thereto
specified in the certificate.
66
Finally, we uphold the Court of Appeals' finding that the issue of forum
shopping was belatedly raised by petitioner and, thus, cannot anymore be
considered at the appellate stage of the proceedings. Petitioner raised the
issue of forum shopping for the first time only on appeal.  Petitioner argued
67
that the complaints filed by respondent did not contain certifications against
non-forum shopping, in violation of Section 5, Rule 7 of the Rules of Court.
68
In S.C. Megaworld Construction and Development Corporation vs.
Parada,  this Court said that objections relating to non-compliance with the
69
verification and certification of non-forum shopping should be raised in the
proceedings below, and not for the first time on appeal. In that case, S.C.
Megaworld argued that the complaint for collection of sum of money should
have been dismissed outright by the trial court on account of an invalid
nonforum shopping certification. It alleged that the Special Power of
Attorney granted to Parada did not specifically include an authority for the
latter to sign the verification and certification of non-forum shopping, thus
rendering the complaint defective for violation of Sections 4 and 5 of Rule 7
of the Rules of Court. On motion for reconsideration of the decision of the
Court of Appeals, petitioner raised for the first time, the issue of forum
shopping. The Court ruled against S.C. Megaworld, thus:
It is well-settled that no question will be entertained on appeal unless it has
been raised in the proceedings below. Points of law, theories, issues and
arguments not brought to the attention of the lower court, administrative
agency or quasi-judicial body, need not be considered by a reviewing court,
as they cannot be raised for the first time at that late stage. Basic
considerations of fairness and due process impel this rule. Any issue raised
for the first time on appeal is barred by estoppel. 70
In this case, the fact that respondent filed a case before the DTI was made
known to petitioner  long before the SEC rendered its decision. Yet, despite
71
its knowledge, petitioner failed to question the alleged forum shopping
before the SEC. The exceptions to the general rule that forum shopping
should be raised in the earliest opportunity, as explained in the cited case of
Young v. Keng Seng,  do not obtain in this case.
72
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals
dated March 29, 2006 is hereby AFFIRMED.
SO ORDERED.
FIRST DIVISION
G.R. No. 198889, January 20, 2016
UFC PHILIPPINES, INC. (NOW MERGED WITH NUTRI-ASIA, INC., WITH NUTRI-ASIA, INC.
AS THE SURVIVING ENTITY), Petitioner, v. FIESTA BARRIO MANUFACTURING
CORPORATION, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
For our disposition is a petition for review on certiorari under Rule 45 seeking to annul and
set aside the June 23, 2011 Decision1 and the October 4, 2011 Resolution2 of the Court of
Appeals in CA-G.R. SP No. 107570, which reversed and set aside the March 26,
2008 Decision3 of the Bureau of Legal Affairs of the Intellectual Property Office (IPO-BLA) and
the January 29, 2009 Decision4 of the Director General of the IPO. Petitioner Nutri-Asia, Inc.
(petitioner) is a corporation duly organized and existing under Philippine laws. 5 It is the
emergent entity in a merger with UFC Philippines, Inc. that was completed on February 11,
2009.6 Respondent Barrio Fiesta Manufacturing Corporation (respondent) is likewise a
corporation organized and existing under Philippine
On April 4, 2002, respondent (Fiesta Barrio Manufacturing Corporation) filed Application No.
4-2002-002757 for the mark "PAPA BOY & DEVICE" for goods under Class 30, specifically for
"lechon sauce."7 The Intellectual Property Office (IPO) published said application for
opposition in the IP Phil. e-Gazette released on September 8, 2006. The mark appears as
follows: 
(Please see image G.R. No. 198889 pg. 2)
On December 11, 2006, petitioner filed with the IPO-BLA a Verified Notice of Opposition to the
above-mentioned application and alleged that: 
1. The mark "PAPA" for use on banana catsup and other similar goods was
first used [in] 1954 by Neri Papa, and thus, was taken from his surname; 
2. After using the mark "PAPA" for about twenty-seven (27) years, Neri Papa
subsequently assigned the mark "PAPA" to Hernan D. Reyes who, on
September 17, 1981, filed an application to register said mark "PAPA" for
use on banana catsup, chili sauce, achara, banana chips, and instant ube
powder; 
3. On August 14, 1983, Hernan D. Reyes was issued Certificate of
Registration No. 32416; 
4. [Certificate of] Registration No. 32416 was subsequently assigned to the
following in successive fashion: Acres & Acres Food, Inc., Southeast Asia
Food, Inc., Heinz-UFC Philippines, Inc., and Opposer UFC Philippines, Inc.; 
5. Last October 28, 2005, Heinz-UFC Philippines, Inc. filed Application Serial
No. 4-2005-010788 which, in effect, is a re- registration of Registration No.
32416 which expired on August 11, 2003; 
6. Hernan D. Reyes also filed on March 04, 1982 an application to register in
the Supplemental Register the "PAPA BANANA CATSUP Label"; 
7. On August 11, 1983, Hernan D. Reyes was issued Certificate of
Registration No. SR-6282 which was subsequently assigned to Acres &
Acres Food, Inc., Southeast Asia Food, Inc., Heinz-UFC Philippines, Inc.; 
8. After its expiration, Opposer filed on November 15, 2006 Trademark
Application Serial No. 4-2006-012346 for the re-registration of the "PAPA
Label Design"; 
9. The mark "PAPA KETSARAP" for use on banana sauce falling under Class
30 was also registered in favor of Acres & Acres Food, Inc. under
Registration No. 34681 issued on August 23, 1985 and renewed last
August 23, 2005 by Heinz-UFC Philippines, Inc. for ten (10) years; 
10. On November 07, 2006, Registration No. 34681 was assigned to Opposer; 
laws.
11. Opposer has not abandoned the use of the mark "PAPA" and the variations 21. Respondent-applicant is not entitled to register the subject mark in its
thereof as Opposer has continued their use up to the present;  favor.8

12. The mark "PAPA BOY & DEVICE" is identical to the mark "PAPA" owned by
Opposer and duly registered in its favor, particularly the dominant feature In its verified opposition before the IPO, petitioner contended that "PAPA BOY & DEVICE"
thereof;  is confusingly similar with its "PAPA" marks inasmuch as the former incorporates the
term "PAPA," which is the dominant feature of petitioner's "PAPA" marks. Petitioner
13. [With the] dominant feature of respondent-applicant's mark "PAPA BOY & averred that respondent's use of "PAPA BOY & DEVICE" mark for its lechon sauce product, if
DEVICE", which is Opposer's "PAPA" and the variations thereof, confusion allowed, would likely lead the consuming public to believe that said lechon sauce product
and deception is likely to result: The consuming public, particularly the originates from or is authorized by petitioner, and that the "PAPA BOY & DEVICE" mark is a
unwary customers, will be deceived, confused, and mistaken into believing variation or derivative of petitioner's "PAPA" marks. Petitioner argued that this was especially
that respondent-applicant's goods come from Opposer or are authorized true considering that petitioner's ketchup product and respondent's lechon sauce product are
by Opposer to Opposer's prejudice, which is particularly true considering related articles that fall under the same Class 30. 9
chanroblesvirtuallawlibrary

that Opposer's sister company, Southeast Asia Food, Inc., and its
predecessors-in-interest have been major manufacturers and distributors
of lechon sauce and other table sauces since 1965 under its registered
mark "Mang Tomas";  and the latter's predecessors-in-interest, had been major manufacturers and distributors of
14. Respondent-applicant's mark "PAPA BOY & DEVICE" which nearly
resembles Opposer's mark "PAPA" and the variations thereof will impress
upon the gullible or unsuspecting public that it is the same or related to
Opposer as to source because its dominant part is the same as Opposer's
mark and, thus, will likely be mistaken to be the mark, or related to, or a
derivative or variation of, Opposer's mark; 
15. The goods covered by respondent-applicant's application fall under Class
30, the same Class under which Opposer's goods enumerated in its earlier
issued registrations; 
16. The test of dominancy is now explicitly incorporated into law in Section
155.1 of the IP Code which defines infringement as the colorable imitation
of a registered mark or a dominant feature thereof, and is provided for by
jurisprudence;  goods specified in the certificate subject to the conditions and limitations stated therein;
Petitioner alleged that the registration of respondent's challenged mark was also likely to
damage the petitioner, considering that its former sister company, Southeast Asia Food, Inc.,
lechon and other table sauces since 1965, such as products employing the registered "Mang
Tomas" mark.
In its Verified Answer, respondent argued that there is no likelihood of confusion between
petitioner's family of "PAPA" trademarks and respondent's "PAPA BOY & DEVICE" trademark.
Respondent raised affirmative defenses and we quote the relevant ones below: 
3. Opposer cites several of its following marks in support of its opposition to the application
but an examination of said marks [reveals] that these have already expired and/or that no
confusing similarity exists x xx;
4. Assuming that the mark "PAPA KETSARAP" had been timely renewed on August 23, 2005
for "banana sauce" under Class 30, the same is not a hindrance to the successful registration of
the mark "PAPA BOY & DEVICE": Jurisprudence provides that a certificate of registration
confers upon the trademark owner the exclusive right to use its own symbol only to those

5. As a result, Opposer's right to use the mark "PAPAKETSARAP" is limited to the products
17. As a corporation also engaged in the food business, Respondent- applicant covered by its certificate of registration which is Class 30 for banana sauce;
knew and/or ought to know that Opposer and its predecessors-in-interest
have been using the mark "PAPA" and the variations thereof for the last 6. Contrary to Opposer's belief, the dominant features of Respondent-applicant's mark "PAPA
fifty-two (52) years while its sister company is engaged in the business of BOY & DEVICE" are the words "PAPA BOY" and the representation of a smiling hog-like
manufacturing and distributing "lechon sauce" and other table sauces for character gesturing the thumbs-up sign and wearing a traditional Filipino hat and scarf while
the last forty-one (41) years;  the dominant feature of Opposer's mark "PAPA KETSARAP" are the words "Papa" and
"Ketsarap", not the word "Papa"; and the word "Ketsarap " is more prominently printed and
18. The approval of the subject application will violate Opposer's right to the displayed in the foreground than the word "Papa" for which reasons opposer's reference to
exclusive use of its registered mark "PAPA" and the variations thereof per the Dominancy Test fails;
Section 13 8 of the IP Code; 
7. Opposer's allegation that the registration of Respondent-applicant's mark "PAPA BOY &
19. The approval of the subject application has caused and will continue to DEVICE" will damage and prejudice the mark "MANG TOMAS" is irrelevant considering that
cause great and irreparable damage and injury to Opposer;  Opposer's basis for filing this opposition is the alleged confusing similarity between
Respondent-applicant's mark and Opposer's mark "PAPA KETSARAP", not the mark "MANG
20. Respondent-applicant filed the subject application fraudulently and in bad TOMAS";
faith; and 
8. Respondent-applicant's mark "PAPA BOY & DEVICE" is neither identical nor confusingly
similar to Opposer's mark "PAPA KETSARAP": Respondent-applicant's mark "PAPABOY &
DEVICE" is an arbitrary mark which differs in overall sound, spelling, meaning, style, 18. Respondent-applicant's mark is distinctive and capable of identifying its goods and
configuration, presentation, and appearance from Opposer's mark "PAPA KETSARAP"; distinguishing them from those offered for sale by others in the market including Opposer's
goods for which reason no confusion will result because Respondent-applicant's mark is for
9. The dissimilarities between the marks are so distinct, thus, confusion is very unlikely: While lechon sauce while Opposer's mark is for banana sauce; and
Opposer's mark is a plain word mark, Respondent-applicant's mark "PAPA BOY & DEVICE" is
much more intricate and distinctive such as Opposer's mark not having the words "Lechon 19. The presence of a common prefix "PAPA" in the marks of both parties does not render said
Sauce" printed inside a blue ribbon-like device which is illustrated below the words "PAPA marks identical or confusingly similar: Opposer cannot exclusively appropriate said prefix
BOY", Opposer's mark not having a prominent smiling hog-like character gesturing a thumbs- considering that other marks such as "Papa Heinz Pizza", "Papa Heinz Sausage", "Papa
up sign and wearing a Filipino hat and scarf stands beside the words "PAPA BOY", and Beaver", "Papa Pop", "Pizza Papa John's & Design", "Papadoods", and "Papa in Wine and
Opposer's mark not having the words "Barrio Fiesta" albeit conspicuously displayed above the Device" are valid and active.10
chanrobleslaw

mark, all which leave no doubt in the consumer's mind on the product that he is purchasing;
Petitioner's mark and its variations appear as follows: 
10. Aside from the fact that Respondent-applicant's mark "PAPA BOY & DEVICE" is distinct
and different in appearance, spelling, sound, meaning, and style from Opposer's mark "PAPA 1. 1. "PAPA" under Registration No. 32416 for Class 29 goods;11
KETSARAP", the difference in the goods covered by both marks is obvious: Since the goods
covered by Respondent-applicant's mark is unrelated and non- competing to those covered by
Opposer's mark, the doctrine allowing the registrations of marks covering unrelated and non- (Please see image G.R. No. 198889 page 7.)
competing goods as enunciated by the Supreme Court is therefore applicable in this case;

11. Respondent-applicant's mark cannot be confusingly similar to Opposer's mark considering

that the products covered by these marks are different: While Respondent-applicant's mark
"PAPA BOY & DEVICE" covers lechon sauce under Class 30, Opposer's mark "PAPA 2. The mark "PAPA" as it appeared upon re-registration of Certificate No. 32416, under
KETSARAP" covers banana sauce; Application No. 4-2005-010788 for Classes 29 and 30 goods;12

12. If a consumer is in the market for banana sauce, he will not buy lechon sauce and vice- (Please see image G.R. No. 198889 page 7.)
versa and as a result, the margin of error in the acquisition of one from the other is simply
remote;

13. Respondent-applicant is the exclusive owner of the mark "PAPA BOY & DEVICE" for lechon
sauce under Class 30: The words "PAPA BOY" is a combination of the nickname of Bonifacio 3. "PAPA LABEL DESIGN" under Registration No. 4-2006-012364; 13 and 
Ongpauco who is one of Respondent-applicant's incorporators and founders- "BOY"- and the
word "PAPA" as Bonifacio Ongpauco's mother, Sixta P. Evangelista, had been fondly known as (Please see image G.R. No. 198889 page 7.)
"Mama Chit", making Respondent-applicant the prior adopter, user, and applicant of the mark
"PAPA BOY & DEVICE" in the Philippines;

14. To protect its ownership over the mark "PAPA BOY & DEVICE" considering that it is the
first to adopt and use said mark, Respondent-applicant applied for its registration under 4. "PAPA KETSARAP" under Certificate of Registration No. 34681, for banana sauce
Application Serial No. 4-2002-002757 for Class 30, and said application was found registrable (Class 30).14
by the Examiner as a consequence of which the same was recommended for allowance after
undergoing a thorough process of examination, which recommendation was then approved by
(Please see image G.R. No. 198889 page 8.)
the Director of the Bureau of Trademarks (BOT);

15. Respondent-applicant's mark "PAPA BOY & DEVICE" has been commercially used in the
Philippines;
PROCEEDINGS BEFORE THE INTELLECTUAL PROPERTY OFFICE
16. Respondent-applicant's mark "PAPA BOY & DEVICE" has been promoted and advertised
for a considerable duration of time and over wide geographical areas: Respondent-applicant The case was referred to mediation but the parties failed to arrive at an amicable settlement.
has invested tremendous amount of resources in the promotion of its mark "PAPA BOY & The case was thus set for preliminary conference. Subsequently, the IPO-BLA directed the
DEVICE" through various media including print publications and promotional materials; parties to file their respective position papers and draft decisions.

17. The widespread local commercial use of the subject mark by Respondent-applicant to The IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's Opposition and
distinguish and identify its various high-quality consumer products has earned Respondent- rejecting respondent's application for "PAPA BOY & DEVICE." The fallo of said decision reads
applicant a well-deserved business reputation and goodwill; as follows: 
WHEREFORE, the VERIFIED NOTICE OF OPPOSITION filed by UFC Philippines, Inc. is, as it is
hereby, SUSTAINED. Consequently, Application Serial No. 4-2002-002757 for the mark "PAPA
BOY & DEVICE" for lechon sauce under Class 30 filed on April 04, 2002 by Barrio Fiesta
Manufacturing Corporation, is, as it is hereby, REJECTED. Let the file wrapper of PAPA BOY &
Device subject matter of this case be forwarded to the Bureau of Trademarks (BOT) for
appropriate action in accordance with this Decision. 15chanrobleslaw
Respondent filed an appeal before the IPO Director General, who found it unmeritorious, and
disposed of the case in the following manner: 
WHEREFORE, the instant appeal is hereby DISMISSED. Let a copy of this Decision as well as
the trademark application and records be furnished and returned to the Director of the
Bureau of Legal Affairs for appropriate action. Further, let also the Director of the Bureau of
Trademarks and the library of the Documentation, Information and Technology Transfer
Bureau be furnished a copy of this Decision for information, guidance, and records
purposes."16
DECISION OF THE COURT OF APPEALS
Respondent then filed a petition with the Court of Appeals, questioning the above decision of
the IPO Director General that affirmed the decision of the IPO Bureau of Legal Affairs Director,
which disallowed respondent's application for trademark registration. Respondent's
arguments before the Court of Appeals are quoted below:  for the latter on April 30, 2007, to bar the registration of petitioner's "PAPA BOY &
A.
REGISTRATION NOS. 32416 AND 42005010788 ISSUED FOR THE "PAPA" MARK AND
REGISTRATION NOS. SR-6282 AND 42006012364 ISSUED FOR THE TRADEMARK "PAPA
BANANA CATSUP LABEL/PAPA LABEL DESIGN" SHOULD NOT BE USED AS BASIS IN
DETERMINING THE EXISTENCE OF CONFUSING SIMILARITY.  respondent's "PAPA KETSARAP" and "PAPA BANANA CATSUP" trademark. Petitioner's
B.
THERE IS NO CONFUSING SIMILARITY BETWEEN PETITIONER-APPLICANT'S "PAPA BOY &
DEVICE" AND RESPONDENT'S "PAPA KETSARAP" MARK. 
C.
PETITIONER-APPLICANT IS ENTITLED TO THE REGISTRATION OF THE MARK "PAPA BOY &
DEVICE."  consumer is in the market for banana sauce, he will not buy lechon sauce and vice-versa
D.
THE OPPOSITION STATES NO CAUSE OF ACTION, AND HENCE, SHOULD BE DENIED
OUTRIGHT.17 chanrobleslaw
As regards the first ground, the Court of Appeals held:  the
Records show that respondent UFC has Certificates of Registration for the trademarks PAPA,
PAPA BANANA CATSUP label and PAPA KETSARAP. A closer look at the respective
Certificate[s] of Registration of the aforementioned marks, however, reveals that at the time
the trademark application of petitioner was published in the IPO e-Gazette on September 8,
2006, the duration of the trademark registration of respondent over the marks PAPA and
PAPA BANANA CATSUP have already expired. On the other hand, the mark PAPA KETSARAP
was timely renewed by respondent as shown by the Certificate of Renewal of
Registration issued on September 1, 2006 by the Director of the Bureau of Trademarks.
Under R.A. No. 8293, as amended by R.A. No. 9150, the duration of a trademark registration is
10 years, renewable for periods of 10 years each renewal. The request for renewal must be
made within 6 months before or after the expiration of the registration. Respondent's PAPA
mark was not renewed within the period provided for under RA No. 8293. Its registered term
ended on August 11, 2003 but was reapplied for registration only on April 4, 2005. Meanwhile,
the mark PAPA BANANA CATSUP was registered by respondent only in the Supplemental
Register, hence, was not provided any protection, x x x. It is noted that the PAPA BANANA
CATSUP label was applied for registration on November 15, 2006, over three years after the
expiration of its registration in the Supplemental Register of the Philippine Patent Office on
August 11, 2003. Thus, while petitioner has a point that the marks PAPA and PAPA
BANANA CATSUP have already expired and the latter having been afforded no
protection at all and should not be juxtaposed with petitioner's trademark, respondent
can still use the marks PAPA KETSARAP and PAPA BANANA CATSUP, it appearing that
the Intellectual Property Office issued a Certificate of Registration No. 4-2006-012364
DEVICE" mark.18 (Emphases supplied, citations omitted.)
Anent the second ground, the Court of Appeals ruled in the following manner: 
After taking into account the aforementioned doctrines and the factual circumstances
of the case at bar, this Court, after considering the trademarks involved as a whole, is of
the view that petitioner's trademark "PAPA BOY & DEVICE" is not confusingly similar to
trademark is "PAPA BOY" as a whole as opposed to respondent's "PAPA". Although on its label
the word "PAPA" is prominent, the trademark should be taken as a whole and not
piecemeal. The difference between the two marks are conspicuous and noticeable .
While respondent's products are both labeled as banana sauces, that of petitioner Barrio
Fiesta is labeled as lechon sauce.
Moreover, it appears on the label of petitioner's product that the said lechon sauce is
manufactured by Barrio Fiesta thus, clearly informing the public [of) the identity of the
manufacturer of the lechon sauce. As claimed by respondent, its products have been in
commercial use for decades. It is safe to assume then that the consumers are already aware
that "PAPA KETSARAP" and "PAPA BANANA CATSUP" are products of UFC and not of
petitioner or the other way around. In addition, as correctly pointed out by petitioner, if a
because aside from the fact that the labels of both parties' products contain the kind of sauce
they are marketing, the color of the products is visibly different. An ordinary consumer is
familiar with the fact that the color of a banana sauce is red while a lechon sauce is dark
brown. There can be no deception as both products are marketed in bottles making the
distinction visible to the eye of the consumer and the likelihood of acquiring a wrong sauce,
remote. Even if the products are placed side by side, the dissimilarities between the two
marks are conspicuous, noticeable and substantial enough to matter especially in the light of
following variables that must be factored in.
Lastly, respondent avers that the word "PAPA" was coined after the surname of the person
who first created and made use of the mark. Admittedly, while "PAPA" is a surname, it is more
widely known as a term of endearment for one's father. Respondent cannot, therefore, claim
exclusive ownership over and singular use of [the] term. Petitioner was able to explain that it
adopted the word "PAPA" in parallel to the nickname of the founder of Barrio fiesta which is
"MAMA CHIT". "PAPA BOY" was derived from the nickname of one of the incorporators of
herein petitioner, a certain Bonifacio Ongpauco, son of Mama Chit. 19(Emphasis ours, citation
omitted.)
Petitioner points out that the Director General and the IPO-BLA found that the dominant
feature of the competing marks is the word "PAPA" and the minor additions to respondent's
"PAPA BOY & DEVICE" mark do not negate likelihood of confusion caused by the latter's use of
the dominant word "PAPA." Petitioner claims that even compared solely to petitioner's "PAPA
KETSARAP" mark (Registration No. 34681), which is conceded to have been timely renewed
and to have never expired, respondent's "PAPA BOY & DEVICE" would still create the
likelihood of confusion.23 chanroblesvirtuallawlibrary

According to petitioner, the Court of Appeals based its decision on Mead Johnson & Co. v. N.V.J.
THEORY OF PETITIONER Van Dorp, Ltd.,24 a case decided almost five decades ago, long before Republic Act No. 8293 or
the 1998 Intellectual Property Code was enforced. Thus, the Court of Appeals erroneously
Thus, petitioner came to this Court, seeking the reversal of the questioned decision and applied the holistic test since given the nature of the products bearing the competing
resolution of the Court of Appeals, and the reinstatement of the decision of the IPO Director marks, the dominancy test should have been applied.
General affirming the decision of the IPO-BLA. Petitioner raises the following grounds: 
Petitioner claims that "[k]etchup and lechon sauce are common and inexpensive
I. household products that are sold in groceries and regularly encountered by the
ordinary or common purchaser who is not expected to examine, scrutinize, and
compare the details of the competing marks."25 cralawred

The court a quo erred in applying the "holistic test" to determine whether there is confusing
similarity between the contending marks, and in reversing the IPO-BLA and the Director Petitioner distinguishes this case from Mead Johnson and claims that the ordinary purchaser
General's application of the "dominancy test."  of ketchup or lechon sauce is not likely to closely scrutinize each mark as a whole, for the
latter is "undiscerningly rash" and usually in a hurry, and cannot be expected to take note of
II. the smiling hog-like character or the blue ribbon-like device with the words "Lechon
Sauce." Petitioner argues that under the Intellectual Property Code, it is not necessary for one
to colorably imitate the competing trademark as a whole. It is sufficient that one imitates a
The court a quo erred in holding that there is no likelihood of confusion between the "dominant feature" of the mark to constitute trademark infringement.
contending marks given that the "PAPA BOY & DEVICE" mark is used on lechon sauce, as
opposed to ketchup products.  Petitioner asserts that as the IPO-BLA and the Director General observed that the ordinary
purchaser is most likely to notice the words "PAPA BOY," which, in turn, may lead him to
believe that there is a connection between respondent's lechon sauce and petitioner's ketchup
III. products.

Under the second ground, petitioner argues that the Court of Appeals seemed to be unmindful
The court a quo erred in holding that Petitioner cannot claim exclusive ownership and use of that two kinds of confusion may arise from the use of similar or colorable imitation marks, i.e.,
the "PAPA" mark for its sauce products because "PAPA" is supposedly a common term of confusion of goods (product confusion) and confusion of business (source or origin
endearment for one's father.20chanrobleslaw

confusion). Petitioner claims that it is reasonable to assume that it may expand its business to
producing lechon sauce, inasmuch as it already produces food sauce products and its Articles
Under the first ground, petitioner submitted the following arguments:  of Incorporation authorizes it to do so.

1. The findings of administrative agencies, if supported by substantial Petitioner alleges that the IPO-BLA recognized that confusion of business may arise from
evidence, are binding upon the courts.21 respondent's use of its "PAPA BOY & DEVICE" mark for lechon sauce products, and that the
Director-General agreed with the IPO-BLA's findings on this issue.

Petitioner alleges that the Court of Appeals should have respected the ruling of the IPO
Director General, which was consistent with the ruling of the IPO-BLA and supported by
substantial evidence, instead of substituting its findings of fact for those of the Director
General and the IPO-BLA. 
2. The dominancy test should have been applied to determine if there is
confusing similarity between the competing marks.22
Petitioner asserts that ketchup and lechon sauce are undeniably related goods; that they
belong to the same class, i.e., Class 30 of the Nice Classifications; that they serve
practically the same purpose, i.e., to spice up dishes; and that they are sold in similar bottles in
the same shelves in grocery stores. Petitioner argues that the Court of Appeals had absolutely
no basis for stating that a person who is out to buy ketchup is not likely to buy lechon sauce by
mistake, as this analysis allegedly only applies to "product confusion" and does not consider
confusion of business. Petitioner alleges that "[t]here equally is actionable confusion when a
buyer purchases Respondent's 'PAPA BOY' lechon sauce believing that the said product is
related to or associated with the famous 'PAPA KETSUP' makers." Petitioner further alleges
that "it is reasonable and likely for a consumer to believe that Respondent's 'PAPA BOY'
lechon sauce originated from or is otherwise connected with Petitioner's line of sauces" and
that this is "the precise evil that recognition of confusion of business seeks to prevent." 26 chanroblesvirtuallawlibrary
Petitioner avers that "PAPA" is a well-known mark and that it has been in commercial use as
early as 1954 on banana ketchup and similar goods. The "PAPA" mark is also registered as a
trademark and in commercial use in other parts of the world such as the United States of
America and the Middle East. Petitioner claims that "[bjeing a trademark that is registered and
well-known both locally and internationally, Petitioner's 'PAPA' marks cannot be
appropriated by another person or entity not only with respect to goods similar to those with
respect to which it is registered, but also with respect to goods which are not similar to those
for which the 'PAPA' marks are registered." 27 chanroblesvirtuallawlibrary
Under the third ground, petitioner claims that the fact that the word "PAPA" is a known term
of endearment for fathers does not preclude it from being used as a mark to identify goods.
Petitioner claims that their mark falls under a type of mark known as "arbitrary or fanciful
marks," which are "marks that bear no logical relation to the actual characteristics of the
products they represent," are "highly distinctive and valid," and "are entitled to the
greatest protection."28 chanroblesvirtuallawlibrary
Petitioner claims that the mark "PAPA" falls under this class of arbitrary marks, even if "PAPA"
is also a common term of endearment for one's father. Petitioner states that there is no logical
connection between one's father and food sauces, such as ketchup; thus, with respect to
ketchup, food sauces, and their related products, and for the purpose of identifying its
products, petitioner claims exclusive ownership of the term "PAPA" as an arbitrary mark.
Petitioner alleges that if respondent "has a good faith and proud desire to unmistakably and
distinctly identify its lechon sauce product out in the market, it should have coined a mark that
departs from and is distinguished from those of its competitors." Petitioner claims that
respondent, with full knowledge of the fame and the decades-long commercial use of
petitioner's "PAPA" marks, opted for "PAPA BOY & DEVICE," which obviously is just a
"colorable imitation."29
THEORY OF RESPONDENT
In its Comment,30 respondent claims that petitioner's marks have either expired and/or "that
no confusing similarity exists between them and respondent's "PAPA BOY & DEVICE' mark."
Respondent alleges that under Section 15 of Republic Act No. 166, a renewal application
should be filed within six months before the expiration of the period or within three months
after such expiration. Respondent avers that the expiration of the 20-year term for the "PAPA"
mark under Registration No. 32416 issued on August 11, 1983 was August 11, 2003. The sixth
month before August 11, 2003 was February 11, 2003 and the third month after August 11,
2003 was November 11, 2003. Respondent claims that the application that petitioner filed on
October 28, 2005 was almost two years late. Thus, it was not a renewal application, but could
only be considered a new application under the new Trademark Law, with the filing date
reckoned on October 28, 2005. The registrability of the mark under the new application was
examined again, and any certificate issued for the registration of "PAPA" could not have been a
renewal certificate.
As for petitioner's other mark "PAPA BANANA CATSUP LABEL," respondent claims that its 20-
year term also expired on August 11, 2003 and that petitioner only filed its application for the
new "PAPA LABEL DESIGN" on November 15, 2006. Having been filed three years beyond the
renewal application deadline, petitioner was not able to renew its application on time, and
cannot claim a "continuous existence of its rights over the 'PAPA BANANA CATSUP LABEL.'"
Respondent claims that the two marks are different from each other and that the registration
of one is independent of the other. Respondent concludes that the certificate of registration
issued for "PAPA LABEL DESIGN" is "not and will never be a renewal certificate." 31 chanroblesvirtuallawlibrary
Respondent also avers as follows: 
1.3. With regard to the two new registrations of petitioner namely: "PAPA" (Reg. No. 4-2005-
010788) and "PAPA LABEL DESIGN" (Reg. No. 4-2006-012364), these were filed on October
28, 2005 and November 15, 2006, respectively, under the Intellectual Property Code (RA
8293), which follows the "first to file" rule, and were obviously filed later than respondent's
"PAPA BOY & DEVICE" mark filed on April 4, 2002. These new marks filed much later than the
opposed "PAPA BOY & DEVICE" mark cannot, therefore, be used as basis for the opposition
and should in fact, be denied outrightly.
x x x x
A search of the Online Trademark Database of Intellectual Property Office (IPO) will show that
only Registration No. 34681 issued for "PAPA KETSARAP" was properly renewed on August
23, 2005. x x x Clearly, the registrations of "PAPA" and "PAPA BANANA CATSUP LABEL" marks
under registration nos. 32416 and SR-6282 respectively, have already expired when
Petitioner filed its opposition proceeding against Respondent's trademark on December 11,
2006. Having expired, and therefore, no longer legally existing, the "PAPA" and "PAPA
BANANA CATSUP LABEL" marks CANNOT BAR the registration of respondent's mark. To
allow petitioner's expired marks to prevent respondent's distinct "PAPA BOY & DEVICE" mark
from being registered would be the ultimate absurdity. 32 chanrobleslaw
Respondent posits that the Court of Appeals did not err in reversing the decisions of the
administrative agencies, alleging that "[while] it is true that the general rule is that the factual
findings of administrative bodies deserve utmost respect when supported by evidence, the
same is subject to exceptions," 33 and that the Court of Appeals had justifiable reasons to
disregard the factual finding of the IPO. Here, the Court of Appeals wisely identified certain
material facts that were overlooked by the IPO-BLA and the IPO Director General which it
opined, when correctly appreciated, would alter the result of the case.
Respondent alleges that the IPO-BLA erroneously considered petitioner's marks "PAPA" and
"PAPA BANANA CATSUP LABEL" when it applied the dominancy test in determining whether
petitioner's marks are confusingly similar to those of respondent's mark "PAPA BOY &
DEVICE."
Respondent avers that the IPO-BLA absurdly took emphasis on the mark "PAPA" to arrive at
its decision and did not take into consideration that petitioner's mark was already expired
when respondent applied for the registration of its "PAPA BOY & DEVICE" mark. Respondent
compares its "PAPA BOY & DEVICE" with the only mark that respondent allegedly has, "PAPA
KETSARAP," and found no confusing similarity between the two.
We quote below respondent's discussion of its application of the dominancy test to the marks
in question: 
Applying the Dominancy test, as correctly emphasized by the Court of Appeals, the dominant
feature in respondent's mark is "PAPA BOY" and not "PAPA". It can be gleaned from
respondent's mark that the word "PAPA" was written in the same font, style and color as the
word "BOY". There is also the presence of a "smiling hog-like character" which is positioned
very prominently, both in size and location in said mark, at glance (sic) even more dominant
than the word "PAPA BOY".
x x x x Respondent also contends that "PAPA BOY & DEVICE" mark is not confusingly similar to
petitioner's trademark "PAPA KETSARAP" in terms of appearance, sound, spelling and
On the other hand, the dominant feature in petitioner's mark is "KETSARAP", not "PAPA". meaning. The difference in nature, usage, taste and appearance of products decreases the
Even an ordinary examiner could observe that the word "KETSARAP" in petitioner's mark is possibility of deception among buyers. 37 chanroblesvirtuallawlibrary

more prominently printed than the word "PAPA".

Respondent alleges that since petitioner merely included banana catsup as its product in its
x x x x certificate, it cannot claim any further right to the mark "PAPA KETSARAP" on products other
than banana catsup. Respondent also alleges that petitioner cannot raise "international
In a dominancy test, the prominent feature of the competing trademarks must be similar notoriety of the mark" for the first time on appeal and that there is no proof that petitioner's
to cause confusion or deception, x x x. mark is internationally well-known.38 chanroblesvirtuallawlibrary

Verily, respondent's dominant feature "PAPA BOY" and the smiling hog-like character and Furthermore, respondent argues that petitioner cannot claim exclusive ownership over the
petitioner's dominant feature "KETSARAP", being the word written in a larger font, are neither use of the word "PAPA," a term of endearment for one's father. Respondent points out that
confusing nor deceiving to the public. In fact, the differences between their dominant marks there are several other valid and active marks owned by third parties which use the word
are very noticeable and conspicuous to every purchaser. "PAPA," even in classes of goods similar to those of petitioner's. Respondent avers that
petitioner's claim that its "PAPA" mark is an arbitrary mark is belatedly raised in the instant
Furthermore, the Supreme Court in Societe des Produits Nestle, S.A. v. Dy [641 Phil. 345], petition, and cannot be allowed because the "PAPA KETSARAP" mark would immediately
applied the dominancy test by taking into account the aural effects of the words and letters bring the consuming public to thinking that the product involved is catsup and the description
contained in the marks in determining the issue of confusing similarity. Obviously, petitioners' of said catsup is "masarap" (delicious) and due to the logical relation of the petitioner's mark
"PAPA KETSARAP" mark does not in any way sounds (sic) like respondent's "PAPA BOY" to the actual product, it being descriptive or generic, it is far from being arbitrary or
mark. The common prefix "PAPA" does not render the marks aurally the same. As discussed fanciful.39
chanroblesvirtuallawlibrary

above, the dominant feature in petitioner's mark is "KETSARAP" and the dominant feature in
respondent's mark is "PAPA BOY". Thus, the words "KETSARAP" and "PAPA BOY" in Lastly, respondent claims that the Court of Appeals correctly ruled that respondent's product
petitioner's and respondent's respective marks are obviously different in sound, making cannot be confused as originating from the petitioner. Since it clearly appears in the product
"PAPA BOY & DEVICE" even more distinct from petitioner's "PAPA KETSARAP" mark.35 chanrobleslaw label of the respondent that it is manufactured by Barrio Fiesta, the public is dutifully
informed of the identity of the lechon sauce manufacturer. The Court of Appeals further took
Using the holistic test, respondent further discusses the differences in the marks in this wise:  into account the fact that petitioner's products have been in commercial use for decades. 40 chanroblesvirtuallawlibrary

Even the use of the holistic test x x x takes into consideration the entirety of the marks in Petitioner, in its Reply41 to respondent's Comment, contends that respondent cannot invoke a
question [to] be considered in resolving confusing similarity. The differences are again prior filing date for the "PAPA BOY" mark as against Petitioner's "PAPA" and "PAPA BANANA
very obvious. Respondent's mark has (1) the word "lechon sauce" printed inside a blue CATSUP LABEL" marks, because the latter marks were still registered when respondent
ribbon-like device which is illustrated below the word "PAPA BOY"; (2) a prominent smiling applied for registration of its "PAPA BOY" mark. Thus, the IPO-BLA and Director General
hog-like character gesturing a thumbs-up sign and wearing a Filipino hat and scarf stands correctly considered them in deciding whether the "PAPA BOY" mark should be registered,
beside the word "PAPA BOY"; and the word "BARRIO FIESTA" conspicuously displayed above using the "first to file" rule under Section 123.1(d) of Republic Act No. 8293, or the Intellectual
the said trademark which leaves no doubt in the consumer's mind on the product that he or Property Code (IP Code).
she is purchasing. On the other hand, petitioner's mark is the word "PAPA" enclosed by a
cloud on top of the word "KETSARAP' enclosed by a geometrical figure. Petitioner reiterates its argument that the Court of Appeals erred in applying the holistic test
and that the proper test under the circumstances is the dominancy test, which was correctly
x x x x applied by the IPO-BLA and the Director General. 42

In the instant case, the respective marks are obviously different in color scheme, logo, THIS COURT'S RULING
spelling, sound, meaning and connotation. Thus, yet again, under the holistic test there
can be no confusion or deception between these marks. The petition has merit. We find that the Court of Appeals erred in applying the holistic test and
in reversing and setting aside the decision of the IPO-BLA and that of the IPO Director General,
It also bears stressing that petitioner's "PAPA KETSARAP" mark covers "banana catsup" while both of which rejected respondent's application for the mark "PAPA BOY & DEVICE."
respondent's "PAPA BOY & DEVICE" covers "lechon sauce", thereby obliterating any confusion
of products of both marks as they travel different channels of trade. If a consumer is in the In Dermaline, Inc. v. Myra Pharmaceuticals, Inc., 43 we defined a trademark as "any distinctive
market for banana catsup, he or she will not buy lechon sauce and vice-versa. As a result, the word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and used
margin of error in the acquisition of one for the other is simply remote. Lechon sauce which is by a manufacturer or merchant on his goods to identify and distinguish them from those
liver sauce is distinct from catsup extracted/ made from banana fruit. The flavor and taste of a manufactured, sold, or dealt by others." We held that a trademark is "an intellectual property
lechon sauce are far from those of a banana catsup. Lechon sauce is sauce for "lechon" while deserving protection by law."
banana catsup is apparently catsup made from banana.36 chanrobleslaw
The rights of the trademark owner are found in the Intellectual Property Code, which d) the likelihood that the plaintiff will bridge the gap;
provides: 
e) evidence of actual confusion;
Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall have the
exclusive right to prevent all third parties not having the owner's consent from using in the f) the defendant's good faith in adopting the mark;
course of trade identical or similar signs or containers for goods or services which are
identical or similar to those in respect of which the trademark is registered where such use g) the quality of defendant's product or service; and/or h) the sophistication of the buyers.
would result in a likelihood of confusion. In case of the use of an identical sign for identical
goods or services, a likelihood of confusion shall be presumed.  "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
Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who ordinary purchaser giving such attention as a purchaser usually gives, as to cause him
has identified in the mind of the public the goods he manufactures or deals in, his to purchase the one supposing it to be the other.
business or services from those of others, whether or not a registered mark is employed,
has a property right in the goodwill of the said goods, business or services so identified, SECTION 5. Determination of Similar and Dissimilar Goods or Services. — Goods or services
which will be protected in the same manner as other property rights. may not be considered as being similar or dissimilar to each other on the ground that, in any
registration or publication by the Office, they appear in different classes of the Nice
The guideline for courts in determining likelihood of confusion is found in A.M. No. 10-3-10- Classification.
SC, or the Rules of Procedure for Intellectual Property Rights Cases, Rule 18, which provides: 
In this case, the findings of fact of the highly technical agency, the Intellectual Property Office,
RULE 18 which has the expertise in this field, should have been given great weight by the Court of
Appeals. As we held in Berris Agricultural Co., Inc. v. Abyadang44: 

Evidence in Trademark Infringement and Unfair Competition Cases SECTION 1. Certificate of R.A. No. 8293 defines a "mark" as any visible sign capable of distinguishing the goods
Registration. — A certificate of registration of a mark shall be prima facie evidence of:  (trademark) or services (service mark) of an enterprise and shall include a stamped or
marked container of goods. It also defines a "collective mark" as any visible sign designated as
a) the validity of the registration; b) the registrant's ownership of the mark; and such in the application for registration and capable of distinguishing the origin or any other
common characteristic, including the quality of goods or services of different enterprises
c) the registrant's exclusive right to use the same in connection with the goods or services and which use the sign under the control of the registered owner of the collective mark.
those that are related thereto specified in the certificate.
On the other hand, R.A. No. 166 defines a "trademark" as any distinctive word, name, symbol,
xxxx emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or
merchant on his goods to identify and distinguish them from those manufactured, sold, or
SECTION 3. Presumption of Likelihood of Confusion. — Likelihood of confusion shall be dealt by another. A trademark, being a special property, is afforded protection by law. But for
presumed in case an identical sign or mark is used for identical goods or services. one to enjoy this legal protection, legal protection ownership of the trademark should rightly
be established.
SECTION 4. Likelihood of Confusion in Other Cases. — In determining whether one trademark
is confusingly similar to or is a colorable imitation of another, the court must consider the The ownership of a trademark is acquired by its registration and its actual use by the
general impression of the ordinary purchaser, buying under the normally prevalent conditions manufacturer or distributor of the goods made available to the purchasing public. Section 122
in trade and giving the attention such purchasers usually give in buying that class of goods . of R.A.. No. 8293 provides that the rights in a mark shall be acquired by means of its valid
Visual, aural, connotative comparisons and overall impressions engendered by the marks in registration with the IPO. A certificate of registration of a mark, once issued, constitutes prima
controversy as they are encountered in the realities of the marketplace must be taken into facie evidence of the validity of the registration, of the registrant's ownership of the mark, and
account. Where there are both similarities and differences in the marks, these must be of the registrant's exclusive right to use the same in connection with the goods or services and
weighed against one another to see which predominates. those that are related thereto specified in the certificate. R.A. No. 8293, however, requires the
applicant for registration or the registrant to file a declaration of actual use (DAU) of the mark,
In determining likelihood of confusion between marks used on non-identical goods or with evidence to that effect, within three (3) years from the filing of the application for
services, several factors may be taken into account, such as, but not limited to: registration; otherwise, the application shall be refused or the mark shall be removed from the
register. In other words, the prima facie presumption brought about by the registration
a) the strength of plaintiff s mark; of a mark may be challenged and overcome, in an appropriate action, by proof of the
nullity of the registration or of non-use of the mark, except when excused. Moreover, the
b) the degree of similarity between the plaintiffs and the defendant's marks; presumption may likewise be defeated by evidence of prior use by another person, i.e., it will
controvert a claim of legal appropriation or of ownership based on registration by a
c) the proximity of the products or services; subsequent user. This is because a trademark is a creation of use and belongs to one who
first used it in trade or commerce.
The determination of priority of use of a mark is a question of fact . Adoption of the mark alone
does not suffice. One may make advertisements, issue circulars, distribute price lists on
certain goods, but these alone will not inure to the claim of ownership of the mark until the
goods bearing the mark are sold to the public in the market. Accordingly, receipts, sales
invoices, and testimonies of witnesses as customers, or orders of buyers, best prove the actual
use of a mark in trade and commerce during a certain period of time.
x x x x
Verily, the protection of trademarks as intellectual property is intended not only to preserve
the goodwill and reputation of the business established on the goods bearing the mark
through actual use over a period of time, but also to safeguard the public as consumers against
confusion on these goods. On this matter of particular concern, administrative agencies,
such as the IPO, by reason of their special knowledge and expertise over matters falling
under their jurisdiction, are in a better position to pass judgment thereon. Thus, their
findings of fact in that regard are generally accorded great respect, if not finality by the
courts, as long as they are supported by substantial evidence, even if such evidence
might not be overwhelming or even preponderant. It is not the task of the appellate
court to weigh once more the evidence submitted before the administrative body and to
substitute its own judgment for that of the administrative agency in respect to
sufficiency of evidence. (Emphasis added, citations omitted.)
In trademark controversies, each case must be scrutinized according to its peculiar
circumstances, such that jurisprudential precedents should only be made to apply if they are
specifically in point.45 The cases discussed below are mentioned only for purposes of lifting the
applicable doctrines, laws, and concepts, but not for their factual circumstances, because of
the uniqueness of each case in controversies such as this one.
There are two tests used in jurisprudence to determine likelihood of confusion, namely the
dominancy test used by the IPO, and the holistic test adopted by the Court of Appeals.
In Skechers, U.S.A., Inc. v. Inter Pacific Industrial Trading Corp., 46 we held:  x
The essential element of infringement under R.A. No. 8293 is that the infringing mark is
likely to cause confusion. In determining similarity and likelihood of confusion,
jurisprudence has developed tests — the Dominancy Test and the Holistic or Totality
Test. The Dominancy Test focuses on the similarity of the prevalent or dominant features of
the competing trademarks that might cause confusion, mistake, and deception in the mind of
the purchasing public. Duplication or imitation is not necessary; neither is it required
that the mark sought to be registered suggests an effort to imitate. Given more
consideration are the aural and visual impressions created by the marks on the buyers of
goods, giving little weight to factors like prices, quality, sales outlets, and market segments.
x x x x
Relative to the question on confusion of marks and trade names, jurisprudence has noted two
(2) types of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in the belief that he was
purchasing the other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of which registration is
applied for by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into that belief
or into the belief that there is some connection between the two parties, though inexistent.
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S"
by respondent in its Strong rubber shoes infringes on the mark already registered by
petitioner with the IPO. While it is undisputed that petitioner's stylized "S" is within an oval
design, to this Court's mind, the dominant feature of the trademark is the stylized "S," as it is
precisely the stylized "S" which catches the eye of the purchaser. Thus, even if respondent
did not use an oval design, the mere fact that it used the same stylized "S", the same being the
dominant feature of petitioner's trademark, already constitutes infringement under the
Dominancy Test.
This Court cannot agree with the observation of the CA that the use of the letter "S" could
hardly be considered as highly identifiable to the products of petitioner alone. The CA even
supported its conclusion by stating that the letter "S" has been used in so many existing
trademarks, the most popular of which is the trademark "S" enclosed by an inverted triangle,
which the CA says is identifiable to Superman. Such reasoning, however, misses the entire
point, which is that respondent had used a stylized "S," which is the same stylized"S" which
petitioner has a registered trademark for. The letter "S" used in the Superman logo, on the
other hand, has a block-like tip on the upper portion and a round elongated tip on the lower
portion. Accordingly, the comparison made by the CA of the letter "S" used in the Superman
trademark with petitioner's stylized "S" is not appropriate to the case at bar.
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that
based on the font and the size of the lettering, the stylized "S" utilized by respondent is the
very same stylized "S" used by petitioner; a stylized "S" which is unique and distinguishes
petitioner's trademark. Indubitably, the likelihood of confusion is present as purchasers will
associate the respondent's use of the stylized "S" as having been authorized by petitioner or
that respondent's product is connected with petitioner's business.
X X X X
While there may be dissimilarities between the appearances of the shoes, to this Court's mind
such dissimilarities do not outweigh the stark and blatant similarities in their general features,
x x.
Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the
holistic test, ruled that there was no colorable imitation, when it cannot be any more clear and
apparent to this Court that there is colorable imitation. The dissimilarities between the shoes
are too trifling and frivolous that it is indubitable that respondent's products will cause
confusion and mistake in the eyes of the public. Respondent's shoes may not be an exact
replica of petitioner's shoes, but the features and overall design are so similar and alike that
confusion is highly likely.
x x x x
Neither can the difference in price be a complete defense in trademark infringement.
In McDonald's Corporation v. L.C. Big Mak Burger, Inc., this Court held: 
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where
prospective purchasers would be misled into thinking that the complaining party has
extended his business into the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential
expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x x x.

Indeed, the registered trademark owner may use its mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The purchasing public might be mistaken in
thinking that petitioner had ventured into a lower market segment such that it is not
inconceivable for the public to think that Strong or Strong Sport Trail might be associated or
connected with petitioner's brand, which scenario is plausible especially since both petitioner
and respondent manufacture rubber shoes.
Withal, the protection of trademarks as intellectual property is intended not only to preserve
the goodwill and reputation of the business established on the goods bearing the mark
through actual use over a period of time, but also to safeguard the public as consumers against
confusion on these goods. While respondent's shoes contain some dissimilarities with
petitioner's shoes, this Court cannot close its eye to the fact that for all intents and purpose,
respondent had deliberately attempted to copy petitioner's mark and overall design and
features of the shoes. Let it be remembered, that defendants in cases of infringement do not
normally copy but only make colorable changes. The most successful form of copying is to
employ enough points of similarity to confuse the public, with enough points of difference to
confuse the courts. (Citations omitted.)
The Court discussed the concept of confusion of business in the case of  Societe Des Produits
Nestle, S.A. v. Dy, Jr.,47 as quoted below:  Applying the dominancy test to the instant case, the Court finds that herein petitioner's
Among the elements, the element of likelihood of confusion is the gravamen of trademark
infringement. There are two types of confusion in trademark infringement: confusion of goods
and confusion of business. In Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, the Court distinguished the two types of confusion:  "Mac"
Callman notes two types of confusion. The first is the confusion of goods "in which event the
ordinarily prudent purchaser would be induced to purchase one product in the belief that he
was purchasing the other." In which case, "defendant's goods are then bought as the plaintiffs,
and the poorer quality of the former reflects adversely on the plaintiffs reputation." The other
is the confusion of business: "Here though the goods of the parties are different, the defendant's
product is such as might reasonably be assumed to originate with the plaintiff, and the public
would then be deceived either into that belief or into the belief that there is some connection
between the plaintiff and defendant which, in fact, does not exist."
There are two tests to determine likelihood of confusion: the dominancy test and holistic test.
The dominancy test focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement takes place when the
competing trademark contains the essential features of another. Imitation or an effort to
imitate is unnecessary. The question is whether the use of the marks is likely to cause
confusion or deceive purchasers.
x x x x
In cases involving trademark infringement, no set of rules can be deduced. Each case must be
decided on its own merits. Jurisprudential precedents must be studied in the light of the facts
of each particular case. In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court
held:  prices,
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar
to another, no set rules can be deduced because each case must be decided on its merits. In
such cases, even more than in any other litigation, precedent must be studied in the light of
the facts of the particular case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point.
In the light of the facts of the present case, the Court holds that the dominancy test is
applicable. In recent cases with similar factual milieus, the Court has consistently applied the
dominancy test, x x x.
x x x x
In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy
test in holding that "MACJOY" is confusingly similar to "MCDONALD'S." The Court held: 
While we agree with the CA's detailed enumeration of differences between the two (2)
competing trademarks herein involved, we believe that the holistic test is not the one
applicable in this case, the dominancy test being the one more suitable. In recent cases with a
similar factual milieu as here, the Court has consistently used and applied the dominancy test
in determining confusing similarity or likelihood of confusion between competing trademarks.
x x x x
"MCDONALD'S" and respondent's "MACJOY" marks are confusingly similar with each other
that an ordinary purchaser can conclude an association or relation between the marks.
To begin with, both marks use the corporate "M" design logo and the prefixes "Me" and/or
as dominant features, x x x.
For sure, it is the prefix "Me," and abbreviation of "Mac," which visually and aurally catches
the attention of the consuming public. Verily, the word "MACJOY" attracts attention the same
way as did "McDonalds," "Mac Fries," "Me Spaghetti," "McDo," "Big Mac" and the rest of the
MCDONALD'S marks which all use the prefixes Me and/or Mac.
Besides and most importantly, both trademarks are used in the sale of fastfood products.
Indisputably, the respondent's trademark application for the "MACJOY & DEVICE" trademark
covers goods under Classes 29 and 30 of the International Classification of Goods, namely,
fried chicken, chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner's
trademark registration for the MCDONALD'S marks in the Philippines covers goods which are
similar if not identical to those covered by the respondent's application.
In McDonald's Corporation v. L.C. Big Mak Burger, Inc., the Court applied the dominancy test in
holding that "BIG MAK" is confusingly similar to "BIG MAC." The Court held: 
This Court x x x has relied on the dominancy test rather than the holistic test. The dominancy
test considers the dominant features in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater weight to the similarity of
the appearance of the product arising from the adoption of the dominant features of the
registered mark, disregarding minor differences. Courts will consider more the aural and
visual impressions created by the marks in the public mind, giving little weight to factors like
quality, sales outlets and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled:
x x x It has been consistently held that the question of infringement of a trademark is to be
determined by the test of dominancy. Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential or dominant features of
another, and confusion and deception is likely to result, infringement takes place. Duplication
or imitation is not necessary; nor is it necessary that the infringing label should suggest an
effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495,
citing Eagle White Lead Co. vs. Pflugh (CC)180 Fed. 579). The question at issue in cases of
infringement of trademarks is whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber
Corporation vs. Honover Rubber Co., 107 F. 2d 588; x x x)
x x x x
The test of dominancy is now explicitly incorporated into law in Section 155.1 of the
Intellectual Property Code which defines infringement as the "colorable imitation of a
registered mark x x x or a dominant feature thereof."
Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark
results in likelihood of confusion. First, "Big Mak" sounds exactly the same as "Big Mac."
Second, the first word in "Big Mak" is exactly the same as the first word in "Big Mac." Third,
the first two letters in "Mak" are the same as the first two letters in "Mac." Fourth, the last
letter "Mak" while a "k" sounds the same as "c" when the word "Mak" is pronounced. Fifth, in
Filipino, the letter "k" replaces "c" in spelling, thus "Caloocan" is spelled "Kalookan."
In Societe Des Produits Nestle, S.A. v. Court of Appeals, the Court applied the dominancy test in
holding that "FLAVOR MASTER" is confusingly similar to "MASTER ROAST" and "MASTER
BLEND." The Court held:  levels. In McDonald's Corporation v. L.C. Big Mak Burger, Inc., the Court held that the scope of
While this Court agrees with the Court of Appeals' detailed enumeration of differences
between the respective trademarks of the two coffee products, this Court cannot agree that
totality test is the one applicable in this case. Rather, this Court believes that the dominancy
test is more suitable to this case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to the elementary postulate of the law on
trademarks and unfair competition that confusing similarity is to be determined on the basis
of visual, aural, connotative comparisons and overall impressions engendered by the marks in
controversy as they are encountered in the realities of the marketplace. The totality or holistic
test only relies on visual comparison between two trademarks whereas the dominancy test
relies not only on the visual but also on the aural and connotative comparisons and overall
impressions between the two trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of dominancy and
held that:
xxxx
The scope of protection afforded to registered trademark owners is not limited to
protection from infringers with identical goods. The scope of protection extends to
protection from infringers with related goods, and to market areas that are the normal
expansion of business of the registered trademark owners. Section 138 of R.A. No. 8293
states: 
Certificates of Registration. — A certificate of registration of a mark shall be prima facie
evidence of validity of the registration, the registrant's ownership of the mark, and of the
registrant's exclusive right to use the same in connection with the goods or services and those
that are related thereto specified in the certificate, x x x.
In Mighty Corporation v. E. & J. Gallo Winery, the Court held that, "Non-competing goods may
be those which, though they are not in actual competition, are so related to each other that it
can reasonably be assumed that they originate from one manufacturer, in which case,
confusion of business can arise out of the use of similar marks." In that case, the Court
enumerated factors in determining whether goods are related:
(1) classification of the goods;
(2) nature of the goods;
(3) descriptive properties, physical attributes or essential characteristics of the goods, with
reference to their form, composition, texture or quality; and
(4) style of distribution and marketing of the goods, including how the goods are displayed
and sold.
x x x x
xxx. However, as the registered owner of the "NAN" mark, Nestle should be free to use its
mark on similar products, in different segments of the market, and at different price
protection afforded to registered trademark owners extends to market areas that are the
normal expansion of business:
x x x x
Even respondent's use of the "Big Mak" mark on non-hamburger food products cannot excuse
their infringement of petitioners' registered mark, otherwise registered marks will lose their
protection under the law. 
The registered trademark owner may use his mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations
of the products for specific segments of the market. The Court has recognized that the
registered trademark owner enjoys protection in product and market areas that are
the normal potential expansion of his business.Thus, the Court has declared: 
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where
prospective purchasers would be misled into thinking that the complaining party has
extended his business into the field (see 148 ALR 56 et sq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential
expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577). (Emphases supplied,
citations omitted.)
Again, this Court discussed the dominancy test and confusion of business in Dermaline, Inc. v.
Myra Pharmaceuticals, Inc.,48 and we quote: 
The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion or deception. It is applied when the trademark sought
to be registered contains the main, essential and dominant features of the earlier registered
trademark, and confusion or deception is likely to result. Duplication or imitation is not
even required; neither is it necessary that the label of the applied mark for registration
should suggest an effort to imitate. The important issue is whether the use of the marks
involved would likely cause confusion or mistake in the mind of or deceive the ordinary
purchaser, or one who is accustomed to buy, and therefore to some extent familiar with, the
goods in question. Given greater consideration are the aural and visual impressions created by
the marks in the public mind, giving little weight to factors like prices, quality, sales outlets,
and market segments. The test of dominancy is now explicitly incorporated into law in Section
155.1 of R.A. No. 8293 which provides —  beauty
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive x x x.
xxxx
Relative to the question on confusion of marks and trade names, jurisprudence has noted two
(2) types of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in the belief that he was
purchasing the other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of which registration is
applied for by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into that belief
or into the belief that there is some connection between the two parties, though inexistent.
x x x x
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while there
are no set rules that can be deduced as what constitutes a dominant feature with respect to
trademarks applied for registration; usually, what are taken into account are signs, color,
design, peculiar shape or name, or some special, easily remembered earmarks of the brand
that readily attracts and catches the attention of the ordinary consumer.
x x x x
Further, Dermaline's stance that its product belongs to a separate and different classification
from Myra's products with the registered trademark does not eradicate the possibility of
mistake on the part of the purchasing public to associate the former with the latter, especially
considering that both classifications pertain to treatments for the skin.
Indeed, the registered trademark owner may use its mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The Court is cognizant that the registered
trademark owner enjoys protection in product and market areas that are the normal potential
expansion of his business. Thus, we have held —  mark which appears prominently to the eyes and ears is the phrase "PAPA BOY" and that is
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as
where prospective purchasers would be misled into thinking that the complaining
party has extended his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is
in any way connected with the activities of the infringer; or when it forestalls the normal
potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577).
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra,
such that, considering the current proliferation of health and beauty products in the market,
the purchasers would likely be misled that Myra has already expanded its business through
Dermaline from merely carrying pharmaceutical topical applications for the skin to health and
services.
Verily, when one applies for the registration of a trademark or label which is almost the same
or that very closely resembles one already used and registered by another, the application
should be rejected and dismissed outright, even without any opposition on the part of the
owner and user of a previously registered label or trademark. This is intended not only to
avoid confusion on the part of the public, but also to protect an already used and registered
trademark and an established goodwill. (Citations omitted.)
Section 123. l(d) of the IP Code provides: 
A mark cannot be registered if it: 
x x x x
(d) Is identical with a registered mark belonging to a different proprietor or a mark with an
earlier filing or priority date, in respect of: 
i. The same goods or services, or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be likely to deceive or cause
confusion[.]
A scrutiny of petitioner's and respondent's respective marks would show that the IPO-BLA
and the IPO Director General correctly found the word "PAPA" as the dominant feature of
petitioner's mark "PAPA KETSARAP." Contrary to respondent's contention, "KETSARAP"
cannot be the dominant feature of the mark as it is merely descriptive of the product.
Furthermore, it is the "PAPA" mark that has been in commercial use for decades and has
established awareness and goodwill among consumers.
We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature of
respondent's "PAPA BOY & DEVICE" mark subject of the application, such that "the word
'PAPA' is written on top of and before the other words such that it is the first word/figure that
catches the eyes." 49 Furthermore, as the IPO Director General put it, the part of respondent's
what a purchaser of respondent's product would immediately recall, not the smiling hog.
We quote the relevant portion of the IPO-BLA decision on this point below: 
A careful examination of Opposer's and Respondent-applicant's respective marks shows that
the word "PAPA" is the dominant feature: In Opposer's marks, the word "PAPA" is either the
mark by itself or the predominant word considering its stylized font and the conspicuous
placement of the word "PAPA" before the other words. In Respondent-applicant's mark, the
word "PAPA" is written on top of and before the other words such that it is the first word
figure that catches the eyes. The visual and aural impressions created by such dominant word
"PAPA" at the least is that the respective goods of the parties originated from the other, or
that one party has permitted or has been given license to the other to use the word "PAPA"
for the other party's product, or that there is a relation/connection between the two parties
when, in fact, there is none. This is especially true considering that the products of both
parties belong to the same class and are closely related: Catsup and lechon sauce or liver sauce
are both gravy-like condiments used to spice up dishes. Thus, confusion of goods and of
business may likely result.
Under the Dominancy Test, the dominant features of the competing marks are considered in
determining whether these competing marks are confusingly similar. Greater weight is given
to the similarity of the appearance of the products arising from the adoption of the dominant
features of the registered mark, disregarding minor differences. The visual, aural, connotative,
and overall comparisons and impressions engendered by the marks in controversy as they are
encountered in the realities of the marketplace are the main considerations (McDonald's
Corporation, et al., v. L. C. Big Mak Burger, Inc., et al., G. R. No. 143993, August 18, 2004;
Societe Des Produits Nestle, S. A." et al. v. Court of Appeals, et al., G. R. No. 112012, April 4,
2001). If the competing trademark contains the main or essential or dominant features
of another, and confusion and deception is likely to result, infringement takes place.
(Lim Hoa v. Director of Patents, 100 Phil. 214 [1956]); Co Tiong Sa v. Director of Patents, et al.,
G. R. No. L-5378, May 24, 1954). Duplication or imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort to imitate (Lim Hoa v. Director of Patents,
supra, and Co Liong Sa v. Director of Patents, supra). Actual confusion is not required: Only
likelihood of confusion on the part of the buying public is necessary so as to render two
marks confusingly similar so as to deny the registration of the junior mark (Sterling
Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 137 Phil. 838 [1969]).
As to the first issue of whether PAPA BOY is confusingly similar to Opposer's PAPA mark, this
Bureau rules in the affirmative.
The records bear the following:
1. Registration No. 32416 issued for the mark "PAPA" under Class 29 goods was deemed
expired as of February 11, 2004 (Exhibit "A" attached to the VERIFIED NOTICE OF
OPPOSITION). Application Serial No. 4- 2005-010788 was filed on October 28, 2005 for the
same mark "PAPA" for Class 30 goods and Registration No. 42005010788 was issued on
March 19,2007;
2. Opposer was issued for the mark "PAPA BANANA CATSUP LABEL" on August 11, 1983
Registration No. SR-6282 for Class 30 goods in the Supplemental Register, which registration
expired in 2003. Application Serial No. 4-2006-012364 was filed for the mark "PAPA LABEL
DESIGN" for Class 30 goods on November 15, 2006, and Registration No. 42006012364 was
issued on April 30, 2007; and
3. Lastly, Registration No. 34681 for the mark "PAPA KETSARAP" for Class 30 goods was
issued on August 23, 1985 and was renewed on August 23, 2005.
Though Respondent-applicant was first to file the subject application on April 04, 2002 vis-a-
vis the mark "PAPA" the filing date of which is reckoned on October 28, 2005, and the mark
"PAPA LABEL DESIGN" the filing date of which is reckoned on November 15, 2006, Opposer
was able to secure a registration for the mark "PAPA KETSARAP" on August 23, 1985
considering that Opposer was the prior registrant and that its renewal application timely filed
on August 23, 2005.
xxxx
Pursuant to [Section 123.l(d) of the IP Code], the application for registration of the subject
mark cannot be allowed considering that Opposer was earlier registrant of the marks PAPA
and PAPA KETSARAP which registrations were timely renewed upon its expiration.
Respondent-applicant's mark "PAPA BOY & DEVICE" is confusingly similar to Opposer's mark
"PAPA KETSARAP" and is applied to goods that are related to Opposer's goods, but Opposer's
mark "PAPA KETSARAP" was registered on August 23, 1985 per Certificate of Registration No.
34681, which registration was renewed for a period of 10 years counted from August 23, 2005
per Certificate of Renewal of Registration No. 34681 issued on August 23, 2005. To repeat,
Opposer has already registered a mark which Respondent-applicant's mark nearly resembles
as to likely deceive or cause confusion as to origin and which is applied to goods to which
respondent-applicant's goods under Class 30 are closely related.
Section 138 of the IP Code provides that a certificate of registration of a mark is prima
facie evidence of the validity of the registration, the registrant's ownership of the mark, and of
the registrant's exclusive right to use the same in connection with the goods and those that are
related thereto specified in the certificate.
We agree that respondent's mark cannot be registered. Respondent's mark is related to a
product, lechon sauce, an everyday all-purpose condiment and sauce, that is not subjected to
great scrutiny and care by the casual purchaser, who knows from regular visits to the grocery
store under what aisle to find it, in which bottle it is contained, and approximately how much
it costs. Since petitioner's product, catsup, is also a household product found on the same
grocery aisle, in similar packaging, the public could think that petitioner had expanded its
product mix to include lechon sauce, and that the "PAPA BOY" lechon sauce is now part of the
"PAPA" family of sauces, which is not unlikely considering the nature of business that
petitioner is in. Thus, if allowed registration, confusion of business may set in, and
petitioner's hard-earned goodwill may be associated to the newer product introduced
by respondent, all because of the use of the dominant feature of petitioner's mark on
respondent's mark, which is the word "PAPA." The words "Barrio Fiesta" are not
included in the mark, and although printed on the label of respondent's lechon sauce
packaging, still do not remove the impression that "PAPA BOY" is a product owned by
the manufacturer of "PAPA" catsup, by virtue of the use of the dominant feature. It is
possible that petitioner could expand its business to include lechon sauce, and that would be
well within petitioner's rights, but the existence of a "PAPA BOY" lechon sauce would already
eliminate this possibility and deprive petitioner of its rights as an owner of a valid mark
included in the Intellectual Property Code.
The Court of Appeals likewise erred in finding that "PAPA," being a common term of
endearment for one's father, is a word over which petitioner could not claim exclusive use and
ownership. The Merriam-Webster dictionary defines "Papa" simply as "a person's father."
True, a person's father has no logical connection with catsup products, and that precisely
makes "PAPA" as an arbitrary mark capable of being registered, as it is distinctive, coming
from a family name that started the brand several decades ago. What was registered was not
the word "Papa" as defined in the dictionary, but the word "Papa" as the last name of
the original owner of the brand. In fact, being part of several of petitioner's marks,
there is no question that the IPO has found "PAPA" to be a registrable mark.
Respondent had an infinite field of words and combinations of words to choose from to coin a
mark for its lechon sauce. While its claim as to the origin of the term "PAPA BOY" is plausible,
it is not a strong enough claim to overrule the rights of the owner of an existing and valid
mark. Furthermore, this Court cannot equitably allow respondent to profit by the name and
reputation carefully built by petitioner without running afoul of the basic demands of fair
play.51
WHEREFORE, we hereby GRANT the petition. We SET ASIDE the June 23, 2011 Decision and
the October 4, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 107570,
and REINSTATE the March 26, 2008 Decision of the Bureau of Legal Affairs of the Intellectual
Property Office (IPO-BLA) and the January 29, 2009 Decision of the Director General of the
IPO. 
SO ORDERED.  The Madrid Protocol, which was adopted in order to remove the challenges
G.R. No. 204605
INTELLECTUAL PROPERTY ASSOCIATION OF THE
PHILIPPINES, Petitioner,  (2) to make the management of the registered marks easier in
vs.
HON. PAQUITO OCHOA, IN HIS CAPACITY AS EXECUTIVE SECRETARY,
HON. ALBERT DEL ROSARIO, IN HIS CAPACITY AS SECRETARY OF THE
DEPARTMENT OF FOREIGN AFFAIRS, AND HON. RICARDO
BLANCAFLOR, IN HIS CAPACITY AS THE DIRECTOR GENERAL OF THE
INTELLECTUAL PROPERTY OFFICE OF THE PHILIPPINES, Respondents.
DECISION
BERSAMIN, J.:
In this special civil action for certiorari and prohibition, the Intellectual
Property Association of the Philippines (IPAP) seeks to declare the
accession of the Philippines to the Protocol Relating to the Madrid
Agreement Concerning the International Registration of Marks (Madrid
Protocol) unconstitutional on the ground of the lack of concurrence by the
Senate, and in the alternative, to declare the implementation thereof as
unconstitutional because it conflicts with Republic Act No. 8293, otherwise
known as the Intellectual Property Code of the Philippines (IP Code). 1 September 2011 to the Department of Foreign Affairs (DFA) that the
We find and declare that the President's ratification is valid and
constitutional because the Madrid Protocol, being an executive agreement as
determined by the Department of Foreign Affairs, does not require the
concurrence of the Senate.
Antecedents
The Madrid System for the International Registration of Marks (Madrid
System), which is the centralized system providing a one-stop solution
for registering and managing marks worldwide, allows the trademark
owner to file one application in one language, and to pay one set of fees
to protect his mark in the territories of up to 97 member-
states.  The Madrid System is governed by the Madrid Agreement, concluded
2
in 1891, and the Madrid Protocol, concluded in 1989. 3
deterring some countries from acceding to the Madrid Agreement, has two
objectives, namely:
(1) to facilitate securing protection for marks; and
different countries. 4
In 2004; the Intellectual Property Office of the Philippines (IPOPHL), the
government agency mandated to administer the intellectual property
system of the country and to implement the state policies on intellectual
property; began considering the country's accession to the Madrid
Protocol. However, based on its assessment in 2005, the IPOPHL needed to
first improve its own operations before making the recommendation in
favor of accession. The IPOPHL thus implemented reforms to eliminate
trademark backlogs and to reduce the turnaround time for the registration
of marks. 5
In the meanwhile, the IPOPHL mounted a campaign for information
dissemination to raise awareness of the Madrid Protocol. It launched a series
of consultations with stakeholders and various business groups regarding
the Philippines' accession to the Madrid Protocol.  It ultimately arrived at the
conclusion that accession would benefit the country and help raise the level
of competitiveness for Filipino brands. Hence, it recommended in
Philippines should accede to the Madrid Protocol. 6
After its own review, the DFA endorsed to the President the country's
accession to the Madrid Protocol. Conformably with its express authority
under Section 9 of Executive Order No. 459 (Providing for the Guidelines in
the Negotiation of International Agreements and its Ratification) dated
November 25, 1997, the DFA determined that the Madrid Protocol was
an executive agreement.  The IPOPHL, the Department of Science and
1âwphi1
Technology, and the Department of Trade and Industry concurred in the
recommendation of the DFA. 7
On March 27, 2012, President Benigno C. Aquino III ratified the Madrid
Protocol through an instrument of accession, The instrument of accession
was deposited with the Director General of the World Intellectual Property
Organization (WIPO) on April 25, 2012.  The Madrid Protocol entered into
8
force in the Philippines on July 25, 2012. 9
Petitioner IP AP, an association of more than 100 law firms and individual
practitioners in Intellectual Property Law whose main objective is to
promote and protect intellectual property rights in the Philippines through
constant assistance and involvement in the legislation of intellectual
property law,  has commenced this special civil action for certiorari and
10
prohibition  to challenge the validity of the President's accession to
11
the Madrid Protocol without the concurrence of the Senate. Citing Pimentel,
Jr. v. Office of the Executive Secretary, the IPAP has averred:
Nonetheless, while the President has the sole authority to negotiate and
enter into treaties, the Constitution provides a limitation to his power by
requiring the concurrence of 2/3 of all the members of the Senate for the
validity of the treaty entered into by him. Section 21, Article VII of the 1987
Constitution provides that "no treaty or international agreement shall be
valid and effective unless concurred in by at least two-thirds of all the
Members of the Senate." The 1935 and the 1973 Constitution also
required the concurrence by the legislature to the treaties entered into by
the executive. 12
According to the IPAP, the Madrid Protocol is a treaty, not an executive
agreement; hence, respondent DFA Secretary Albert Del Rosario acted with
grave abuse of discretion in determining the Madrid Protocol as an
executive agreement. 13
The IPAP has argued that the implementation of the Madrid Protocol in the
Philippines; specifically the processing of foreign trademark applications,
conflicts with the IP Code,  whose Section 125 states:
14
Sec. 125. Representation; Address for Service. - If the applicant is not
domiciled or has no real and effective commercial establishment in the
Philippines; he shall designate by a written document filed in the office,
the name and address of a Philippine resident who may be served
notices or process in proceedings affecting the mark. Such notices or
services may be served upon the person so designated by leaving a copy
thereof at the address specified in the last designation filed. If the person so
designated cannot be found at the address given in the last designation, such
notice or process may be served upon the Director. (Sec. 3; R.A. No. 166 a)
It has posited that Article 2 of the Madrid Protocol provides in contrast:
Article 2
Securing Protection through International Registration
(1) Where an application for the registration of a mark has been filed with
the Office of a Contracting Party, or where a mark has been registered in the
register of the Office of a Contracting Party, the person in whose name that
application (hereinafter referred to as "the basic application;') or that
registration (hereinafter referred to as "the basic registration") stands may,
subject to the provisions of this Protocol secure protection for his mark in
the territory of the Contracting Parties, by obtaining the registration of that
mark in the register of the International Bureau of the World Intellectual
Property Organization (hereinafter referred to as "the international
registration," "the International Register," "the International Bureau" and
"the Organization'', respectively), provided that,
(i) where the basic application has been filed with the Office of a Contracting
State or where the basic registration has been made by such an Office, the
person in whose name that application or registration stands is a national of
that Contracting State, or is domiciled, or has a real and effective industrial
or commercial establishment, in the said Contracting State,
(ii) where the basic application has been filed with the Office of a
Contracting Organization or where the basic registration has been made by
such an Office, the person in whose name that application or registration
stands is a national of a State member of that Contracting Organization, or is
domiciled, or has a real and effective industrial or commercial
establishment, in the territory of the said Contracting Organization.
(2) The application for international registration (hereinafter referred to as
"the international application") shall be filed with the International Bureau
through the intermediary of the Office with which the basic application was
filed or by which the basic registration was made (hereinafter referred to as
"the Office of origin"), as the case may be.
(3) Any reference in this Protocol to an "Office" or an "Office of a Contracting
Party" shall be construed as a reference to the office that is in charge, on
behalf of a Contracting Party, of the registration of marks, and any reference
in this Protocol to "marks" shall be construed as a reference to trademarks
and service marks.
(4) For the purposes of this Protocol, "territory of a Contracting Party"
means, where the Contracting Party is a State, the territory of that State and,
where the Contracting Party is an intergovernmental organization, the
territory in which the constituting treaty of that intergovernmental
organization applied.
The IPAP has insisted that Article 2 of the Madrid Protocol means that
foreign trademark applicants may file their applications through the
International Bureau or the WIPO, and their applications will be
automatically granted trademark protection without the need for
designating their resident agents in the country. 15
Moreover, the IPAP has submitted that the procedure outlined in the Guide
to the International Registration of Marks relating to representation before
the International Bureau is the following, to wit:
Rule 3(1)(a) 09.02 References in the Regulations, Administrative
Instructions or in this Guide to representation relate only to representation
before the International Bureau. The questions of the need for a
representative before the Office of origin or the Office of a designated
Contracting Party (for example, in the event of a refusal of protection issued
by such an Office), who may act as a representative in such cases and the
method of appointment, are outside the scope of the Agreement, Protocol
and Regulations and are governed by the law and practice of the Contracting
Party concerned.
which procedure is in conflict with that under Section 125 of the IP Code,
and constitutes in effect an amendment of the local law by the Executive
Department. 16
The IPAP has prayed that the implementation of the Madrid Protocol in the
Philippines be restrained in order to prevent future wrongs considering that
the IP AP and its constituency have a clear and unmistakable right not to be
deprived of the rights granted them by the IP Code and existing local laws. 17
In its comment in behalf of the respondents, the Office of the Solicitor
General (OSG) has stated that the IPAP does not have the locus standi to
challenge the accession to the Madrid Protocol; that the IPAP cannot invoke
the Court's original jurisdiction absent a showing of any grave abuse of
discretion on the part of the respondents; that the President's ratification of
the Madrid Protocol as an executive agreement is valid because the Madrid
Protocol is only procedural, does not create substantive rights, and does not
require the amendment of the IP Code; that the IPAP is not entitled to the
restraining order or injunction because it suffers no damage from the
ratification by the President, and there is also no urgency for such relief; and
the IPAP has no clear unmistakable right to the relief sought. 18
Issues
The following issues are to be resolved, namely:
I. Whether or not the IP AP has locus standi to challenge the President's
ratification of the Madrid Protocol;
II. Whether or not the President's ratification of the Madrid Protocol is valid
and constitutional; and
III. Whether or not the Madrid Protocol is in conflict with the IP Code.
Ruling of the Court
The petition for certiorari and prohibition is without merit.
A.
The issue of legal standing to sue, or locus standi
The IPAP argues in its reply  that it has the locus standi to file the present
19
case by virtue of its being an association whose members stand to be injured
as a result of the enforcement of the Madrid Protocol in the Philippines; that
the injury pertains to the acceptance and approval of applications submitted
through the Madrid Protocol without local representation as required by
Section 125 of the IP Code;  and that such will diminish the rights granted
20
by the IP Code to Intellectual Property Law practitioners like the members
of the IPAP.21
The argument of the IPAP is untenable.
Legal standing refers to "a right of appearance in a court of justice on a given
question."  According to Agan, Jr. v. Philippine International Air Terminals
22
Co., Inc., standing is "a peculiar concept in constitutional law because in
23
some cases, suits are not brought by parties who have been personally
injured by the operation of a law or any other government act but by
concerned citizens, taxpayers or voters who actually sue in the public
interest."
The Court has frequently felt the need to dwell on the issue of standing in
public or constitutional litigations to sift the worthy from the unworthy
public law litigants seeking redress or relief. The following elucidation in De
Castro v. Judicial and Bar Council offers the general understanding of the
24
context of legal standing, or locus standi for that purpose, viz. :
In public or constitutional litigations, the Court is often burdened with the
determination of the locus standi of the petitioners due to the ever-present
need to regulate the invocation of the intervention of the Court to correct
any official action or policy in order to avoid obstructing the efficient
functioning of public officials and offices involved in public service. It is
required, therefore, that the petitioner must have a personal stake in the
outcome of the controversy, for, as indicated in Agan, Jr. v. Philippine
International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "'alleged
such a personal stake in the outcome of the controversy as to assure
that concrete adverseness which sharpens the presentation of issues
upon which the court so largely depends for illumination of difficult
constitutional questions," Accordingly, it has been held that the
interest of a person assailing the constitutionality of a statute must be
direct and personal. He must be able to show, not only that the law or
any government act is invalid, but also that he sustained or is in
imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite
way. It must appear that the person complaining has been or is about
to be denied some right or privilege to which he is lawfully entitled or
that he is about to be subjected to some burdens or penalties by reason
of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted
the direct injury test for determining whether a petitioner in a public action
had locus standi. There, the Court held that the person who would assail the
validity of a statute must have "a personal and substantial interest in the
case such that he has sustained, or will sustain direct injury as a
result." Vera was followed in Custodio v. President of the Senate, Manila Race
Horse Trainers' Association v. De la Fuente, Anti-Chinese League of the
Philippines v. Felix, and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi, being a
mere procedural technicality, can be waived by the Court in the exercise of
its discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court
liberalized the approach when the cases had "transcendental importance."
Some notable controversies whose petitioners did not pass the direct injury
test were allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided
to resolve the issues raised by the petition due to their "farreaching
implications,'; even if the petitioner had no personality to file the suit. The
liberal approach of Aquino v. Commission on Elections has been adopted in
several notable cases, permitting ordinary citizens, legislators, and civic
organizations to bring their suits involving the constitutionality or validity
of laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a
supposedly illegal or unconstitutional executive or legislative action rests on
the theory that the petitioner represents the public in general. Although
such petitioner may not be as adversely affected by the action complained
against as are others, it is enough that he sufficiently demonstrates in his
petition that he is entitled to protection or relief from the Court in the
vindication ofa public right.
25
The injury that the IPAP will allegedly suffer from the implementation of
the Madrid Protocol is imaginary, incidental and speculative as opposed to a
direct and material injury required by the foregoing tenets on locus
standi. Additionally, as the OSG points out in the comment,  the IPAP has
26
misinterpreted Section 125 of the IP Code on the issue of representation.
The provision only states that a foreign trademark applicant "shall designate
by a written document filed in the office, the name and address of a
Philippine resident who may be served notices or process in proceedings
affecting the mark;" it does not grant anyone in particular the right to
represent the foreign trademark applicant. Hence, the IPAP cannot justly
claim that it will suffer irreparable injury or diminution of rights granted to
it by Section 125 of the IP Code from the implementation of the Madrid
Protocol.
Nonetheless, the IPAP also emphasizes that the paramount public interest
involved has transcendental importance because its petition asserts that the
Executive Department has overstepped the bounds of its authority by
thereby cutting into another branch's functions and responsibilities.  The 27
assertion of the IPAP may be valid on this score. There is little question
that the issues raised herein against the implementation of the Madrid
Protocol are of transcendental importance. Accordingly, we recognize
IPAP's locus standi to bring the present challenge. Indeed, the Court has
adopted a liberal attitude towards locus standi whenever the issue
presented for consideration has transcendental significance to the people,
or whenever the issues raised are of paramount importance to the public.
B.
Accession to the
Madrid Protocol was constitutional
The IP AP submits that respondents Executive Secretary and DFA Secretary
Del Rosario gravely abused their discretion in determining that there was
no need for the Philippine Senate's concurrence with the Madrid
Protocol; that the Madrid Protocol involves changes of national policy, and
its being of a permanent character requires the Senate's
concurrence,  pursuant to Section 21, Article VII of the Constitution, which
29
states that "no treaty or international agreement shall be valid and effective
unless concurred in by at least two-thirds of all the Members of the Senate."
Before going further, we have to distinguish between treaties and
international agreements, which require the Senate's concurrence, on one
hand, and executive agreements, which may be validly entered into without
the Senate's concurrence. Executive Order No. 459, Series of 1997,  notes
30
the following definitions, to wit:
Sec. 2. Definition of Terms.
a. International agreement - shall refer to a contract or understanding,
regardless of nomenclature, entered into between the Philippines and
another government in written form and governed by international law,
whether embodied in a single instrument or in two or more related
instruments.
b. Treaties - international agreements entered into by the Philippines
which require legislative concurrence after executive ratification. This term
may include compacts like conventions, declarations, covenants and acts.
c. Executive Agreements - similar to treaties except that they do not
require legislative concurrence.
The Court has highlighted the difference between treaties and executive
agreements in Commissioner of Customs v. Eastern Sea Trading,  thusly:
31
International agreements involving political issues or changes of national
policy and those involving international arrangements of a permanent
28
character usually take the form of treaties. But international agreements
embodying adjustments of detail  carrying out well-established national
policies and traditions and those involving arrangements of a more or
less temporary  nature usually take the form of executive agreements.
In the Philippines, the DFA, by virtue of Section 9, Executive Order No.
459,  is initially given the power to determine whether an agreement is to
32
be treated as a treaty or as an executive agreement. To determine the issue
of whether DFA Secretary Del Rosario gravely abused his discretion in
making his determination relative to the Madrid Protocol, we review the
jurisprudence on the nature of executive agreements, as well as the subject
matters to be covered by executive agreements.
The pronouncement in Commissioner of Customs v. Eastern Sea Trading is 33
instructive, to wit:
x x x The concurrence of said House of Congress is required by our
fundamental law in the making of "treaties" (Constitution of the Philippines;
Article VII, Section 10[7]), which are, however, distinct and different from
"executive agreements," which may be validly entered into without such
concurrence.
"Treaties are formal documents which require ratification with the approval
of two thirds of the Senate. Executive agreements become binding through
executive action without the need of a vote by the Senate or by Congress.
xxxx
"x x x the right of the Executive to enter into binding
agreements without the necessity of subsequent Congressional
approval has been confirmed by long usage. From the earliest days of our
history we have entered into executive agreements covering such subjects
as commercial and consular relations, most-favored-nation rights, patent
rights, trademark and copyright protection, postal and navigation
arrangements and the settlement of claims. The validity of these has never
been seriously questioned by our courts.
xxxx
Agreements with respect to the registration of trademarks have been
concluded by the Executive with various countries under the Act of
Congress of March 3, 1881 (21 Stat. 502), x x x
xxxx
In this connection, Francis B. Sayre, former U.S. High Commissioner to the
Philippines, said in his work on "The Constitutionality of Trade Agreement
Acts":
Agreements concluded by the President which fall short of treaties are
commonly referred to as executive agreements and are no less common in
our scheme of government than are the more formal instruments - treaties
and conventions. They sometimes take the form of exchanges of notes
and at other times that or more formal documents denominated
'agreements' or 'protocols'. The point where ordinary correspondence
between this and other governments ends and agreements - whether
denominated executive agreements or exchanges of notes or otherwise -
begin, may sometimes be difficult of ready ascertainment. It would be
useless to undertake to discuss here the large variety of executive
agreements as such, concluded from time to time. Hundreds of executive
agreements, other than those entered into under the trade-agreements act,
have been negotiated with foreign governments. x x x It would seem to be
sufficient, in order to show that the trade agreements under the act of 1934
are not anomalous in character, that they are not treaties, and that they have
abundant precedent in our history, to refer to certain classes of agreements
heretofore entered into by the Executive without the approval of the
Senate. They cover such subjects as the inspection of vessels,
navigation dues, income tax on shipping profits, the admission of civil
aircraft, customs matters, and commercial relations generally,
international claims, postal matters, the registration of trademarks
and copyrights, etcetera. Some of them were concluded not by specific
congressional authorization but in conformity with policies declared
in acts of Congress with respect to the general subject matter, such as
tariff acts; while still others, particularly those with respect of the
settlement of claims against foreign governments, were concluded
independently of any legislation. (Emphasis ours)
As the foregoing pronouncement indicates, the registration of trademarks
and copyrights have been the subject of executive agreements entered into
without the concurrence of the Senate. Some executive agreements have
been concluded in conformity with the policies declared in the acts of
Congress with respect to the general subject matter.
It then becomes relevant to examine our state policy on intellectual
property in general, as reflected in Section 2 of our IP Code, to wit:
Section 2. Declaration of State Policy. - The State recognizes that an
effective intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer of
technology, attracts foreign investments, and ensures market access
for our products. It shall protect and secure the exclusive rights of
scientists, inventors, artists and other gifted citizens to their
intellectual property and creations, particularly when beneficial to the
people, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State
shall promote the diffusion of knowledge and information for the
promotion of national development and progress and the common
good.
It is also the policy of the State to streamline administrative
procedures of registering patents, trademarks and copyright, to
liberalize the registration on the transfer of technology; and to enhance the
enforcement of intellectual property rights in the Philippines.
In view of the expression of state policy having been made by the Congress
itself, the IPAP is plainly mistaken in asserting that "there was no
Congressional act that authorized the accession of the Philippines to
the Madrid Protocol." 34
Accordingly, DFA Secretary Del Rosario’s determination and treatment of
the Madrid Protocol as an executive agreement; being in apparent
contemplation of the express state policies on intellectual property as well
as within his power under Executive Order No. 459, are upheld. We observe
at this point that there are no hard and fast rules on the propriety of
entering into a treaty or an executive agreement on a given subject as an
instrument of international relations. The primary consideration in the
choice of the form of agreement is the parties' intent and desire to craft
their international agreement in the form they so wish to further their
respective interests. The matter of form takes a back seat when it
comes to effectiveness and binding effect of the enforcement of a treaty
or an executive agreement; inasmuch as all the parties; regardless of
the form, become obliged to comply conformably with the time-
honored principle of pacta sunt servanda. The principle binds the
35
parties to perform in good faith their parts in the agreements. 36
amend or modify the IP Code on the acquisition of trademark rights
considering that the applications under the Madrid Protocol are still
examined according to the relevant national law, In that regard, the IPOPHL
will only grant protection to a mark that meets the local registration
requirements.

c. WHEREFORE, this Court DISMISSES the petition for certiorari and

prohibition for lack of merit; and ORDERS the petitioner to pay the costs of
There is no conflict between the suit.

Madrid Protocol and the IP Code. SO ORDERED.

The IPAP also rests its challenge on the supposed conflict between
the Madrid Protocol and the IP Code, contending that the Madrid
Protocol does away with the requirement of a resident agent under Section
125 of the IP Code; and that the Madrid Protocol is unconstitutional for
being in conflict with the local law, which it cannot modify.

The IPAP's contentions stand on a faulty premise. The method of

registration through the IPOPHL, as laid down by the IP Code, is distinct and
separate from the method of registration through the WIPO, as set in
the Madrid Protocol. Comparing the two methods of registration despite
their being governed by two separate systems of registration is thus
misplaced.

In arguing that the Madrid Protocol conflicts with Section 125 of the IP Code,

the IP AP highlights the importance of the requirement for the designation
of a resident agent. It underscores that the requirement is intended to
ensure that non-resident entities seeking protection or privileges under
Philippine Intellectual Property Laws will be subjected to the country's
jurisdiction. It submits that without such resident agent, there will be a need
to resort to costly, time consuming and cumbersome extraterritorial service
of writs and processes.37

The IPAP misapprehends the procedure for examination under the Madrid

Protocol, The difficulty, which the IPAP illustrates, is minimal, if not
altogether inexistent. The IPOPHL actually requires the designation of
the resident agent when it refuses the registration of a mark. Local
representation is further required in the submission of the Declaration of
Actual Use, as well as in the submission of the license contract.  The Madrid
38

Protocol accords with the intent and spirit of the IP Code, particularly on the
subject of the registration of trademarks. The Madrid Protocol does not