kabushi kaisha v CA GR 120900 july 20, 2000

Facts:
On January 15, 1985, private respondent NSR Rubber Corporation (private respondent) filed an
application for registration of the mark CANON for sandals in the Bureau of Patents, Trademarks,
and Technology Transfer (BPTTT). A Verified Notice of Opposition was filed by petitioner, a
foreign corporation duly organized and existing under the laws of Japan, alleging that it will be
damaged by the registration of the trademark CANON in the name of private respondent. The
case was docketed as Inter Partes Case No. 3043.

Based on the records, the evidence presented by petitioner consisted of its certificates of
registration for the mark CANON in various countries covering goods belonging to class 2
(paints, chemical products, toner, and dye stuff). Petitioner also submitted in evidence its
Philippine Trademark Registration No. 39398, showing its ownership over the trademark CANON
also under class 2.

On November 10, 1992, the BPTTT issued its decision dismissing the opposition of petitioner
and giving due course to private respondent's application for the registration of the trademark
CANON. On February 16, 1993, petitioner appealed the decision of the BPTTT with public
respondent Court of Appeals that eventually affirmed the decision of BPTTT. Hence, this petition
for review.

Issue:
WON PETITIONER IS ENTITLED TO EXCLUSIVE USE OF THE MARK CANON

Ruling:

The BPTTT and the Court of Appeals share the opinion that the trademark "CANON" as used by
petitioner for its paints, chemical products, toner, and dyestuff, can be used by private
respondent for its sandals because the products of these two parties are dissimilar. Petitioner
protests the appropriation of the mark CANON by private respondent on the ground that
petitioner has used and continues to use the trademark CANON on its wide range of goods
worldwide. Allegedly, the corporate name or tradename of petitioner is also used as its trademark
on diverse goods including footwear and other related products like shoe polisher and polishing
agents. To lend credence to its claim, petitioner points out that it has branched out in its business
based on the various goods carrying its trademark CANON , including footwear which petitioner
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contends covers sandals, the goods for which private respondent sought to register the mark
CANON. For petitioner, the fact alone that its trademark CANON is carried by its other products
like footwear, shoe polisher and polishing agents should have precluded the BPTTT from giving
due course to the application of private respondent.

We find the arguments of petitioner to be unmeritorious. Ordinarily, the ownership of a trademark

or tradename is a property right that the owner is entitled to protect as mandated by the
4 

Trademark Law. However, when a trademark is used by a party for a product in which the other
5 

party does not deal, the use of the same trademark on the latter's product cannot be validly
objected to.

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The certificates of registration for the trademark CANON in other countries and in the Philippines
as presented by petitioner, clearly showed that said certificates of registration cover goods
belonging to class 2 (paints, chemical products, toner, dyestuff). On this basis, the BPTTT
correctly ruled that since the certificate of registration of petitioner for the trademark CANON
covers class 2 (paints, chemical products, toner, dyestuff), private respondent can use the
trademark CANON for its goods classified as class 25 (sandals). Clearly, there is a world of
difference between the paints, chemical products, toner, and dyestuff of petitioner and the
sandals of private respondent.

Petitioner counters that notwithstanding the dissimilarity of the products of the parties, the
trademark owner is entitled to protection when the use of by the junior user "forestalls the normal
expansion of his business". Petitioner's opposition to the registration of its trademark CANON by
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private respondent rests upon petitioner's insistence that it would be precluded from using the
mark CANON for various kinds of footwear, when in fact it has earlier used said mark for said
goods. Stretching this argument, petitioner claims that it is possible that the public could presume
that petitioner would also produce a wide variety of footwear considering the diversity of its
products marketed worldwide.

We do not agree. Even in this instant petition, except for its bare assertions, petitioner failed to
attach evidence that would convince this Court that petitioner has also embarked in the
production of footwear products. We quote with approval the observation of the Court of Appeals
that:

"The herein petitioner has not made known that it intends to venture into the business of
producing sandals. This is clearly shown in its Trademark Principal Register (Exhibit "U")
where the products of the said petitioner had been clearly and specifically described as
"Chemical products, dyestuffs, pigments, toner developing preparation, shoe polisher,
polishing agent". It would be taxing one's credibility to aver at this point that the
production of sandals could be considered as a possible "natural or normal expansion" of
its business operation"

We reiterated the principle that the certificate of registration confers upon the trademark owner
the exclusive right to use its own symbol only to those goods specified in the certificate, subject
to the conditions and limitations stated therein. Thus, the exclusive right of petitioner in this case
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to use the trademark CANON is limited to the products covered by its certificate of registration.

Petitioner further argues that the alleged diversity of its products all over the world makes it
plausible that the public might be misled into thinking that there is some supposed connection
between private respondent's goods and petitioner. Petitioner is apprehensive that there could
be confusion as to the origin of the goods, as well as confusion of business, if private respondent
is allowed to register the mark CANON. In such a case, petitioner would allegedly be immensely
prejudiced if private respondent would be permitted to take "a free ride on, and reap the
advantages of, the goodwill and reputation of petitioner Canon"

The likelihood of confusion of goods or business is a relative concept, to be determined only

according to the particular, and sometimes peculiar, circumstances of each case. Here, the
products involved are so unrelated that the public will not be misled that there is the slightest
nexus between petitioner and the goods of private respondent.

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In cases of confusion of business or origin, the question that usually arises is whether the
respective goods or services of the senior user and the junior user are so related as to likely
cause confusion of business or origin, and thereby render the trademark or tradenames
confusingly similar. Goods are related when they belong to the same class or have the same
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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
19 

related because they serve the same purpose or are sold in grocery stores.

Undoubtedly, the paints, chemical products, toner and dyestuff of petitioner that carry the
trademark CANON are unrelated to sandals, the product of private respondent. We agree with
the BPTTT, following the Esso doctrine, when it noted that the two classes of products in this
case flow through different trade channels. The products of petitioner are sold through special
chemical stores or distributors while the products of private respondent are sold in grocery
stores, sari-sari stores and department stores. Thus, the evident disparity of the products of the
23 

parties in the case at bar renders unfounded the apprehension of petitioner that confusion of
business or origin might occur if private respondent is allowed to use the mark CANON.

According to petitioner, it should not be required to prove that its trademark is well-known and
that the products are not similar as required by the quoted memorandum. Petitioner emphasizes
that the guidelines in the memorandum of Ongpin implement Article 6bis of the Paris Convention,
the provision for the protection of trademarks, not tradenames.

We cannot uphold petitioner's position.

The term "trademark" is defined by RA 166, the Trademark Law, as including "any word, name,
symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer
or merchant to identify his goods and distinguish them for those manufactured, sold or dealt in by
others." Tradename is defined by the same law as including "individual names and surnames,
26 

firm names, tradenames, 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." Simply put, a trade name refers to the business and its goodwill; a trademark refers
27 

to the goods. 28

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and Japan, the country of petitioner, are signatories , 29 

is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and indications of source or
appellations of origin, and at the same time aims to repress unfair competition. We agree with
30 

public respondents that the controlling doctrine with respect to the applicability of Article 8 of the
Paris Convention is that established in Kabushi Kaisha Isetan vs. Intermediate Appellate
Court. As pointed out by the BPTTT:
31 

"Regarding the applicability of Article 8 of the Paris Convention, this Office believes that
there is no automatic protection afforded an entity whose tradename is alleged to have
been infringed through the use of that name as a trademark by a local entity.

In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No. 75420,
15 November 1991, the Honorable Supreme Court held that:

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 'The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world which have signed it from using a
tradename which happens to be used in one country. To illustrate – if a taxicab or
bus company in a town in the United Kingdom or India happens to use the
tradename "Rapid Transportation", it does not necessarily follow that "Rapid" can
no longer be registered in Uganda, Fiji, or the Philippines.

This office is not unmindful that in the Treaty of Paris for the Protection of Intellectual
Property regarding well-known marks and possible application thereof in this case.
Petitioner, as this office sees it, is trying to seek refuge under its protective mantle,
claiming that the subject mark is well known in this country at the time the then
application of NSR Rubber was filed.

However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin, issued a
memorandum dated 25 October 1983 to the Director of Patents, a set of guidelines in the
implementation of Article 6bis (sic) of the Treaty of Paris. These conditions are:

a) the mark must be internationally known;

b) the subject of the right must be a trademark, not a patent or copyright or anything else;

c) the mark must be for use in the same or similar kinds of goods; and

d) the person claiming must be the owner of the mark (The Parties Convention
Commentary on the Paris Convention. Article by Dr. Bogsch, Director General of the
World Intellectual Property Organization, Geneva, Switzerland, 1985)'

From the set of facts found in the records, it is ruled that the Petitioner failed to comply with the
third requirement of the said memorandum that is the mark must be for use in the same or similar
kinds of goods. The Petitioner is using the mark "CANON" for products belonging to class 2
(paints, chemical products) while the Respondent is using the same mark for sandals (class 25).
Hence, Petitioner's contention that its mark is well-known at the time the Respondent filed its
application for the same mark should fail. 

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sehwani v in n out burger GR 171053 oct 15, 2007

Facts:
Respondent IN-N-OUT Burger, Inc., a foreign corporation organized under the laws of California,
U.S.A., and not doing business in the Philippines, filed before the Bureau of Legal Affairs of the
IPO (BLA-IPO), an administrative complaint against petitioners Sehwani, Inc. and Benita’s Frites,
Inc. for violation of intellectual property rights, attorney’s fees and damages with prayer for the
issuance of a restraining order or writ of preliminary injunction. 4

Respondent alleged that it is the owner of the tradename "IN-N-OUT" and trademarks "IN-N-
OUT," "IN-N-OUT Burger & Arrow Design" and "IN-N-OUT Burger Logo," which are used in its
business since 1948 up to the present. These tradename and trademarks were registered in the
United States as well as in other parts of the world. 5

On June 2, 1997, respondent applied with the IPO for the registration of its trademark "IN-N-OUT
Burger & Arrow Design" and servicemark "IN-N-OUT." In the course of its application,
respondent discovered that petitioner Sehwani, Inc. had obtained Trademark Registration No.
56666 for the mark "IN N OUT" (THE INSIDE OF THE LETTER "O" FORMED LIKE A STAR) on
December 17, 1993 without its authority.6 Respondent thus demanded that petitioner Sehwani,
Inc. desist from claiming ownership of the mark "IN-N-OUT" and to voluntarily cancel its
Trademark Registration No. 56666. Petitioner Sehwani, Inc. however refused to accede to the
demand and even entered into a Licensing Agreement granting its co-petitioner Benita’s Frites,
Inc. license to use for a period of five years the trademark "IN-N-OUT BURGER" in its restaurant
in Pasig City.7 Hence, respondent filed a complaint for violation of intellectual property rights.

In their answer with counterclaim, petitioners alleged that respondent lack the legal capacity to
sue because it was not doing business in the Philippines and that it has no cause of action
because its mark is not registered or used in the Philippines. Petitioner Sehwani, Inc. also
claimed that as the registered owner of the "IN-N-OUT" mark, it enjoys the presumption that the
same was validly acquired and that it has the exclusive right to use the mark. Moreover,
petitioners argued that other than the bare allegation of fraud in the registration of the mark,
respondent failed to show the existence of any of the grounds for cancellation thereof under
Section 151 of Republic Act (R.A.) No. 8293, otherwise known as The Intellectual Property Code
of the Philippines.

Issue:

Ruling:

Contrary to petitioners’ argument, respondent has the legal capacity to sue for the protection of
its trademarks, albeit it is not doing business in the Philippines. Section 160 in relation to Section
3 of R.A. No. 8293, provides:

SECTION 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement
Action. — Any foreign national or juridical person who meets the requirements of Section 3 of
this Act and does not engage in business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not it is licensed to do business in the
Philippines under existing laws.

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Section 3 thereof provides:

SECTION 3. International Conventions and Reciprocity. — Any person who is a national or who
is domiciled or has a real and effective industrial establishment in a country which is a party to
any convention, treaty or agreement relating to intellectual property rights or the repression of
unfair competition, to which the Philippines is also a party, or extends reciprocal rights to
nationals of the Philippines by law, shall be entitled to benefits to the extent necessary to give
effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to
which any owner of an intellectual property right is otherwise entitled by this Act.

Respondent anchors its causes of action under Articles 6 bis and 8 of The Convention of Paris for
the Protection of Industrial Property, otherwise known as the Paris Convention, wherein both the
United States and the Philippines are signatories. 26 The Articles read:

In the aforementioned case, we are inclined to favor the declaration of the mark "IN-N-OUT" as
an internationally well-known mark on the basis of "registrations in various countries around the
world and its comprehensive advertisements therein."

The Ongpin Memorandum dated 25 October 1983 which was the basis for the decision in the
previous inter partes case and which set the criteria for determining whether a mark is well
known, takes into consideration the extent of registration of a mark. Similarly, the implementing
rules of Republic Act 8293, specifically Section (e) Rule 102 Criteria for determining whether a
mark is well known, also takes into account the extent to which the mark has been registered in
the world in determining whether a mark is well known.

The quality image and reputation acquired by the complainant’s IN-N-OUT mark is unmistakable.
With this, complainant’s mark have met other criteria set in the Implementing Rules of Republic
Act 8293, namely, ‘a’ and ‘d’ of Rule 102, to wit:

"Rule 102:

(a) the duration, extent and geographical area of any use of the mark, in particular, the duration,
extent and geographical area of any promotion of the mark, including publicity and the
presentation at fairs or exhibitions, of the goods and/or services to which the mark applies;

xxxx

(d) the quality image or reputation acquired by the mark"

Hence, on the basis of evidence presented consisting of worldwide registration of mark "IN-N-
OUT" almost all of which were issued earlier than the respondent’s date of filing of its application
and the subsequent registration of the mark "IN-N-OUT" in this Office, as well as the
advertisements therein by the complainant, this Office hereby affirms its earlier declaration that
indeed, the mark "IN-N-OUT BURGER LOGO" is an internally well-known mark.

The fact that respondent’s marks are neither registered nor used in the Philippines is of no
moment. The scope of protection initially afforded by Article 6bis of the Paris Convention has been
expanded in the 1999 Joint Recommendation Concerning Provisions on the Protection of Well-
Known Marks, wherein the World Intellectual Property Organization (WIPO) General Assembly
and the Paris Union agreed to a nonbinding recommendation that a well-known mark should be
protected in a country even if the mark is neither registered nor used in that country. Part I,
Article 2(3) thereof provides:

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(3) [Factors Which Shall Not Be Required] (a) A Member State shall not require, as a condition
for determining whether a mark is a well-known mark:

(i) that the mark has been used in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, the Member
State;

(ii) that the mark is well known in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, any jurisdiction
other than the Member State; or

(iii) that the mark is well known by the public at large in the Member State. (Underscoring
supplied)

Moreover, petitioners’ claim that no ground exists for the cancellation of their registration lacks
merit. Section 151(b) of RA 8293 provides:

SECTION 151. Cancellation. — 151.1. A petition to cancel a registration of a mark under this Act
may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be
damaged by the registration of a mark under this Act as follows:

xxxx

(b) At any time, if the registered mark becomes the generic name for the goods or services, or a
portion thereof, for which it is registered, or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source of the goods or services
on or in connection with which the mark is used. x x x. 1âwphi1

The evidence on record shows that not only did the petitioners use the IN-N-OUT Burger
trademark for the name of their restaurant, but they also used identical or confusingly similar
mark for their hamburger wrappers and french-fries receptacles, thereby effectively
misrepresenting the source of the goods and services.

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