xSECOND DIVISION classified under Class 6 — "full cream milk for adults in [sic] all ages." Dy, Jr.
distributes and sells the powdered milk in Dumaguete, Negros Oriental,
G.R. No. 172276               August 8, 2010
SOCIETE DES PRODUITS NESTLE, S.A., Petitioner,
vs.
MARTIN T. DY, JR., Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari under Rule 45 of the Rules of Court.
The petition challenges the 1 September 2005 Decision and 4 April 2006
Resolution of the Court of Appeals in CA-G.R. CV No. 62730, finding
respondent Martin T. Dy, Jr. (Dy, Jr.) not liable for trademark infringement.
The Court of Appeals reversed the 18 September 1998 Decision of the
Regional Trial Court (RTC), Judicial Region 7, Branch 9, Cebu City, in Civil
Case No. CEB-19345.
The Facts
Petitioner Societe Des Produits Nestle, S.A. (Nestle) is a foreign corporation
organized under the laws of Switzerland. It manufactures food products and
beverages. As evidenced by Certificate of Registration No. R-14621 issued
on 7 April 1969 by the then Bureau of Patents, Trademarks and Technology
Transfer, Nestle owns the "NAN" trademark for its line of infant powdered
milk products, consisting of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. NAN
is classified under Class 6 — "diatetic preparations for infant feeding."
Nestle distributes and sells its NAN milk products all over the Philippines. It
has been investing tremendous amounts of resources to train its sales force
and to promote the NAN milk products through advertisements and press
releases.
Dy, Jr. owns 5M Enterprises. He imports Sunny Boy powdered milk from
Australia and repacks the powdered milk into three sizes of plastic packs
bearing the name "NANNY." The packs weigh 80, 180 and 450 grams and
are sold for ₱8.90, ₱17.50 and ₱39.90, respectively. NANNY is is also
Cagayan de Oro, and parts of Mindanao.
In a letter dated 1 August 1985, Nestle requested Dy, Jr. to refrain from
using "NANNY" and to undertake that he would stop infringing the "NAN"
trademark. Dy, Jr. did not act on Nestle’s request. On 1 March 1990, Nestle
filed before the RTC, Judicial Region 7, Branch 31, Dumaguete City, a
complaint against Dy, Jr. for infringement. Dy, Jr. filed a motion to dismiss
alleging that the complaint did not state a cause of action. In its 4 June 1990
order, the trial court dismissed the complaint. Nestle appealed the 4 June
1990 order to the Court of Appeals. In its 16 February 1993 Resolution, the
Court of Appeals set aside the 4 June 1990 order and remanded the case to
the trial court for further proceedings.
Pursuant to Supreme Court Administrative Order No. 113-95, Nestle filed
with the trial court a motion to transfer the case to the RTC, Judicial Region
7, Branch 9, Cebu City, which was designated as a special court for
intellectual property rights.
The RTC’s Ruling
In its 18 September 1998 Decision, the trial court found Dy, Jr. liable for
infringement. The trial court held:
If determination of infringement shall only be limited on whether or not the
mark used would likely cause confusion or mistake in the minds of the
buying public or deceive customers, such in [sic] the most considered view
of this forum would be highly unlikely to happen in the instant case. This is
because upon comparison of the plaintiff’s NAN and defendant’s NANNY,
the following features would reveal the absence of any deceptive
tendency in defendant’s NANNY: (1) all NAN products are contained tin cans
[sic], while NANNY are contained in plastic packs; (2) the predominant colors
used in the labels of NAN products are blue and white, while the
predominant colors in the plastic packings of NANNY are blue and green; (3)
the labels of NAN products have at the bottom portion an elliptical shaped
figure containing inside it a drawing of nestling birds, which is overlapped by
the trade-name "Nestle", while the plastic packs of NANNY have a drawing
of milking cows lazing on a vast green field, back-dropped with snow
covered mountains; (4) the word NAN are [sic] all in large, formal and
conservative-like block letters, while the word NANNY are [sic] all in small
and irregular style of letters with curved ends; and (5) all NAN products are
milk formulas intended for use of [sic] infants, while NANNY is an instant full
cream powdered milk intended for use of [sic] adults.
The foregoing has clearly shown that infringement in the instant case cannot
be proven with the use of the "test of dominancy" because the deceptive
tendency of the unregistered trademark NANNY is not apparent from the
essential features of the registered trademark NAN.
However, in Esso Standard Eastern, Inc. vs. Court of Appeals, et al. L-
29971, Aug. 31, 1982, the Supreme Court took the occasion of discussing
what is implied in the definition of "infringement" when it stated: "Implicit in
this definition is the concept that the goods must be so related that there is
likelihood either of confusion of goods or business. x x x But as to whether
trademark infringement exists depends for the most part upon whether or not
the goods are so related that the public may be, or is actually, deceived and
misled that they came from the same maker or manufacturer. For non-
competing goods may be those which, though they are not in actual
competition, are so related to each other that it might reasonably be
assumed that they originate from one manufacturer. Non-competing goods
may also be those which, being entirely unrelated, could not reasonably be
assumed to have a common source. In the former case of related goods,
confusion of business could arise out of the use of similar marks; in the latter
case of non-related goods, it could not."
Furthermore, in said case the Supreme Court as well discussed on when
goods may become so related for purposes of infringement when it stated:
"Goods are related when they belong to the same class or have same
descriptive properties; when they possess the same physical attributes or
essential characteristics with reference to their form, composition, texture or
quality. They may also be related because they serve the same purpose or
are sold in grocery stores. x x x
Considering that defendant’s NANNY belongs to the same class as that of
plaintiff’s NAN because both are food products, the defendant’s unregistered
trade mark NANNY should be held an infringement to plaintiff’s registered
trademark NAN because defendant’s use of NANNY would imply that it
came from the manufacturer of NAN. Furthermore, since the word "nanny"
means a "child’s nurse," there might result the not so remote probability that
defendant’s NANNY may be confused with infant formula NAN despite the
aparent [sic] disparity between the features of the two products.
Dy, Jr. appealed the 18 September 1998 Decision to the Court of Appeals.
The Court of Appeals’ Ruling
In its 1 September 2005 Decision, the Court of Appeals reversed the trial
court’s 18 September 1998 Decision and found Dy, Jr. not liable for
infringement. The Court of Appeals held:
[T]he trial court appeared to have made a finding that there is no colorable
imitation of the registered mark "NAN" in Dy’s use of "NANNY" for his own
milk packs. Yet it did not stop there. It continued on applying the "concept of
related goods."
The Supreme Court utlilized the "concept of related goods" in the said case
of Esso Standard Easter, Inc. versus Court of Appeals, et al. wherein two
contending parties used the same trademark "ESSO" for two different goods,
i.e. petroleum products and cigarettes. It rules that there is infringement of
trademark involving two goods bearing the same mark or label, even if the
said goods are non-competing, if and only if they are so related that the
public may be, or is actually, deceived that they originate from the one maker
or manufacturer. Since petroleum products and cigarettes, in kind and
nature, flow through different trade channels, and since the possibility of
confusion is unlikely in the general appearances of each mark as a whole,
the Court held in this case that they cannot be so related in the context of
infringement.
In applying the concept of related goods in the present case, the trial court
haphazardly concluded that since plaintiff-appellee’s NAN and defendant-
appellant’s NANNY belong to the same class being food products, the
unregistered NANNY should be held an infringement of Nestle’s NAN
because "the use of NANNY would imply that it came from the manufacturer
of NAN." Said court went on to elaborate further: "since the word "NANNY"
means a "child’s nurse," there might result the not so remote probability that
defendant’s NANNY may be confused with infant formula NAN despite the
aparent (sic) disparity between the features of the two products as discussed
above."
The trial court’s application of the doctrine laid down by the Supreme Court
in the Esso Standard case aforementioned and the cases cited therein is
quite misplaced. The goods of the two contending parties in those cases
bear similar marks or labels: "Esso" for petroleum products and cigarettes,
"Selecta" for biscuits and milk, "X-7" for soap and perfume, lipstick and nail
polish. In the instant case, two dissimilar marks are involved — plaintiff-
appellee’s "NAN" and defendant-appellant’s "NANNY." Obviously, the
concept of related goods cannot be utilized in the instant case in the same
way that it was used in the Esso Standard case.
In the Esso Standard case, the Supreme Court even cautioned judges that in
resolving infringement or trademark cases in the Philippines, particularly in
ascertaining whether one trademark is confusingly similar to or is a colorable
imitation of another, precedent must be studied in the light of the facts of the
particular case. Each case must be decided on its own merits. In the more
recent case of Societe Des Produits Nestle S.A. Versus Court of Appeals,
the High Court further stressed that due to the peculiarity of the facts of each
infringement case, a judicial forum should not readily apply a certain test or
standard just because of seeming similarities. The entire panoply of
elements constituting the relevant factual landscape should be
comprehensively examined.
While it is true that both NAN and NANNY are milk products and that the
word "NAN" is contained in the word "NANNY," there are more glaring
dissimilarities in the entirety of their trademarks as they appear in their
respective labels and also in relation to the goods to which they are
attached. The discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing in both labels in
order that he may draw his conclusion whether one is confusingly similar to
the other. Even the trial court found these glaring dissimilarities as above-
quoted. We need not add more of these factual dissimilarities.
NAN products, which consist of Pre-NAN, NAN-H-A, NAN-1 and NAN-2, are
all infant preparations, while NANNY is a full cream milk for adults in [sic] all
ages. NAN milk products are sold in tin cans and hence, far expensive than
the full cream milk NANNY sold in three (3) plastic packs containing 80, 180
and 450 grams and worth ₱8.90, ₱17.50 and ₱39.90 per milk pack. The
labels of NAN products are of the colors blue and white and have at the
bottom portion an elliptical shaped figure containing inside it a drawing of
nestling birds, which is overlapped by the trade-name "Nestle." On the other
hand, the plastic packs NANNY have a drawing of milking cows lazing on a
vast green field, back-dropped with snow-capped mountains and using the
predominant colors of blue and green. The word NAN are [sic] all in large,
formal and conservative-like block letters, while the word NANNY are [sic] all
in small and irregular style of letters with curved ends. With these material
differences apparent in the packaging of both milk products, NANNY full
cream milk cannot possibly be an infringement of NAN infant milk.1avvphi1
Moreover, NAN infant milk preparation is more expensive than NANNY
instant full cream milk. The cheaper price of NANNY would give, at the very
first instance, a considerable warning to the ordinary purchaser on whether
he is buying an infant milk or a full cream milk for adults. A cursory
examination of the packaging would confirm the striking differences between
the products in question.
In view of the foregoing, we find that the mark NANNY is not confusingly
similar to NAN. Dy therefore cannot be held liable for infringement.
Nestle filed a motion for reconsideration. In its 4 April 2006 Resolution, the
Court of Appeals denied the motion for lack of merit. Hence, the present
petition.
Issue
The issue is whether Dy, Jr. is liable for infringement.
The Court’s Ruling
The petition is meritorious.
Section 22 of Republic Act (R.A.) No. 166, as amended, states:
Infringement, what constitutes. — Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or
colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
Section 155 of R.A. No. 8293 states:
Remedies; Infringement. — Any person who shall, without the consent of the
owner of the registered mark:
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; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or
a dominant feature thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion,
or to cause mistake, or to deceive, shall be liable in a civil action for
infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing
material.
In Prosource International, Inc. v. Horphag Research Management SA, the
Court laid down the elements of infringement under R.A. Nos. 166 and 8293:
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-
A, and 20 thereof, the following constitute the elements of trademark
infringement:
"(a) A trademark actually used in commerce in the Philippines and
registered in the principal register of the Philippine Patent Office[;]
(b) [It] is used by another person in connection with the sale,
offering for sale, or advertising of any goods, business or services
or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or
origin of such goods or services, or identity of such business; or
such trademark is reproduced, counterfeited, copied or colorably
imitated by another person and such reproduction, counterfeit, copy
or colorable imitation is applied to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services as to likely
cause confusion or mistake or to deceive purchasers[;]
(c) [T]he trademark is used for identical or similar goods[;] and
(d) [S]uch act is done without the consent of the trademark
registrant or assignee."
On the other hand, the elements of infringement under R.A. No. 8293 are as
follows:
·The trademark being infringed is registered in the Intellectual
Property Office; however, in infringement of trade name, the same
need not be registered;
·The trademark or trade name is reproduced, counterfeited, copied,
or colorably imitated by the infringer;
·The infringing mark or trade name is used in connection with the
sale, offering for sale, or advertising of any goods, business or
services; or the infringing mark or trade name is applied to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods,
business or services;
·The use or application of the infringing mark or trade name is likely
to cause confusion or mistake or to deceive purchasers or others as
to the goods or services themselves or as to the source or origin of
such goods or services or the idenity of such business; and
·It is without the consent of the trademark or trade name owner or
the assignee thereof.
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:
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 plaintiff’s, and the poorer quality
of the former reflects adversely on the plaintiff’s 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.
The holistic test considers the entirety of the marks, including labels and
packaging, in determining confusing similarity. The focus is not only on the
predominant words but also on the other features appearing on the labels.
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:
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. In Prosource
International, Inc., the Court applied the dominancy test in holding that
"PCO-GENOLS" is confusingly similar to "PYCNOGENOL." The Court held:
The trial and appellate courts applied the Dominancy Test in determining
whether there was a confusing similarity between the marks PYCNOGENOL
and PCO-GENOL. Applying the test, the trial court found, and the CA
affirmed, that:
"Both the word[s] PYCNOGENOL and PCO-GENOLS have the same suffix
"GENOL" which on evidence, appears to be merely descriptive and furnish
no indication of the origin of the article and hence, open for trademark
registration by the plaintiff through combination with another word or phrase
such as PYCNOGENOL, Exhibits "A" to "A-3." Furthermore, although the
letters "Y" between P and C, "N" between O and C and "S" after L are
missing in the [petitioner’s] mark PCO-GENOLS, nevertheless, when the two
words are pronounced, the sound effects are confusingly similar not to
mention that they are both described by their manufacturers as a food
supplement and thus, identified as such by their public consumers. And
although there were dissimilarities in the trademark due to the type of letters
used as well as the size, color and design employed on their individual
packages/bottles, still the close relationship of the competing product’s name
is sounds as they were pronounced, clearly indicates that purchasers could
be misled into believing that they are the same and/or originates from a
common source and manufacturer."
We find no cogent reason to depart from such conclusion.
This is not the first time the Court takes into account the aural effects of the
words and letters contained in the marks in determining the issue of
confusing similarity. In Marvex Commercial Co., Inc. v. Petra Hawpia & Co.,
et al., cited in McDonald’s Corporation v. L.C. Big Mak Burger, Inc., the
Court held:
"The following random list of confusingly similar sounds in the matter of
trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947,
Vol. 1, will reinforce our view that "SALONPAS" and "LIONPAS" are
confusingly similar in sound: "Gold Dust" and ""Gold Drop"; "Jantzen" and
"Jass-Sea"; "Silver Flash" and Supper Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and Charseurs"; "Cutex" and
"Cuticlean"; "Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso" and Hoo
Hoo." Leon Amdur, in his book "Trade-Mark Law and Practice," pp. 419-421,
cities [sic], as coming within the purview of the idem sonans rule, "Yusea"
and "U-C-A," "Steinway Pianos" and "Steinberg Pianos," and "Seven-Up"
and "Lemon-Up." In Co Tiong vs. Director of Patents, this Court
unequivocally said that "Celdura" and "Condura" are confusingly similar in
sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the
name "Lusolin" is an infringement of the trademark "Sapolin," as the sound
of the two names is almost the same."
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.
xxxx
Applying the dominancy test to the instant case, the Court finds that herein
petitioner’s "MCDONALD’S" and respondent’s "MACJOY" marks are 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 "Mc" and/or "Mac" as dominant features. x x x
For sure, it is the prefix "Mc," 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," "MacFries,"
"McSpaghetti," "McDo," "Big Mac" and the rest of the MCDONALD’S marks
which all use the prefixes Mc 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 prices, 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)
xxxx
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:
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:
From the evidence at hand, it is sufficiently established that the word
MASTER is the dominant feature of opposer’s mark. The word MASTER is
printed across the middle portion of the label in bold letters almost twice the
size of the printed word ROAST. Further, the word MASTER has always
been given emphasis in the TV and radio commercials and other
advertisements made in promoting the product. x x x In due time, because of
these advertising schemes the mind of the buying public had come to learn
to associate the word MASTER with the opposer’s goods.
x x x. It is the observation of this Office that much of the dominance which
the word MASTER has acquired through Opposer’s advertising schemes is
carried over when the same is incorporated into respondent-applicant’s
trademark FLAVOR MASTER. Thus, when one looks at the label bearing the
trademark FLAVOR MASTER (exh. 4) one’s attention is easily attracted to
the word MASTER, rather than to the dissimilarities that exist. Therefore, the
possibility of confusion as to the goods which bear the competing marks or
as to the origins thereof is not farfetched.
Applying the dominancy test in the present case, the Court finds that
"NANNY" is confusingly similar to "NAN." "NAN" is the prevalent feature of
Nestle’s line of infant powdered milk products. It is written in bold letters and
used in all products. The line consists of PRE-NAN, NAN-H.A., NAN-1,
and NAN-2. Clearly, "NANNY" contains the prevalent feature "NAN." The
first three letters of "NANNY" are exactly the same as the letters of "NAN."
When "NAN" and "NANNY" are pronounced, the aural effect is confusingly
similar.
In determining the issue of confusing similarity, the Court takes into account
the aural effect of the letters contained in the marks. In Marvex Commercial
Company, Inc. v. Petra Hawpia & Company, the Court held:
It is our considered view that the trademarks "SALONPAS" and "LIONPAS"
are confusingly similar in sound.
Both these words have the same suffix, "PAS", which is used to denote a
plaster that adheres to the body with curative powers. "PAS," being merely
descriptive, furnishes no indication of the origin of the article and therefore is
open for appropriation by anyone (Ethepa vs. Director of Patents, L-20635,
March 31, 1966) and may properly become the subject of a trademark by
combination with another word or phrase.
xxxx
The following random list of confusingly similar sounds in the matter of
trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947,
Vol. 1, will reinforce our view that "SALONPAS" and "LIONPAS" are
confusingly similar in sound: "Gold Dust" and ""Gold Drop"; "Jantzen" and
"Jass-Sea"; "Silver Flash" and Supper Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and Charseurs"; "Cutex" and
"Cuticlean"; "Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso" and Hoo
Hoo." Leon Amdur, in his book "Trade-Mark Law and Practice," pp. 419-421,
cities [sic], as coming within the purview of the idem sonans rule, "Yusea"
and "U-C-A," "Steinway Pianos" and "Steinberg Pianos," and "Seven-Up"
and "Lemon-Up." In Co Tiong vs. Director of Patents, this Court
unequivocally said that "Celdura" and "Condura" are confusingly similar in
sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the
name "Lusolin" is an infringement of the trademark "Sapolin," as the sound
of the two names is almost the same.
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. (Emphasis supplied)
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.
NANNY and NAN have the same classification, descriptive properties and
physical attributes. Both are classified under Class 6, both are milk products,
and both are in powder form. Also, NANNY and NAN are displayed in the
same section of stores — the milk section.
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). (Emphasis supplied)
WHEREFORE, we GRANT the petition. We SET ASIDE the 1 September
2005 Decision and 4 April 2006 Resolution of the Court of Appeals in CA-
G.R. CV No. 62730 and REINSTATE the 18 September 1998 Decision of
the Regional Trial Court, Judicial Region 7, Branch 9, Cebu City, in Civil
Case No. CEB-19345.
SO ORDERED.

The Court agrees with the lower courts that there are differences between ANTONIO T. CARPIO
NAN and NANNY: (1) NAN is intended for infants while NANNY is intended Associate Justice
for children past their infancy and for adults; and (2) NAN is more expensive
than NANNY. 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 levels. In McDonald’s Corporation v. L.C.
Big Mak Burger, Inc., the Court held that the scope of protection afforded to
registered trademark owners extends to market areas that are the normal
expansion of business:

xxx

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
G.R. No. 143993             August 18, 2004
MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES,
INC., petitioners,
vs.
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B.
DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI AYCARDO, and
GRACE HUERTO, respondents.
DECISION
CARPIO,  J.:
The Case
This is a petition for review1 of the Decision dated 26 November 1999 of the
Court of Appeals2 finding respondent L.C. Big Mak Burger, Inc. not liable for
trademark infringement and unfair competition and ordering petitioners to
pay respondents P1,900,000 in damages, and of its Resolution dated 11
July 2000 denying reconsideration. The Court of Appeals' Decision reversed
the 5 September 1994 Decision3 of the Regional Trial Court of Makati,
Branch 137, finding respondent L.C. Big Mak Burger, Inc. liable for
trademark infringement and unfair competition.
The Facts
Petitioner McDonald's Corporation ("McDonald's") is a corporation organized
under the laws of Delaware, United States. McDonald's operates, by itself or
through its franchisees, a global chain of fast-food restaurants.
McDonald's4 owns a family of marks5 including the "Big Mac" mark for its
"double-decker hamburger sandwich."6 McDonald's registered this trademark
with the United States Trademark Registry on 16 October 1979.7 Based on
this Home Registration, McDonald's applied for the registration of the same
mark in the Principal Register of the then Philippine Bureau of Patents,
Trademarks and Technology ("PBPTT"), now the Intellectual Property Office
("IPO"). Pending approval of its application, McDonald's introduced its "Big
Mac" hamburger sandwiches in the Philippine market in September 1981.
On 18 July 1985, the PBPTT allowed registration of the "Big Mac" mark in
the Principal Register based on its Home Registration in the United States.
Like its other marks, McDonald's displays the "Big Mac" mark in items8 and
paraphernalia9 in its restaurants, and in its outdoor and indoor signages.
From 1982 to 1990, McDonald's spent P10.5 million in advertisement for
"Big Mac" hamburger sandwiches alone.10
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic
corporation, is McDonald's Philippine franchisee.11
Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is a
domestic corporation which operates fast-food outlets and snack vans in
Metro Manila and nearby provinces.12 Respondent corporation's menu
includes hamburger sandwiches and other food items.13 Respondents
Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo,
Araceli Aycardo, and Grace Huerto ("private respondents") are the
incorporators, stockholders and directors of respondent corporation.14
On 21 October 1988, respondent corporation applied with the PBPTT
for the registration of the "Big Mak" mark for its hamburger sandwiches.
McDonald's opposed respondent corporation's application on the ground that
"Big Mak" was a colorable imitation of its registered "Big Mac" mark for the
same food products. McDonald's also informed respondent Francis Dy
("respondent Dy"), the chairman of the Board of Directors of respondent
corporation, of its exclusive right to the "Big Mac" mark and requested him
to desist from using the "Big Mac" mark or any similar mark.
Having received no reply from respondent Dy, petitioners on 6 June 1990
sued respondents in the Regional Trial Court of Makati, Branch 137 ("RTC"),
for trademark infringement and unfair competition. In its Order of 11 July
1990, the RTC issued a temporary restraining order ("TRO") against
respondents enjoining them from using the "Big Mak" mark in the operation
of their business in the National Capital Region.15 On 16 August 1990, the
RTC issued a writ of preliminary injunction replacing the TRO.16
In their Answer, respondents admitted that they have been using the name
"Big Mak Burger" for their fast-food business. Respondents claimed,
however, that McDonald's does not have an exclusive right to the "Big Mac"
mark or to any other similar mark. Respondents point out that the Isaiyas
Group of Corporations ("Isaiyas Group") registered the same mark for
hamburger sandwiches with the PBPTT on 31 March 1979. One Rodolfo
Topacio ("Topacio") similarly registered the same mark on 24 June
1983, prior to McDonald's registration on 18 July 1985. Alternatively,
respondents claimed that they are not liable for trademark infringement or for
unfair competition, as the "Big Mak" mark they sought to register does not
constitute a colorable imitation of the "Big Mac" mark. Respondents asserted
that they did not fraudulently pass off their hamburger sandwiches as those
of petitioners' Big Mac hamburgers.17 Respondents sought damages in their
counterclaim.
In their Reply, petitioners denied respondents' claim that McDonald's is not
the exclusive owner of the "Big Mac" mark. Petitioners asserted that while
the Isaiyas Group and Topacio did register the "Big Mac" mark ahead of
McDonald's, the Isaiyas Group did so only in the Supplemental Register of
the PBPTT and such registration does not provide any protection.
McDonald's disclosed that it had acquired Topacio's rights to his registration
in a Deed of Assignment dated 18 May 1981.18
The Trial Court's Ruling
On 5 September 1994, the RTC rendered judgment ("RTC Decision") finding
respondent corporation liable for trademark infringement and unfair
competition. However, the RTC dismissed the complaint against private
respondents and the counterclaim against petitioners for lack of merit and
insufficiency of evidence. The RTC held:
Undeniably, the mark "B[ig] M[ac]" is a registered trademark for
plaintiff McDonald's, and as such, it is entitled [to] protection against
infringement.
xxxx
There exist some distinctions between the names "B[ig] M[ac]" and
"B[ig] M[ak]" as appearing in the respective signages, wrappers and
containers of the food products of the parties. But infringement
goes beyond the physical features of the questioned name and the
original name. There are still other factors to be considered.
xxxx
Significantly, the contending parties are both in the business of fast-
food chains and restaurants. An average person who is hungry and
wants to eat a hamburger sandwich may not be discriminating
enough to look for a McDonald's restaurant and buy a "B[ig] M[ac]"
hamburger. Once he sees a stall selling hamburger sandwich, in all
likelihood, he will dip into his pocket and order a "B[ig] M[ak]"
hamburger sandwich. Plaintiff McDonald's fast-food chain
has attained wide popularity and acceptance by the consuming
public so much so that its air-conditioned food outlets and
restaurants will perhaps not be mistaken by many to be the same
as defendant corporation's mobile snack vans located along busy
streets or highways. But the thing is that what is being sold
by both contending parties is a food item – a hamburger sandwich
which is for immediate consumption, so that a buyer may easily be
confused or deceived into thinking that the "B[ig] M[ak]" hamburger
sandwich he bought is a food-product of plaintiff McDonald's, or a
subsidiary or allied outlet thereof. Surely, defendant corporation has
its own secret ingredients to make its hamburger sandwiches as
palatable and as tasty as the other brands in the market,
considering the keen competition among mushrooming hamburger
stands and multinational fast-food chains and restaurants. Hence,
the trademark "B[ig] M[ac]" has been infringed by defendant
corporation when it used the name "B[ig] M[ak]" in its signages,
wrappers, and containers in connection with its food business. xxxx
Did the same acts of defendants in using the name "B[ig] M[ak]" as
a trademark or tradename in their signages, or in causing the name
"B[ig] M[ak]" to be printed on the wrappers and containers of their
food products also constitute an act of unfair competition under
Section 29 of the Trademark Law?
The answer is in the affirmative. xxxx
The xxx provision of the law concerning unfair competition is
broader and more inclusive than the law concerning the
infringement of trademark, which is of more limited range, but within
its narrower range recognizes a more exclusive right derived
by the adoption and registration of the trademark by the person
whose goods or services are first associated therewith.
xxx Notwithstanding the distinction between an action for trademark
infringement and an action for unfair competition, however, the law
extends substantially the same relief to the injured party
for both cases. (See Sections 23 and 29 of Republic Act No. 166)
 Any conduct may be said to constitute unfair competition if the
effect is to pass off on the public the goods of one man as the
goods of another. The choice of "B[ig] M[ak]" as tradename by
defendant corporation is not merely for sentimental reasons but
was clearly made to take advantage of the reputation, popularity
and the established goodwill of plaintiff McDonald's. For, as stated
in Section 29, a person is guilty of unfair competition who in selling
his goods shall give them the general appearance, of goods of
another manufacturer or dealer, either as to the goods themselves
or in the wrapping of the packages in which they are contained, or
the devices or words thereon, or in any other feature of their
appearance, which would likely influence purchasers to believe that
the goods offered are those of a manufacturer or dealer other
than the actual manufacturer or dealer. Thus, plaintiffs have
established their valid cause of action against the defendants for
trademark infringement and unfair competition and for damages.19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs
McDonald's Corporation and McGeorge Food Industries, Inc. and
against defendant L.C. Big Mak Burger, Inc., as follows:
1. The writ of preliminary injunction issued in this case on [16
August 1990] is made permanent;
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay
plaintiffs actual damages in the amount of P400,000.00, exemplary
damages in the amount of P100,000.00, and attorney's fees and
expenses of litigation in the amount of P100,000.00;
3. The complaint against defendants Francis B. Dy, Edna A. Dy,
Rene B. Dy, Wiliam B. Dy, Jesus Aycardo, Araceli Aycardo and
Grace Huerto, as well as all counter-claims, are dismissed for lack
of merit as well as for insufficiency of evidence.20
Respondents appealed to the Court of Appeals.
The Ruling of the Court of Appeals
On 26 November 1999, the Court of Appeals rendered judgment ("Court of
Appeals' Decision") reversing the RTC Decision and ordering McDonald's to
pay respondents P1,600,000 as actual and compensatory damages and
P300,000 as moral damages. The Court of Appeals held:
Plaintiffs-appellees in the instant case would like to impress on this
Court that the use of defendants-appellants of its corporate name –
the whole "L.C. B[ig] M[ak] B[urger], I[nc]." which appears on their
food packages, signages and advertisements is an infringement of
their trademark "B[ig] M[ac]" which they use to identify [their] double
decker sandwich, sold in a Styrofoam box packaging material with
the McDonald's logo of umbrella "M" stamped thereon, together
with the printed mark in red bl[o]ck capital letters, the words being
separated by a single space. Specifically, plaintiffs-appellees argue
that defendants-appellants' use of their corporate name is a
colorable imitation of their trademark "Big Mac".
xxxx
To Our mind, however, this Court is fully convinced that no
colorable imitation exists. As the definition dictates, it is
not sufficient that a similarity exists in both names, but that more
importantly, the over-all presentation, or in their essential,
substantive and distinctive parts is such as would likely MISLEAD
or CONFUSE persons in the ordinary course of purchasing the
genuine article. A careful comparison of the way the trademark
"B[ig] M[ac]" is being used by plaintiffs-appellees and corporate
name L.C. Big Mak Burger, Inc. by defendants-appellants, would
readily reveal that no confusion could take place, or that the
ordinary purchasers would be misled by it. As pointed out by
defendants-appellants, the plaintiffs-appellees' trademark is used to
designate only one product, a double decker sandwich sold in a
Styrofoam box with the "McDonalds" logo. On the other hand, what
the defendants-appellants corporation is using is not a trademark
for its food product but a business or corporate name. They use the
business name "L.C. Big Mak Burger, Inc." in their restaurant
business which serves diversified food items such as siopao,
noodles, pizza, and sandwiches such as hotdog, ham, fish burger
and hamburger. Secondly, defendants-appellants' corporate or
business name appearing in the food packages and signages are
written in silhouette red-orange letters with the "b" and "m" in upper
case letters. Above the words "Big Mak" are the upper case letter
"L.C.". Below the words "Big Mak" are the words "Burger, Inc."
spelled out in upper case letters. Furthermore, said corporate or
business name appearing in such food packages and signages is
always accompanied by the company mascot, a young chubby boy
named Maky who wears a red T-shirt with the upper case "m"
appearing therein and a blue lower garment. Finally, the
defendants-appellants' food packages are made of plastic material.
xxxx
xxx [I]t is readily apparent to the naked eye that there appears a
vast difference in the appearance of the product and
the manner that the tradename "Big Mak" is being used and
presented to the public. As earlier noted, there are glaring
dissimilarities between plaintiffs-appellees' trademark and
defendants-appellants' corporate name. Plaintiffs-appellees'
product carrying the trademark "B[ig] M[ac]" is a double decker
sandwich (depicted in the tray mat containing photographs of the
various food products xxx sold in a Styrofoam box with the
"McDonald's" logo and trademark in red, bl[o]ck capital letters
printed thereon xxx at a price which is more expensive than the
defendants-appellants' comparable food products. In order to buy a
"Big Mac", a customer needs to visit an air-conditioned
"McDonald's" restaurant usually located in a nearby commercial
center, advertised and identified by its logo - the umbrella "M", and
its mascot – "Ronald McDonald". A typical McDonald's restaurant
boasts of a playground for kids, a second floor to
accommodate additional customers, a drive-thru to allow customers
with cars to make orders without alighting from their vehicles, the
interiors of the building are well-lighted, distinctly decorated and
painted with pastel colors xxx. In buying a "B[ig] M[ac]", it
is necessary to specify it by its trademark. Thus, a customer needs
to look for a "McDonald's" and enter it first before he can find a
hamburger sandwich which carry the mark "Big Mac". On the other
hand, defendants-appellants sell their goods through snack vans
xxxx
Anent the allegation that defendants-appellants are guilty of unfair
competition, We likewise find the same untenable.
Unfair competition is defined as "the employment of deception
or any other means contrary to good faith by which a
person shall pass off the goods manufactured by him or in which he
deals, or his business, or service, for those of another who has
already established good will for his similar good, business or
services, or any acts calculated to produce the same result" (Sec.
29, Rep. Act No. 166, as amended).
To constitute unfair competition therefore it must necessarily follow
that there was malice and that the entity concerned was in bad
faith.
In the case at bar, We find no sufficient evidence adduced by
plaintiffs-appellees that defendants-appellants deliberately tried to
pass off the goods manufactured by them for those of plaintiffs-
appellees. The mere suspected similarity in the sound of the
defendants-appellants' corporate name with the plaintiffs-appellees'
trademark is not sufficient evidence to conclude unfair competition.
Defendants-appellants explained that the name "M[ak]" in their
corporate name was derived from both the first names of the
mother and father of defendant Francis Dy, whose names are
Maxima and Kimsoy. With this explanation, it is up to the plaintiffs-
appellees to prove bad faith on the part of defendants-appellants. It
is a settled rule that the law always presumes good faith such
that any person who seeks to be awarded damages due to acts of
another has the burden of proving that the latter acted in bad faith
or with ill motive. 21
Petitioners sought reconsideration of the Court of Appeals' Decision but the
appellate court denied their motion in its Resolution of 11 July 2000.
Hence, this petition for review.
Petitioners raise the following grounds for their petition:
I. THE COURT OF APPEALS ERRED IN FINDING THAT
RESPONDENTS' CORPORATE NAME "L.C. BIG MAK BURGER,
INC." IS NOT A COLORABLE IMITATION OF THE MCDONALD'S
TRADEMARK "BIG MAC", SUCH COLORABLE IMITATION BEING
AN ELEMENT OF TRADEMARK INFRINGEMENT.
A. Respondents use the words "Big Mak" as trademark for
their products and not merely as their business or
corporate name.
B. As a trademark, respondents' "Big Mak" is undeniably
and unquestionably similar to petitioners' "Big Mac"
trademark based on the dominancy test and the idem
sonans test resulting inexorably in confusion on the part of
the consuming public.
 II. THE COURT OF APPEALS ERRED IN REFUSING TO
CONSIDER THE INHERENT SIMILARITY BETWEEN THE MARK
"BIG MAK" AND THE WORD MARK "BIG MAC" AS
AN INDICATION OF RESPONDENTS' INTENT TO DECEIVE OR
DEFRAUD FOR PURPOSES OF ESTABLISHING UNFAIR
COMPETITION.22
Petitioners pray that we set aside the Court of Appeals' Decision and
reinstate the RTC Decision.
In their Comment to the petition, respondents question the propriety of this
petition as it allegedly raises only questions of fact. On the merits,
respondents contend that the Court of Appeals committed no reversible error
in finding them not liable for trademark infringement and unfair competition
and in ordering petitioners to pay damages.
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are proper for a
petition for review under Rule 45.
2. On the merits, (a) whether respondents used the words "Big Mak" not only
as part of the corporate name "L.C. Big Mak Burger, Inc." but also as a
trademark for their hamburger products, and (b) whether respondent
corporation is liable for trademark infringement and unfair competition.23
The Court's Ruling
The petition has merit.
On Whether the Questions Raised in the Petition are Proper for a
Petition for Review
A party intending to appeal from a judgment of the Court of Appeals may file
with this Court a petition for review under Section 1 of Rule 45 ("Section
1")24 raising only questions of law. A question of law exists when the doubt or
difference arises on what the law is on a certain state of facts. There is a
question of fact when the doubt or difference arises on the truth or falsity of
the alleged facts. 25
Here, petitioners raise questions of fact and law in assailing the Court of
Appeals' findings on respondent corporation's non-liability for trademark
infringement and unfair competition. Ordinarily, the Court can deny due
course to such a petition. In view, however, of the contradictory findings of
fact of the RTC and Court of Appeals, the Court opts to accept the petition,
this being one of the recognized exceptions to Section 1.26 We took a similar
course of action in Asia Brewery, Inc. v. Court of Appeals27 which also
involved a suit for trademark infringement and unfair competition in which the
trial court and the Court of Appeals arrived at conflicting findings.
On the Manner Respondents Used
"Big Mak" in their Business
Petitioners contend that the Court of Appeals erred in ruling that the
corporate name "L.C. Big Mak Burger, Inc." appears in the packaging for
respondents' hamburger products and not the words "Big Mak" only.
The contention has merit.
The evidence presented during the hearings on petitioners' motion for the
issuance of a writ of preliminary injunction shows that the plastic wrappings
and plastic bags used by respondents for their hamburger sandwiches bore
the words "Big Mak." The other descriptive words "burger" and "100% pure
beef" were set in smaller type, along with the locations of
branches.28 Respondents' cash invoices simply refer to their hamburger
sandwiches as "Big Mak."29 It is respondents' snack vans that carry the
words "L.C. Big Mak Burger, Inc."30
It was only during the trial that respondents presented in evidence the plastic
wrappers and bags for their hamburger sandwiches relied on by the Court of
Appeals.31 Respondents' plastic wrappers and bags were identical with those
petitioners presented during the hearings for the injunctive writ except that
the letters "L.C." and the words "Burger, Inc." in respondents' evidence were
added above and below the words "Big Mak," respectively. Since petitioners'
complaint was based on facts existing before and during the hearings on the
injunctive writ, the facts established during those hearings are the proper
factual bases for the disposition of the issues raised in this petition.
On the Issue of Trademark Infringement
Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA 166"),
the law applicable to this case,32 defines trademark infringement as follows:
 Infringement, what constitutes. — Any person who [1] shall use,
without the consent of the registrant, any reproduction, counterfeit,
copy or colorable imitation of any registered mark or trade-name in
connection with the sale, offering for sale, or advertising
of any goods, business or services on or in connection with which
such use is likely to cause confusion or mistake or to deceive
purchasers or others as to the source or origin of such goods or
services, or identity of such business; or [2] reproduce, counterfeit,
copy, or colorably imitate any such mark or trade-name and apply
such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods,
business or services, shall be liable to a civil action by the registrant
for any or all of the remedies herein provided.33
Petitioners base their cause of action under the first part of Section
22, i.e. respondents allegedly used, without petitioners' consent, a colorable
imitation of the "Big Mac" mark in advertising and selling respondents'
hamburger sandwiches. This likely caused confusion in the mind of the
purchasing public on the source of the hamburgers or the identity of the
business.
To establish trademark infringement, the following elements must be shown:
(1) the validity of plaintiff's mark; (2) the plaintiff's ownership of the mark; and
(3) the use of the mark or its colorable imitation by the alleged infringer
results in "likelihood of confusion."34 Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.35
On the Validity of the "Big Mac"Mark
and McDonald's Ownership of such Mark
A mark is valid if it is "distinctive" and thus not barred from registration under
Section 436 of RA 166 ("Section 4"). However, once registered, not only the
mark's validity but also the registrant's ownership of the mark is prima facie
presumed.37
Respondents contend that of the two words in the "Big Mac" mark, it is only
the word "Mac" that is valid because the word "Big" is generic and
descriptive (proscribed under Section 4[e]), and thus "incapable of exclusive
appropriation."38
The contention has no merit. The "Big Mac" mark, which should be treated in
its entirety and not dissected word for word,39 is neither generic nor
descriptive. Generic marks are commonly used as the name or description of
a kind  of goods,40 such as "Lite" for beer41 or "Chocolate Fudge" for
chocolate soda drink.42 Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who
has never seen it or does not know it exists,43 such as "Arthriticare" for
arthritis medication.44 On the contrary, "Big Mac" falls
under the class of fanciful or arbitrary marks as it bears no logical relation to
the actual characteristics of the product it represents.45 As such, it is highly
distinctive and thus valid. Significantly, the trademark "Little Debbie" for
snack cakes was found arbitrary or fanciful.46
The Court also finds that petitioners have duly established McDonald's
exclusive ownership of the "Big Mac" mark. Although Topacio and the
Isaiyas Group registered the "Big Mac" mark ahead of McDonald's, Topacio,
as petitioners disclosed, had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark only in the
Supplemental Register. A mark which is not registered in
the Principal Register, and thus not distinctive, has no real
protection.47 Indeed, we have held that registration in the Supplemental
Register is not even a prima facie evidence of the validity of the registrant's
exclusive right to use the mark on the goods specified in the certificate.48
On Types of Confusion
Section 22 covers two types of confusion arising from the use of similar or
colorable imitation marks, namely, confusion of goods (product confusion)
and confusion of business (source or origin confusion). In Sterling Products
International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et
al.,49 the Court distinguished these two types of confusion, thus:
[Rudolf] 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." xxx 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."
Under Act No. 666,50 the first trademark law, infringement was limited to
confusion of goods only, when the infringing mark is used on "goods of a
similar kind."51 Thus, no relief was afforded to the party whose registered
mark or its colorable imitation is used on different although related goods. To
remedy this situation, Congress enacted RA 166 on 20 June 1947. In
defining trademark infringement, Section 22 of RA 166 deleted the
requirement in question and expanded its scope to include such use of the
mark or its colorable imitation that is likely to result in confusion on "the
source or origin of such goods or services, or identity of such
business."52 Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non-
competing but related enough to produce confusion of affiliation.53
On Whether Confusion of Goods and
Confusion of Business are Applicable
Petitioners claim that respondents' use of the "Big Mak" mark on
respondents' hamburgers results in confusion of goods, particularly with
respect to petitioners' hamburgers labeled "Big Mac." Thus,
petitioners alleged in their complaint:
1.15. Defendants have unduly prejudiced and clearly
infringed upon the property rights of plaintiffs in the McDonald's
Marks, particularly the mark "B[ig] M[ac]". Defendants' unauthorized
acts are likely, and calculated, to confuse, mislead or deceive the
public into believing that the products and services offered by
defendant Big Mak Burger, and the business it is engaged in, are
approved and sponsored by, or affiliated with, plaintiffs.54 (Emphasis
supplied)
Since respondents used the "Big Mak" mark on the same
goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used,
trademark infringement through confusion of goods is a proper issue in this
case.
Petitioners also claim that respondents' use of the "Big Mak" mark in the sale
of hamburgers, the same business that petitioners are engaged in, results in
confusion of business. Petitioners alleged in their complaint:
1.10. For some period of time, and without the consent of plaintiff
McDonald's nor its licensee/franchisee, plaintiff McGeorge, and in
clear violation of plaintiffs' exclusive right to use and/or
appropriate the McDonald's marks, defendant Big Mak Burger
acting through individual defendants, has been operating "Big Mak
Burger", a fast food restaurant business dealing in the sale of
hamburger and cheeseburger sandwiches, french fries and other
food products, and has caused to be printed on the wrapper of
defendant's food products and incorporated in its signages the
name "Big Mak Burger", which is confusingly similar to and/or is a
colorable imitation of the plaintiff McDonald's mark "B[ig] M[ac]",
xxx. Defendant Big Mak Burger has thus unjustly created the
impression that its business is approved and sponsored by, or
affiliated with, plaintiffs. xxxx
2.2 As a consequence of the acts committed by defendants, which
unduly prejudice and infringe upon the property rights of plaintiffs
McDonald's and McGeorge as the real owner and rightful
proprietor, and the licensee/franchisee, respectively, of the
McDonald's marks, and which are likely to have caused confusion
or deceived the public as to the true source, sponsorship or
affiliation of defendants' food products and restaurant
business, plaintiffs have suffered and continue to
suffer actual damages in the form of injury to their business
reputation and goodwill, and of the dilution of the distinctive quality
of the McDonald's marks, in particular, the mark "B[ig]
M[ac]".55 (Emphasis supplied)
Respondents admit that their business includes selling hamburger
sandwiches, the same food product that petitioners sell using the "Big Mac"
mark. Thus, trademark infringement through confusion of business is also a
proper issue in this case.
Respondents assert that their "Big Mak" hamburgers cater mainly to the low-
income group while petitioners' "Big Mac" hamburgers cater to the middle
and upper income groups. Even if this is true, the likelihood of confusion of
business remains, since the low-income group might be led to believe that
the "Big Mak" hamburgers are the low-end hamburgers marketed by
petitioners. After all, petitioners have the exclusive right to use the "Big Mac"
mark. On the other hand, respondents would benefit by associating their low-
end hamburgers, through the use of the "Big Mak" mark, with petitioners'
high-end "Big Mac" hamburgers, leading to likelihood of confusion in the
identity of business.
Respondents further claim that petitioners use the "Big Mac" mark only on
petitioners' double-decker hamburgers, while respondents use the "Big Mak"
mark on hamburgers and other products like siopao, noodles and pizza.
Respondents also point out that petitioners sell their Big Mac double-deckers
in a styrofoam box with the "McDonald's" logo and trademark in red, block
letters at a price more expensive than the hamburgers of respondents. In
contrast, respondents sell their Big Mak hamburgers in plastic wrappers and
plastic bags. Respondents further point out that petitioners' restaurants are
air-conditioned buildings with drive-thru service, compared to respondents'
mobile vans.
These and other factors respondents cite cannot negate the undisputed fact
that respondents use their "Big Mak" mark on hamburgers, the same food
product that petitioners' sell with the use of their registered mark "Big Mac."
Whether a hamburger is single, double or triple-decker, and whether
wrapped in plastic or styrofoam, it remains the same hamburger food
product. Even respondents' 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 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).56 (Emphasis supplied)
On Whether Respondents' Use of the "Big Mak"
Mark Results in Likelihood of Confusion
In determining likelihood of confusion, jurisprudence has developed two
tests, the dominancy test and the holistic test.57 The dominancy test focuses
on the similarity of the prevalent features of the competing trademarks that
might cause confusion. In contrast, the holistic test requires the court to
consider the entirety of the marks as applied to the products, including the
labels and packaging, in determining confusing similarity.
The Court of Appeals, in finding that there is no likelihood of confusion that
could arise in the use of respondents' "Big Mak" mark on hamburgers, relied
on the holistic test. Thus, the Court of Appeals ruled that "it is
not sufficient that a similarity exists in both name(s), but that more
importantly, the overall presentation, or in their essential, substantive and
distinctive parts is such as would likely MISLEAD or CONFUSE persons in
the ordinary course of purchasing the genuine article." The holistic test
considers the two marks in their entirety, as they appear on the goods with
their labels and packaging. It is not enough to consider their words and
compare the spelling and pronunciation of the words.58
Respondents now vigorously argue that the Court of Appeals' application of
the holistic test to this case is correct and in accord with prevailing
jurisprudence.
This Court, however, 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.59 Courts will consider more
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.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60 the Court
ruled:
xxx 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; xxx)
(Emphasis supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director of
Patents,61 Phil. Nut Industry, Inc. v. Standard Brands Inc.,62 Converse
Rubber Corporation v. Universal Rubber Products, Inc.,63 and Asia
Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des
Produits Nestlé, S.A. v. Court of Appeals,65 the Court explicitly rejected
the holistic test in this wise:
[T]he 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. (Emphasis supplied)
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 xxx 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
in "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 short, aurally the two marks are the same, with the first word
of both marks phonetically the same, and the second word of both marks
also phonetically the same. Visually, the two marks have both two words and
six letters, with the first word of both marks having the same letters and the
second word having the same first two letters. In spelling, considering the
Filipino language, even the last letters of both marks are the same.
Clearly, respondents have adopted in "Big Mak" not only the dominant
but also almost all the features of "Big Mac." Applied to the same food
product of hamburgers, the two marks will likely result in confusion in the
public mind.
The Court has taken into account the aural effects of the words and
letters contained in the marks in determining the issue of confusing
similarity. Thus, in Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et
al.,66 the Court held:
The following random list of confusingly similar sounds in the matter
of trademarks, culled from Nims, Unfair Competition and Trade
Marks, 1947, Vol. 1, will reinforce our view that "SALONPAS" and
"LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold
Drop"; "Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper
Flash"; "Cascarete" and "Celborite"; "Celluloid" and "Cellonite";
"Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe" and
"Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon
Amdur, in his book "Trade-Mark Law and Practice", pp. 419-421,
cities, as coming within the purview of the idem sonans rule,
"Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos",
and "Seven-Up" and "Lemon-Up". In Co Tiong vs. Director of
Patents, this Court unequivocally said that "Celdura" and "Cordura"
are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement
of the trademark "Sapolin", as the sound of the two names is almost
the same. (Emphasis supplied)
Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater
confusion, not only aurally but also visually.
Indeed, a person cannot distinguish "Big Mac" from "Big Mak" by their
sound. When one hears a "Big Mac" or "Big Mak" hamburger advertisement
over the radio, one would not know whether the "Mac" or "Mak" ends with a
"c" or a "k."
Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their
advertisement expenses, has built goodwill and reputation for such mark
making it one of the easily recognizable marks in the market today.
This increases the likelihood that consumers will mistakenly associate
petitioners' hamburgers and business with those of respondents'.
Respondents' inability to explain sufficiently how and why they came to
choose "Big Mak" for their hamburger sandwiches indicates their intent to
imitate petitioners' "Big Mac" mark. Contrary to the Court of Appeals' finding,
respondents' claim that their "Big Mak" mark was inspired by the first names
of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As
petitioners well noted:
 [R]espondents, particularly Respondent Mr. Francis Dy, could have
arrived at a more creative choice for a corporate name by using the
names of his parents, especially since he was allegedly driven by
sentimental reasons. For one, he could have put his father's name
ahead of his mother's, as is usually done in this patriarchal society,
and derived letters from said names in that order. Or, he could have
taken an equal number of letters (i.e., two) from each name, as is
the more usual thing done. Surely, the more plausible reason
behind Respondents' choice of the word "M[ak]", especially when
taken in conjunction with the word "B[ig]", was their intent to take
advantage of Petitioners' xxx "B[ig] M[ac]" trademark, with
their alleged sentiment-focused "explanation" merely thought of as
a convenient, albeit unavailing, excuse or defense for such an
unfair choice of name.67
Absent proof that respondents' adoption of the "Big Mak" mark was due
to honest mistake or was fortuitous,68 the inescapable conclusion is that
respondents adopted the "Big Mak" mark to "ride on the coattails" of the
more established "Big Mac" mark.69 This saves respondents much of the
expense in advertising to create market recognition of their mark and
hamburgers.70
Thus, we hold that confusion is likely to result in the public mind. We sustain
petitioners' claim of trademark infringement.
On the Lack of Proof of
Actual Confusion
Petitioners' failure to present proof of actual confusion does not negate their
claim of trademark infringement. As noted in American Wire & Cable Co. v.
Director of Patents,71 Section 22 requires the less stringent standard of
"likelihood of confusion" only. While proof of actual confusion is the best
evidence of infringement, its absence is inconsequential.72
On the Issue of Unfair Competition
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
xxxx
Any person who will employ deception or any other means contrary
to good faith by which he shall pass off the goods manufactured by
him or in which he deals, or his business, or services for those of
the one having established such goodwill, or
who shall commit any acts calculated to produce said
result, shall be guilty of unfair competition, and shall be subject to
an action therefor.
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair
competition:
(a) Any person, who in selling his goods shall give them the
general appearance of goods of another manufacturer or
dealer, either as to the goods themselves or in the wrapping of
the packages in which they are contained, or the devices or
words thereon, or in any feature of their appearance, which would
be likely to influence purchasers to believe that the goods offered
are those of a manufacturer or dealer, other
than the actual manufacturer or dealer, or who otherwise clothes
the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent vendor
of such goods or any agent of any vendor engaged in selling such
goods with a like purpose;
(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 services of another who has identified such
services in the mind of the public; or
(c) Any person who shall make any false statement in the course
of trade or who shall commit any other act contrary to good faith of
a nature calculated to discredit the goods, business or services of
another. (Emphasis supplied)
The essential elements of an action for unfair competition are (1) confusing
similarity in the general appearance of the goods, and (2) intent to deceive
the public and defraud a competitor.74 The confusing similarity may or may
not result from similarity in the marks, but may result from other external
factors in the packaging or presentation of the goods. The intent to deceive
and defraud may be inferred from the similarity of the appearance of the
goods as offered for sale to the public.75 Actual fraudulent intent need not be
shown.76
Unfair competition is broader than trademark infringement and includes
passing off goods with or without trademark infringement. Trademark
infringement is a form of unfair competition.77 Trademark infringement
constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of
the general appearance of the goods. There can be trademark infringement
without unfair competition as when the infringer discloses on the labels
containing the mark that he manufactures the goods, thus preventing the
public from being deceived that the goods originate from the trademark
owner.78
To support their claim of unfair competition, petitioners allege that
respondents fraudulently passed off their hamburgers as "Big Mac"
hamburgers. Petitioners add that respondents' fraudulent intent can be
inferred from the similarity of the marks in question.79
Passing off (or palming off) takes place where the defendant, by imitative
devices on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that they are
buying that of his competitors.80 Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of
deceiving the public that the goods are those of his competitor.
The RTC described the respective marks and the goods of petitioners and
respondents in this wise:
The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its
double decker hamburger sandwich. The packaging material is
a styrofoam box with the McDonald's logo and trademark in red
with block capital letters printed on it. All letters of the "B[ig] M[ac]"
mark are also in red and block capital letters. On the other
hand, defendants' "B[ig] M[ak]" script print is in orange with only the
letter "B" and "M" being capitalized and the packaging material
is plastic wrapper. xxxx Further, plaintiffs' logo and mascot are the
umbrella "M" and "Ronald McDonald's", respectively, compared to
the mascot of defendant Corporation which is a chubby boy called
"Macky" displayed or printed between the words "Big" and
"Mak."81 (Emphasis supplied)
Respondents point to these dissimilarities as proof that they did not give their
hamburgers the general appearance of petitioners' "Big Mac" hamburgers.
The dissimilarities in the packaging are minor compared to the stark
similarities in the words that give respondents' "Big Mak" hamburgers the
general appearance of petitioners' "Big Mac" hamburgers. Section 29(a)
expressly provides that the similarity in the general appearance of the goods
may be in the "devices or words" used on the wrappings. Respondents have
applied on their plastic wrappers and bags almost the same words that
petitioners use on their styrofoam box. What attracts the attention of the
buying public are the words "Big Mak" which are almost the same, aurally
and visually, as the words "Big Mac." The dissimilarities in the material and
other devices are insignificant compared to the glaring similarity in the words
used in the wrappings.
Section 29(a) also provides that the defendant gives "his goods the general
appearance of goods of another manufacturer." Respondents' goods are
hamburgers which are also the goods of petitioners. If respondents sold egg
sandwiches only instead of hamburger sandwiches, their use of the "Big
Mak" mark would not give their goods the general appearance of petitioners'
"Big Mac" hamburgers. In such case, there is only trademark infringement
but no unfair competition. However, since respondents chose to apply the
"Big Mak" mark on hamburgers, just like petitioner's use of the "Big Mac"
mark on hamburgers, respondents have obviously clothed their goods with
the general appearance of petitioners' goods.
Moreover, there is no notice to the public that the "Big Mak" hamburgers are
products of "L.C. Big Mak Burger, Inc." Respondents introduced during the
trial plastic wrappers and bags with the words "L.C. Big Mak Burger, Inc." to
inform the public of the name of the seller of the hamburgers. However,
petitioners introduced during the injunctive hearings plastic wrappers and
bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc."
Respondents' belated presentation of plastic wrappers and bags bearing the
name of "L.C. Big Mak Burger, Inc." as the seller of the hamburgers is an
after-thought designed to exculpate them from their unfair business conduct.
As earlier stated, we cannot consider respondents' evidence since
petitioners' complaint was based on facts existing before and during the
injunctive hearings.
Thus, there is actually no notice to the public that the "Big Mak" hamburgers
are products of "L.C. Big Mak Burger, Inc." and not those of petitioners who
have the exclusive right to the "Big Mac" mark. This clearly shows
respondents' intent to deceive the public. Had respondents' placed a notice
on their plastic wrappers and bags that the hamburgers are sold by "L.C. Big
Mak Burger, Inc.", then they could validly claim that they did not intend to
deceive the public. In such case, there is only trademark infringement but
no unfair competition.82 Respondents, however, did not give such notice. We
hold that as found by the RTC, respondent corporation is liable for unfair
competition.

The Remedies Available to Petitioners

Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a

plaintiff who successfully maintains trademark infringement and unfair
competition claims is entitled to injunctive and monetary reliefs. Here, the
RTC did not err in issuing the injunctive writ of 16 August 1990 (made
permanent in its Decision of 5 September 1994) and in ordering the payment
of P400,000 actual damages in favor of petitioners. The injunctive writ is
indispensable to prevent further acts of infringement by respondent
corporation. Also, the amount of actual damages is a reasonable percentage
(11.9%) of respondent corporation's gross sales for three (1988-1989 and
1991) of the six years (1984-1990) respondents have used the "Big Mak"
mark.84

The RTC also did not err in awarding exemplary damages by way of
correction for the public good85 in view of the finding of unfair competition
where intent to deceive the public is essential. The award of attorney's fees
and expenses of litigation is also in order.86

WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision

dated 26 November 1999 of the Court of Appeals and its Resolution dated
11 July 2000 and REINSTATE the Decision dated 5 September 1994 of the
Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak
Burger, Inc. liable for trademark infringement and unfair competition.

SO ORDERED.
 SECOND DIVISION
G.R. No. 164321               March 23, 2011
SKECHERS, U.S.A., INC., Petitioner,
vs.
INTER PACIFIC INDUSTRIAL TRADING CORP., and/or INTER PACIFIC
TRADING CORP. and/or STRONG SPORTS GEAR CO., LTD., and/or
STRONGSHOES WAREHOUSE and/or STRONG FASHION SHOES
TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA
and/or JEFFREY R. MORALES and/or any of its other proprietor/s,
directors, officers, employees and/or occupants of its premises located
at S-7, Ed & Joe's Commercial Arcade, No. 153 Quirino Avenue,
Parañaque City, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
TRENDWORKS INTERNATIONAL CORPORATION, Petitioner-Intervenor,
vs.
INTER PACIFIC INDUSTRIAL TRADING CORP. and/or INTER PACIFIC
TRADING CORP. and/or STRONG SPORTS GEAR CO., LTD., and/or
STRONGSHOES WAREHOUSE and/or STRONG FASHION SHOES
TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA
and/or JEFFREY R. MORALES and/or any of its other proprietor/s,
directors, officers, employees and/or occupants of its premises located
at S-7, Ed & Joe's Commercial Arcade, No. 153 Quirino Avenue,
Parañaque City, Respondents.
RESOLUTION
PERALTA, J.:
For resolution are the twin Motions for Reconsideration1 filed by petitioner
and petitioner-intervenor from the Decision rendered in favor of respondents,
dated November 30, 2006.
At the outset, a brief narration of the factual and procedural antecedents that
transpired and led to the filing of the motions is in order.
The present controversy arose when petitioner filed with Branch 24 of the
Regional Trial Court (RTC) of Manila an application for the issuance of
search warrants against an outlet and warehouse operated by respondents
for infringement of trademark under Section 155, in relation to Section 170 of
Republic Act No. 8293, otherwise known as the Intellectual Property Code of
the Philippines.2 In the course of its business, petitioner has registered the
trademark "SKECHERS"3 and the trademark "S" (within an oval design)4 with
the Intellectual Property Office (IPO).
Two search warrants5 were issued by the RTC and were served on the
premises of respondents. As a result of the raid, more than 6,000 pairs of
shoes bearing the "S" logo were seized.
Later, respondents moved to quash the search warrants, arguing that there
was no confusing similarity between petitioner’s "Skechers" rubber shoes
and its "Strong" rubber shoes.
On November 7, 2002, the RTC issued an Order6 quashing the search
warrants and directing the NBI to return the seized goods. The RTC agreed
with respondent’s view that Skechers rubber shoes and Strong rubber shoes
have glaring differences such that an ordinary prudent purchaser would not
likely be misled or confused in purchasing the wrong article.
Aggrieved, petitioner filed a petition for certiorari7 with the Court of Appeals
(CA) assailing the RTC Order. On November 17, 2003, the CA issued a
Decision8 affirming the ruling of the RTC.
Subsequently, petitioner filed the present petition9 before this Court which
puts forth the following assignment of errors:
A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION IN CONSIDERING MATTERS OF
DEFENSE IN A CRIMINAL TRIAL FOR TRADEMARK
INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE
SEARCH WARRANT WHEN IT SHOULD HAVE LIMITED ITSELF
TO A DETERMINATION OF WHETHER THE TRIAL COURT
COMMITTED GRAVE ABUSE OF DISCRETION IN QUASHING
THE SEARCH WARRANTS.
B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION IN FINDING THAT RESPONDENTS
ARE NOT GUILTY OF TRADEMARK INFRINGEMENT IN THE
CASE WHERE THE SOLE TRIABLE ISSUE IS THE EXISTENCE
OF PROBABLE CAUSE TO ISSUE A SEARCH WARRANT.10
In the meantime, petitioner-intervenor filed a Petition-in-Intervention11 with
this Court claiming to be the sole licensed distributor of Skechers products
here in the Philippines.
On November 30, 2006, this Court rendered a Decision12 dismissing the
petition.
Both petitioner and petitioner-intervenor filed separate motions for
reconsideration.
In petitioner’s motion for reconsideration, petitioner moved for a
reconsideration of the earlier decision on the following grounds:
(a) THIS HONORABLE COURT MUST RE-EXAMINE THE FACTS
OF THIS CASE DUE TO THE SIGNIFICANCE AND
REPERCUSSIONS OF ITS DECISION.
(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH
THE UNAUTHORIZED REPRODUCTIONS OF THE "S"
TRADEMARK OWNED BY PETITIONER WERE INTENDED FOR
DISTRIBUTION IN THE PHILIPPINE MARKET TO THE
DETRIMENT OF PETITIONER – RETURNING THE GOODS TO
RESPONDENTS WILL ADVERSELY AFFECT THE GOODWILL
AND REPUTATION OF PETITIONER.
(c) THE SEARCH WARRANT COURT AND THE COURT OF
APPEALS BOTH ACTED WITH GRAVE ABUSE OF DISCRETION.
(d) THE SEARCH WARRANT COURT DID NOT PROPERLY RE-
EVALUATE THE EVIDENCE PRESENTED DURING THE
SEARCH WARRANT APPLICATION PROCEEDINGS.
(e) THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS
CASE, AS IT IS BASED ON A DIFFERENT FACTUAL MILIEU.
PRELIMINARY FINDING OF GUILT (OR ABSENCE THEREOF)
MADE BY THE SEARCH WARRANT COURT AND THE COURT
OF APPEALS WAS IMPROPER.
(f) THE SEARCH WARRANT COURT OVERSTEPPED ITS
DISCRETION. THE LAW IS CLEAR. THE DOMINANCY TEST
SHOULD BE USED.
(g) THE COURT OF APPEALS COMMITTED ERRORS OF
JURISDICTION.13
On the other hand, petitioner-intervenor’s motion for reconsideration raises
the following errors for this Court’s consideration, to wit:
(a) THE COURT OF APPEALS AND THE SEARCH WARRANT
COURT ACTED CONTRARY TO LAW AND JURISPRUDENCE IN
ADOPTING THE ALREADY-REJECTED HOLISTIC TEST IN
DETERMINING THE ISSUE OF CONFUSING SIMILARITY;
(b) THE COURT OF APPEALS AND THE SEARCH WARRANT
COURT ACTED CONTRARY TO LAW IN HOLDING THAT THERE
IS NO PROBABLE CAUSE FOR TRADEMARK INFRINGEMENT;
AND
(c) THE COURT OF APPEALS SANCTIONED THE TRIAL
COURT’S DEPARTURE FROM THE USUAL AND ACCEPTED
COURSE OF JUDICIAL PROCEEDINGS WHEN IT UPHELD THE
QUASHAL OF THE SEARCH WARRANT ON THE BASIS SOLELY
OF A FINDING THAT THERE IS NO CONFUSING SIMILARITY. 14
A perusal of the motions submitted by petitioner and petitioner-intervenor
would show that the primary issue posed by them dwells on the issue of
whether or not respondent is guilty of trademark infringement.
After a thorough review of the arguments raised herein, this Court
reconsiders its earlier decision.
The basic law on trademark, infringement, and unfair competition is Republic
Act (R.A.) No. 8293. Specifically, Section 155 of R.A. No. 8293 states:
Remedies; Infringement. — Any person who shall, without the consent of the
owner of the registered mark:
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; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or
a dominant feature thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion,
or to cause mistake, or to deceive, shall be liable in a civil action for
infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing
material.15
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.16
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 labels so that the observer may draw
conclusion on whether one is confusingly similar to the other.17
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.18
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.
Both the RTC and the CA applied the Holistic Test in ruling that respondent
had not infringed petitioner’s trademark. For its part, the RTC noted the
following supposed dissimilarities between the shoes, to wit:
1. The mark "S" found in Strong Shoes is not enclosed in an "oval
design."
2. The word "Strong" is conspicuously placed at the backside and
insoles.
 3. The hang tags and labels attached to the shoes bears the word
"Strong" for respondent and "Skechers U.S.A." for private
complainant;
4. Strong shoes are modestly priced compared to the costs of
Skechers Shoes.19
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. As can be readily observed by simply
comparing petitioner’s Energy20 model and respondent’s Strong21 rubber
shoes, respondent also used the color scheme of blue, white and gray
utilized by petitioner. Even the design and "wavelike" pattern of the midsole
and outer sole of respondent’s shoes are very similar to petitioner’s shoes, if
not exact patterns thereof. At the side of the midsole near the heel of both
shoes are two elongated designs in practically the same location. Even the
outer soles of both shoes have the same number of ridges, five at the back
and six in front. On the side of respondent’s shoes, near the upper part,
appears the stylized "S," placed in the exact location as that of the stylized
"S" on petitioner’s shoes. On top of the "tongue" of both shoes appears the
stylized "S" in practically the same location and size. Moreover, at the back
of petitioner’s shoes, near the heel counter, appears "Skechers Sport Trail"
written in white lettering. However, on respondent’s shoes appears "Strong
Sport Trail" noticeably written in the same white lettering, font size, direction
and orientation as that of petitioner’s shoes. On top of the heel collar of
petitioner’s shoes are two grayish-white semi-transparent circles. Not
surprisingly, respondent’s shoes also have two grayish-white semi-
transparent circles in the exact same location.lihpwa1
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.1avvphi1
In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc.,22 this
Court, in a case for unfair competition, had opined that even if not all the
details are identical, as long as the general appearance of the two products
are such that any ordinary purchaser would be deceived, the imitator should
be liable, to wit:
From said examination, We find the shoes manufactured by defendants to
contain, as found by the trial court, practically all the features of those of the
plaintiff Converse Rubber Corporation and manufactured, sold or marketed
by plaintiff Edwardson Manufacturing Corporation, except for their respective
brands, of course. We fully agree with the trial court that "the respective
designs, shapes, the colors of the ankle patches, the bands, the toe patch
and the soles of the two products are exactly the same ... (such that) at a
distance of a few meters, it is impossible to distinguish "Custombuilt" from
"Chuck Taylor." These elements are more than sufficient to serve as basis
for a charge of unfair competition. Even if not all the details just mentioned
were identical, with the general appearances alone of the two products, any
ordinary, or even perhaps even a not too perceptive and discriminating
customer could be deceived, and, therefore, Custombuilt could easily be
passed off for Chuck Taylor. Jurisprudence supports the view that under
such circumstances, the imitator must be held liable. x x x23
Neither can the difference in price be a complete defense in trademark
infringement. In McDonald’s Corporation v. L.C. Big Mak Burger. Inc.,24 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 x25
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.26 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.27 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.28 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.29

WHEREFORE, premises considered, the Motion for Reconsideration is

GRANTED. The Decision dated November 30, 2006 is RECONSIDERED
and SET ASIDE.

SO ORDERED.
G.R. No. 159938             March 31, 2006
SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD.,
SHANGRI-LA PROPERTIES, INC., MAKATI SHANGRI-LA HOTEL &
RESORT, INC., AND KUOK PHILIPPINES PROPERTIES, INC., Petitioners,
vs.
DEVELOPERS GROUP OF COMPANIES, INC., Respondent.
DECISION
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioners
Shangri-La International Hotel Management, Ltd. (SLIHM), et al. assail and
seek to set aside the Decision dated May 15, 20031 of the Court of Appeals
(CA) in CA-G.R. CV No. 53351 and its Resolution2 of September 15, 2003
which effectively affirmed with modification an earlier decision of the
Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-91-8476, an
action for infringement and damages, thereat commenced by respondent
Developers Group of Companies, Inc. (DGCI) against the herein petitioners.
The facts:
At the core of the controversy are the "Shangri-La" mark and "S" logo.
Respondent DGCI claims ownership of said mark and logo in the Philippines
on the strength of its prior use thereof within the country. As DGCI stresses
at every turn, it filed on October 18, 1982 with the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) pursuant to Sections 2 and 4
of Republic Act (RA) No. 166,3 as amended, an application for registration
covering the subject mark and logo. On May 31, 1983, the BPTTT issued in
favor of DGCI the corresponding certificate of registration therefor, i.e.,
Registration No. 31904. Since then, DGCI started using the "Shangri-La"
mark and "S" logo in its restaurant business.
On the other hand, the Kuok family owns and operates a chain of hotels with
interest in hotels and hotel-related transactions since 1969. As far back as
1962, it adopted the name "Shangri-La" as part of the corporate names of all
companies organized under the aegis of the Kuok Group of Companies (the
Kuok Group). The Kuok Group has used the name "Shangri-La" in all
Shangri-La hotels and hotel-related establishments around the world which
the Kuok Family owned.
To centralize the operations of all Shangri-la hotels and the ownership of the
"Shangri-La" mark and "S" logo, the Kuok Group had incorporated in Hong
Kong and Singapore, among other places, several companies that form part
of the Shangri-La International Hotel Management Ltd. Group of Companies.
EDSA Shangri-La Hotel and Resort, Inc., and Makati Shangri-La Hotel and
Resort, Inc. were incorporated in the Philippines beginning 1987 to own and
operate the two (2) hotels put up by the Kuok Group in Mandaluyong and
Makati, Metro Manila.
All hotels owned, operated and managed by the aforesaid SLIHM Group of
Companies adopted and used the distinctive lettering of the name "Shangri-
La" as part of their trade names.
From the records, it appears that Shangri-La Hotel Singapore commissioned
a Singaporean design artist, a certain Mr. William Lee, to conceptualize and
design the logo of the Shangri-La hotels.
During the launching of the stylized "S" Logo in February 1975, Mr. Lee gave
the following explanation for the logo, to wit:
The logo which is shaped like a "S" represents the uniquely Asean
architectural structures as well as keep to the legendary Shangri-la theme
with the mountains on top being reflected on waters below and the
connecting centre [sic] line serving as the horizon. This logo, which is a bold,
striking definitive design, embodies both modernity and sophistication in
balance and thought.
Since 1975 and up to the present, the "Shangri-La" mark and "S" logo have
been used consistently and continuously by all Shangri-La hotels and
companies in their paraphernalia, such as stationeries, envelopes, business
forms, menus, displays and receipts.
The Kuok Group and/or petitioner SLIHM caused the registration of, and in
fact registered, the "Shangri-La" mark and "S" logo in the patent offices in
different countries around the world.
On June 21, 1988, the petitioners filed with the BPTTT a petition, docketed
as Inter Partes Case No. 3145, praying for the cancellation of the registration
of the "Shangri-La" mark and "S" logo issued to respondent DGCI on the
ground that the same were illegally and fraudulently obtained and
appropriated for the latter's restaurant business. They also filed in the same
office Inter Partes Case No. 3529, praying for the registration of the same
mark and logo in their own names.
Until 1987 or 1988, the petitioners did not operate any establishment in the
Philippines, albeit they advertised their hotels abroad since 1972 in
numerous business, news, and/or travel magazines widely circulated around
the world, all readily available in Philippine magazines and newsstands.
They, too, maintained reservations and booking agents in airline companies,
hotel organizations, tour operators, tour promotion organizations, and in
other allied fields in the Philippines.
It is principally upon the foregoing factual backdrop that respondent DGCI
filed a complaint for Infringement and Damages with the RTC of Quezon City
against the herein petitioners SLIHM, Shangri-La Properties, Inc., Makati
Shangri-La Hotel & Resort, Inc., and Kuok Philippine Properties, Inc.,
docketed as Civil Case No. Q-91-8476 and eventually raffled to Branch 99 of
said court. The complaint with prayer for injunctive relief and damages
alleged that DGCI has, for the last eight (8) years, been the prior exclusive
user in the Philippines of the mark and logo in question and the registered
owner thereof for its restaurant and allied services. As DGCI alleged in its
complaint, SLIHM, et al., in promoting and advertising their hotel and other
allied projects then under construction in the country, had been using a mark
and logo confusingly similar, if not identical, with its mark and "S" logo.
Accordingly, DGCI sought to prohibit the petitioners, as defendants a quo,
from using the "Shangri-La" mark and "S" logo in their hotels in the
Philippines.
In their Answer with Counterclaim, the petitioners accused DGCI of
appropriating and illegally using the "Shangri-La" mark and "S" logo, adding
that the legal and beneficial ownership thereof pertained to SLIHM and that
the Kuok Group and its related companies had been using this mark and
logo since March 1962 for all their corporate names and affairs. In this
regard, they point to the Paris Convention for the Protection of Industrial
Property as affording security and protection to SLIHM's exclusive right to
said mark and logo. They further claimed having used, since late 1975, the
internationally-known and specially-designed "Shangri-La" mark and "S" logo
for all the hotels in their hotel chain.
Pending trial on the merits of Civil Case No. Q-91-8476, the trial court issued
a Writ of Preliminary Injunction enjoining the petitioners from using the
subject mark and logo. The preliminary injunction issue ultimately reached
the Court in G.R. No. 104583 entitled Developers Group of Companies, Inc.
vs. Court of Appeals, et al. In a decision4 dated March 8, 1993, the Court
nullified the writ of preliminary injunction issued by the trial court and directed
it to proceed with the main case and decide it with deliberate dispatch.
While trial was in progress, the petitioners filed with the court a motion to
suspend proceedings on account of the pendency before the BPTTT of Inter
Partes Case No. 3145 for the cancellation of DGCI's certificate of
registration. For its part, respondent DGCI filed a similar motion in that case,
invoking in this respect the pendency of its infringement case before the trial
court. The parties' respective motions to suspend proceedings also reached
the Court via their respective petitions in G.R. No. 114802, entitled
Developers Group of Companies, Inc. vs. Court of Appeals, et al. and G.R.
No. 111580, entitled Shangri-La International Hotel Management LTD., et al.
vs. Court of Appeals, et al., which were accordingly consolidated.
In a consolidated decision5 dated June 21, 2001, the Court, limiting itself to
the core issue of whether, despite the petitioners' institution of Inter Partes
Case No. 3145 before the BPTTT, herein respondent DGCI "can file a
subsequent action for infringement with the regular courts of justice in
connection with the same registered mark," ruled in the affirmative, but
nonetheless ordered the BPTTT to suspend further proceedings in said inter
partes case and to await the final outcome of the main case.
Meanwhile, trial on the merits of the infringement case proceeded.
Presented as DGCI's lone witness was Ramon Syhunliong, President and
Chairman of DGCI's Board of Directors. Among other things, this witness
testified that:
1. He is a businessman, with interest in lumber, hotel, hospital,
trading and restaurant businesses but only the restaurant business
bears the name "Shangri-La" and uses the same and the "S-logo"
as service marks. The restaurant now known as "Shangri-La Finest
Chinese Cuisine" was formerly known as the "Carvajal Restaurant"
until December 1982, when respondent took over said restaurant
business.
2. He had traveled widely around Asia prior to 1982, and admitted
knowing the Shangri-La Hotel in Hong Kong as early as August
1982.
3. The "S-logo" was one of two (2) designs given to him in
December 1982, scribbled on a piece of paper by a jeepney
signboard artist with an office somewhere in Balintawak. The
unnamed artist supposedly produced the two designs after about
 two or three days from the time he (Syhunliong) gave the idea of
the design he had in mind.
4. On October 15, 1982, or before the unknown signboard artist
supposedly created the "Shangri-La" and "S" designs, DGCI was
incorporated with the primary purpose of "owning or operating, or
both, of hotels and restaurants".
5. On October 18, 1982, again prior to the alleged creation date of
the mark and logo, DGCI filed an application for trademark
registration of the mark "SHANGRI-LA FINEST CHINESE CUISINE
& S. Logo" with the BPTTT. On said date, respondent DGCI
amended its Articles of Incorporation to reflect the name of its
restaurant, known and operating under the style and name of
"SHANGRI-LA FINEST CHINESE CUISINE." Respondent DGCI
obtained Certificate of Registration No. 31904 for the "Shangri-La"
mark and "S" logo.
Eventually, the trial court, on the postulate that petitioners', more particularly
petitioner SLIHM's, use of the mark and logo in dispute constitutes an
infringement of DGCI's right thereto, came out with its decision6 on March 8,
1996 rendering judgment for DGCI, as follows:
WHEREFORE, judgment is hereby rendered in favor of [respondent DGCI]
and against [SLIHM, et al.] -
a) Upholding the validity of the registration of the service mark
"Shangri-la" and "S-Logo" in the name of [respondent];
b) Declaring [petitioners'] use of said mark and logo as infringement
of [respondent's] right thereto;
c) Ordering [petitioners], their representatives, agents, licensees,
assignees and other persons acting under their authority and with
their permission, to permanently cease and desist from using
and/or continuing to use said mark and logo, or any copy,
reproduction or colorable imitation
thereof, in the promotion, advertisement, rendition of their hotel and
allied projects and services or in any other manner whatsoever;
d) Ordering [petitioners] to remove said mark and logo from any
premises, objects, materials and paraphernalia used by them
and/or destroy any and all prints, signs, advertisements or other
materials bearing said mark and logo in their possession and/or
under their control; and
e) Ordering [petitioners], jointly and severally, to indemnify
[respondent] in the amounts of P2,000,000.00 as actual and
compensatory damages, P500,000.00 as attorney's fee and
expenses of litigation.
Let a copy of this Decision be certified to the Director, Bureau of Patents,
Trademarks and Technology Transfer for his information and appropriate
action in accordance with the provisions of Section 25, Republic Act No. 166
Costs against [petitioners].
SO ORDERED. [Words in brackets added.]
Therefrom, the petitioners went on appeal to the CA whereat their recourse
was docketed as CA G.R. SP No. 53351.
As stated at the threshold hereof, the CA, in its assailed Decision of May 15,
2003,7 affirmed that of the lower court with the modification of deleting the
award of attorney's fees. The appellate court predicated its affirmatory action
on the strength or interplay of the following premises:
1. Albeit the Kuok Group used the mark and logo since 1962, the
evidence presented shows that the bulk use of the tradename was
abroad and not in the Philippines (until 1987). Since the Kuok
Group does not have proof of actual use in commerce in the
Philippines (in accordance with Section 2 of R.A. No. 166), it cannot
claim ownership of the mark and logo in accordance with the
holding in Kabushi Kaisha Isetan v. IAC8, as reiterated in Philip
Morris, Inc. v. Court of Appeals.9
2. On the other hand, respondent has a right to the mark and logo
by virtue of its prior use in the Philippines and the issuance of
Certificate of Registration No. 31904.
3. The use of the mark or logo in commerce through the bookings
made by travel agencies is unavailing since the Kuok Group did not
 establish any branch or regional office in the Philippines. As it were,
the Kuok Group was not engaged in commerce in the Philippines
inasmuch as the bookings were made through travel agents not
owned, controlled or managed by the Kuok Group.
4. While the Paris Convention protects internationally known marks,
R.A. No. 166 still requires use in commerce in the Philippines.
Accordingly, and on the premise that international agreements,
such as Paris Convention, must yield to a municipal law, the
question on the exclusive right over the mark and logo would still
depend on actual use in commerce in the Philippines.
Petitioners then moved for a reconsideration, which motion was denied by
the CA in its equally assailed Resolution of September 15, 2003.10
As formulated by the petitioners, the issues upon which this case hinges are:
1. Whether the CA erred in finding that respondent had the right to
file an application for registration of the "Shangri-La" mark and "S"
logo although respondent never had any prior actual commercial
use thereof;
2. Whether the CA erred in finding that respondent's supposed use
of the identical "Shangri-La" mark and "S" logo of the petitioners
was not evident bad faith and can actually ripen into ownership,
much less registration;
3. Whether the CA erred in overlooking petitioners' widespread
prior use of the "Shangri-La" mark and "S" logo in their operations;
4. Whether the CA erred in refusing to consider that petitioners are
entitled to protection under both R.A. No. 166, the old trademark
law, and the Paris Convention for the Protection of Industrial
Property;
5. Whether the CA erred in holding that SLIHM did not have the
right to legally own the "Shangri-La" mark and "S" logo by virtue of
and despite their ownership by the Kuok Group;
6. Whether the CA erred in ruling that petitioners' use of the mark
and logo constitutes actionable infringement;
7. Whether the CA erred in awarding damages in favor of
respondent despite the absence of any evidence to support the
same, and in failing to award relief in favor of the petitioners; and
8. Whether petitioners should be prohibited from continuing their
use of the mark and logo in question.
There are two preliminary issues, however, that respondent DGCI calls our
attention to, namely:
1. Whether the certification against forum-shopping submitted on
behalf of the petitioners is sufficient;
2. Whether the issues posed by petitioners are purely factual in
nature hence improper for resolution in the instant petition for
review on certiorari.
DGCI claims that the present petition for review should be dismissed outright
for certain procedural defects, to wit: an insufficient certification against
forum shopping and raising pure questions of fact. On both counts, we find
the instant petition formally and substantially sound.
In its Comment, respondent alleged that the certification against forum
shopping signed by Atty. Lee Benjamin Z. Lerma on behalf and as counsel
of the petitioners was insufficient, and that he was not duly authorized to
execute such document. Respondent further alleged that since petitioner
SLIHM is a foreign entity based in Hong Kong, the Director's Certificate
executed by Mr. Madhu Rama Chandra Rao, embodying the board
resolution which authorizes Atty. Lerma to act for SLIHM and execute the
certification against forum shopping, should contain the authentication by a
consular officer of the Philippines in Hong Kong.
In National Steel Corporation v. CA,11 the Court has ruled that the
certification on non-forum shopping may be signed, for and in behalf of a
corporation, by a specifically authorized lawyer who has personal knowledge
of the facts required to be disclosed in such document. The reason for this is
that a corporation can only exercise its powers through its board of directors
and/or its duly authorized officers and agents. Physical acts, like the signing
of documents, can be performed only by natural persons duly authorized for
the purpose.12
Moreover, Rule 7, Section 5 of the Rules of Court concerning the certification
against forum shopping does not require any consular certification if the
petitioner is a foreign entity. Nonetheless, to banish any lingering doubt,
petitioner SLIHM furnished this Court with a consular certification dated
October 29, 2003 authenticating the Director's Certificate authorizing Atty.
Lerma to execute the certification against forum shopping, together with
petitioners' manifestation of February 9, 2004.
Respondent also attacks the present petition as one that raises pure
questions of fact. It points out that in a petition for review under Rule 45 of
the Rules of Court, the questions that may properly be inquired into are
strictly circumscribed by the express limitation that "the petition shall raise
only questions of law which must be distinctly set forth."13 We do not,
however, find that the issues involved in this petition consist purely of
questions of fact. These issues will be dealt with as we go through the
questions raised by the petitioners one by one.
Petitioners' first argument is that the respondent had no right to file an
application for registration of the "Shangri-La" mark and "S" logo because it
did not have prior actual commercial use thereof. To respondent, such an
argument raises a question of fact that was already resolved by the RTC and
concurred in by the CA.
First off, all that the RTC found was that respondent was the prior user and
registrant of the subject mark and logo in the Philippines. Taken in proper
context, the trial court's finding on "prior use" can only be interpreted to
mean that respondent used the subject mark and logo in the country before
the petitioners did. It cannot be construed as being a factual finding that
there was prior use of the mark and logo before registration.
Secondly, the question raised is not purely factual in nature. In the context of
this case, it involves resolving whether a certificate of registration of a mark,
and the presumption of regularity in the performance of official functions in
the issuance thereof, are sufficient to establish prior actual use by the
registrant. It further entails answering the question of whether prior actual
use is required before there may be a valid registration of a mark.
Under the provisions of the former trademark law, R.A. No. 166, as
amended, which was in effect up to December 31, 1997, hence, the law in
force at the time of respondent's application for registration of trademark, the
root of ownership of a trademark is actual use in commerce. Section 2 of
said law requires that before a trademark can be registered, it must have
been actually used in commerce and service for not less than two months in
the Philippines prior to the filing of an application for its registration.
Registration, without more, does not confer upon the registrant an absolute
right to the registered mark. The certificate of registration is merely a prima
facie proof that the registrant is the owner of the registered mark or trade
name. Evidence of prior and continuous use of the mark or trade name by
another can overcome the presumptive ownership of the registrant and may
very well entitle the former to be declared owner in an appropriate case.14
Among the effects of registration of a mark, as catalogued by the Court in
Lorenzana v. Macagba,15 are:
1. Registration in the Principal Register gives rise to
a presumption of the validity of the registration, the registrant's
ownership of the mark, and his right to the exclusive use thereof. x
xx
2. Registration in the Principal Register is limited to the actual
owner of the trademark and proceedings therein pass on the issue
of ownership, which may be contested through opposition or
interference proceedings, or, after registration, in a petition for
cancellation. xxx
[Emphasis supplied]1avvphil.ñet
Ownership of a mark or trade name may be acquired not necessarily by
registration but by adoption and use in trade or commerce. As between
actual use of a mark without registration, and registration of the mark without
actual use thereof, the former prevails over the latter. For a rule widely
accepted and firmly entrenched, because it has come down through the
years, is that actual use in commerce or business is a pre-requisite to the
acquisition of the right of ownership.16
While the present law on trademarks17 has dispensed with the requirement
of prior actual use at the time of registration, the law in force at the time of
registration must be applied, and thereunder it was held that as a condition
precedent to registration of trademark, trade name or service mark, the
same must have been in actual use in the Philippines before the filing of the
application for registration.18 Trademark is a creation of use and therefore
actual use is a pre-requisite to exclusive ownership and its registration with
the Philippine Patent Office is a mere administrative confirmation of the
existence of such right.19
By itself, registration is not a mode of acquiring ownership. When the
applicant is not the owner of the trademark being applied for, he has no right
to apply for registration of the same. 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.20 Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to
evidence to the contrary.
Here, respondent's own witness, Ramon Syhunliong, testified that a jeepney
signboard artist allegedly commissioned to create the mark and logo
submitted his designs only in December 1982.21 This was two-and-a-half
months after the filing of the respondent's trademark application on October
18, 1982 with the BPTTT. It was also only in December 1982 when the
respondent's restaurant was opened for business.22 Respondent cannot now
claim before the Court that the certificate of registration itself is proof that the
two-month prior use requirement was complied with, what with the fact that
its very own witness testified otherwise in the trial court. And because at the
time (October 18, 1982) the respondent filed its application for trademark
registration of the "Shangri-La" mark and "S" logo, respondent was not using
these in the Philippines commercially, the registration is void.
Petitioners also argue that the respondent's use of the "Shangri-La" mark
and "S" logo was in evident bad faith and cannot therefore ripen into
ownership, much less registration. While the respondent is correct in saying
that a finding of bad faith is factual, not legal,23 hence beyond the scope of a
petition for review, there are, however, noted exceptions thereto. Among
these exceptions are:
1. When the inference made is manifestly mistaken, absurd or
impossible;24
2. When there is grave abuse of discretion;25
3. When the judgment is based on a misapprehension of facts;26
4. When the findings of fact are conflicting;27 and
5. When the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent.28
And these are naming but a few of the recognized exceptions to the rule.
The CA itself, in its Decision of May 15, 2003, found that the respondent's
president and chairman of the board, Ramon Syhunliong, had been a guest
at the petitioners' hotel before he caused the registration of the mark and
logo, and surmised that he must have copied the idea there:
Did Mr. Ramon Syhunliong, [respondent's] President copy the mark and
devise from one of [petitioners'] hotel (Kowloon Shangri-la) abroad? The
mere fact that he was a visitor of [petitioners'] hotel abroad at one time
(September 27, 1982) establishes [petitioners'] allegation that he got the
idea there.29
Yet, in the very next paragraph, despite the preceding admission that the
mark and logo must have been copied, the CA tries to make it appear that
the adoption of the same mark and logo could have been coincidental:
The word or name "Shangri-la" and the S-logo, are not uncommon. The
word "Shangri-la" refers to a (a) remote beautiful imaginary place where life
approaches perfection or (b) imaginary mountain land depicted as a utopia
in the novel Lost Horizon by James Hilton. The Lost Horizon was a well-read
and popular novel written in 1976. It is not impossible that the parties,
inspired by the novel, both adopted the mark for their business to conjure [a]
place of beauty and pleasure.
The S-logo is, likewise, not unusual. The devise looks like a modified Old
English print.30
To jump from a recognition of the fact that the mark and logo must have
been copied to a rationalization for the possibility that both the petitioners
and the respondent coincidentally chose the same name and logo is not only
contradictory, but also manifestly mistaken or absurd. Furthermore, the "S"
logo appears nothing like the "Old English" print that the CA makes it out to
be, but is obviously a symbol with oriental or Asian overtones. At any rate, it
is ludicrous to believe that the parties would come up with the exact same
lettering for the word "Shangri-La" and the exact same logo to boot. As
correctly observed by the petitioners, to which we are in full accord:
x x x When a trademark copycat adopts the word portion of another's
trademark as his own, there may still be some doubt that the adoption is
intentional. But if he copies not only the word but also the word's exact font
and lettering style and in addition, he copies also the logo portion of the
trademark, the slightest doubt vanishes. It is then replaced by the certainty
that the adoption was deliberate, malicious and in bad faith.31
It is truly difficult to understand why, of the millions of terms and combination
of letters and designs available, the respondent had to choose exactly the
same mark and logo as that of the petitioners, if there was no intent to take
advantage of the goodwill of petitioners' mark and logo.32
One who has imitated the trademark of another cannot bring an action for
infringement, particularly against the true owner of the mark, because he
would be coming to court with unclean hands.33 Priority is of no avail to the
bad faith plaintiff. Good faith is required in order to ensure that a second user
may not merely take advantage of the goodwill established by the true
owner.
This point is further bolstered by the fact that under either Section 17 of R.A.
No. 166, or Section 151 of R.A. No. 8293, or Article 6bis(3) of the Paris
Convention, no time limit is fixed for the cancellation of marks registered or
used in bad faith.34 This is precisely why petitioners had filed an inter partes
case before the BPTTT for the cancellation of respondent's registration, the
proceedings on which were suspended pending resolution of the instant
case.
Respondent DGCI also rebukes the next issue raised by the petitioners as
being purely factual in nature, namely, whether the CA erred in overlooking
petitioners' widespread prior use of the "Shangri-La" mark and "S" logo in
their operations. The question, however, is not whether there had been
widespread prior use, which would have been factual, but whether that prior
use entitles the petitioners to use the mark and logo in the Philippines. This
is clearly a question which is legal in nature.
It has already been established in the two courts below, and admitted by the
respondent's president himself, that petitioners had prior widespread use of
the mark and logo abroad:
There is, to be sure, an  impressive mass of proof that petitioner SLIHM
and its related companies abroad used the name and logo for one purpose
or another x x x.35 [Emphasis supplied]
In respondent's own words, "[T]he Court of Appeals did note petitioners' use
of the mark and logo but held that such use did not confer to them ownership
or exclusive right to use them in the Philippines."36 To petitioners' mind, it
was error for the CA to rule that their worldwide use of the mark and logo in
dispute could not have conferred upon them any right thereto. Again, this is
a legal question which is well worth delving into.
R.A. No. 166, as amended, under which this case was heard and decided
provides:
Section 2. What are registrable. - Trademarks, trade names and service
marks owned by persons, corporations, partnerships or associations
domiciled in the Philippines and by persons, corporations, partnerships or
associations domiciled in any foreign country may be registered in
accordance with the provisions of this Act: Provided, That said trademarks
trade names, or service marks are actually in use in commerce and
services not less than two months in the Philippines before the time the
applications for registration are filed: And provided, further, That the country
of which the applicant for registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially
certified, with a certified true copy of the foreign law translated into the
English language, by the government of the foreign country to the
Government of the Republic of the Philippines.
Section 2-A. Ownership of trademarks, trade names and service marks;
how acquired. - Anyone who lawfully produces or deals in merchandise of
any kind or who engages in any lawful business, or who renders any lawful
service in commerce, by actual use thereof in manufacture or trade, in
business, and in the service rendered, may appropriate to his exclusive use
a trademark, a trade name, or a servicemark not so appropriated by
another, to distinguish his merchandise, business or service from the
merchandise, business or services of others. The ownership or possession
of a trademark, trade name, service mark, heretofore or hereafter
appropriated, as in this section provided, shall be recognized and protected
in the same manner and to the same extent as are other property rights
known to this law. [Emphasis supplied]
Admittedly, the CA was not amiss in saying that the law requires the actual
use in commerce of the said trade name and "S" logo in the
Philippines. Hence, consistent with its finding that the bulk of the petitioners'
evidence shows that the alleged use of the Shangri-La trade name was done
abroad and not in the Philippines, it is understandable for that court to rule in
respondent's favor. Unfortunately, however, what the CA failed to perceive is
that there is a crucial difference between the aforequoted Section 2 and
Section 2-A of R.A. No. 166. For, while Section 2 provides for what
is  registrable, Section 2-A, on the other hand, sets out how ownership  is
acquired. These are two distinct concepts.
Under Section 2, 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 2 months prior to the application for registration. Since
"ownership" of the trademark is required for registration, Section 2-A 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. Hence, under R.A. No. 166, as amended, one
may be an owner of a mark due to actual use thereof but not yet have the
right to register such ownership here due to failure to use it within the
Philippines for two months.
While the petitioners may not have qualified under Section 2 of R.A. No. 166
as a registrant, neither did respondent DGCI, since the latter also failed to
fulfill the 2-month actual use requirement. What is worse, DGCI was not
even the owner of the mark. For it to have been the owner, the mark must
not have been already appropriated (i.e., used) by someone else. At the time
of respondent DGCI's registration of the mark, the same was already being
used by the petitioners, albeit abroad, of which DGCI's president was
fully aware.
It is respondent's contention that since the petitioners adopted the "Shangri-
La" mark and "S" logo as a mere corporate name or as the name of their
hotels, instead of using them as a trademark or service mark, then such
name and logo are not trademarks. The two concepts of corporate name or
business name and trademark or service mark, are not mutually exclusive. It
is common, indeed likely, that the name of a corporation or business is also
a trade name, trademark or service mark. Section 38 of R.A. No. 166 defines
the terms as follows:
Sec. 38. Words and terms defined and construed - In the construction of this
Act, unless the contrary is plainly apparent from the context - The term
"trade name" includes individual names and surnames, firm names, trade
names, devices or words used by manufacturers, industrialists, merchants,
agriculturists, and others to identify their business, vocations or occupations;
the names or titles lawfully adopted and used by natural or juridical
persons, unions, and any manufacturing, industrial, commercial, agricultural
or other organizations engaged in trade or commerce.
The term "trade mark" includes any word, name, symbol, emblem, sign or
device or any combination thereof adopted and used by a manufacturer or
merchant to identify his goods and distinguish them from those
manufactured, sold or dealt in by others.
The term "service mark" means a mark used in the sale or advertising of
services to identify the services of one person and distinguish them from
the services of others and includes without limitation the marks,
names, symbols, titles, designations, slogans, character names, and
distinctive features of radio or other advertising. [Emphasis supplied]
Clearly, from the broad definitions quoted above, the petitioners can be
considered as having used the "Shangri-La" name and "S" logo as a
tradename and service mark.
The new Intellectual Property Code (IPC), Republic Act No. 8293,
undoubtedly shows the firm resolve of the Philippines to observe and follow
the Paris Convention by incorporating the relevant portions of the
Convention such that persons who may question a mark (that is, oppose
registration, petition for the cancellation thereof, sue for unfair competition)
include persons whose internationally well-known mark, whether or not
registered, is
identical with or confusingly similar to or constitutes a translation of a mark
that is sought to be registered or is actually registered.37
However, while the Philippines was already a signatory to the Paris
Convention, the IPC only took effect on January 1, 1988, and in the absence
of a retroactivity clause, R.A. No. 166 still applies.38 Under the prevailing law
and jurisprudence at the time, the CA had not erred in ruling that:
The Paris Convention mandates that protection should be afforded to
internationally known marks as signatory to the Paris Convention, without
regard as to whether the foreign corporation is registered, licensed or doing
business in the Philippines. It goes without saying that the same runs afoul
to Republic Act No. 166, which requires the actual use in commerce in the
Philippines of the subject mark or devise. The apparent conflict between the
two (2) was settled by the Supreme Court in this wise -
"Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirement of actual use in the Philippines
must subordinate an international agreement inasmuch as the apparent
clash is being decided by a municipal tribunal (Mortensen vs. Peters, Great
Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions 93; Paras,
International Law and World Organization, 1971 Ed., p. 20). Withal, the fact
that international law has been made part of the law of the land does not by
any means imply the primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal, not superior,
to national legislative enactments (Salonga and Yap, Public International
Law, Fourth ed., 1974, p. 16)."39 [Emphasis supplied]

Consequently, the petitioners cannot claim protection under the Paris

Convention. Nevertheless, with the double infirmity of lack of two-month prior
use, as well as bad faith in the respondent's registration of the mark, it is
evident that the petitioners cannot be guilty of infringement. It would be a
great injustice to adjudge the petitioners guilty of infringing a mark when they
are actually the originator and creator thereof.

Nor can the petitioners' separate personalities from their mother corporation
be an obstacle in the enforcement of their rights as part of the Kuok Group of
Companies and as official repository, manager and operator of the subject
mark and logo. Besides, R.A. No. 166 did not require the party seeking relief
to be the owner of the mark but  "any person who believes that he is or will
be damaged by the registration of a mark or trade name."40

WHEREFORE, the instant petition is GRANTED. The assailed Decision and

Resolution of the Court of Appeals dated May 15, 2003 and September 15,
2003, respectively, and the Decision of the Regional Trial Court of Quezon
City dated March 8, 1996 are hereby SET ASIDE. Accordingly, the complaint
for infringement in Civil Case No. Q-91-8476 is ordered DISMISSED.

SO ORDERED.
 THIRD DIVISION
G.R. No. 221717, June 19, 2017
MANG INASAL PHILIPPINES, INC., Petitioner, v. IFP
MANUFACTURING CORPORATION, Respondent.
DECISION
VELASCO JR., J.:
Before us is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court of the Resolutions dated June 10, 20151 and
December 2, 20152 of the Court of Appeals (CA) in CA-G.R. SP No.
139020.
The Facts
The Trademark Application and the Opposition
Respondent IFP Manufacturing Corporation is a local manufacturer
of snacks and beverages.
On May 26, 2011, respondent filed with the Intellectual Property
Office (IPO) an application3 for the registration of the mark "OK
Hotdog Inasal Cheese Hotdog Flavor Mark" (OK Hotdog Inasal
mark) in connection with goods under Class 30 of the Nice
Classification.4 The said mark, which respondent intends to use on
one of its curl snack products, appears as follows:
(See Image)
The application of respondent was opposed5 by petitioner Mang
Inasal Philippines, Inc.
Petitioner is a domestic fast food company and the owner of the
mark "Mang Inasal, Home of Real Pinoy Style Barbeque and
Device" Mang Inasal mark) for services under Class 43 of the Nice
Classification.6 The said mark, which was registered with the IPO in
20067 and had been used by petitioner for its chain of restaurants
since 2003,8 consists of the following insignia:
(See Image)
Petitioner, in its opposition, contended that the registration of
respondent's OK Hotdog Inasal mark is prohibited under Section
123.1(d)(iii) of Republic Act No. (RA) 8293.9 Petitioner averred
that the OK Hotdog Inasal mark and the Mang Inasal mark share
similarities—both as to their appearance and as to the goods or
services that they represent—which tend to suggest a false
connection or association between the said marks and, in that
regard, would likely cause confusion on the part of the public.10 As
petitioner explained:
1. The OK Hotdog Inasal mark is similar to the Mang Inasal
mark. Both marks feature the same dominant element—
i.e., the word "INASAL"—printed and stylized in the exact
same manner, viz:
a. In both marks, the word "INASAL" is spelled using
the same font style and red color;
b. In both marks, the word "INASAL" is placed inside
the same black outline and yellow background; and
c. In both marks, the word "INASAL" is arranged in
the same staggered format.
2. The goods that the OK Hotdog Inasal mark is intended to
identify (i.e., curl snack products) are also closely related
to the services represented by the Mang Inasal mark (i.e.,
fast food restaurants). Both marks cover inasal  or inasal-
flavored food products.
Petitioner's opposition was referred to the Bureau of Legal Affairs
(BLA) of the IPO for hearing and disposition.
Decisions of the IPO-BLA and the IPO-DG
On September 19, 2013, after due proceedings, the IPO-BLA
issued a Decision11 dismissing petitioner's opposition. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, the instant opposition is
hereby DISMISSED. Let the filewrapper [sic] of Trademark
Application Serial No. 4-2011-006098 be returned, together with a
copy of this Decision, to the Bureau of Trademarks for further
information and appropriate action.
SO ORDERED.
Aggrieved, petitioner appealed the Decision of IPO-BLA to the
Director General (DG) of the IPO.12
On December 15, 2014, the IPO-DG rendered a
Decision13 dismissing the appeal of petitioner. The fallo  of the
Decision accordingly reads:
Wherefore, premises considered, the appeal is hereby dismissed.
Let a copy of this Decision be furnished to the Director ofBureau
ofLegal Affairs and the Director of Bureau of Trademarks for their
appropriate action and information. Further, let a copy of this
Decision be furnished to the library ofthe Documentation,
Information and Technology Transfer Bureau for records purposes.
SO ORDERED.
Both the IPO-BLA and the IPO-DG were not convinced that the OK
Hotdog Inasal mark is confusingly similar to the Mang Inasal mark.
They rebuffed petitioner's contention, thusly:
1. The OK Hotdog Inasal mark is not similar to the Mang
Inasal mark. In terms of appearance, the only similarity
between the two marks is the word "INASAL." However,
there are other words like "OK,"
"HOTDOG," and "CHEESE" and images like that of curls
and cheese that are found in the OK Hotdog Inasal mark
but are not present in the Mang Inasal mark.14
In addition, petitioner cannot prevent the application of the
word "INASAL" in the OK Hotdog Inasal mark. No person
or entity can claim exclusive right to use the
word "INASAL" because it is merely a generic or
descriptive word that means barbeque or barbeque
products.15
2. Neither can the underlying goods and services of the two
marks be considered as closely related. The products
represented by the two marks are not competitive and are
sold in different channels of trade. The curl snack products
of the OK Hotdog Inasal mark are sold in sari-sari stores,
grocery stores and other small distributor outlets, whereas
the food products associated with the Mang Inasal mark
are sold in petitioner's restaurants.16
Undeterred, petitioner appealed to the CA.
Resolutions of the CA and the Instant Appeal
On June 10, 2015, the CA issued a Resolution17 denying the appeal
of petitioner. Petitioner filed a motion for reconsideration, but this
too was denied by the CA through its Resolution18 dated December
2, 2015. The CA, in its Resolutions, simply agreed with the
ratiocinations of the IPO-BLA and IPO-DG.
Hence, the instant appeal.
Here, petitioner prays for the reversal of the CA Resolutions.
Petitioner maintains that the OK Hotdog Inasal mark is confusingly
similar to the Mang Inasal mark and insists that the trademark
application of respondent ought to be denied for that reason.
Our Ruling
We have examined the OK Hotdog Inasal and Mang Inasal marks
under the lens of pertinent law and jurisprudence. And, through it,
we have determined the justness of petitioner's claim. By our legal
and jurisprudential standards, the respondent's OK Hotdog Inasal
mark is, indeed, likely to cause deception or confusion on the part
of the public. Hence, contrary to what the IPO-BLA, IPO-DG, and
the CA had ruled, the respondent's application should have been
denied.
We, therefore, grant the appeal.
I reasonably be assumed to originate with the registrant of an
The Proscription: Sec. 123.1 (d)(iii) of RA 8293
A mark that is similar to a registered mark or a mark with an
earlier filing or priority date (earlier mark) and which is likely to
cause confusion on the part of the public cannot be registered with
the IPO. Such is the import of Sec. 123.1(d)(iii) of RA 8293:
SECTION 123. Registrability. -
123. 1. A mark cannot be registered if it:
xxxx
d. x x x:
i. xxx
ii. xxx
iii. ...nearly resembles [a registered mark
belonging to a different proprietor or a
mark with an earlier filing or priority date]
as to be likely to deceive or cause
confusion.
The concept of confusion, which is at the heart of the proscription,
could either refer to confusion of goods  or confusion of
business. In Skechers U.S.A., Inc. v. Trendworks International
Corporation,19 we discussed and differentiated both types of
confusion, as follows:
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
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.
Confusion, in either of its forms, is, thus, only possible when the
goods or services covered by allegedly similar marks are identical,
similar or re1ated in some manner.20
Verily, to fall under the ambit of Sec. 123.1(d)(iii) and be regarded
as likely to deceive or cause confusion upon the purchasing public,
a prospective mark must be shown to meet two (2) minimum
conditions:
1. The prospective mark must nearly resemble or be similar
to an earlier mark; and
2. The prospective mark must pertain to goods or services
that are either identical, similar or related to the goods or
services represented by the earlier mark.
The rulings of the IPO-BLA, IPO-DG, and the CA all rest on the
notion that the OK Hotdog Inasal mark does not fulfill both
conditions and so may be granted registration.
We disagree.
II
The OK Hotdog Inasal Mark Is Similar to the Mang Inasal
Mark

The first condition of the proscription requires resemblance
or similarity between a prospective mark and an earlier mark
Similarity does not mean absolute identity of marks.21 To be
regarded as similar to an earlier mark, it is enough that a
prospective mark be a colorable imitation of the
former.22 Colorable imitation denotes such likeness in form,
content, words, sound, meaning, special arrangement or general
appearance of one mark with respect to another as would likely
mislead an average buyer in the ordinary course of purchase.23
In determining whether there is similarity or colorable imitation
between two marks, authorities employ either the dominancy
test or the holistic test.24 In Mighty Corporation v. E. & J. Gallo
Winery,25 we distinguished between the two tests as follows:
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion
or deception, and thus infringement. If the competing
trademark contains the main, essential or dominant
features of another, and confusion or 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. The question is whether the use of the
marks involved is likely to cause confusion or mistake in the mind
of the public or deceive purchasers.
On the other hand, the Holistic Test requires that the entirety of
the marks in question be considered in resolving confusing
similarity. Comparison of words is not the only determining factor.
The trademarks in their entirety as they appear in their respective
labels or hang tags must also be considered in relation to the
goods to which they are attached. The discerning eye of the
observer must focus not only on the predominant words but also
on the other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the other.
(citations omitted and emphasis supplied)
There are currently no fixed rules as to which of the two tests can
be applied in any given case.26 However, recent case law on
trademark seems to indicate an overwhelming judicial preference
towards applying the dominancy test.27 We conform.
Our examination of the marks in controversy yielded the following
findings:
1. The petitioner's Mang Inasal mark has a single dominant
feature—the word "INASAL"  written in a bold red typeface
against a black outline and yellow background with
staggered design. The other perceptible elements of the
mark—such as the word "MANG"  written in black colored
font at the upper left side of the mark and the
phrase "HOME OF REAL PINOY STYLE BARBEQUE"  written
in a black colored stylized font at the lower portion of the
mark—are not as visually outstanding as the mentioned
feature.
2. Being the sole dominant element, the
word "INASAL," as stylized in the Mang Inasal mark,
is also the most distinctive and recognizable feature
of the said mark.
3. The dominant element "INASAL," as stylized in the
Mang Inasal mark, is different from the term "inasaf'
per se.  The term "inasal" per se  is a descriptive term
that cannot be appropriated. However, the dominant
element "INASAL," as stylized in the Mang Inasal
mark, is not. Petitioner, as the registered owner of
the Mang Inasal mark, can claim exclusive use of
such element.
4. The respondent's OK Hotdog Inasal mark, on the other
hand, has three (3) dominant features: (a) the
word "INASAL" written in a bold red typeface against a
black and yellow outline with staggered design; (b) the
word "HOTDOG" written in green colored font; and (c) a
picture of three pieces of curls. Though there are other
observable elements in the mark—such as the
word "OK" written in red colored font at the upper left side
of the mark, the small red banner overlaying the picture of
the curls with the words "CHEESE HOTDOG
FLAVOR" written on it, and the image of a block of cheese
 beside the picture of the curls—none of those are as
prevalent as the two features aforementioned.
5. The dominant element "INASAL" in the OK Hotdog
Inasal mark is exactly the same as the dominant
element "NASAL" in the Mang Inasal mark. Both
elements in both marks are printed using the exact
same red colored font, against the exact same black
outline and yellow background and is arranged in the
exact same staggered format.
6. Apart from the element "INASAL," there appear no other
perceivable similarities between the two marks.
Given the foregoing premises, and applying the dominancy test,
we hold that the OK Hotdog Inasal mark is a colorable imitation of
the Mang Inasal mark.
First. The fact that the conflicting marks have exactly the same
dominant element is key. It is undisputed that the OK Hotdog
Inasal mark copied and adopted as one of its dominant features
the "INASAL" element of the Mang Inasal mark. Given that
the "INASAL" element is, at the same time, the dominant and most
distinctive feature of the Mang Inasal mark, the said element's
incorporation in the OK Hotdog Inasal mark, thus, has
the potential to project the deceptive and false impression that the
latter mark is somehow linked or associated with the former mark.
Second. The differences between the two marks are trumped by
the
overall impression created by their similarity. The mere fact that
there are other elements in the OK Hotdog Inasal mark that are
not present in the Mang Inasal mark actually does little to change
the probable public perception that both marks are linked or
associated. It is worth reiterating that the OK Hotdog Inasal mark
actually brandishes a literal copy of the most recognizable feature
of the Mang Inasal mark. We doubt that an average buyer catching
a casual glimpse of the OK Hotdog Inasal mark would pay more
attention to the peripheral details of the said mark than it would to
the mark's more prominent feature, especially when the same
invokes the distinctive feature of another more popular brand.
All in all, we find that the OK Hotdog Inasal mark is similar to the
Mang Inasal mark.
III
The Goods for which the Registration of the
OK Hotdog Inasal Mark Is Sought Are Related to the
Services Being Represented by the Mang Inasal Mark
The second condition of the proscription requires that the
prospective mark pertain to goods or services that are either
identical, similar or related to the goods or services represented by
the earlier mark. While there can be no quibble that the curl snack
product for which the registration of the OK Hotdog Inasal mark is
sought cannot be considered as identical or similar to the
restaurant services represented by the Mang Inasal mark, there is
ample reason to conclude that the said product and services may
nonetheless be regarded as related to each other.
Related goods and services are those that, though non-identical or
non-similar, are so logically connected to each other that they may
reasonably be assumed to originate from one manufacturer or
from economically-linked manufacturers.28 In determining whether
goods or services are related, several factors may be considered.
Some of those factors recognized in our jurisprudence are:29
1. the business (and its location) to which the goods belong;
2. the class of product to which the goods belong;
3. the product's quality, quantity, or size, including the nature
of the package, wrapper or container;
4. the nature and cost of the articles;
 5. the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition,
texture or quality;
6. the purpose of the goods;
7. whether the article is bought for immediate consumption,
that is, day-to-day household items;
8. the fields of manufacture;
9. the conditions under which the article is usually purchased,
and
10. the channels of trade through which the goods flow, how
they are distributed, marketed, displayed and sold.
Relative to the consideration of the foregoing factors,
however, Mighty Corporation30 significantly imparted:
The wisdom of this approach is its recognition that each trademark
infringement case presents its own unique set of facts. No single
factor is preeminent, nor can the presence or absence of one
determine, without analysis of the others, the outcome of an
infringement suit. Rather, the court is required to sift the evidence
relevant to each of the criteria. This requires that the entire
panoply of elements constituting the relevant factual landscape be
comprehensively examined. It is a weighing and balancing process.
With reference to this ultimate question, and from a balancing of
the determinations reached on all of the factors, a conclusion is
reached whether the parties have a right to the relief sought.
A very important circumstance though is whether there
exists a likelihood that an appreciable number of ordinarily
prudent purchasers will be misled, or simply confused, as to
the source of the goods in question. The "purchaser" is not the
"completely unwary consumer" but is the "ordinarily intelligent
buyer" considering the type of product involved he is accustomed
to buy, and therefore to some extent familiar with, the goods in
question. The test of fraudulent simulation is to be found in the
likelihood of the deception of some persons in some measure
acquainted with an established design and desirous of purchasing
the commodity with which that design has been associated. The
test is not found in the deception, or the possibility of deception, of
the person who knows nothing about the design which has been
counterfeited, and who must be indifferent between that and the
other. The simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinary intelligent
buyer who has a need to supply and is familiar with the
article that he seeks to purchase. (citations omitted and
emphasis supplied)
Mindful of the foregoing precepts, we hold that the curl snack
product for which the registration of the OK Hotdog Inasal mark is
sought is related to the restaurant services represented by the
Mang Inasal mark, in such a way that may lead to a confusion of
business. In holding so, we took into account the specific kind of
restaurant business that petitioner is engaged in, the reputation of
the petitioner's mark, and the particular type of curls sought to be
marketed by the respondent, thus:
First. Petitioner uses the Mang Inasal mark in connection with its
restaurant services that is particularly known for its
chicken inasal, i.e., grilled chicken doused in a
special inasal marinade.31 The inasal  marinade is different from the
typical barbeque marinade and it is what gives the chicken inasal
its unique taste and distinct orange color.32Inasal refers to the
manner of grilling meat products using an inasal marinade.
Second. The Mang Inasal mark has been used for petitioner's
restaurant business since 2003. The restaurant started in Iloilo but
has since expanded its business throughout the country. Currently,
the Mang Inasal chain of restaurants has a total of 464 branches
scattered throughout the nation's three major islands.33 It is, thus,
fair to say that a sizeable portion of the population is
knowledgeable of the Mang Inasal mark.
Third. Respondent, on the other hand, seeks to market under the
OK Hotdog Inasal mark curl snack products which it publicizes as
having a cheese hotdog inasal flavor.34
Accordingly, it is the fact that the underlying goods and services of
both marks deal with inasal and inasal-flavored products which
ultimately fixes the relations between such goods and services.
Given the foregoing circumstances and the aforesaid similarity
between the marks in controversy, we are convinced that an
average buyer who comes across the curls marketed under the OK
Hotdog Inasal mark is likely to be confused as to the true source of
such curls. To our mind, it is not unlikely that such buyer would be
led into the assumption that the curls are of petitioner and that the
latter has ventured into snack manufacturing or, if not, that the
petitioner has supplied the flavorings for respondent's product.
Either way, the reputation of petitioner would be taken advantage
of and placed at the mercy of respondent.
2. SETTING ASIDE the Decision dated December 15, 2014
of the Director General of the Intellectual Property Office in
Appeal No. 14-2013-0052;
3. SETTING ASIDE the Decision dated September 19, 2013
of the Director of the Bureau of Legal Affairs of the
Intellectual Property Office in IPC No. 14-2012-00369; and
4. DIRECTING the incumbent Director General and Director
of the Bureau of Legal Affairs of the Intellectual Property
Office to DENY respondent's Application No. 4-2011-
006098 for the registration of the mark "OK Hotdog
Inasal Cheese Hotdog Flavor Mark."

All in all, we find that the goods for which the registration of the
OK Hotdog Inasal mark is sought are related to the services being
SO ORDERED.
represented by the Mang Inasal mark.

IV

Conclusion

The OK Hotdog Inasal mark meets the two conditions of the

proscription under Sec. 123.1(d)(iii) ofRA 8293. First, it is similar
to the Mang Inasal mark, an earlier mark Second, it pertains to
goods that are related to the services represented by such earlier
mark Petitioner was, therefore, correct; and the IPO-BLA, IPO-DG,
and the CA's rulings must be reversed. The OK Hotdog Inasal mark
is not entitled to be registered as its use will likely deceive or
cause confusion on the part of the public and, thus, also likely to
infringe the Mang Inasal mark The law, in instances such as this,
must come to the succor of the owner of the earlier mark.

WHEREFORE, premises considered, the petition is

hereby GRANTED. We hereby render a decision as follows:

1. REVERSING and SETTING ASIDE the Resolutions dated

June 10, 2015 and December 2, 2015 of the Court of
Appeals in CA-G.R. SP No. 139020;
 In its answer dated 23 March 1982, petitioner contended that its trademark
was entirely and unmistakably different from that of private respondent and
that its certificate of registration was legally and validly granted.3
G.R. No. 100098 December 29, 1995
On 20 February 1984, petitioner caused the publication of its application for
registration of the trademark "STYLISTIC MR. LEE" in the Principal
EMERALD GARMENT MANUFACTURING CORPORATION, petitioner,
Register."4
vs.
HON. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS
AND TECHNOLOGY TRANSFER and H.D. LEE COMPANY, On 27 July 1984, private respondent filed a notice of opposition to
INC., respondents. petitioner's application for registration also on grounds that petitioner's
trademark was confusingly similar to its "LEE" trademark.5 The case was
docketed as Inter Partes Case No. 1860.

On 21 June 1985, the Director of Patents, on motion filed by private

KAPUNAN, J.:
respondent dated 15 May 1985, issued an order consolidating Inter Partes
Cases Nos. 1558 and 1860 on grounds that a common question of law was
In this petition for review on certiorari under Rule 45 of the Revised Rules of involved.6
Court, Emerald Garment Manufacturing Corporation seeks to annul the
decision of the Court of Appeals dated 29 November 1990 in CA-G.R. SP
On 19 July 1988, the Director of Patents rendered a decision granting private
No. 15266 declaring petitioner's trademark to be confusingly similar to that of
respondent's petition for cancellation and opposition to registration.
private respondent and the resolution dated 17 May 1991 denying
petitioner's motion for reconsideration.
The Director of Patents found private respondent to be the prior registrant of
the trademark "LEE" in the Philippines and that it had been using said mark
The record reveals the following antecedent facts:
in the Philippines.7

On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign

Moreover, the Director of Patents, using the test of dominancy, declared that
corporation organized under the laws of Delaware, U.S.A., filed with the
petitioner's trademark was confusingly similar to private respondent's mark
Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a Petition
because "it is the word 'Lee' which draws the attention of the buyer and
for Cancellation of Registration No. SR 5054 (Supplemental Register) for the
leads him to conclude that the goods originated from the same
trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks,
manufacturer. It is undeniably the dominant feature of the mark."8
briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class
25, issued on 27 October 1980 in the name of petitioner Emerald Garment
Manufacturing Corporation, a domestic corporation organized and existing On 3 August 1988, petitioner appealed to the Court of Appeals and on 8
under Philippine laws. The petition was docketed as Inter Partes Case No. August 1988, it filed with the BPTTT a Motion to Stay Execution of the 19
1558.1 July 1988 decision of the Director of Patents on grounds that the same
would cause it great and irreparable damage and injury. Private respondent
submitted its opposition on 22 August 1988.9
Private respondent, invoking Sec. 37 of R.A. No. 166 (Trademark Law) and
Art. VIII of the Paris Convention for the Protection of Industrial Property,
averred that petitioner's trademark "so closely resembled its own trademark, On 23 September 1988, the BPTTT issued Resolution No. 88-33 granting
'LEE' as previously registered and used in the Philippines, and not petitioner's motion to stay execution subject to the following terms and
abandoned, as to be likely, when applied to or used in connection with conditions:
petitioner's goods, to cause confusion, mistake and deception on the part of
the purchasing public as to the origin of the goods."2
 1. That under this resolution, Respondent-Registrant is
authorized only to dispose of its current stock using the
mark "STYLISTIC MR. LEE";
2. That Respondent-Registrant is strictly prohibited from
further production, regardless of mode and source, of the
mark in question (STYLISTIC MR. LEE) in addition to its
current stock;
3. That this relief Order shall automatically cease upon
resolution of the Appeal by the Court of Appeals and, if the
Respondent's appeal loses, all goods bearing the mark
"STYLISTIC MR. LEE" shall be removed from the market,
otherwise such goods shall be seized in accordance with
the law.
SO ORDERED.10
On 29 November 1990, the Court of Appeals promulgated its decision
affirming the decision of the Director of Patents dated 19 July 1988 in all
respects.11
In said decision the Court of Appeals expounded, thus:
xxx xxx xxx
Whether or not a trademark causes confusion and is likely
to deceive the public is a question of fact which is to be
resolved by applying the "test of dominancy", meaning, if
the competing trademark contains the main or essential or
dominant features of another by reason of which confusion
and deception are likely to result, then infringement takes
place; that duplication or imitation is not necessary, a
similarity in the dominant features of the trademark would
be sufficient.
The word "LEE" is the most prominent and distinctive
feature of the appellant's trademark and all of the
appellee's "LEE" trademarks. It is the mark which draws
the attention of the buyer and leads him to conclude that
the goods originated from the same manufacturer. While it
is true that there are other words such as "STYLISTIC",
printed in the appellant's label, such word is printed in
such small letters over the word "LEE" that it is not
conspicuous enough to draw the attention of ordinary
buyers whereas the word "LEE" is printed across the label
in big, bold letters and of the same color, style, type and
size of lettering as that of the trademark of the appellee.
The alleged difference is too insubstantial to be noticeable.
Even granting arguendo that the word "STYLISTIC" is
conspicuous enough to draw attention, the goods may
easily be mistaken for just another variation or line of
garments under the ap appelle's "LEE" trademarks in view
of the fact that the appellee has registered trademarks
which use other words in addition to the principal mark
"LEE" such as "LEE RIDERS", "LEESURES" and "LEE
LEENS". The likelihood of confusion is further made more
probable by the fact that both parties are engaged in the
same line of business. It is well to reiterate that the
determinative factor in ascertaining whether or not the
marks are confusingly similar to each other is not whether
the challenged mark would actually cause confusion or
deception of the purchasers but whether the use of such
mark would likely cause confusion or mistake on the part
of the buying public.
xxx xxx xxx
The appellee has sufficiently established its right to prior
use and registration of the trademark "LEE" in the
Philippines and is thus entitled to protection from any
infringement upon the same. It is thus axiomatic that one
who has identified a peculiar symbol or mark with his
goods thereby acquires a property right in such symbol or
mark, and if another infringes the trademark, he thereby
invokes this property right.
The merchandise or goods being sold by the parties are
not that expensive as alleged to be by the appellant and
are quite ordinary commodities purchased by the average
person and at times, by the ignorant and the unlettered.
Ordinary purchasers will not as a rule examine the small
letterings printed on the label but will simply be guided by
the presence of the striking mark "LEE". Whatever
difference there may be will pale in insignificance in the
 face of an evident similarity in the dominant features and
overall appearance of the labels of the parties.12
x x x           x x x          x x x
On 19 December 1990, petitioner filed a motion for reconsideration of the
above-mentioned decision of the Court of Appeals.
Private respondent opposed said motion on 8 January 1991 on grounds that
it involved an impermissible change of theory on appeal. Petitioner allegedly
raised entirely new and unrelated arguments and defenses not previously
raised in the proceedings below such as laches and a claim that private
respondent appropriated the style and appearance of petitioner's trademark
when it registered its "LEE" mark under Registration No. 44220.13
On 17 May 1991, the Court of Appeals issued a resolution rejecting
petitioner's motion for reconsideration and ruled thus:
xxx xxx xxx
A defense not raised in the trial court cannot be raised on
appeal for the first time. An issue raised for the first time
on appeal and not raised timely in the proceedings in the
lower court is barred by estoppel.
The object of requiring the parties to present all questions
and issues to the lower court before they can be presented
to this Court is to have the lower court rule upon them, so
that this Court on appeal may determine whether or not
such ruling was erroneous. The purpose is also in
furtherance of justice to require the party to first present
the question he contends for in the lower court so that the
other party may not be taken by surprise and may present
evidence to properly meet the issues raised.
Moreover, for a question to be raised on appeal, the same
must also be within the issues raised by the parties in their
pleadings. Consequently, when a party deliberately adopts
a certain theory, and the case is tried and decided based
upon such theory presented in the court below, he will not
be permitted to change his theory on appeal. To permit
him to do so would be unfair to the adverse party. A
question raised for the first time on appeal, there having
opportunity to raise them in the court of origin constitutes a
change of theory which is not permissible on appeal.
In the instant case, appellant's main defense pleaded in its
answer dated March 23, 1982 was that there was "no
confusing similarity between the competing trademark
involved. On appeal, the appellant raised a single issue, to
wit:
The only issue involved in this case is
whether or not respondent-registrant's
trademark "STYLISTIC MR. LEE" is
confusingly similar with the petitioner's
trademarks "LEE or LEERIDERS, LEE-
LEENS and LEE-SURES."
Appellant's main argument in this motion for
reconsideration on the other hand is that the appellee is
estopped by laches from asserting its right to its
trademark. Appellant claims although belatedly that
appellee went to court with "unclean hands" by changing
the appearance of its trademark to make it identical to the
appellant's trademark.
Neither defenses were raised by the appellant in the
proceedings before the Bureau of Patents. Appellant
cannot raise them now for the first time on appeal, let
alone on a mere motion for reconsideration of the decision
of this Court dismissing the appellant's appeal.
While there may be instances and situations justifying
relaxation of this rule, the circumstance of the instant case,
equity would be better served by applying the settled rule it
appearing that appellant has not given any reason at all as
to why the defenses raised in its motion for
reconsideration was not invoked earlier.14
x x x           x x x          x x x
Twice rebuffed, petitioner presents its case before this Court on the following
assignment of errors:
 I. THE COURT OF APPEALS ERRED IN NOT FINDING
THAT PRIVATE RESPONDENT CAUSED THE
ISSUANCE OF A FOURTH "LEE" TRADEMARK
IMITATING THAT OF THE PETITIONER'S ON MAY 5,
1989 OR MORE THAN EIGHT MONTHS AFTER THE
BUREAU OF PATENT'S DECISION DATED JULY 19,
1988.
II. THE COURT OF APPEALS ERRED IN RULING THAT
THE DEFENSE OF ESTOPPEL BY LACHES MUST BE
RAISED IN THE PROCEEDINGS BEFORE THE
BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER.
III. THE COURT OF APPEALS ERRED WHEN IT
CONSIDERED PRIVATE RESPONDENT'S PRIOR
REGISTRATION OF ITS TRADEMARK AND
DISREGARDED THE FACT THAT PRIVATE
RESPONDENT HAD FAILED TO PROVE COMMERCIAL
USE THEREOF BEFORE FILING OF APPLICATION FOR
REGISTRATION.15
In addition, petitioner reiterates the issues it raised in the Court of Appeals:
I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER
OR NOT PETITIONER'S TRADEMARK SYTLISTIC MR.
LEE, IS CONFUSINGLY SIMILAR WITH THE PRIVATE
RESPONDENT'S TRADEMARK LEE OR LEE-RIDER,
LEE-LEENS AND LEE-SURES.
II. PETITIONER'S EVIDENCES ARE CLEAR AND
SUFFICIENT TO SHOW THAT IT IS THE PRIOR USER
AND ITS TRADEMARK IS DIFFERENT FROM THAT OF
THE PRIVATE RESPONDENT.
III. PETITIONER'S TRADEMARK IS ENTIRELY
DIFFERENT FROM THE PRIVATE RESPONDENT'S
AND THE REGISTRATION OF ITS TRADEMARK
IS PRIMA FACIE EVIDENCE OF GOOD FAITH.
IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK
CANNOT BE CONFUSED WITH PRIVATE
RESPONDENT'S LEE TRADEMARK.16
Petitioner contends that private respondent is estopped from instituting an
action for infringement before the BPTTT under the equitable principle of
laches pursuant to Sec. 9-A of R.A. No. 166, otherwise known as the Law on
Trade-marks, Trade-names and Unfair Competition:
Sec. 9-A. Equitable principles to govern proceedings. — In
opposition proceedings and in all other inter partes
proceedings in the patent office under this act, equitable
principles of laches, estoppel, and acquiescence, where
applicable, may be considered and applied.
Petitioner alleges that it has been using its trademark "STYLISTIC MR. LEE"
since 1 May 1975, yet, it was only on 18 September 1981 that private
respondent filed a petition for cancellation of petitioner's certificate of
registration for the said trademark. Similarly, private respondent's notice of
opposition to petitioner's application for registration in the principal register
was belatedly filed on 27 July 1984.17
Private respondent counters by maintaining that petitioner was barred from
raising new issues on appeal, the only contention in the proceedings below
being the presence or absence of confusing similarity between the two
trademarks in question.18
We reject petitioner's contention.
Petitioner's trademark is registered in the supplemental register. The
Trademark Law (R.A. No. 166) provides that "marks and tradenames for the
supplemental register shall not be published for or be subject to opposition,
but shall be published on registration in the Official Gazette."19 The reckoning
point, therefore, should not be 1 May 1975, the date of alleged use by
petitioner of its assailed trademark but 27 October 1980,20 the date the
certificate of registration SR No. 5054 was published in the Official Gazette
and issued to petitioner.
It was only on the date of publication and issuance of the registration
certificate that private respondent may be considered "officially" put on
notice that petitioner has appropriated or is using said mark, which, after all,
is the function and purpose of registration in the supplemental register.21 The
record is bereft of evidence that private respondent was aware of petitioner's
trademark before the date of said publication and issuance. Hence, when
private respondent instituted cancellation proceedings on 18 September
1981, less than a year had passed.
Corollarily, private respondent could hardly be accused of inexcusable delay
in filing its notice of opposition to petitioner's application for registration in the
principal register since said application was published only on 20 February
1984.22 From the time of publication to the time of filing the opposition on 27
July 1984 barely five (5) months had elapsed. To be barred from bringing
suit on grounds of estoppel and laches, the delay must be
lengthy.23
More crucial is the issue of confusing similarity between the two trademarks.
Petitioner vehemently contends that its trademark "STYLISTIC MR. LEE" is
entirely different from and not confusingly similar to private respondent's
"LEE" trademark.
Private respondent maintains otherwise. It asserts that petitioner's trademark
tends to mislead and confuse the public and thus constitutes an infringement
of its own mark, since the dominant feature therein is the word "LEE."
The pertinent provision of R.A. No. 166 (Trademark Law) states thus:
Sec. 22. Infringement,  what constitutes. — Any person
who shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely
to cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services,
or identity of such business; or reproduce, counterfeit,
copy or colorably imitable any such mark or trade-name
and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or
services; shall be liable to a civil action by the registrant for
any or all of the remedies herein provided.
Practical application, however, of the aforesaid provision is easier said than
done. In the history of trademark cases in the Philippines, particularly in
ascertaining whether one trademark is confusingly similar to or is a colorable
imitation of another, no set rules can be deduced. Each case must be
decided on its own merits.
In Esso Standard Eastern, Inc.  v. Court of Appeals,24 we held:
. . . But likelihood of confusion is a relative concept; to be
determined only according to the particular, and
sometimes peculiar, circumstances of each case. It is
unquestionably true that, as stated in Coburn vs. Puritan
Mills, Inc.: "In trademark cases, even more than in other
litigation, precedent must be studied in the light of the facts
of the particular case."
x x x           x x x          x x x
Likewise, it has been observed that:
In determining whether a particular name or mark is a
"colorable imitation" of another, no all-embracing rule
seems possible in view of the great number of factors
which must necessarily be considered in resolving this
question of fact, such as the class of product or business
to which the article belongs; the product's quality, quantity,
or size, including its wrapper or container; the dominant
color, style, size, form, meaning of letters, words, designs
and emblems used; the nature of the package, wrapper or
container; the character of the product's purchasers;
location of the business; the likelihood of deception or the
mark or name's tendency to confuse;
etc.25
Proceeding to the task at hand, the essential element of infringement is
colorable imitation. This term has been defined as "such a close or ingenious
imitation as to be calculated to deceive ordinary purchasers, or such
resemblance of the infringing mark to the original as to deceive an ordinary
purchaser giving such attention as a purchaser usually gives, and to cause
him to purchase the one supposing it to be the other."26
Colorable imitation does not mean such similitude as
amounts to identity. Nor does it require that all the details
be literally copied. Colorable imitation refers to such
 similarity in form, content, words, sound, meaning, special
arrangement, or general appearance of the trademark or
tradename with that of the other mark or tradename in
their over-all presentation or in their essential, substantive
and distinctive parts as would likely mislead or confuse
persons in the ordinary course of purchasing the genuine
article.27
In determining whether colorable imitation exists, jurisprudence has
developed two kinds of tests — the Dominancy Test applied in Asia
Brewery, Inc. v. Court of Appeals 28 and other cases 29 and the Holistic Test
developed in Del Monte Corporation v. Court of Appeals  30 and its
proponent cases.31
As its title implies, the test of dominancy focuses on the similarity of the
prevalent features of the competing trademarks which might cause confusion
or deception and thus constitutes infringement.
xxx xxx xxx
. . . 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 it is
necessary that the infringing label should suggest an effort
to imitate. [C. Neilman Brewing Co. v. 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; . . .)32
x x x           x x x          x x x
On the other side of the spectrum, the holistic test mandates that the entirety
of the marks in question must be considered in determining confusing
similarity.
xxx xxx xxx
In determining whether the trademarks are confusingly
similar, a comparison of the words is not the only
determinant factor. The trademarks in their entirety as they
appear in their respective labels or hang tags must also be
considered in relation to the goods to which they are
attached. The discerning eye of the observer must focus
not only on the predominant words but also on the other
features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to
the other.33
x x x           x x x          x x x
Applying the foregoing tenets to the present controversy and taking into
account the factual circumstances of this case, we considered the
trademarks involved as a whole and rule that petitioner's "STYLISTIC MR.
LEE" is not confusingly similar to private respondent's "LEE" trademark.
Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although on its
label the word "LEE" is prominent, the trademark should be considered as a
whole and not piecemeal. The dissimilarities between the two marks become
conspicuous, noticeable and substantial enough to matter especially in the
light of the following variables that must be factored in.
First, the products involved in the case at bar are, in the main, various kinds
of jeans. These are not your ordinary household items like catsup, soysauce
or soap which are of minimal cost. Maong pants or jeans are not
inexpensive. Accordingly, the casual buyer is predisposed to be more
cautious and discriminating in and would prefer to mull over his purchase.
Confusion and deception, then, is less likely. In Del Monte Corporation
v. Court of Appeals, 34 we noted that:
. . . Among these, what essentially determines the
attitudes of the purchaser, specifically his inclination to be
cautious, is the cost of the goods. To be sure, a person
who buys a box of candies will not exercise as much care
as one who buys an expensive watch. As a general rule,
an ordinary buyer does not exercise as much prudence in
buying an article for which he pays a few centavos as he
does in purchasing a more valuable thing. Expensive and
valuable items are normally bought only after deliberate,
comparative and analytical investigation. But mass
products, low priced articles in wide use, and matters of
 everyday purchase requiring frequent replacement are
bought by the casual consumer without great
care. . . .
Second, like his beer, the average Filipino consumer generally buys his
jeans by brand. He does not ask the sales clerk for generic jeans but for,
say, a Levis, Guess, Wrangler or even an Armani. He is, therefore, more or
less knowledgeable and familiar with his preference and will not easily be
distracted.
Finally, in line with the foregoing discussions, more credit should be given to
the "ordinary purchaser." Cast in this particular controversy, the ordinary
purchaser is not the "completely unwary consumer" but is the "ordinarily
intelligent buyer" considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok  35 is better suited to
the present case. There, the "ordinary purchaser" was defined as one
"accustomed to buy, and therefore to some extent familiar with, the goods in
question. The test of fraudulent simulation is to be found in the likelihood of
the deception of some persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which
that design has been associated. The test is not found in the deception, or
the possibility of deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent between
that and the other. The simulation, in order to be objectionable, must be such
as appears likely to mislead the ordinary intelligent buyer who has a need to
supply and is familiar with the article that he seeks to purchase."
There is no cause for the Court of Appeal's apprehension that petitioner's
products might be mistaken as "another variation or line of garments under
private respondent's 'LEE' trademark".36 As one would readily observe,
private respondent's variation follows a standard format "LEERIDERS,"
"LEESURES" and "LEELEENS." It is, therefore, improbable that the public
would immediately and naturally conclude that petitioner's "STYLISTIC MR.
LEE" is but another variation under private respondent's "LEE" mark.
As we have previously intimated the issue of confusing similarity between
trademarks is resolved by considering the distinct characteristics of each
case. In the present controversy, taking into account these unique factors,
we conclude that the similarities in the trademarks in question are not
sufficient as to likely cause deception and confusion tantamount to
infringement.
Another way of resolving the conflict is to consider the marks involved from
the point of view of what marks are registrable pursuant to Sec. 4 of R.A. No.
166, particularly paragraph 4 (e):
CHAPTER II-A.— The Principal Register
(Inserted by Sec. 2, Rep. Act No. 638.)
Sec. 4. Registration of trade-marks, trade-names and
service-marks on the principal register. — There is hereby
established a register of trade-marks, trade-names and
service-marks which shall be known as the principal
register. The owner of a trade-mark, trade-name or
service-mark used to distinguish his goods, business or
services from the goods, business or services of others
shall have the right to register the same on the principal
register, unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when applied
to or used in connection with the goods, business or
services of the applicant is merely descriptive or
deceptively misdescriptive of them, or when applied to or
used in connection with the goods, business or services of
the applicant is primarily geographically descriptive or
deceptively misdescriptive of them,  or is primarily merely
a surname; (Emphasis ours.)
x x x           x x x          x x x
"LEE" is primarily a surname. Private respondent cannot, therefore, acquire
exclusive ownership over and singular use of said term.
. . . It has been held that a personal name or surname may
not be monopolized as a trademark or tradename as
against others of the same name or surname. For in the
absence of contract, fraud, or estoppel, any man may use
his name or surname in all legitimate ways. Thus,
"Wellington" is a surname, and its first user has no cause
of action against the junior user of "Wellington" as it is
incapable of exclusive appropriation.37
In addition to the foregoing, we are constrained to agree with petitioner's
contention that private respondent failed to prove prior actual commercial
use of its "LEE" trademark in the Philippines before filing its application for
registration with the BPTTT and hence, has not acquired ownership over
said mark.
Actual use in commerce in the Philippines is an essential prerequisite for the
acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A of the
Philippine Trademark Law (R.A. No. 166) which explicitly provides that:
CHAPTER II. Registration of Marks and Trade-names.
Sec. 2. What are registrable. — Trade-marks, trade-
names, and service marks owned by persons,
corporations, partnerships or associations domiciled in the
Philippines and by persons, corporations, partnerships, or
associations domiciled in any foreign country may be
registered in accordance with the provisions of this
act: Provided, That said trade-marks,  trade-names,  or
service marks are actually in use in commerce and
services not less than two months in the Philippines
before the time the applications for registration are
filed: And Provided, further, That the country of which the
applicant for registration is a citizen grants by law
substantially similar privileges to citizens of the
Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the
English language, by the government of the foreign
country to the Government of the Republic of the
Philippines. (As amended.) (Emphasis ours.)
Sec. 2-A. Ownership of trade-marks, trade-names and
service-marks; how acquired. — Anyone who lawfully
produces or deals in merchandise of any kind or who
engages in lawful business, or who renders any lawful
service in commerce, by actual use hereof in manufacture
or trade, in business, and in the service rendered; may
appropriate to his exclusive use a trade-mark, a trade-
name, or a service-mark not so appropriated by another,
to distinguish his merchandise, business or services from
others. The ownership or possession of trade-mark, trade-
name, service-mark, heretofore or hereafter appropriated,
as in this section provided, shall be recognized and
protected in the same manner and to the same extent as
are other property rights to the law. (As amended.)
(Emphasis ours.)
The provisions of the 1965 Paris Convention for the Protection of Industrial
Property 38 relied upon by private respondent and Sec. 21-A of the
Trademark Law (R.A. No. 166)39 were sufficiently expounded upon and
qualified in the recent case of Philip Morris, Inc. v. Court of Appeals:40
xxx xxx xxx
Following universal acquiescence and comity, our
municipal law on trademarks regarding the requirement of
actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash is
being decided by a municipal tribunal (Mortisen vs. Peters,
Great Britain, High Court of Judiciary of Scotland, 1906, 8
Sessions, 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that
international law has been made part of the law of the land
does not by any means imply the primacy of international
law over national law in the municipal sphere. Under the
doctrine of incorporation as applied in most countries,
rules of international law are given a standing equal, not
superior, to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have the
capacity to sue for infringement irrespective of lack of
business activity in the Philippines on account of Section
21-A of the Trademark Law but the question of whether
they have an exclusive right over their symbol as to justify
issuance of the controversial writ will depend on actual use
of their trademarks in the Philippines in line with Sections
2 and 2-A of the same law. It is thus incongruous for
petitioners to claim that when a foreign corporation not
licensed to do business in the Philippines files a complaint
for infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit for
infringement but it may not necessarily be entitled to
 protection due to absence of actual use of the emblem in
the local market.
x x x           x x x          x x x
Undisputably, private respondent is the senior registrant, having obtained
several registration certificates for its various trademarks "LEE,"
"LEERIDERS," and "LEESURES" in both the supplemental and principal
registers, as early as 1969 to 1973.41 However, registration alone will not
suffice. In Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft,42 we declared:
xxx xxx xxx
A rule widely accepted and firmly entrenched because it
has come down through the years is that actual use in
commerce or business is a prerequisite in the acquisition
of the right of ownership over a trademark.
xxx xxx xxx
It would seem quite clear that adoption alone of a
trademark would not give exclusive right thereto. Such
right "grows out of their actual use." Adoption is not use.
One may make advertisements, issue circulars, give out
price lists on certain goods; but these alone would not give
exclusive right of use. For trademark is a creation of use.
The underlying reason for all these is that purchasers have
come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader's right to protection
in the trade he has built up and the goodwill he has
accumulated from use of the trademark. Registration of a
trademark, of course, has value: it is an administrative act
declaratory of a pre-existing right.  Registration does not,
however, perfect a trademark right. (Emphasis ours.)
x x x           x x x          x x x
To augment its arguments that it was, not only the prior registrant, but also
the prior user, private respondent invokes Sec. 20 of the Trademark Law,
thus:
Sec. 20. Certificate of registration  prima facie  evidence of
validity. — A certificate of registration of a mark or
tradename shall be a  prima facie evidence of the validity
of the registration, the registrant's ownership of the mark
or trade-name, and of the registrant's exclusive right to
use the same in connection with the goods, business or
services specified in the certificate, subject to any
conditions and limitations stated therein.
The credibility placed on a certificate of registration of one's trademark, or its
weight as evidence of validity, ownership and exclusive use, is qualified. A
registration certificate serves merely as  prima facie  evidence. It is not
conclusive but can and may be rebutted by controverting evidence.
Moreover, the aforequoted provision applies only to registrations in the
principal register.43 Registrations in the supplemental register do not enjoy a
similar privilege. A supplemental register was created precisely for the
registration of marks which are not registrable on the principal register due to
some defects.44
The determination as to who is the prior user of the trademark is a question
of fact and it is this Court's working principle not to disturb the findings of the
Director of Patents on this issue in the absence of any showing of grave
abuse of discretion. The findings of facts of the Director of Patents are
conclusive upon the Supreme Court provided they are supported by
substantial evidence.45
In the case at bench, however, we reverse the findings of the Director of
Patents and the Court of Appeals. After a meticulous study of the records,
we observe that the Director of Patents and the Court of Appeals relied
mainly on the registration certificates as proof of use by private respondent
of the trademark "LEE" which, as we have previously discussed are not
sufficient. We cannot give credence to private respondent's claim that its
"LEE" mark first reached the Philippines in the 1960's through local sales by
the Post Exchanges of the U.S. Military Bases in the Philippines46 based as it
was solely on the self-serving statements of Mr. Edward Poste, General
Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D. Lee,
Co., Inc., U.S.A., herein private respondent. 47 Similarly, we give little weight
to the numerous
vouchers representing various advertising expenses in the Philippines for
"LEE" products. 48 It is well to note that these expenses were incurred only in
1981 and 1982 by LEE (Phils.), Inc. after it entered into a licensing
agreement with private respondent on 11 May 1981.49
On the other hand, petitioner has sufficiently shown that it has been in the SO ORDERED.
business of selling jeans and other garments adopting its "STYLISTIC MR.
LEE" trademark since 1975 as evidenced by appropriate sales invoices to
various stores and retailers.50

Our rulings in Pagasa Industrial Corp. v. Court of Appeals 51 and Converse

Rubber Corp. v. Universal Rubber Products, Inc.,52 respectively, are
instructive:

The Trademark Law is very clear. It requires actual

commercial use of the mark prior to its registration. There
is no dispute that respondent corporation was the first
registrant, yet it failed to fully substantiate its claim that it
used in trade or business in the Philippines the subject
mark; it did not present proof to invest it with exclusive,
continuous adoption of the trademark which should consist
among others, of considerable sales since its first use. The
invoices submitted by respondent which were dated way
back in 1957 show that the zippers sent to the Philippines
were to be used as "samples" and "of no commercial
value." The evidence for respondent must be clear,
definite and free from inconsistencies. "Samples" are not
for sale and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to the
"use" contemplated by law. Respondent did not expect
income from such "samples." There were no receipts to
establish sale, and no proof were presented to show that
they were subsequently sold in the Philippines.

xxx xxx xxx

The sales invoices provide the best proof that there were
actual sales of petitioner's product in the country and that
there was actual use for a protracted period of petitioner's
trademark or part thereof through these sales.

For lack of adequate proof of actual use of its trademark in the Philippines
prior to petitioner's use of its own mark and for failure to establish confusing
similarity between said trademarks, private respondent's action for
infringement must necessarily fail.

WHEREFORE, premises considered, the questioned decision and resolution

are hereby REVERSED and SET ASIDE.

G.R. No. L-29971 August 31, 1982
ESSO STANDARD EASTERN, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS ** and UNITED CIGARETTE
CORPORATION, respondents.
&
TEEHANKEE, J.:1äwphï1.ñët
The Court affirms on the basis of controlling doctrine the appealed decision
of the Court of Appeals reversing that of the Court of First Instance of Manila
and dismissing the complaint filed by herein petitioner against private
respondent for trade infringement for using petitioner's trademark ESSO,
since it clearly appears that the goods on which the trademark ESSO is used
by respondent is non-competing and entirely unrelated to the products of
petitioner so that there is no likelihood of confusion or deception on the part
of the purchasing public as to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., 1 then a foreign corporation duly
licensed to do business in the Philippines, is engaged in the sale of
petroleum products which are Identified with its trademark ESSO (which as
successor of the defunct Standard Vacuum Oil Co. it registered as a
business name with the Bureaus of Commerce and Internal Revenue in April
and May, 1962). Private respondent in turn is a domestic corporation then
engaged in the manufacture and sale of cigarettes, after it acquired in
November, 1963 the business, factory and patent rights of its predecessor
La Oriental Tobacco Corporation, one of the rights thus acquired having
been the use of the trademark ESSO on its cigarettes, for which a permit
had been duly granted by the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing cigarettes
with the trademark ESSO, when petitioner commenced a case for trademark
infringement in the Court of First Instance of Manila. The complaint alleged
that the petitioner had been for many years engaged in the sale of petroleum
products and its trademark ESSO had acquired a considerable goodwill to
such an extent that the buying public had always taken the trademark ESSO
as equivalent to high quality petroleum products. Petitioner asserted that the
continued use by private respondent of the same trademark ESSO on its
cigarettes was being carried out for the purpose of deceiving the public as to
its quality and origin to the detriment and disadvantage of its own products.
In its answer, respondent admitted that it used the trademark ESSO on its
own product of cigarettes, which was not Identical to those produced and
sold by petitioner and therefore did not in any way infringe on or imitate
petitioner's trademark. Respondent contended that in order that there may
be trademark infringement, it is indispensable that the mark must be used by
one person in connection or competition with goods of the same kind as the
complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro 2 and Arce &
Sons, Inc. vs. Selecta Biscuit Company, 3 referring to related products,
decided in favor of petitioner and ruled that respondent was guilty of
infringement of trademark.
On appeal, respondent Court of Appeals found that there was no trademark
infringement and dismissed the complaint. Reconsideration of the decision
having been denied, petitioner appealed to this Court by way of certiorari to
reverse the decision of the Court of Appeals and to reinstate the decision of
the Court of First Instance of Manila. The Court finds no ground for granting
the petition.
The law defines infringement as the use without consent of the trademark
owner of any "reproduction, counterfeit, copy or colorable limitation of any
registered mark or tradename in connection with the sale, offering for sale,
or advertising of any goods, business or services on or in connection with
which such use is likely to cause confusion or mistake or to deceive
purchasers or others as to the source or origin of such goods or services, or
Identity of such business; or reproduce, counterfeit, copy or colorably imitate
any such mark or tradename and apply such reproduction, counterfeit, copy
or colorable limitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used upon or in connection
with such goods, business or services." 4 Implicit in this definition is the
concept that the goods must be so related that there is a likelihood either of
confusion of goods or business. 5 But likelihood of confusion is a relative
concept; to be determined only according to the particular, and sometimes
peculiar, circumstances of each case. 6 It is unquestionably true that, as
stated in Coburn vs. Puritan Mills, Inc. 7 "In trademark cases, even more
than in other litigation, precedent must be studied in the light of the facts of
the particular case.
It is undisputed that the goods on which petitioner uses the trademark
ESSO, petroleum products, and the product of respondent, cigarettes, are
non-competing. But as to whether trademark infringement exists depends for
the most part upon whether or not the goods are so related that the public
may be, or is actually, deceived and misled that they came from the same
maker or manufacturer. For non-competing goods may be those which,
though they are not in actual competition, are so related to each other that it
might reasonably be assumed that they originate from one
manufacturer. Non-competing goods may also be those which, being
entirely unrelated, could not reasonably be assumed to have a common
source. in the former case of related goods, confusion of business could
arise out of the use of similar marks; in the latter case of non-related goods,
it could not. 8 The vast majority of courts today follow the modern theory or
concept of "related goods" 9 which the Court has likewise adopted and
uniformly recognized and applied. 10
Goods are related when they belong to the same class or have the same
descriptive properties; when they possess the same physical attributes or
essential characteristics with reference to their form, composition, texture or
quality. They may also be related because they serve the same purpose or
are sold in grocery stores. 11 Thus, biscuits were held related to milk because
they are both food products. 12 Soap and perfume, lipstick and nail polish are
similarly related because they are common household items now a
days. 13 The trademark "Ang Tibay" for shoes and slippers was disallowed to
be used for shirts and pants because they belong to the same general class
of goods. 14 Soap and pomade although non- competitive, were held to be
similar or to belong to the same class, since both are toilet articles. 15 But no
confusion or deception can possibly result or arise when the name
"Wellington" which is the trademark for shirts, pants, drawers and other
articles of wear for men, women and children is used as a name of a
department store. 16
Thus, in Acoje Mining Co., Inc. vs. Director of Patents, 17 the Court, through
now Chief Justice Fernando, reversed the patent director's decision on the
question of "May petitioner Acoje Mining Company register for the purpose
of advertising its product, soy sauce, the trademark LOTUS, there being
already in existence one such registered in favor of the Philippine Refining
Company for its product, edible oil, it being further shown that the trademark
applied for is in smaller type, colored differently, set on a background which
is dissimilar as to yield a distinct appearance?" and ordered the granting of
petitioner's application for registration ruling that "there is quite a difference
between soy sauce and edible oil. If one is in the market for the former, he is
not likely to purchase the latter just because of the trademark LOTUS" and
"when regard is had for the principle that the two trademarks in their entirety
as they appear in their respective labels should be considered in relation to
the goods advertised before registration could be denied, the conclusion is
inescapable that respondent Director ought to have reached a different
conclusion. "
By the same token, in the recent case of Philippine Refining Co., Inc. vs. Ng
Sam and Director of Patents, 18 the Court upheld the patent director's
registration of the same trademark CAMIA for therein respondent's product
of ham notwithstanding its already being used by therein petitioner for a wide
range of products: lard butter, cooking oil, abrasive detergents, polishing
materials and soap of all kinds. The Court, after noting that the same CAMIA
trademark had been registered by two other companies, Everbright
Development Company and F. E. Zuellig, Inc. for their respective products of
thread and yarn (for the former) and textiles, embroideries and laces (for the
latter) ruled that "while ham and some of the products of petitioner are
classified under Class 47 (Foods and Ingredients of Food), this alone cannot
serve as the decisive factor in the resolution of whether or not they are
related goods. Emphasis should be on the similarity of the products involved
and not on the arbitrary classification or general description of their
properties or characteristics." The Court, therefore, concluded that "In fine,
We hold that the businesses of the parties are non-competitive and their
products so unrelated  that the use of Identical trademarks is not likely to give
rise to confusion, much less cause damage to petitioner."
In the situation before us, the goods are obviously different from each other
with "absolutely no iota of similitude" 19 as stressed in respondent court's
judgment. They are so foreign to each other as to make it unlikely that
purchasers would think that petitioner is the manufacturer of respondent's
goods.ït¢@lFº  The mere fact that one person has adopted and used a
trademark on his goods does not prevent the adoption and use of the same
trademark by others on unrelated articles of a different kind. 20
Petitioner uses the trademark ESSO and holds certificate of registration of
the trademark for petroleum products, including aviation gasoline, grease,
cigarette lighter fluid and other various products such as plastics, chemicals,
synthetics, gasoline solvents, kerosene, automotive and industrial fuel,
bunker fuel, lubricating oil, fertilizers, gas, alcohol, insecticides and the
ESSO Gasul" burner, while respondent's business is solely for the
manufacture and sale of the unrelated product of cigarettes. The public
knows too well that petitioner deals solely with petroleum products that there
is no possibility that cigarettes with ESSO brand will be associated with
whatever good name petitioner's ESSO trademark may have generated.
Although petitioner's products are numerous, they are of the same class or
line of merchandise which are non-competing with respondent's product of
cigarettes, which as pointed out in the appealed judgment
is beyond petitioner's "zone of potential or natural and logical
expansion" 21 When a trademark is used by a party for a product in which the
other party does not deal, the use of the same trademark on the latter's
product cannot be validly objected to. 22
Another factor that shows that the goods involved are non-competitive and
non-related is the appellate court's finding that they flow through different
channels of trade, thus: "The products of each party move along and are
disposed through different channels of distribution. The (petitioner's)
products are distributed principally through gasoline service and lubrication
stations, automotive shops and hardware stores. On the other hand, the
(respondent's) cigarettes are sold in sari-sari stores, grocery stores, and
other small distributor outlets. (Respondent's) cigarettes are even peddled in
the streets while (petitioner's) 'gasul' burners are not. Finally, there is a
marked distinction between oil and tobacco, as well as between petroleum
and cigarettes. Evidently, in kind and nature the products of (respondent)
and of (petitioner) are poles apart." 23
the petition for review for lack of merit in the Identical case of Shell Company
of the Philippines, Ltd vs. Court of Appeals  25, wherein the Court thereby
affirmed the patent office's registration of the trademark SHELL as used in
the cigarettes manufactured by therein respondent Fortune Tobacco
Corporation notwithstanding the therein petitioner Shell Company's
opposition thereto as the prior registrant of the same trademark for its
gasoline and other petroleum trademarks, on the strength of the controlling
authority of Acoje Mining Co. vs. Director of Patents, Supra, and the same
rationale that "(I)n the Philippines, where buyers of appellee's (Fortune
Corp.'s) cigarettes, which are low cost articles, can be more numerous
compared to buyers of the higher priced petroleum and chemical products of
appellant (Shell Co.) and where appellant (Shell) is known to be in the
business of selling petroleum and petroleum-based chemical products, and
no others, it is difficult to conceive of confusion in the minds of the buying
public in the sense it can be thought that appellant (Shell) is the
manufacturer of appellee's (Fortune's) cigarettes, or that appellee (Fortune)
is the manufacturer or processor of appellant's (Shell's) petroleum and
chemical products." 26

Respondent court correctly ruled that considering the general appearances ACCORDINGLY, the petition is dismissed and the decision of respondent
of each mark as a whole, the possibility of any confusion is unlikely. A Court of Appeals is hereby affirmed.
comparison of the labels of the samples of the goods submitted by the
parties shows a great many differences on the trademarks used. As pointed
out by respondent court in its appealed decision, "(A) witness for the plaintiff,
Mr. Buhay, admitted that the color of the "ESSO" used by the plaintiff for the
oval design where the blue word ESSO is contained is the distinct and
unique kind of blue. In his answer to the trial court's question, Mr. Buhay
informed the court that the plaintiff never used its trademark on any product
where the combination of colors is similar to the label of the Esso cigarettes,"
and "Another witness for the plaintiff, Mr. Tengco, testified that generally, the
plaintiff's trademark comes all in either red, white, blue or any combination of
the three colors. It is to be pointed out that not even a shade of these colors
appears on the trademark of the appellant's cigarette. The only color that the
appellant uses in its trademark is green." 24

Even the lower court, which ruled initially for petitioner, found that a
"noticeable difference between the brand ESSO being used by the
defendants and the trademark ESSO of the plaintiff is that the former has a
rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background."

In point of fact and time, the Court's dismissal of the petition at bar was
presaged by its Resolution of May 21, 1979 dismissing by minute resolution

G.R. No. 209843
TAIWAN KOLIN CORPORATION, LTD., Petitioner,
vs.
KOLIN ELECTRONICS CO., INC., Respondent.
DECISION
VELASCO, JR., J.:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court
interposed by petitioner Taiwan Kolin Corporation, Ltd. (Taiwan Kolin),
assailing the April 30, 2013 Decision1 of the Court of Appeals (CA) in CA-
G.R. SP No. 122565 and its subsequent November 6, 2013 Resolution.2 The
assailed issuances effectively denied petitioner's trademark application for
the use of "KOLIN" on its television and DVD players.
The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office
(IPO), then Bureau of Patents, Trademarks, and Technology Transfer, a
trademark application, docketed as Application No. 4-1996-106310, for the
use of "KOLIN" on a combination of goods, including colored televisions,
refrigerators, window-type and split-type air conditioners, electric fans and
water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of
the Nice Classification (NCL).
Application No. 4-1996-106310 would eventually be considered abandoned
for Taiwan Kolin’s failure to respond to IPO’s Paper No. 5 requiring it to elect
one class of good for its coverage. However, the same application was
subsequently revived through Application Serial No. 4-2002-011002,3 with
petitioner electing Class 9 as the subject of its application, particularly:
television sets, cassette recorder, VCD Amplifiers, camcorders and other
audio/video electronic equipment, flat iron, vacuum cleaners, cordless
handsets, videophones, facsimile machines, teleprinters, cellular phones and
automatic goods vending machine. The application would in time be duly
published.4
On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics)
opposed petitioner’s revived application, docketed as Inter Partes Case No.
14-2006-00096. As argued, the mark Taiwan Kolin seeks to register is
identical, if not confusingly similar, with its "KOLIN" mark registered on
November 23, 2003, covering the following products under Class 9 of the
NCL: automatic voltage regulator, converter, recharger, stereo booster, AC-
DC regulated power supply, step-down transformer, and PA amplified AC-
DC.5
To digress a bit, Kolin Electronics’ "KOLIN" registration was, as it turns out,
the subject of a prior legal dispute between the parties in Inter Partes Case
No. 14-1998-00050 beforethe IPO. In the said case, Kolin Electronics’ own
application was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed,
the prior registrant and user of the "KOLIN" trademark, having registered the
same in Taipei, Taiwan on December 1, 1988. The Bureau of Legal Affairs of
the IPO (BLA-IPO), however, did not accord priority right to Taiwan Kolin’s
Taipei registration absent evidence to prove that it has already used the said
mark in the Philippines as early as 1988. On appeal, the IPO Director
General affirmed the BLA-IPO’s Decision. Taiwan Kolin elevated the case to
the CA, but without injunctive relief, Kolin Electronics was able to register the
"KOLIN" trademark on November 23, 2003for its products.6 Subsequently,
the CA, on July 31, 2006, affirmed7 the Decision of the Director General.
In answer to respondent’s opposition in Inter Partes Case No. 14-2006-
00096, petitioner argued that it should be accorded the benefits of a foreign-
registered mark under Secs. 3 and 131.1 of Republic Act No. 8293,
otherwise known as the Intellectual Property Code of the Philippines (IP
Code);8 that it has already registered the "KOLIN" mark in the People’s
Republic of China, Malaysia and Vietnam, all of which are parties to the
Paris Convention for the Protection of Industrial Property (Paris Convention)
and the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS); and that benefits accorded to a well-known mark should be
accorded to petitioner.9
Ruling of the BLA-IPO
By Decision10 dated August 16, 2007, the BLA-IPO denied petitioner’s
application disposing as follows:
In view of all the foregoing, the instant Opposition is as, it is hereby
SUSTAINED. Accordingly, application bearing Serial No. 4-1996-106310 for
the mark "KOLIN" filed in the name of TAIWAN KOLIN., LTD. on February
29, 1996 for goods falling under Class 09 of the International Classification
of Goods such as cassette recorder, VCD, woofer, amplifiers, camcorders
and other audio/video electronic equipment, flat iron, vacuum cleaners,
cordless handsets, videophones, facsimile machines, teleprinters, cellular
phones, automatic goods vending machines and other electronic equipment
is hereby REJECTED.
Let the file wrapper of "KOLIN", subject of this case be forwarded to the
Bureau of Trademarks (BOT) for appropriate action in accordance with this
Decision.
SO ORDERED.
Citing Sec. 123(d) of the IP Code,11 the BLA-IPO held that a mark cannot be
registered if it is identical with a registered mark belonging to a different
proprietor in respect of the same or closely-related goods. Accordingly,
respondent, as the registered owner of the mark "KOLIN" for goods falling
under Class 9 of the NCL, should then be protected against anyone who
impinges on its right, including petitioner who seeks to register an identical
mark to be used on goods also belonging to Class 9 of the NCL.12 The BLA-
IPO also noted that there was proof of actual confusion in the form of
consumers writing numerous e-mails to respondent asking for information,
service, and complaints about petitioner’s products.13
Petitioner moved for reconsideration but the same was denied on January
26, 2009 for lack of merit.14 Thus, petitioner appealed the above Decision to
the Office of the Director General of the IPO.
Ruling of the IPO Director General
On November 23, 2011, the IPO Director General rendered a
Decision15 reversing that of the BLA-IPO in the following wise:
Wherefore, premises considered, the appeal is hereby GRANTED. The
Appellant’s Trademark Application No. 4-1996-106310 is hereby GIVEN
DUE COURSE subject to the use limitation or restriction for the goods
"television and DVD player". 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 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.
SO ORDERED.
In so ruling, the IPO Director General ratiocinated that product classification
alone cannot serve as the decisive factor in the resolution of whether or not
the goods are related and that emphasis should be on the similarity of the
products involved and not on the arbitrary classification or general
description of their properties or characteristics. As held, the mere fact that
one person has adopted and used a particular trademark for his goods does
not prevent the adoption and use of the same trademark by others on
articles of a different description.16
Aggrieved, respondent elevated the case to the CA.
Ruling of the Court of Appeals
In its assailed Decision, the CA found for Kolin Electronics, on the strength of
the following premises: (a) the mark sought to be registered by Taiwan Kolin
is confusingly similar to the one already registered in favor of Kolin
Electronics; (b) there are no other designs, special shape or easily
identifiable earmarks that would differentiate the products of both competing
companies;17 and (c) the intertwined use of television sets with amplifier,
booster and voltage regulator bolstered the fact that televisions can be
considered as within the normal expansion of Kolin Electronics,18 and is
thereby deemed covered by its trademark as explicitly protected under Sec.
13819 of the IP Code.20 Resultantly, the CA granted respondent’s appeal
thusly:
WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision
of the Director General of the Intellectual Property Office in Inter Partes Case
No. 14-2006-0096 is REVERSED and SET ASIDE. The September 17, 2007
Decision of the Bureau of Legal Affairs of the same office is REINSTATED.
SO ORDERED.
Petitioner moved for reconsideration only to be denied by the CA through its
equally assailed November 6, 2013 Resolution. Hence, the instant recourse.
The Issue
The primordial issue to be resolved boils down to whether or not petitioner is
entitled to its trademark registration of "KOLIN" over its specific goods of
television sets and DVD players. Petitioner postulates, in the main, that its
goods are not closely related to those of Kolin Electronics. On the other
hand, respondent hinges its case on the CA’s findings that its and
petitioner’s products are closely-related. Thus, granting petitioner’s
application for trademark registration, according to respondent, would cause
confusion as to the public.
The Court's Ruling
The petition is impressed with merit.
Identical marks may be registered for
products from the same classification
To bolster its opposition against petitioner’s application to register trademark
"KOLIN," respondent maintains that the element of mark identity argues
against approval of such application, quoting the BLA IPO’s ruling in this
regard:21
Indubitably, Respondent-Applicant’s [herein petitioner] mark is identical to
the registered mark of herein Opposer [herein respondent] and the identical
mark is used on goods belonging to Class 9 to which Opposer’s goods are
also classified. On this point alone, Respondent-Applicant’s application
should already be denied.
The argument is specious.
The parties admit that their respective sets of goods belong to Class 9 of the
NCL, which includes the following:22
Class 9
Scientific, nautical, surveying, photographic, cinematographic, optical,
weighing, measuring, signalling, checking (supervision), life-saving and
teaching apparatus and instruments; apparatus and instruments for
conducting, switching, transforming, accumulating, regulating or controlling
electricity; apparatus for recording, transmission or reproduction of sound or
images; magneticdata carriers, recording discs; compact discs, DVDs and
other digital recording media; mechanisms for coin-operated apparatus; cash
registers, calculating machines, data processing equipment, computers;
computer software; fire-extinguishing apparatus.
But mere uniformity in categorization, by itself, does not automatically
preclude the registration of what appears to be an identical mark, if that be
the case. In fact, this Court, in a long line of cases, has held that such
circumstance does not necessarily result in any trademark infringement. The
survey of jurisprudence cited in Mighty Corporation v. E. & J Gallo
Winery23 is enlightening on this point:
(a) in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered
the approval of Acoje Mining’s application for registration of the
trademark LOTUS for its soy sauce even though Philippine Refining
Company had prior registration and use of such identical mark for
its edible oil which, like soy sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of
Patents,25 we upheld the Patent Director’s registration of the same
trademark CAMIA for Ng Sam’s ham under Class 47, despite
Philippine Refining Company’s prior trademark registration and
actual use of such mark on its lard, butter, cooking oil (all of which
belonged to Class 47), abrasive detergents, polishing materials and
soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and
Santos Lim Bun Liong,26 we dismissed Hickok’s petition to cancel
private respondent’s HICKOK trademark registration for its Marikina
shoes as against petitioner’s earlier registration of the same
trademark for handkerchiefs, briefs, belts and wallets.
Verily, whether or not the products covered by the trademark sought to be
registered by Taiwan Kolin, on the one hand, and those covered by the prior
issued certificate of registration in favor of Kolin Electronics, on the other, fall
under the same categories in the NCL is not the sole and decisive factor in
determining a possible violation of Kolin Electronics’ intellectual property
right should petitioner’s application be granted. It is hornbook doctrine, as
held in the above-cited cases, that emphasis should be on the similarity of
the products involved and not on the arbitrary classification or general
description of their properties or characteristics. The mere fact that one
person has adopted and used a trademark on his goods would not, without
more, prevent the adoption and use of the same trademark by others on
unrelated articles of a different kind.27 The CA erred in denying petitioner’s
registration application
Respondent next parlays the idea of relation between products as a factor
militating against petitioner’s application. Citing Esso Standard Eastern, Inc.
v. Court of Appeals,28 respondent argues that the goods covered by
petitioner’s application and those covered by its registration are actually
related belonging as they do to the same class or have the same physical
characteristics with reference to their form, composition, texture, or quality,
or if they serve the same purpose. Respondent likewise draws parallelisms
between the present controversy and the following cases:29
(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits
were held related to milk because they were both food products;
(b) In Chua Che vs. Phil. Patents Office,31 soap and perfume,
lipstick and nail polish are held to be similarly related because they
are common household items;
(c) In Ang vs. Teodoro,32 the trademark "Ang Tibay" for shoes and
slippers was disallowed to be used for shirts and pants because
they belong to the same general class of goods; and
(d) In Khe vs. Lever Bros. Co.,33 soap and pomade, although
noncompetitive, were held to be similar or belong to the same
class, since both are toilet articles.
Respondent avers that Kolin Electronics’ and Taiwan Kolin’s products are
closely-related not only because both fall under Class 9 of the NCL, but
mainly because they both relate to electronic products, instruments,
apparatus, or appliances.34 Pushing the point, respondent would argue that
Taiwan Kolin and Kolin Electronics’ goods are inherently similar in that they
are all plugged into electric sockets and perform a useful
function.35 Furthermore, respondent echoes the appellate court’s
ratiocination in denying petitioner’s application, viz:36
Significantly, Kolin Electronics’ goods (automatic voltage regulator;
converter; recharger; stereo booster; AC-DC regulated power supply; step-
down transformer; and PA amplified AC-DC) and Taiwan Kolin’s television
sets and DVD players are both classified under class 9 of the NICE
agreement. At first glance, it is also evident that all these goods are
generally described as electrical devices. x x x [T]he goods of both Kolin
Electronics and Taiwan Kolin will inevitably be introduced to the public as
"KOLIN" products and will be offered for sale in the same channels of trade.
Contrary to Taiwan Kolin’s claim, power supply as well as audio and stereo
equipment like booster and amplifier are not only sold in hardware and
electrical shops. These products are commonly found in appliance stores
alongside television sets and DVD players. With the present trend in today’s
entertainment of having a home theater system, it is not unlikely to see a
stereo booster, amplifier and automatic voltage regulator displayed together
with the television sets and DVD players. With the intertwined use of these
products bearing the identical "KOLIN" mark, the ordinary intelligent
consumer would likely assume that they are produced by the same
manufacturer.
In sum, the intertwined use, the same classification of the products as class
9 under the NICE Agreement, and the fact that they generally flow through
the same channel of trade clearly establish that Taiwan Kolin’s television
sets and DVD players are closely related to Kolin Electronics’ goods. As
correctly pointed out by the BLA-IPO, allowing Taiwan Kolin’s registration
would only confuse consumers as to the origin of the products they intend to
purchase. Accordingly, protection should be afforded to Kolin Electronics, as
the registered owner of the "KOLIN" trademark.37 (emphasis added)
The CA’s approach and reasoning to arrive at the assailed holding that the
approval of petitioner’s application is likely to cause confusion or deceive fail
to persuade.
a. The products covered by
petitioner’s application and
respondent’s registration are
unrelated
A certificate of trademark registration confers upon the trademark owner the
exclusive right to sue those who have adopted a similar mark not only in
connection with the goods or services specified in the certificate, but also
with those that are related thereto.38
In resolving one of the pivotal issues in this case––whether or not the
products of the parties involved are related––the doctrine in Mighty
Corporation is authoritative. There, the Court held that the goods should be
tested against several factors before arriving at a sound conclusion on the
question of relatedness. Among these are:
(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
 (c) the product’s quality, quantity, or size, including the nature of the
package, wrapper or container;
(d) the nature and cost of the articles;
(e) the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or
quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is,
day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are
distributed, marketed, displayed and sold.39
As mentioned, the classification of the products under the NCL is merely part
and parcel of the factors to be considered in ascertaining whether the goods
are related. It is not sufficient to state that the goods involved herein are
electronic products under Class 9 in order to establish relatedness between
the goods, for this only accounts for one of many considerations enumerated
in Mighty Corporation. In this case, credence is accorded to petitioner’s
assertions that:40
a. Taiwan Kolin’s goods are classified as home appliances as
opposed to Kolin Electronics’ goods which are power supply and
audio equipment accessories;
b. Taiwan Kolin’s television sets and DVD players perform distinct
function and purpose from Kolin Electronics’ power supply and
audio equipment; and
c. Taiwan Kolin sells and distributes its various home appliance
products on wholesale and to accredited dealers, whereas Kolin
Electronics’ goods are sold and flow through electrical and
hardware stores.
Clearly then, it was erroneous for respondent to assume over the CA to
conclude that all electronic products are related and that the coverage of one
electronic product necessarily precludes the registration of a similar mark
over another. In this digital age wherein electronic products have not only
diversified by leaps and bounds, and are geared towards interoperability, it is
difficult to assert readily, as respondent simplistically did, that all devices that
require plugging into sockets are necessarily related goods.
It bears to stress at this point that the list of products included in Class
941 can be sub-categorized into five (5) classifications, namely: (1) apparatus
and instruments for scientific or research purposes, (2) information
technology and audiovisual equipment, (3) apparatus and devices for
controlling the distribution and use of electricity, (4) optical apparatus and
instruments, and (5) safety equipment.42 From this sub-classification, it
becomes apparent that petitioner’s products, i.e., televisions and DVD
players, belong to audio visiual equipment, while that of respondent,
consisting of automatic voltage regulator, converter, recharger, stereo
booster, AC-DC regulated power supply, step-down transformer, and PA
amplified AC-DC, generally fall under devices for controlling the distribution
and use of electricity.
b. The ordinarily intelligent
buyer is not likely to be
confused
In trademark cases, particularly in ascertaining whether one trademark is
confusingly similar to another, no rigid set rules can plausible be formulated.
Each case must be decided on its merits, with due regard to the goods or
services involved, the usual purchaser’s character and attitude, among
others. In such cases, even more than in any other litigation, precedent must
be studied in the light of the facts of a 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.43 For a clearer perspective and as
matter of record, the following image on the left44 is the trademark applied for
by petitioner, while the image juxtaposed to its right45 is the trademark
registered by respondent:

While both competing marks refer to the word "KOLIN" written in upper case
letters and in bold font, the Court at once notes the distinct visual and aural
differences between them: Kolin Electronics’ mark is italicized and colored
black while that of Taiwan Kolin is white in pantone red color background.
The differing features between the two, though they may appear minimal,
are sufficient to distinguish one brand from the other.
It cannot be stressed enough that the products involved in the case at bar
are, generally speaking, various kinds of electronic products. These are not
ordinary consumable household items, like catsup, soy sauce or soap which
are of minimal cost.46 The products of the contending parties are relatively
luxury items not easily considered affordable. Accordingly, the casual buyer
is predisposed to be more cautious and discriminating in and would prefer to
mull over his purchase. Confusion and deception, then, is less likely.47 As
further elucidated in Del Monte Corporation v. Court of Appeals:48
x x x Among these, what essentially determines the attitudes of the
purchaser, specifically his inclination to be cautious, is the cost of the goods.
To be sure, a person who buys a box of candies will not exercise as much
care as one who buys an expensive watch. As a general rule, an ordinary
buyer does not exercise as much prudence in buying an article for which he
pays a few centavos as he does in purchasing a more valuable thing.
Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation. But mass products, low priced
articles in wide use, and matters of everyday purchase requiring frequent
replacement are bought by the casual consumer without great care x x x.
(emphasis added) Respondent has made much reliance on Arce & Sons,
Chua Che, Ang, and Khe, oblivious that they involved common household
items––i.e., biscuits and milk, cosmetics, clothes, and toilet articles,
respectively–– whereas the extant case involves luxury items not regularly
and inexpensively purchased by the consuming public. In accord with
common empirical experience, the useful lives of televisions and DVD
players last for about five (5) years, minimum, making replacement
purchases very infrequent. The same goes true with converters and
regulators that are seldom replaced despite the acquisition of new
equipment to be plugged onto it. In addition, the amount the buyer would be
parting with cannot be deemed minimal considering that the price of
televisions or DVD players can exceed today’s monthly minimum wage. In
light of these circumstances, it is then expected that the ordinary intelligent
buyer would be more discerning when it comes to deciding which electronic
product they are going to purchase, and it is this standard which this Court
applies herein in determining the likelihood of confusion should petitioner’s
application be granted.
To be sure, the extant case is reminiscent of Emerald Garment
Manufacturing Corporation v. Court of Appeals,49 wherein the opposing
trademarks are that of Emerald Garment Manufacturing Corporation’s
"Stylistic Mr. Lee" and H.D. Lee’s "LEE." In the said case, the appellate court
affirmed the decision of the Director of Patents denying Emerald Garment’s
application for registration due to confusing similarity with H.D. Lee’s
trademark. This Court, however, was of a different beat and ruled that there
is no confusing similarity between the marks, given that the products
covered by the trademark, i.e., jeans, were, at that time, considered pricey,
typically purchased by intelligent buyers familiar with the products and are
more circumspect, and, therefore, would not easily be deceived. As held:
Finally, in line with the foregoing discussions, more credit should be given to
the "ordinary purchaser." Cast in this particular controversy, the ordinary
purchaser is not the "completely unwary consumer" but is the "ordinarily
intelligent buyer" considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50 is better suited to the
present case. There, the "ordinary purchaser" was defined as one
"accustomed to buy, and therefore to some extent familiar with, the goods in
question. The test of fraudulent simulation is to be found in the likelihood of
the deception of some persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which
that design has been associated. The test is not found in the deception, or
the possibility of deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent between
that and the other. The simulation, in order to be objectionable, must be such
as appears likely to mislead the ordinary intelligent buyer who has a need to
supply and is familiar with the article that he seeks to purchase."51 (emphasis
added)
Consistent with the above ruling, this Court finds that the differences WHEREFORE, in view of the foregoing, the petition is hereby GRANTED.
between the two marks, subtle as they may be, are sufficient to prevent any The Decision and the Resolution of the Court of Appeals in CA-G.R. SP No.
confusion that may ensue should petitioner’s trademark application be 122565, dated April 30, 2013 and November 6, 2013, respectively, are
granted. As held in Esso Standard Eastern, Inc.:52 hereby REVERSED and SET ASIDE. Accordingly, the Decision of the
Intellectual Property Office Director General in Inter Partes Case No. 14-
Respondent court correctly ruled that considering the general appearances 2006-00096, dated November 23, 2011, is hereby REINSTATED.
of each mark as a whole, the possibility of any confusion is unlikely. A
comparison of the labels of the samples of the goods submitted by the SO ORDERED.
parties shows a great many differences on the trademarks used. As pointed
out by respondent court in its appealed decision, "(A) witness for the plaintiff,
Mr. Buhay, admitted that the color of the ‘ESSO’ used by the plaintiff for the
oval design where the blue word ESSO is contained is the distinct and
unique kind of blue. In his answer to the trial court’s question, Mr. Buhay
informed the court that the plaintiff never used its trademark on any product
where the combination of colors is similar to the label of the Esso cigarettes,"
and "Another witness for the plaintiff, Mr. Tengco, testified that generally, the
plaintiff’s trademark comes all in either red, white, blue or any combination of
the three colors. It is to be pointed out that not even a shade of these colors
appears on the trademark of the appellant’s cigarette. The only color that the
appellant uses in its trademark is green."

Even the lower court, which ruled initially for petitioner, found that a
"noticeable difference between the brand ESSO being used by the
defendants and the trademark ESSO of the plaintiff is that the former has a
rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background."

All told, We are convinced that petitioner's trademark registration not only
covers unrelated good, but is also incapable of deceiving the ordinary
intelligent buyer. The ordinary purchaser must be thought of as having, and
credited with, at least a modicum of intelligence to be able to see the
differences between the two trademarks in question.53

Questions of fact may still be entertained

On a final note, the policy according factual findings of courts a quo great
respect, if not finality, is not binding where they have overlooked,
misapprehended, or misapplied any fact or circumstance of weight and
substances.54 So it must be here; the nature of the products involved
materially affects the outcome of the instant case. A reversal of the appellate
Court's Decision is then in order.
 SECOND DIVISION
G.R. No. 190065               August 16, 2010
DERMALINE, INC., Petitioner,
vs.
MYRA PHARMACEUTICALS, INC. Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 seeking to reverse and set aside
the Decision dated August 7, 20092 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 1235 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
similar to its own mark such that the registration and use of Dermaline’s
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.